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Financing Proposal and Notice of GM
Further to the announcement dated 22 July 2015, North River Resources, the AIM quoted resource company focused on the Namib Project Lead-Zinc Project in Namibia, has provided an update in respect to its proposed near term financing plan to raise US$4.0 million, which will be used to progress the Company’s flagship Namib Project to a construction decision.
Highlights
· Phase One Fundraising requirement of US$4.0 million will enable the Company to continue to work towards delivering an economically and operationally robust project ahead of construction. Work programmes employing Phase One Fundraising will include:
o initial Front End Engineering & Design
o early development of the Namib Project North decline
o sourcing of plant and equipment
o on-going underground development programme required to establish access for the next phase of resource expansion drilling
o recruitment of technical and operational staff at the Namib Project
· Greenstone Placing, and Placing and Open Offer:
o Phase One Fundraising proposed to be raised in two stages, an initial placing of unsecured 10 per cent. convertible loan notes 2018 and a subsequent placing and open offer of new ordinary shares to new and certain existing shareholders of the Company
o Greenstone Resources L.P., the Company’s largest shareholder will conditionally subscribe or underwrite the full US$4.0 million Phase One Fundraising
o Greenstone will subscribe US$1.2 million for the Tranche One Notes immediately following the General Meeting, subject to shareholder approval
o a Placing and an Open Offer open to all Qualifying Shareholders to raise up to US$2.8 million is intended to be launched in September 2015, conditionally underwritten by Greenstone, subject to shareholder approval
· Assuming the Placing and Open Offer proceed to raise US$2.8 million from investors other than Greenstone, the Tranche One Notes will be converted such that Greenstone will hold no more than 29.99 per cent. of the then Issued Share Capital
· The Greenstone Placing provides the Company with critical funding to continue operations, while also providing certainty of funding to allow the Company to continue advancing the development of the Namib Project simultaneously with preparations for the Placing and Open Offer
· The Phase One Fundraising requirement nominally assumes for planning purposes that the Company will receive the Mining Licence on or before the 31 October 2015
· Shareholder approval for disapplication of statutory pre-emption rights in respect of the Phase One Fundraising proposals, consisting of the Greenstone Placing and the proposed Placing and Open Offer, and an additional working capital headroom of US$2.0 million is to be sought at a general meeting of the Company to be held at 11.00 a.m. (UK time) on 28 August 2015 at the offices of Shakespeare Martineau LLP, 5th Floor, One America Square, Crosswall, London, EC3N 2SG, further details of which are set out in a circular being posted to shareholders today
· Shareholder call to be hosted by North River Chief Executive Officer, James Beams, at 10.30am on Wednesday 12 August to discuss the financing proposal, further information and dial in details are set out below
Defined terms used in this announcement which have not been defined in the body of this announcement shall, unless the context otherwise requires, have the meaning given to them in Appendix III.
North River Chief Executive Officer James Beams said, “The proposed fundraising, which has been structured to allow qualifying shareholders the opportunity to participate, will enable the Company to commence initial FEED and continue mine development work ahead of receipt of the Mining Licence. This is in line with our vision to develop the Namib Project into an efficient and commercial production asset in Namibia for relatively low capital expenditure. While the licence application process has prompted some slippage in the development schedule, we are confident that this will soon be forthcoming. As demonstrated by Greenstone’s on-going support for the Namib Project, we are not alone in this belief, and I am hopeful that our shareholders share this confidence in what is a stand-out brownfield asset located in a highly attractive mining environment.”
Greenstone Founder, and North River Director, Mark Sawyer said, “Through the current difficult market climate Greenstone remains supportive of North River and the Namib Project. The funding facility provided by Greenstone, as announced today, provides the Company with critical capital to advance the Namib Project through the next phase of work, while allowing qualifying shareholders to participate in a Placing and Open Offer, thereby allowing such shareholders to share pro-rata in the funding needs and ownership of the Company. Greenstone looks forward to North River achieving the milestones required to reach a construction decision, and ultimately advancing the Namib Project through to production.”
