Firestone Diamonds (FDI)

 

LSE:FDI: Results of Firm Placing & Placing, Notice of GM

Firestone Diamonds

01 Dec 2017 10:22:35

Firestone Diamonds

RNS Number : 1375Y
Firestone Diamonds PLC
01 December 2017
 

This announcement contains inside information for the purposes of article 7 of Regulation 596/2014.

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND, NEW ZEALAND OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN FIRESTONE PLC OR ANY OTHER ENTITY IN ANY JURISDICTION.

1 December 2017

Firestone Diamonds plc
("Firestone" or the "Company") (AIM: FDI)

Results of Firm Placing and Placing
Notice of General Meeting

Firestone Diamonds plc, the AIM-quoted diamond mining company, is pleased to announce the results of the Firm Placing and Placing initially announced earlier today.

·              147,888,528 Firm Placing Shares have been conditionally placed at 10 pence per New Ordinary Share (the "Issue Price") to raise, in aggregate, gross proceeds of £14.8 million (US$20 million).

·              A further 36,954,356 Placing Shares, subject to clawback under the Open Offer, have been conditionally placed at the Issue Price to raise additional gross proceeds of £3.7 million (US$5 million). The Open Offer will provide Qualifying Shareholders with an opportunity to participate in the Fundraising at the Issue Price.

·              The Issue Price represents a discount of 49.4 per cent. to the Closing Price on 30 November 2017.

·              The Fundraising is conditional, inter alia, on the passing of the Resolutions at the General Meeting to be held at 10.00 a.m. on 20 December 2017. Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will occur on or around 21 December 2017.

·              The net proceeds of the Fundraising will be used, inter alia, to fund on-going operations at the Liqhobong Diamond Mine.

A circular setting out details of the proposed Fundraising and giving notice of the General Meeting to approve these proposals will be sent to Shareholders later today and will also be available in due course on the Company's website: www.firestonediamonds.com.

For more information contact:

Firestone Diamonds plc

Stuart Brown

+44 (0)20 8741 7810

Macquarie Capital (Europe) Limited (Nomad and Broker)

Nick Stamp
Nicholas Harland
Guy de Freitas

+44 (0)20 3037 2000

Tavistock (Public and Investor Relations)

Simon Hudson
Jos Simson
Barney Hayward

+44 (0)20 7920 3150

+44 (0)7788 554 035

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS


2017

Record Date and time for entitlement under the Open Offer

5.30 p.m. on 30 November

Announcement of the Firm Placing and the Placing and Open Offer

1 December

Announcement of the results of the Firm Placing and the Placing

1 December

Dispatch of the Circular, the Forms of Proxy to Qualifying Shareholders and Application Forms to Qualifying Non-CREST Shareholders

1 December

Existing Ordinary Shares marked 'ex' entitlement by the London Stock Exchange

4 December

Basic Entitlements and Excess Entitlements credited to CREST accounts of Qualifying CREST Shareholders

5 December

Recommended latest time and date for requesting withdrawal of Basic Entitlements and Excess Entitlements from CREST

4.30 p.m. on 13 December

Latest time and date for depositing Basic Entitlements and Excess Entitlements into CREST

3.00 p.m. on 14 December

Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)

3.00 p.m. on 15 December

Latest time and date for receipt of Forms of Proxy for the General Meeting

10.00 a.m. on 18 December

Latest time and date for receipt of completed Application Forms from Qualifying Shareholders and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)

11.00 a.m. on 19 December

General Meeting

10.00 a.m. on 20 December

Announcement of results of the General Meeting and the Open Offer

20 December

Expected date of Admission and commencement of dealings in New Ordinary Shares

21 December

Expected date for CREST accounts to be credited with New Ordinary Shares

21 December

Share certificates in relation to New Ordinary Shares dispatched by

29 December

Notes:

Each of the times and dates set out in the above timetable and mentioned in this announcement is subject to change by the Company (with the agreement of Macquarie), in which event details of the new times and dates will be notified to the London Stock Exchange and the Company will make an appropriate announcement to a Regulatory Information Service.

References to times in this announcement are to London times unless otherwise stated.

Different deadlines and procedures for applications may apply in certain cases. For example, if Qualifying Shareholders hold their Ordinary Shares through a CREST member or other nominee, that person may set an earlier date for application and payment than the dates noted above.

 

FUNDRAISING STATISTICS

Closing Price(1)

19.75 pence

Issue Price

10 pence

Number of Existing Ordinary Shares in issue on the Record Date

320,271,086

Number of Firm Placing Shares

147,888,528

Number of Open Offer Shares

36,954,356

Open Offer Basic Entitlement

3 Open Offer Shares for every 26 Existing Ordinary Shares

Number of New Ordinary Shares

184,842,884

Enlarged Issued Share Capital immediately following Admission

505,113,970

Gross proceeds of the Firm Placing

£14.8 million

Gross proceeds of the Open Offer

£3.7 million

Estimated net proceeds of the Fundraising

£17.8 million

Percentage of the Enlarged Issued Share Capital represented by the New Ordinary Shares

36.6 per cent.

ISIN of the Existing Ordinary Shares (and the New Ordinary Shares to be admitted to trading following the Fundraising)

GB00BKX59Y86

SEDOL of the Existing Ordinary Shares (and the New Ordinary Shares to be admitted to trading following the Fundraising)

BKX59Y8

ISIN of the Open Offer Entitlements

GB00BF0W1859

ISIN of the Excess Open Offer Entitlements

GB00BF0W1966

Legal Entity Identifier (LEI)

2138001NJUREOWJ89O78

Assuming no Ordinary Shares are issued between the date of this announcement and Admission.

(1) Closing Price on 30 November 2017, being the latest practicable date prior to the announcement of the Fundraising.

 

1          INTRODUCTION

The Company has raised £18.5 million (US$25 million) before expenses comprising a Firm Placing of £14.8 million (US$20 million) and a Placing, subject to clawback under an Open Offer, of £3.7 million (US$5 million) through the issue of 184,842,884 New Ordinary Shares at an issue price of 10 pence per New Ordinary Share in order, inter alia, to fund on-going operations at the Liqhobong Diamond Mine. 

