Amara Mining PLC Results of Upsized Placing (6949C)

TIDMAMA

RNS Number : 6949C

Amara Mining PLC

21 January 2015

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR PUBLICATION, RELEASE OR DISSEMINATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF SUCH JURISDICTIONS.

21 January 2015 AIM:AMA

Amara Mining plc

("Amara" or the "Company")

RESULTS OF PLACING

UPSIZED PLACING TO RAISE GBP14.6 MILLION (US$22.0 MILLION)

Amara, the AIM listed West African focused gold mining company, is pleased to announce the successful completion of the oversubscribed Bookbuild for the conditional placing (the "Placing") announced on 20 January 2015.

A total of 91,250,000 new ordinary shares (the "Placing Shares") have been conditionally placed by Peel Hunt LLP ("Peel Hunt") and GMP Securities Europe LLP ("GMP") at a price of 16.0 pence per share (the "Placing Price") with certain existing and new institutional and other investors to raise gross proceeds of GBP14.6 million (approximately US$22.0 million). The completion of the Placing is conditional upon inter alia the approval of shareholders in a general meeting of the Company (the "General Meeting") and admission of the Placing Shares to trading on AIM ("Admission").

Highlights

-- Following the Placing, Amara will be fully funded to the point of making a construction decision for its Yaoure Gold Project ("Yaoure") in Côte d'Ivoire, including the delivery of a Bankable Feasibility Study ("BFS") in Q4 2015

-- Introduction of a mining-focused investment group, Tembo Capital Mining Fund LP ("Tembo Capital") as a new strategic investor in the Company

-- The Placing demonstrates the confidence and commitment of the Company's existing and new shareholders in Yaoure, the Company and its management team

   --     Funds from the Placing to be used as follows: 

o to deliver a BFS at Yaoure in Q4 2015

o further exploration of Yaoure to deliver additional Measured and Indicated Resources into the economic pit-shells, expand the current in-pit Mineral Resources and follow up regional targets for further resource growth

o general working capital purposes to the point of making a construction decision in H1 2016

John McGloin, Chairman and Chief Executive Officer of Amara, commented:

"With the proposed placing, we will secure the financing of the Yaoure Gold Project through to a construction decision. I am delighted with the support we've received from our existing shareholders and new shareholders for this upsized and oversubscribed fundraise. I am particularly pleased to welcome Tembo Capital, providing a further endorsement for the project. With a production profile of 279,000 ounces/annum over a 10 year life, Yaoure has the potential to be one of the top gold mines in Africa by production. Its total costs are also forecast to be among the lowest five mines in Africa. It is testimony to Yaoure's compelling economics that even in an unpredictable gold price environment the project received such strong backing to allow Amara to continue to unlock its value."

"While previously we were financed to complete the PFS, we agreed with our major shareholders that a low cash position would leave Amara vulnerable at a time when it is important for us to keep moving forwards as rapidly as possible. This fundraise will enable Amara to further de-risk and increase confidence in Yaoure during 2015. I look forward to delivering the PFS for Yaoure later this quarter, which will be based upon the recently announced 6.8 million ounce Mineral Resource. Following this we will recommence our exploration work to further improve confidence in the Yaoure deposit, which will support a BFS in Q4 2015, add further Measured and Indicated Resources into the economic pit-shells and understand the regional opportunities for further mineralisation. From here, we will be well informed to make a construction decision to bring Africa's next major gold mine into production."

Unless otherwise defined, capitalised terms in this announcement shall have the meaning ascribed to them in the definitions section at Appendix I of the announcement of 20 January 2015.

For more information please contact:

 
  Amara Mining plc 
    John McGloin, Chairman and Chief Executive 
    Officer 
    Pete Gardner, Finance Director 
    Katharine Sutton, Head of Investor            [phone] 
    Relations                                      1420 
   Peel Hunt LLP 
    (Nominated Adviser & Joint Broker) 
    Matthew Armitt                                [phone] 
    Ross Allister                                  8900 
   GMP Securities Europe LLP 
    (Joint Broker) 
    Richard Greenfield                            [phone] 
    Alex Carse                                     2800 
   Farm Street Communications 
    (Media Relations)                             +44 (0)7593 
    Simon Robinson                                 340 107 
 

The Placing

The Company has received firm commitments from investors to raise gross proceeds of GBP14.6 million (approximately US$22.0 million) through the Placing of 91,250,000 Placing Shares at a price of 16.0 pence per share.

