Sula Iron & Gold PLC Placing, Subscription and Proposed Open Offer (6182P)

TIDMSULA

RNS Number : 6182P

Sula Iron & Gold PLC

18 November 2016

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A BREACH OF THE RELEVANT SECURITIES LAWS OF SUCH JURISDICTION.

This announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any investment decision in respect of Sula Iron & Gold Plc or other evaluation of any securities of Sula Iron & Gold Plc or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities.

18 November 2016

SULA IRON & GOLD PLC

("Sula" or the "Company")

Placing and Subscription to raise approximately GBP1.17 million gross

Proposed Open Offer

Directors' Subscriptions

Sula (AIM: SULA), the multi-commodity exploration company focused on Sierra Leone, is pleased to announce that it has conditionally raised approximately GBP1.17 million (before expenses) through a placing by VSA Capital Limited and direct subscriptions for, in aggregate, of 558,733,765 new ordinary shares of 0.1p each in the Company ("Ordinary Shares") (the "New Ordinary Shares") at an issue price of 0.21p per share (the "Placing and Subscription Price") to new and existing shareholders (the "Placing and Subscription").

As part of the Placing and Subscription, certain Directors of the Company, being Roger Murphy, Iain Macpherson, Howard Baker and Matt Wood, have collectively subscribed for 77,872,758 New Ordinary Shares at the Placing and Subscription Price (the "Directors' Subscriptions"), raising GBP0.16 million (before expenses).

The Company is also pleased to announce that it is proposing to make an Open Offer as soon as practicable to all qualifying shareholders of the Company to raise up to a further GBP0.3 million (before expenses) by the issue of up to 143,031,940 shares (the "Open Offer Shares") at the Placing and Subscription Price (the "Open Offer").

Roger Murphy, Chief Executive Officer of Sula, commented:

"We are delighted with the continued support shown for the development of our Ferensola gold project in Sierra Leone and are pleased to be able to make the open offer to our existing shareholders, which allows them to participate in the equity fundraise at the same price per share. The proceeds of this fundraising will be used for the next phase of exploration including additional diamond drilling that will commence early in the New Year and which is expected to further demonstrate the scale of our project. We are looking forward to updating shareholders as the programme yields results during the course of the coming months."

The Placing and Subscription

Pursuant to the Placing and Subscription, new and existing shareholders, including certain of the Directors as part of the Directors' Subscriptions, have agreed to subscribe for the New Ordinary Shares at the Placing and Subscription Price. The Placing and Subscription Price represents a discount of approximately 7 per cent. to the Company's closing middle market share price of 0.225p on 17 November 2016.

The New Ordinary Shares have been issued conditional upon their admission to trading on AIM ("Admission"). The Company has made application for Admission of the New Ordinary Shares and it is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence at 8.00 a.m. on 24 November 2016. The New Ordinary Shares represent, in aggregate, 30.1 per cent. of the Company's share capital as enlarged by the New Ordinary Shares (the "Enlarged Share Capital").

The Placing and Subscription is not conditional upon the Open Offer taking place or shareholder approval. The New Ordinary Shares will rank pari passu in all respects with the Company's existing Ordinary Shares (including the right to participate in the Open Offer) and will be issued fully paid.

Following completion of the Placing and Subscription, the Company's Enlarged Share Capital will comprise 1,859,415,219 Ordinary Shares. This figure of 1,859,415,219 Ordinary Shares may be used by Shareholders as the denominator for the calculations by which they may determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

The Proposed Open Offer

The Company is proposing to make a 1 for 13 Open Offer of up to 143,031,940 Open Offer Shares at the Placing and Subscription Price in order to give qualifying shareholders the opportunity to participate in an equity fundraising at the same price as the investors participating in the Placing and Subscription.

The Open Offer will provide an opportunity for all qualifying shareholders to participate in the Open Offer pro rata to their holdings of Ordinary Shares at the record date for the Open Offer with the option to apply to subscribe for more Open Offer Shares pursuant to an excess application facility.

Further details including the timetable for the proposed Open Offer will be set out in the Open Offer circular (the "Open Offer Circular"), which will be sent to qualifying shareholders as soon as practicable.

In the event that the proposed Open Offer is not fully subscribed by such qualifying shareholders, VSA Capital Limited ("VSA"), acting in its capacity as broker and placement agent to the Company, will have the ability to place any Open Offer Shares for which valid applications have not been received at the Placing and Subscription Price over a period of 2 days after the Open Offer closes.

As the Directors' have sufficient existing share capital authorities to allot shares in the Company, the Open Offer is not conditional upon shareholder approval.