The Board is grateful for the continued support of its major Shareholders who have conditionally subscribed for the significant majority of the Fundraising.

The Issue Price represents a discount of 49.4 per cent. to the Closing Price on 30 November 2017 (the latest practicable date prior to the announcement of the Fundraising). Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will occur on or around 21 December 2017. The Firm Placing, Placing and the Open Offer are conditional, inter alia, on the passing of the Resolutions at the General Meeting. Shareholder approval will be sought in respect of the Firm Placing, Placing and the Open Offer at the General Meeting which is convened for 10.00 a.m. on 20 December 2017 at 4 More London Riverside, London SE1 2AU.

The Directors recognise the importance of pre-emption rights to Shareholders and the Open Offer provides Qualifying Shareholders with an opportunity to participate in the proposed issue of New Ordinary Shares at the Issue Price. RCF, Pacific Road and Edwards Family Holdings have undertaken not to subscribe for any New Ordinary Shares under the Open Offer in order to allow for other Qualifying Shareholders to apply for Excess Shares under the Excess Application Facility.

The Company also announced earlier today that it has:

·              formulated a revised mine plan to better cater for the current lower-than-expected diamond sale results in order to ensure the Company can mine sustainably should the lower average diamond values being achieved persist; and

·              reached agreement in principle with its lender, ABSA Bank Limited ("ABSA"), conditionally upon completion of the Fundraising and approval of both commercial and political risk insurance by the Export Credit Insurance Corporation of South Africa ("ECIC"), to, inter alia, defer capital repayments under the ABSA Debt Facility for a period of 18 months from 1 January 2018 to 30 June 2019 and extend the final maturity date by 30 months to December 2023.

2          BACKGROUND TO AND REASONS FOR THE FUNDRAISING AND USE OF PROCEEDS

Firestone is a diamond mining company with operations focused in Lesotho. Firestone commenced production at the Liqhobong Diamond Mine in Lesotho in October 2016. Liqhobong is owned 75 per cent. by Firestone and 25 per cent. by the Government of Lesotho. Lesotho is emerging as one of Africa's significant new diamond producers, hosting Gem Diamonds' Letseng Mine, Firestone's Liqhobong Diamond Mine and Namakwa Diamond's Kao Mine.

As announced on 29 September 2017, the Company has achieved lower than expected diamond prices in its sales for the last two quarters.  Notwithstanding an improvement in the average diamond value received at the most recent sale on 9 October 2017 of US$83 per carat, the Liqhobong Diamond Mine is still being affected by the combination of lower than expected occurrence of larger, better quality diamonds and on-going subdued market conditions for the lower quality diamonds.

The Liqhobong Diamond Mine is in the early stages of production. A degree of variability is to be expected during this period, particularly as mining operations are yet to access all of the areas of the ore body in a proportionate way. Since commencing operations in October 2016, around 0.6 million carats have been sold at an average value of US$82 per carat. This compares to the Company's updated definitive feasibility study in 2013 which was based on an estimated average base case value of US$107 per carat.

It was also announced on 29 September 2017 that the Company would require additional financing as well as a restructuring of its near-term debt obligations should it continue to achieve the current levels of diamond pricing. The Company has had productive discussions with its lender ABSA and its major Shareholders, the conclusion of which has been that the Fundraising, in conjunction with the amendments to the ABSA Debt Facility, is the best way to protect the interests of all stakeholders whilst enabling the Company, in the short term, to transition to a nine-year mine plan with higher near-term cash generation.

The revised mine plan will be focused in the near term on mining and treating ore over the whole ore body to obtain a more representative footprint than has been possible to date, as well as increasing the opportunity for the recovery of large gem stones which, by nature, are typically scarce and unpredictable. In the medium term, the Company will also be able to retain the flexibility to revert to the original 14-year plan should diamond prices recover materially.

The Fundraising, in conjunction with the amendments to the ABSA Debt Facility, is being undertaken in order to provide additional working capital to insulate the Company against any on-going weakness in the diamond market and any sustained under-recovery of larger, higher quality diamonds whilst, at the same time, allowing it to develop to a point where Liqhobong's long term potential is better understood.  Using a low-case diamond price assumption of US$75 per carat, the Directors anticipate that including the net proceeds of the Fundraising and the 18 month standstill on the ABSA Debt Facility capital repayments, Liqhobong will be cash flow break even after servicing all interest on the ABSA Debt Facility, working costs and stay in business capital as well as the necessary small corporate overhead.

The net proceeds of the Fundraising will be used:

·              to fund mining activities and to provide sufficient headroom while diamond market prices remain subdued, thereby enabling the Company to achieve its objective of better understanding the true potential of the ore body;

·              to service the December 2017 capital repayment of US$5.2 million under the ABSA Debt Facility

·              to fund the debt service reserve account with US$4.6 million in respect of the interest due under the ABSA Debt Facility during the standstill period; and

·              for other general on-going working capital expenditure.

The Company will continue to review, on an on-going basis, the quality of stones recovered and realised diamond values. The Directors believe that by adopting the shorter nine-year mine plan, with the benefit of the flexibility of reverting to the longer 14-year plan, the Company will be best positioned to operate on a sustainable basis should the lower average diamond values persist with the optionality of taking advantage of the longer life of mine should the average diamond values received increase or should there be an improvement in market conditions.

3          REVISED MINE PLAN

The Company has formulated a revised nine-year mine plan in conjunction with its technical advisers which it believes will deliver the best returns in the medium term at low risk whilst at the same time offering optionality of taking advantage of the longer life of mine should the average diamond values increase or should there be an improvement in market conditions. Should this occur, the Company will be able to revert to the original 14-year mine plan. The revised plan is over a shorter nine-year period and involves the stripping of 76.0 million fewer waste tonnes.  The Directors believe, following completion of the Fundraise and the amendment to the ABSA Debt Facility, Liqhobong will be cash generative at an operational level using the revised plan. Furthermore, over the following 18 months, the mining in the pit will cover a far more representative area of the ore, which the Directors expect to improve the likelihood of recovering higher quality stones and, in turn, provide a truer representation of diamond quality and pricing than has been possible from the production at Liqhobong to date.