Following Admission, the Placing Shares will represent approximately 21.7 per cent. of the Company's Enlarged Share Capital of 420,229,827 Ordinary Shares.

The Placing is conditional, inter alia, on the approval of shareholders at the General Meeting of the Company to be held on or around 6 February 2015 and upon Admission of the Placing Shares to trading on AIM.

A circular convening the General Meeting and setting out further details of the Placing (the "Circular") is expected to be sent to shareholders today.

Subject to the approval of shareholders at the General Meeting and the Placing Agreement not having been terminated in accordance with its terms, it is expected that the Placing Shares will be admitted to trading on AIM on or around 10 February 2015.

The Directors intend to vote in favour of each of the Resolutions in respect of their aggregate beneficial interest in respect of 2,735,009 Ordinary Shares representing approximately 0.84 per cent. of the Existing Ordinary Shares. Existing institutional shareholders who are participating in the Placing have irrevocably committed to vote in favour of each of the Resolutions in respect of their entire existing shareholdings.

The Placing Shares issued pursuant to the Placing will, when issued, be credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares of the Company, including the right to receive all dividends and other distributions declared after the date of their issue.

Use of proceeds

The conditional Placing will raise gross proceeds of GBP14.6 million (approximately US$22.0 million).

The net proceeds of the Placing will be sufficient to meet the Group's needs to the point of making a construction decision for its Yaoure Gold Project. The expected application of funds raised in the Placing, after expenses, is summarised as follows:

 
                                            US$m 
 Yaoure 
 BFS                                         2.4 
 Resource definition and exploration         7.5 
 Base costs to March 2016                    3.4 
                                           ----- 
 Total Yaoure                               13.3 
 
 Baomahun Gold Project ("Baomahun") 
 Base costs to March 2016                    2.1 
                                           ----- 
 Total Baomahun                              2.1 
 
 Working capital / G&A expenses to March 
  2016                                       5.7 
                                           ----- 
 TOTAL                                      21.1 
 

The estimated costs at Yaoure include all costs associated with completion of the BFS in 2015 together with an allowance for further resource definition and exploration drilling. This is intended to further increase confidence in the Yaoure Mineral Resource, adding additional Measured and Indicated Resources to the economic pit-shells and to allow the regional opportunities for further mineralisation to be followed-up. This envisages that a drill spacing of not more than 50m will be required to yield Indicated Resources and a drill spacing of not more than 25m will be required to yield Measured Resources.

The base costs listed above for both projects include the fees to the governments of Côte d'Ivoire (for Yaoure) and Sierra Leone (for Baomahun) to maintain the licence areas, salaries for local and expatriate employees, funds used for corporate social responsibility purposes such as community initiatives, and 'standstill' costs, including the cost of running the Amara offices, vehicles and other buildings in each host country.

Working capital includes all costs associated with the head office together with an allowance of US$0.8 million to expand the Amara operating team as the Company advances the project to BFS and ultimately a production decision, expected in early 2016.

Background information on Tembo Capital LLP

As part of the Placing, Tembo Capital will subscribe for 24,830,000Placing Shares, representing 5.9 per cent. of the Enlarged Share Capital through its affiliate Ndovu Capital V B.V ("Tembo Fund").

Tembo Capital is a mining private equity fund group, which specialises in Africa and emerging markets. The Tembo Capital team has a wealth of experience of the mining industry, mining investment and long-term private equity investment in Africa and emerging markets. Further details on Tembo Capital and its management team can be found at www.tembocapital.com.

The Company, Tembo Fund and Tembo Capital LLP, its investment advisor, have agreed to enter into a relationship agreement pursuant to which, the Tembo Fund would be granted (inter alia) the following rights, conditional on completion of the Placing and Admission:

1. if the Tembo Fund holds 5 per cent. or more of the voting rights attaching to the Ordinary Shares, it shall be entitled to certain information and consultation rights in respect of the business of the Company;

2. if the Tembo Fund holds more than 12.5 per cent. of the voting rights attaching to the Ordinary Shares, it shall be entitled to appoint an observer at Board meetings; and

3. if Tembo Fund holds more than 20 per cent. of the voting rights attaching to the Ordinary Shares, it shall be entitled to appoint a non-executive director to the Board (in replacement of its observer).

