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Fully Underwritten Open Offer and Placing
North River Resources, the AIM quoted resource company focused on the Namib Project Lead-Zinc Project in Namibia, has provided an update, further to the announcements made on 11 and 28 August 2015, in respect to its proposed near term financing plan to raise US$4.0 million with the launch today of a fully underwritten open offer and placing.
The Open Offer and Placing will raise US$2.8 million in addition to the US$1.2million already advanced by Greenstone Resources L.P. to the Company following the general meeting of the Company of 28 August 2015. Subject to the satisfaction or waiver of certain conditions (as more fully detailed in the Circular, as defined below, the Open Offer and Placing are fully underwritten by Greenstone and will bring the total raised under the Phase One Fundraising to US$4.0 million, which will be used to progress the Company’s flagship Namib Project to a construction decision.
Highlights
· Launch of Fully Underwritten Open Offer and Placing:
o Open Offer to all Eligible Shareholders at 0.2 pence per Ordinary Share to raise US$2.8 million.
o 2 Open Offer Shares for every 3 Existing Ordinary Shares held.
o In the event that the Open Offer does not raise the full US$2.8 million, the Directors have entered into the Placing Agreement with the Company’s broker, RFC Ambrian Limited, to place the balance of Open Offer Shares, at no less than 0.2 pence per share, to raise the total amount of US$2.8 million (under the Open Offer and the Placing).
o Certain of the Directors have committed to subscribe for, in aggregate, approximately £135,000 of shares in the Placing.
o Circular being posted today to Eligible Shareholders (and also made available on the Company’s website) with details on how to subscribe for the Open Offer.
o Greenstone as cornerstone shareholder has conditionally undertaken to subscribe or underwrite the full US$2.8m Open Offer and Placing under the Underwriting Facility.
· Issue of Convertible Loan Notes to Greenstone:
o Following receipt of Shareholder approval at the general meeting of the Company held on 28 August 2015, Greenstone was issued US$1.2 million of Convertible Loan Notes.
o Assuming the Open Offer and the Placing raise, in aggregate, US$2.8 million, Greenstone will convert its entire holding of Convertible Loan Notes into Ordinary Shares and there will be no drawdown under the Underwriting Facility.
· 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.
North River Chief Executive Officer James Beams said, “Thanks to the support received from shareholders for the Placing and Open Offer, we are pleased to commence this process which will see institutions, private investors and the Company’s directors aligned in our goal of delivering a robust, construction-ready lead-zinc project in Namibia. We look forward to completing this raising and updating shareholders accordingly.”