Item

Unit

Existing mining plan (2015)

Revised mining plan (2017)

Difference

Ore mined/treated

mt

50.9

32.9

(18.0)

Waste mined

mt

105.0

29.0

(76.0)

Total mined

mt

155.9

61.9

(94.0)

Average strip ratio

Waste/ore

2.1

0.9

(1.2)

Plant capacity

mtpa

3.6

3.6

-

In-situ grade

cpht

27.3

23.5

(3.8)

Average annual production

mcts pa

1.0

0.9

(0.1)

Opex cost

ZAR/t treated

192.9

175.5

(17.4)

Opex cost

US$/t treated

14.5

13.0

(1.5)

Steady state operating exp.

US$/carat

53.2

55.2

2.0

Royalty

%

7%

5%

(2%)

Diamond price escalation (real)

%

3%

3%

-

Total carats

Million

13.9

7.7

(6.2)

Life of open pit mine

Years

14

9

(5)

 

4          ILLUSTRATIVE EXAMPLES

Year-end cash position following completion of the Fundraising

The following table sets out illustrative examples of the Company's year-end cash position following completion of the Fundraising and amendment to the ABSA Debt Facility based on a US$75, US$80 and US$90 per carat diamond price and a number of other assumptions, the key ones of which are summarised below.

US$ per carat diamond price

 

Cash position at year end (US$m)

 

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

US$75

11

12

13

12

12

10

17

38

67

80

US$80

13

18

24

29

33

35

45

70

104

118

US$90

18

31

47

61

75

84

102

135

178

196

The key assumptions to the illustrative examples above are:

·              US$ per carat diamond prices adjusted for real price inflation of 3 per cent. per annum);

·              Liqhobong operating assumptions consistent with the revised mine plan;

·              ZAR:US$ exchange rate of ZAR13.50:US$1;

·              maintenance capex of US$2 million in FY2018, c.US$1 million for FY2019 to FY 2026;

·              US$25 million capital raise and 18 month debt standstill (capital repayment) from January 2018 to 30 June 2019;

·              opening cash balance of US$4.3 million on 1 October 2017;

·              additional net aggregate working capital inflows (dependent on timing of sales etc.) for FY18 to FY27 of c.US$2 million; and

·              only repayment of the ABSA Debt Facility modelled (i.e. excludes repayment of the Series A Bonds and the Series B Bonds).

Revised mine plan NPV

The following table sets out the indicative NPV of Liqhobong following completion of the Fundraising and amendment to the ABSA Debt Facility based on a US$75, US$80, US$90, US$100, US$110 and US$120 per carat diamond price and a number of other assumptions, the key ones of which are summarised below.

US$ per carat diamond price

US$75

US$80

US$90

US$100

US$110

US$120

NPV (US$m)

114

141

195

240

284

328

The key assumptions to the indicative NPV of Liqhobong above are:

·              US$ per carat diamond prices adjusted for real price inflation of 3 per cent. per annum;

·              Liqhobong operating assumptions consistent with the revised mine plan; and

·              NPV before the repayment of the ABSA Debt Facility, the Series A Bonds and the Series B Bonds.

The information used to prepare the illustrative examples above has been compiled from a number of sources. The illustrative examples have not been audited and are based on a number of assumptions (including the key assumptions set out above). The illustrative examples do not constitute profit forecasts and the Company's actual cash position at year-end and/or NPV will be based on a number of factors, including future diamond price and exchange rates, which, if different from the assumptions above would result in the Company's actual cash position at year-end and/or NPV being materially different from the tables set out above.

5          TRADING UPDATE

The Liqhobong Diamond Mine

 

Liqhobong construction was largely completed on-time and on-budget in October 2016 without a single lost time injury.  Plant commissioning and ramp up activities were completed in June 2017 and steady state commercial production was reached at the end of June 2017.  365,891 carats were recovered during FY 2017, whilst diamond sales for the financial year saw 310,376 carats sold, generating total sale proceeds of US$27.8 million, achieving an average value of US$90 per carat.  The Company has now  reached over five million man-hours worked whilst maintaining its record of zero lost time injuries.

Of the 2,878,952 tonnes treated for the twelve months to 30 September 2017, 80 per cent. came from the lower grade K2 material in the pit with some dilution, seven per cent. came from the K4 material also with some dilution, 13 per cent. came from K5 and coming from historic mixed stockpiles used during the initial commissioning stages.

Summary of sales and diamond market update*

 


Q3 FY 2017

Q4 FY 2017

Q1 FY 2018

Q2 FY 2018

Carats sold

127,590 cts

182,786 cts

195,330 cts

69,193 cts

Total sales

US$13.7m

US$14.1m

US$13.5m

US$5.7m

Average value

US$107/ct

US$77/ct

US$69/ct

US$83/ct

*Two sales per quarter except Q2 FY 2018 (one sale).

As reported in the 29 September 2017 operational update, the Company believes that the widely reported November 2016 Indian de-monetisation programme continues to impact diamond pricing, in particular in the market for smaller stones that comprise the bulk of the run-of-mine goods sold in the Company's sales to date. The initial impact of the de-monetisation was a drop in prices as a result of demand reduction, which has been exacerbated by an oversupply of goods that has since kept pricing at depressed levels.

It was encouraging that the Company's October 2017 sale saw an improvement in pricing for both finer sized stones and larger stones and included the sale of a 133 carat gem-quality light yellow diamond (the largest diamond recovered at Liqhobong to date).

Near-term headwinds aside, the Directors believe that the long-term fundamentals of the diamond sector remain strong.