Related party transaction

RDV Corporation ("RDV") currently has a shareholding of 60,534,293 Ordinary Shares representing approximately 18.4% of the Company's existing share capital. Accordingly, RDV is therefore considered a related party of the Company and RDV's subscription for 3,390,000 Placing Shares under the Placing is considered a related party transaction under the AIM Rules. The independent directors consider, having consulted with Peel Hunt, the Company's nominated adviser, that the terms of RDV's participation in the Placing are fair and reasonable insofar as Shareholders are concerned.

Notes:

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by either of the Joint Bookrunners or by any of their respective affiliates or agents or brokers, as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Peel Hunt is acting for Amara and for no-one else in connection with the Bookbuild and the Placing, and will not be responsible to anyone other than Amara for providing the protections afforded to customers of Peel Hunt nor for providing advice to any other person in relation to the Placing or any other matter referred to herein. Peel Hunt is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA").

GMP is acting for Amara and for no-one else in connection with the Bookbuild and the Placing, and will not be responsible to anyone other than Amara for providing the protections afforded to customers of GMP nor for providing advice to any other person in relation to the Placing or any other matter referred to herein. GMP is authorised and regulated in the United Kingdom by the FCA.

Persons receiving this announcement should note that neither Peel Hunt nor GMP will be responsible to anyone other than the Company for providing the protections afforded to clients of Peel Hunt or GMP or for advising any other person on the arrangements described in this announcement. Neither Peel Hunt nor GMP have authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by either of them nor do they make any representation or warranty, express or implied, for the accuracy of any information or opinion contained in this announcement or for the omission of any information. Each of Peel Hunt and GMP disclaim all and any responsibility or liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement.

The distribution of this announcement and the Placing in certain jurisdictions may be restricted by law. No action has been taken by Amara, Peel Hunt or GMP that would permit the Placing or possession or distribution of this announcement or any other offering or publicity material relating to the Placing in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement becomes available are required by Amara, Peel Hunt and GMP to inform themselves about, and to observe, such restrictions.

The information in this announcement shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would require preparation of further prospectuses or other offer documentation, or be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.

The Placing Shares under the Placing may not (unless an exemption from the requirement to file a prospectus, registration, statement or equivalent document under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia, Japan, the Republic of South Africa or any other jurisdiction.

The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and may not be offered, sold or delivered within the United States except in transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws. The Joint Bookrunners have agreed that, except as permitted by the Placing Agreement and as expressly permitted by applicable laws of the United States, they will not offer or sell the Placing Shares within the United States. The Placing Agreement permits the Joint Bookrunners, through certain of their U.S. broker-dealer affiliates, to offer the Placing Shares in the United States to "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act ("QIBS") or Accredited Investors that will purchase Placing Shares from the Company pursuant to Rule 506 of Regulation D under the U.S. Securities Act. This announcement does not constitute an offering to sell, or a solicitation of an offering to buy, any Placing Shares in the United States. Moreover, the Placing Agreement provides that the Joint Bookrunners will offer and sell the Placing Shares outside the United States only in accordance with Regulation S under the U.S. Securities Act. Until 40 days after the commencement of the Placing, an offer or sale of the Placing Shares within the United States by a dealer (whether or not participating in the Placing) may violate the registration requirements of the U.S. Securities Act unless such Placing or sale is made pursuant to an exemption from registration under the U.S. Securities Act.

This announcement is not for distribution directly or indirectly in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia) or any jurisdiction into which the same would be unlawful. No public offering of securities of Amara will be made in connection with the Placing in the United Kingdom, the United States, the EEA, Switzerland or elsewhere.

The information in this announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the US Securities Act or the applicable laws of other jurisdictions.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this announcement should seek appropriate advice before taking any action.

This information is provided by RNS

The company news service from the London Stock Exchange

END

ROIPKDDPKBKKADB