Should all the Open Offer Shares be taken up by qualifying shareholders or otherwise placed by VSA, the Open Offer Shares will represent approximately 8 per cent. of the Company's issued share capital post completion of the Placing and Subscription as enlarged by the Open Offer Shares.

Use of the Placing and Subscription and Open Offer Proceeds

The net proceeds of the Placing and Subscription (and Open Offer, if any) if any, will be used to conduct additional diamond drilling on Sula's Sanama Hill, which already hosts a JORC Compliant Exploration Target and into our much larger Eastern Target where Sula recently reported some positive trenching results and findings of visible gold. The net proceeds will also fund other on-going exploration activities and drilling support from the Dalakuru exploration camp located between Sanama Hill and the Eastern Target and also be used for the group's general working capital purposes.

Directors' Subscriptions

Following the Directors' Subscriptions, the interests of Roger Murphy, Iain Macpherson, Howard Baker and Matt Wood in the Ordinary Share capital of the Company will be as detailed below.

 
 Director              Number        Number            Total             % of           Total           % of 
                     of existing      of New          Ordinary          Enlarged       Ordinary       Enlarged 
                      Ordinary       Ordinary          Shares            Share          Shares          Share 
                       Shares         Shares        immediately         Capital       immediately      Capital 
                                    Subscribed       following        immediately      following     immediately 
                                       for          the Placing        following       the Open       following 
                                                  and Subscription        the            Offer           the 
                                                                        Placing           (1)           Open 
                                                                          and                           Offer 
                                                                      Subscription                       (1) 
-----------------  -------------  ------------  ------------------  --------------  -------------  ------------- 
 Roger 
  Murphy                 0         15,714,286       15,714,286           0.85         15,714,286        0.78 
-----------------  -------------  ------------  ------------------  --------------  -------------  ------------- 
 Iain Macpherson         0         38,269,748       38,269,748           2.06         38,269,748        1.91 
-----------------  -------------  ------------  ------------------  --------------  -------------  ------------- 
 Howard 
  Baker              6,791,666      7,715,876       14,507,542           0.78         14,507,542        0.72 
-----------------  -------------  ------------  ------------------  --------------  -------------  ------------- 
 Matt Wood           1,495,641     16,172,848       17,668,489           0.95         17,668,489        0.88 
-----------------  -------------  ------------  ------------------  --------------  -------------  ------------- 
 Total               8,287,307     77,872,758       86,160,065           4.63         86,160,065        4.30 
-----------------  -------------  ------------  ------------------  --------------  -------------  ------------- 
 

(1) Assuming full take-up of the Open Offer

Subscription for New Ordinary Shares by Ongeza Mining

The Company has agreed to pay Ongeza Mining ("Ongeza"), a company of which Iain Macpherson, a Director of Sula, is a director and a subsidiary of Madini Minerals ("Madini"), which owns 25 per cent. of Madini Occidental ("MO"), a Substantial Shareholder of the Company as defined by the AIM Rules, aggregate fees of GBP0.048 million in relation to the Placing and Subscription ("Subscription Fees"). Ongeza has agreed to use its Subscription Fees to subscribe for 22,935,932 of the New Ordinary Shares as part of the Subscription (the "Ongeza Subscription").

Following the issue of the New Ordinary Shares, MO and Ongeza will be interested in 319,874,530 and 22,935,932 Ordinary Shares respectively, representing 17.2 per cent. and 1.2 per cent. of the Enlarged Share Capital immediately following the Placing and Subscription.

Related Party Transactions

The Directors' Subscriptions and the Ongeza Subscription are each deemed to be related party transactions in accordance with the AIM Rules for Companies. Accordingly, the independent director, for this purpose being Nick Warrell, considers, having consulted with the Company's Nominated Adviser, Strand Hanson Limited, that the terms thereof are fair and reasonable insofar as the Company's shareholders are concerned.

For further information, please contact:

 
 Sula Iron & Gold plc                [phone] 
  Roger Murphy, CEO                   8304 
 Strand Hanson Limited (Financial 
  and Nominated Adviser) 
  James Harris 
  Matthew Chandler                   [phone] 
  James Dance                         3494 
 VSA Capital Limited (Financial 
  Adviser and Corporate Broker) 
  Andrew Monk 
  Andrew Raca                        [phone] 
  Justin McKeegan                     5000 
 

Ongeza Mining (Financial and Technical Adviser) [phone]

Iain Macpherson

Ilja Graulich

This information is provided by RNS

The company news service from the London Stock Exchange

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November 18, 2016 11:21 ET (16:21 GMT)