6          SUMMARY OF THE GROUP'S FINANCING ARRANGEMENTS

6.1       The ABSA Debt Facility

As announced on 11 April 2014, ABSA granted the Group a project debt finance facility of up to US$82.4 million for the construction and commissioning of Liqhobong.  The terms of the ABSA Debt Facility included a total term of 6.5 years, with an 18 month draw down period for construction and with the repayment of capital occurring in the final 4.5 years of the loan term.

ABSA has agreed, in principle, to (i) an 18 month debt standstill on capital repayments for the period from 1 January 2018 to 30 June 2019; and (ii) an extension of the final maturity date by 30 months to December 2023. The financial covenants and definition of financial completion in the ABSA Debt Facility would also be revised to reflect the revised mine plan and remaining life of the facility and the cash sweep would be increased from 40 per cent. to 50 per cent. after provision for sufficient working capital.  A credit review will be held in twelve months' time to assess actual performance against expectations and consider additional restructuring actions if necessary. ABSA will also have the ability to call a credit review before December 2018 or to declare default in the event of average diamond values for three consecutive sales being below US$70 per carat, which is below the base case value of US$75 per carat adopted by ABSA for measurement during the standstill period.  The Company also expects an increase of between 0.25 per cent. and 0.5 per cent. in the margin rates payable, together with a potential increase in the ECIC premium (depending on the outcome of the ECIC review). These amendments are conditional, inter alia, on:

·              approval of both commercial and political risk insurance by the ECIC;

·              the Company raising at least US$20 million pursuant to the Fundraising;

·              the Company's debt service reserve account to be expanded to cover 18 months' interest during the standstill period; and

·              other customary conditions standard for facilities of this nature including documentation and the signing of material contracts.

An illustrative comparison of the scheduled capital repayment profiles of the existing and proposed ABSA Debt Facility are set out in the table below.


FY18

FY19

FY20

FY21

FY22

FY23

FY24

Existing ABSA Debt Facility (US$m)

19.5

22.1

20.3

15.9

-

-

-

Proposed ABSA Debt Facility (US$m)

9.9

1.9

10.2

14.0

21.2

11.5

9.0

The Company believes that good progress is being made in relation to satisfying the conditions precedent for such amendments.

6.2       The Series A Bonds

As previously announced, on 26 May 2014, the Company entered into the Mezzanine Facility whereby US$15.0 million was agreed to be provided by each of Pacific Road and RCF (US$30.0 million in aggregate). The Mezzanine Facility has an interest rate of 8.0 per cent. per annum payable quarterly in arrears. All interest payments are payable in cash save that the Group may, at its discretion, provided that no event of default is subsisting and no requirement under Rule 9 of the Takeover Code to make a mandatory offer would be triggered, elect to satisfy such payment by way of the issue of new Ordinary Shares at an issue price equal to the 20 day VWAP of an Ordinary Share. The Mezzanine Facility is repayable on 20 August 2022.

On 24 April 2015 it was announced that the Mezzanine Facility was being restructured by way of an issue of quoted Eurobonds and, accordingly, the Company issued US$30.0 million principal amount of Series A Bonds. The Series A Bonds have the same commercial terms (described in the Company's circular to Shareholders dated 24 April 2015) as the Mezzanine Facility.

As at the date of this announcement, the Company has issued 5,936,792 new Ordinary Shares and 5,341,480 new Ordinary Shares to RCF and Pacific Road respectively to satisfy the payment of interest under the Series A Bonds and it is currently the Directors intention to continue to issue Ordinary Shares to satisfy such interest payments.

As part of the funding package provided by RCF and Pacific Road, each received 2014 Warrants entitling each of them to subscribe for 24,393,218 new Ordinary Shares.

6.3       The Series B Bonds

As previously announced, under the terms of the ABSA Debt Facility, the Company was required to secure a separate standby debt facility to fund any potential cost over-runs or delays in respect of the Liqhobong Diamond Mine, to remain in place until the mine achieved technical and financial completion. RCF agreed to provide this facility by agreeing to subscribe for Series B Bonds.

Following the amendment and restatement of the Series B Bonds announced on 22 June 2017, the Company was granted put options by RCF to require RCF to purchase any or all of the Series B Bonds at a price of US$1,000 per Series B Bond in minimum drawdowns of US$2.0 million (and thereafter in US$1 million increments), up to a maximum of US$15.0 million.

As at the date of this announcement the Company has issued US$7.0 million Series B Bonds to RCF with a further US$8.0 million of Series B Bonds available.

In order to facilitate the ability of the holder of the Series B Bonds to elect to receive new Ordinary Shares, as opposed to cash on the redemption of the Series B Bonds by the Company, the Company agreed that, upon the issue of a Series B Bond, the Company will also issue RCF with Series B Warrants. The Series B Warrants are attached to the Series B Bonds and, on redemption of the Series B Bonds by the Company, RCF (or any third party to whom the Series B Bonds have been transferred) may exercise the Series B Warrants such that they will receive such number of new Ordinary Shares as is equal to the applicable redemption amount divided by the applicable exercise price, as opposed to the applicable redemption amount in cash.

Further details of the Series B Bonds and the Series B Warrants are contained in the Company's circular to Shareholders dated 24 April 2015 and its announcement dated 22 June 2017.

7          FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2017

The Company announced its final results for the year to 30 June 2017 earlier today. A copy of the final results is available on the Company's website at www.firestonediamonds.com. Shareholders should read those results in full before making any application for Open Offer Shares.

8          DETAILS OF THE FUNDRAISING

The Company has conditionally raised £18.5 million (US$25 million) before expenses, comprising: (i) a Firm Placing to raise £14.8 million; and (ii) a Placing, subject to clawback under an Open Offer, to raise an additional £3.7 million, in each case through the issue of New Ordinary Shares at the Issue Price.  The New Ordinary Shares will represent 36.6 per cent. of the Enlarged Issued Share Capital. Macquarie, as agent of the Company, has conditionally placed the Firm Placing Shares and the Placing Shares at the Issue Price pursuant to the Placing and Open Offer Agreement. The Fundraising is not underwritten.

Qualifying Shareholders are being offered the right to subscribe for Open Offer Shares in accordance with the terms of the Open Offer. Qualifying Shareholders are not being offered the right to subscribe for the Firm Placing Shares.

The Board considers the Firm Placing, Placing and the Open Offer to be an appropriate fundraising structure, providing certainty of funds to complete the plans outlined above whilst providing existing Shareholders with the opportunity to participate in the Fundraising through the Open Offer.

The terms and conditions of the Open Offer are set out in Part 2 of the Circular.

All elements of the Fundraising have the same Issue Price. The Issue Price of 10 pence per New Ordinary Share represents a 49.4 per cent. discount to the Closing Price of 19.75 pence per Existing Ordinary Share on 30 November 2017 (being the latest practicable date prior to the publication announcement of the Fundraising). The Issue Price has been set by the Directors following their assessment of market conditions and following discussions with its major Shareholders. The Directors are in agreement that the level of discount and method of issue are appropriate to secure the investment necessary.

Firm Placing

Macquarie, as agent for the Company and pursuant to the Placing and Open Offer Agreement, has conditionally placed the Firm Placing Shares at the Issue Price to raise gross proceeds of £14.8 million. The Firm Placing Shares represent approximately 80.0 per cent. of the New Ordinary Shares and have been placed with institutional and other investors, including RCF and Pacific Road. The Firm Placing Shares are not subject to clawback.

Placing and Open Offer

The Directors recognise the importance of pre-emption rights to Shareholders and consequently 36,954,356 Open Offer Shares are being offered to existing Shareholders by way of the Open Offer. The Open Offer provides Qualifying Shareholders with an opportunity to participate in the Fundraising by subscribing for their respective Basic Entitlements and Excess Entitlements. RCF, Pacific Road and Edwards Family Holdings have undertaken not to subscribe for any New Ordinary Shares under the Open Offer in order to allow for other Qualifying Shareholders to apply for Excess Shares under the Excess Application Facility.

As part of the Placing and Open Offer, Macquarie as agent for the Company and pursuant to the Placing and Open Offer Agreement has conditionally placed the Placing Shares with Placees who have agreed to subscribe for the Placing Shares at the Issue Price.

Subject to the fulfilment of the conditions set out below and in Part 2 of the Circular, Qualifying Shareholders are being given the opportunity to subscribe for Open Offer Shares under the Open Offer at the Issue Price, payable in full on application and free of all expenses, pro rata to their existing shareholdings on the following basis:

3 Open Offer Shares for every 26 Existing Ordinary Shares

Open Offer Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Open Offer Shares will not be allocated and will be disregarded. Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their Basic Entitlement.

If Qualifying Shareholders have sold or otherwise transferred all of their Existing Ordinary Shares after the ex-entitlement Date, they shall not entitled to participate in the Open Offer.

The Open Offer is not a rights issue. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying Non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should be aware that under the Open Offer, unlike in a rights issue, any New Ordinary Shares not applied for will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer, but will be placed with Placees pursuant to the Placing and Open Offer Agreement, and the net proceeds will be retained, for the benefit of the Company.

Application has been made for the Open Offer Entitlements of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements will be admitted to CREST on 5 December 2017.

The Open Offer Entitlements will also be enabled for settlement in CREST on 5 December 2017 to satisfy bona fide market claims only. Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

Further details of the Open Offer and the terms and conditions on which it is being made, including the procedure for application and payment, are contained in Part 2 of the Circular and for Qualifying Non-CREST Shareholders on the Application Form. To be valid, Application Forms (duly completed) and payment in full for the Open Offer Shares applied for must be received by Link Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, by no later than 11.00 a.m. on 19 December 2017.

Qualifying Non-CREST Shareholders will receive an Application Form with the Circular which sets out their maximum entitlement to Open Offer Shares as shown by the number of Basic Entitlements allocated to them.

Qualifying Shareholders are also being given the opportunity, provided that they take up their Basic Entitlements in full, to apply for Excess Entitlements through the Excess Application Facility.

Excess Application Facility

The Excess Application Facility will enable Qualifying Shareholders, provided that they take up their Basic Entitlements in full, to apply for Excess Entitlements. Qualifying Non-CREST Shareholders who wish to apply to acquire more than their Basic Entitlements should complete the relevant sections on the Application Form.

Qualifying CREST Shareholders will have Excess Entitlements credited to their stock account in CREST and should refer to paragraph 3.2 of Part 2 of the Circular for information on how to apply for Excess Entitlements pursuant to the Excess Application Facility. Applications for Excess Entitlements will be satisfied only and to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their Basic Entitlements and may be scaled back at the Company's absolute discretion.

Once subscriptions by Qualifying Shareholders under their Basic Entitlements have been satisfied, the Company shall, in its absolute discretion, determine whether or not to meet any applications for Excess Entitlements in full or in part and no assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full, in part or at all. Application will be made for the Basic Entitlements and Excess Entitlements in respect of Qualifying CREST Shareholders to be admitted to CREST.

It is expected that New Ordinary Shares issued pursuant to subscriptions by Qualifying Shareholders exercising their Basic Entitlements and Excess Entitlements will be admitted to CREST at 8.00 a.m. on 21 December 2017. Such New Ordinary Shares will also be enabled for settlement in CREST at 8.00 a.m. on 21 December 2017. Applications through the means of the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. Qualifying Non-CREST Shareholders will receive an Application Form with the Circular which sets out their entitlement to Open Offer Shares as shown by the number of Basic Entitlements allocated to them. Qualifying Non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded.

Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Basic Entitlements on 5 December 2017. Qualifying CREST Shareholders should note that although the Basic Entitlements and Excess Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of their Open Offer Entitlements may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. If applications are made for less than all of the Open Offer Shares available, then the lower number of Open Offer Shares will be issued and any outstanding Basic Entitlements will lapse.

Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part 2 of the Circular. For Qualifying Non-CREST Shareholders, completed Application Forms, accompanied by full payment, should be returned by post, or by hand (during normal business hours only), to Link Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU so as to arrive as soon as possible and in any event so as to be received no later than 11.00 a.m. on 19 December 2017. For Qualifying CREST Shareholders the relevant CREST instructions must have been settled by no later than 11.00 a.m. on 19 December 2017.

Basis of allocation under the Fundraising

The Placing may be scaled back at the Company's absolute discretion in order to satisfy valid applications by Qualifying Shareholders under the Open Offer. The Open Offer is being made on a pre-emptive basis to Qualifying Shareholders. Any New Ordinary Shares that are available under the Open Offer and are not taken up by Qualifying Shareholders pursuant to their Open Offer Entitlements will be reallocated to the Placing.

The number of Placing Shares to be clawed back from Placees to satisfy valid applications by Qualifying Shareholders under the Open Offer will be calculated pro rata to each Placee's commitment to subscribe for Placing Shares.

Other information relating to the Fundraising

Each of the placing of the Firm Placing Shares, the Placing Shares and the issue of the Open Offer Shares is conditional, inter alia, upon Admission becoming effective by no later than 8.00 a.m. on 21 December 2017 (or such later time and/or date as Macquarie and the Company may agree being no later than 8.00 a.m. on 29 December 2017). The Placing is conditional on completion of the Open Offer.

The Open Offer is subject to the satisfaction, amongst other matters, of the following conditions on or before 21 December 2017 (or such time and date being no later than 8.00 a.m. on 29 December 2017, as the Company may decide):

·      Admission becoming effective by 8.00 a.m. on 21 December 2017 (or such later time or date not being later than 8.00 a.m. on 29 December 2017 as the Company may decide);

·      the Placing and Open Offer Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms; and

·      the Resolutions having been duly passed without amendment at the General Meeting and the Resolutions becoming unconditional.

In the event that the Open Offer does not become unconditional by 8.00 a.m. on 21 December 2017 (or such later time and date as the Company may decide being no later than 8.00 a.m. on 29 December 2017), the Open Offer will lapse and application monies will be returned by post to the Applicant(s) at the Applicant's risk and without interest, to the address set out in the Application Form, within 14 days thereafter.

The New Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission.

Settlement and dealings

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings will commence at 8.00 a.m. on 21 December 2017. Further information in respect of settlement and dealings in the New Ordinary Shares is set out in paragraph 7 of Part 2 of the Circular.

Overseas Shareholders

Certain Overseas Shareholders may not be permitted to subscribe for Open Offer Shares pursuant to the Open Offer and should refer to paragraph 6 of Part 2 of the Circular.

9          RELATED PARTY TRANSACTIONS

9.1       Participation in the Firm Placing by the Directors

The following Directors are subscribing for New Ordinary Shares at the Issue Price pursuant to the Fundraising:

Director

No. of Ordinary Shares held prior to the Fundraising

No. of Ordinary Shares subscribed pursuant to the Fundraising

No. of Ordinary Shares held following completion of the Fundraising

Percentage of Enlarged Issued Share Capital held following completion of the Fundraising

Lucio Genovese

2,846,944

739,372

3,586,316

0.71%

Stuart Brown

507,148

369,686

876,834

0.17%

Keith Johnson

282,997

110,906

393,903

0.08%

The Directors are subscribing for New Ordinary Shares directly with the Company and not as Placees.

9.2       Participation in the Fundraising by RCF and Pacific Road

RCF and Pacific Road currently hold 77,083,679 Ordinary Shares (24.07 per cent. of the existing issued ordinary share capital) and 76,488,367 Ordinary Shares (23.88 per cent. of the existing issued ordinary share capital) respectively, making them substantial shareholders in the Company for the purpose of the AIM Rules. RCF is subscribing for 44,362,292 Firm Placing Shares and 14,780,320 Placing Shares and Pacific Road is subscribing for 44,362,292 Firm Placing Shares and 14,780,320 Placing Shares and therefore these constitute related party transactions in accordance with Rule 13 of the AIM Rules. Following the Fundraising (and assuming no Placing Shares subscribed by RCF or Pacific Road are clawed-back under the Open Offer), RCF will hold 136,226,291 Ordinary Shares (26.97 per cent. of the Enlarged Issued Share Capital) and Pacific Road will hold 135,630,979 Ordinary Shares (26.85 per cent. of the Enlarged Issued Share Capital). The Directors (apart from Mr. Keith Johnson and Mr. Niall Young, who are RCF's nominee and Pacific Road's nominee on the Board respectively and therefore are not deemed to be independent) consider, having consulted with Macquarie, that the participation of RCF and Pacific Road in the Firm Placing is fair and reasonable insofar as Shareholders are concerned.

For the avoidance of doubt, following completion of the Fundraising: (i) RCF will continue to hold 2014 Warrants entitling them to subscribe for 24,393,218 new Ordinary Shares and the Series B Warrants; (ii) Pacific Road will continue to hold 2014 Warrants entitling them to subscribe for 24,393,218 new Ordinary Shares; and (iii) the Company currently intends to continue to issue new Ordinary Shares to RCF and Pacific Road to satisfy future payment of interest under the Series A Bonds.

10        GENERAL MEETING

The General Meeting of the Company is to be held at 10.00 a.m. on 20 December 2017, at the offices of 4 More London Riverside, London SE1 2AU. The General Meeting is being held for the purpose of considering and, if thought fit, passing the Resolutions in order to approve the Fundraising.

11        RECOMMENDATION AND VOTING INTENTIONS

The Board believe that the Fundraising is in the best interests of the Shareholders and the Company as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions as they and Shareholders connected with them intend to do so in respect of their aggregate beneficial holdings of Ordinary Shares.

 

IMPORTANT INFORMATION

This announcement is for information purposes only and does not itself constitute an offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of any securities in the Company and does not constitute investment advice.

Neither this announcement nor any copy of it may be taken or transmitted, published or distributed, directly or indirectly, into the United States, Australia, Canada, Japan or South Africa or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian, Japanese or South African securities laws. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe any such restrictions.

This announcement does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Ordinary Shares or other securities in the United States (including its territories and possessions, any state of the United States and the District of Colombia (the United States or US)), Australia, Canada, Japan or South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

The Fundraising and the distribution of this announcement and other information in connection with the Fundraising in certain jurisdictions may be restricted by law and persons into whose possession this announcement, any document or other information referred to herein, comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

In particular, the securities of the Company (including the New Ordinary Shares) have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws or with any securities regulatory authority of any state or other jurisdiction of the United States, and accordingly the New Ordinary Shares may not be offered, sold, pledged or transferred, directly or indirectly, in, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any relevant state or jurisdiction of the United States. There is no intention to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.

The New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Fundraising or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

Macquarie Capital (Europe) Limited ("Macquarie") is authorised and regulated in the United Kingdom by the FCA, is acting as nominated adviser, sole bookrunner and broker to the Company in respect of the Fundraising. Macquarie is acting for the Company and for no-one else in connection with the Fundraising, and will not be treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protections afforded to its customers nor for providing advice in connection with the Fundraising or any other matters referred to herein and apart from the responsibilities and liabilities (if any) imposed on Macquarie by Financial Services and Markets Act 2000 (as amended) ("FSMA"), any liability therefor is expressly disclaimed. Any other person should seek their own independent legal, investment and tax advice as they see fit.

For the avoidance of doubt, Macquarie does not have any obligation to use its reasonable endeavours to place, as agent for the Company, any Firm Placing Shares subscribed directly with the Company at the Issue Price (as more particularly set out at paragraph 9 above) and references to Firm Placing Shares in this announcement shall be interpreted mutatis mutandis.

FORWARD LOOKING STATEMENTS

This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "predict" or other words of similar meaning. Examples of forward-looking statements include, amongst others, statements regarding or which make assumptions in respect of the planned use of the proceeds for the Fundraising, the Group's liquidity position, the future performance of the Group, future interest rates and currency controls, the Group's future financial position, plans and objectives for future operations and any other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in interest rates and foreign exchanges rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under IFRS applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond the Company's control. As a result, the Company's actual future results may differ materially from the plans, goals, and expectations set forth in the Company's forward-looking statements. Any forward-looking statements made in this announcement by or on behalf of the Company speak only as of the date they are made. These forward looking statements reflect the Company's judgement at the date of this announcement and are not intended to give any assurance as to future results. Except as required by the FCA, the London Stock Exchange, the AIM Rules or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

References

All times referred to in this announcement are, unless otherwise stated, references to UK time.

All references in this announcement to "£", "pence" or "p" are to the lawful currency of the UK, references to "US$" are to the lawful currency of the United States and references to "ZAR" are to the lawful currency of the Republic of South Africa.



 

DEFINITIONS

The following definitions apply throughout this announcement, unless the context requires otherwise:

 

2014 Warrants

warrants to subscribe for, in aggregate, 48,786,436 new Ordinary Shares, as more particularly described in the Company's circular dated 11 April 2014

ABSA

ABSA Bank Limited, acting through its Corporate Investment Banking division

ABSA Debt Facility

the US$82.4 million project debt finance facility provided by ABSA to LMDC

Admission

admission of the New Ordinary Shares to trading on AIM and such admission becoming effective in accordance with the AIM Rules

AIM

the AIM market operated by the London Stock Exchange

AIM Rules

the AIM Rules for Companies and/or the AIM Rules for Nominated Advisers (as the context may require)

AIM Rules for Companies

the rules of AIM as set out in the publication entitled 'AIM Rules for Companies' published by the London Stock Exchange from time to time

AIM Rules for Nominated Advisers

the rules of AIM as set out in the publication entitled 'AIM Rules for Nominated Advisers' published by the London Stock Exchange from time to time

Application Form

the application form accompanying the Circular to be used by Qualifying Non-CREST Shareholders in connection with the Open Offer

Basic Entitlement(s)

the entitlement to subscribe for Open Offer Shares, allocated to a Qualifying Shareholder pursuant to the Open Offer

Board or Directors

the board of directors of the Company for the time being

certificated or in certificated form

the description of a share or other security which is not in uncertificated form (that is not in CREST)

Circular

the Circular to be sent to Shareholders on or around 1 December 2017 containing details of the Fundraising and the General Meeting

Closing Price

the closing middle market quotation of an Ordinary Share as derived from the Daily Official List of the London Stock Exchange

Company or Firestone

Firestone Diamonds plc, a company incorporated in England and Wales with registered number 03589905 and having its registered office at The Triangle, 5 - 17 Hammersmith Grove, London W6 0LG

CREST

the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations)

CREST Manual

the compendium of documents entitled "CREST Manual" issued by Euroclear from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, the CREST Rules, the CCSS Operations Manual and the CREST Glossary of Terms

CREST Member

a person who has been admitted by Euroclear as a system member (as defined in the CREST Regulations)

CREST Participant

a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations)

CREST Payment

shall have the meaning given in the CREST Manual

CREST Proxy Instruction

the appropriate CREST message made to appoint a proxy, properly authenticated in accordance with Euroclear's specifications

CREST Regulations

the Uncertificated Securities Regulations 2001 (as amended)

CREST Sponsor

a CREST participant admitted to CREST as a CREST sponsor

CREST Sponsored Member

a CREST member admitted to CREST as a sponsored member

ECIC

Export Credit Insurance Corporation of South Africa SOC LTD

Enlarged Issued Share Capital

the issued share capital of the Company immediately following Admission

EU

the European Union

Eurobonds

the Series A Bonds and/or Series B Bonds, as appropriate

Euroclear

Euroclear UK & Ireland Limited

Excess Application Facility

the facility pursuant to which Qualifying Shareholders may apply to subscribe for such number of Open Offer Shares in excess of their Basic Entitlements

Excess Entitlement(s)

in respect of a Qualifying Shareholder, the entitlement (provided that the Qualifying Shareholder has agreed to take up its Basic Entitlement in full) to apply for Open Offer Shares in excess of the Basic Entitlement

Existing Ordinary Shares

the 320,271,086 Ordinary Shares in issue at the Record Date

FCA

the UK Financial Conduct Authority

Firm Placing Shares

the 146,668,564 new Ordinary Shares to be issued by the Company under the Firm Placing at the Issue Price and, where the context requires, the 1,219,964 new Ordinary Shares to be subscribed by certain Directors as more particularly described at paragraph 9.1 of this announcement

Firm Placing

the placing of the 146,668,564 Firm Placing Shares pursuant to the Placing and Open Offer Agreement and, where the context requires, the subscription of 1,219,964 new Ordinary Shares by certain Directors as more particularly described at paragraph 9.1 of this announcement

FSMA

the UK Financial Services and Markets Act 2000 (as amended)

Fundraising

the Firm Placing, and the Placing and Open Offer

General Meeting

the general meeting of the Company in relation to the Fundraising to be held at 10.00 a.m. on 20 December 2017

Group

the Company and/or its subsidiary undertakings at the date of this announcement (as defined in sections 1159 and 1160 of the Act)

ISIN

International Securities Identification Number

Issue Price

10 pence per New Ordinary Share

Lesotho

the Kingdom of Lesotho

Lesotho Government

the Government of the Kingdom of Lesotho

Link Asset Services

a trading name of Link Market Services Limited, a company incorporated in England and Wales with registered number 02605568 and having its registered office at The Registry, Beckenham, Kent BR3 4TU

Liqhobong or Liqhobong Diamond Mine

the Liqhobong Diamond Mine which is located in the Lesotho Highlands

LMDC

Liqhobong Mining Development Company (Pty) Limited, which is 75 per cent. owned by the Company and 25 per cent. owned by the Lesotho Government, which operates the Liqhobong Diamond Mine

London Stock Exchange

London Stock Exchange plc

Macquarie

Macquarie Capital (Europe) Limited, a private limited company incorporated in England and Wales under registered number 03704031 and having its registered office at Ropemaker Place, 28 Ropemaker Street, London EC2Y 9HD, the Company's nominated adviser and sole broker for the purposes of the Fundraising and Admission

Mezzanine Facility

the mezzanine facility for US$30 million in total received from Pacific Road and RCF

New Ordinary Shares

together, the Firm Placing Shares, the Placing Shares and the Open Offer Shares

Notice of General Meeting

the notice of General Meeting, set out in the Circular

Open Offer

the conditional invitation by the Company to Qualifying Shareholders to apply to subscribe for Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in the Circular and in the case of the Qualifying Non-CREST Shareholders only, the Application Form

Open Offer Entitlements

an entitlement to subscribe for Open Offer Shares, allocated to a Qualifying Shareholder under the Open Offer (and, for the avoidance of doubt, references to Open Offer Entitlements include Basic Entitlements and Excess CREST Open Offer Entitlements)

Open Offer Shares

36,954,356 New Ordinary Shares to be offered to Qualifying Shareholders under the Open Offer

Ordinary Shares

the ordinary shares of one penny each in the capital of the Company

Overseas Shareholders

Shareholders with registered addresses outside the UK or who are citizens of, incorporated in, registered in or otherwise resident in, countries outside the UK

Pacific Road

(i) Pacific Road Resources Fund II L.P. represented by Pacific Road Capital Management GP II Limited; and (ii) Pacific Road Resources Fund II represented by Pacific Road Capital II PTY Limited

Placees

any persons who have agreed to subscribe for Placing Shares pursuant to the Placing

Placing

the placing of the Placing Shares pursuant to the Placing and Open Offer Agreement

Placing Shares

36,954,356 new Ordinary Shares (excluding the Firm Placing Shares) to be issued by the Company under the Placing at the Issue Price in accordance with the terms of the Placing and Open Offer Agreement; and which number shall reduce commensurate with the number of Open Offer Shares to be issued

Placing and Open Offer Agreement

the conditional placing and offer agreement dated 1 December 2017 between the Company and Macquarie relating to the Fundraising

Prospectus Rules

the rules made by the FCA under Part VI of FSMA in relation to offers of transferable securities to the public and admission of transferable securities to trading on a regulated market

Qualifying CREST Shareholders

Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are in uncertificated form

Qualifying Non-CREST Shareholders

Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are held in certificated form

Qualifying Shareholders

holders of Existing Ordinary Shares on the register of members of the Company at the Record Date with the exception (subject to certain exceptions) of Shareholders resident in or citizens of any Restricted Jurisdiction

RCF

Resource Capital Fund VI L.P.

Record Date

5.30 p.m. on 30 November 2017 being the latest time by which transfers of Existing Ordinary Shares must be received for registration by the Company in order to allow transferees to be recognised as Qualifying Shareholders

Regulatory Information Service

has the meaning given in the AIM Rules for Companies

Resolutions

the resolutions to be proposed at the General Meeting which are set out in full in the Notice of General Meeting

Restricted Jurisdictions

each of Australia, Canada, Japan, the Republic of South Africa, New Zealand and the United States

Securities Act

the US Securities Act of 1933, as amended from time to time and the rules and regulations promulgated thereunder

Series A Bonds

has the meaning given to such term at paragraph 6.2 above

Series B Bonds

has the meaning given to such term at paragraph 6.3 above

Series B Warrants

has the meaning given to such term at paragraph 6.3 above

Shareholders

holders of Existing Ordinary Shares

uncertificated or uncertificated form

recorded on a register of securities maintained by Euroclear in accordance with the CREST Regulations as being in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST

Takeover Code

the City Code on Takeovers and Mergers

UK or United Kingdom

the United Kingdom of England, Scotland, Wales and Northern Ireland

US or United States

the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia

£ or sterling

pounds sterling, the legal currency of the United Kingdom; and

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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