Savannah Resources PLC Cash Subscriptions of £3.91 million (6125U)

TIDMSAV

RNS Number : 6125U

Savannah Resources PLC

25 October 2017

Savannah Resources Plc / Index: AIM / Epic: SAV / Sector: Mining

25 October 2017

Savannah Resources Plc

Cash Subscriptions of GBP3.91 million

Savannah Resources plc (AIM: SAV) ('Savannah' or 'the Company'), the AIM quoted resource development company, announces that it has raised approximately GBP3.91 million cash (before expenses) through the subscription by both new and existing investors (the 'Subscription') of 74,433,232 new ordinary shares ('Subscription Shares') at a placing price of 5.25p per ordinary share (the 'Subscription Price') as well as the issue of one warrant for every two new Subscription Shares with each warrant having an exercise price of 6.0p and a term of three years (the 'Warrants'). To view the press release with the diagrams please use the following link: http://www.rns-pdf.londonstockexchange.com/rns/6125U_-2017-10-25.pdf

HIGHLIGHTS:

   --     Raised gross proceeds of approximately GBP3.91 million cash 
   --     Funds to be used to advance portfolio of projects including: 

o further resource drilling at the Mina do Barroso Lithium Project in Portugal with the aim of delivering an initial Mineral Resource Estimate;

o completion of a scoping study ahead of commencing mining in H1 2018 at the Company's copper project in Oman; and

o advancing the pre-feasibility study and commissioning of the pilot plant at the Mutamba Heavy Mineral Sands Project in Mozambique.

David Archer, Savannah's Chief Executive Office said today, "The placement evidences the continued strong support for the Company of our cornerstone shareholder, Al Marjan Ltd, and from a number of existing and new shareholders. The funds raised will support our near term copper development objectives for Oman, an increasing tempo of activity at our lithium project in Portugal and our pre-feasibility study and pilot plant construction in Mozambique. With this placement we are well positioned to move confidently into 2018."

Figure 1: Drill rig at NOA prospect at Mina do Barroso

Details of the Subscription

The Company will have a pro-forma cash balance of GBP4.84 million following the receipt of the Subscription proceeds of GBP3.91 million, specifically:

-- Al Marjan Ltd, the Company's largest shareholder, shall have increased its shareholding to 29.39% with a cash subscription of GBP1.21 million; and

-- Mr. Husain Salman Ghulam Al-Lawati, a prominent Omani business person, has taken a 5% shareholding in the Company.

The net proceeds of the Subscription will be used by Savannah to advance its pipeline of projects. This includes further drilling at the Mina do Barroso Lithium Project in Portugal, where an ongoing Reverse Circulation drill programme will help define a Mineral Resource Estimate as a basis for a scoping study. Additionally, the funds raised will be used to advance the Company's copper mine development in Oman. Funds raised will also be used for the preliminary feasibility study ('PFS') and finalise the commissioning of the pilot plant at the Mutamba Heavy Mineral Sands Project in Mozambique.

The Company will also convene a General Meeting at which shareholders will be asked to give the directors the necessary authorities to issue new ordinary shares of 1p each ('Ordinary Shares') in the future. The Subscription and the issue of the Subscription Shares announced today shall not be contingent upon the results of the proposed General Meeting, since they are issued out of the existing headroom granted to directors at the last general meeting. Details of the General Meeting will be announced separately and a notice of General Meeting will be sent to shareholders in due course.

Related Party Transaction

Al Marjan is a substantial shareholder of the Company, as such Al Marjan's subscription for Subscription Shares (the 'Al Marjan Subscription') constitutes a related party transaction in accordance with AIM Rule 13. Matthew King, David Archer, and Dale Ferguson, who are not subscribing for Subscription Shares and are therefore independent directors for these purposes, having consulted with the Company's Nominated Adviser, consider the terms of the Al Marjan Subscription to be fair and reasonable insofar as Savannah's shareholders are concerned.

Voting Rights and Regulatory information

Application will be made for the 74,433,232 Subscription Shares, which will rank pari passu with the existing Ordinary Shares, to be admitted to trading on AIM ('Admission'). It is expected that Admission will become effective and dealings will commence at 8:00am on or around 31 October 2017. The Warrants are due to be issued one business day following Admission, vesting immediately, having an exercise price of 6.0p, and being exercisable within three years from the date of issue.

Following the Admission of the Subscription Shares, the percentage holding of certain significant shareholders will increase as per the table below:

 
 Shareholder          Holding         Percentage      Number             Holding         Percentage 
                       Prior           of Ordinary     of Subscription    Following       of Ordinary 
                       to the          Shares          Shares             Subscription    Shares 
                       Subscription    prior           Subscribed                         Following 
                                       to the          for                                Subscription 
                                       Subscription 
-------------------  --------------  --------------  -----------------  --------------  -------------- 
 Al Marjan 
  Ltd                   163,750,179          29.17%         23,128,571     186,878,750          29.39% 
-------------------  --------------  --------------  -----------------  --------------  -------------- 
 Husain Salman 
  Ghulam Al-Lawati              nil             nil         31,792,519      31,792,519           5.00% 
-------------------  --------------  --------------  -----------------  --------------  -------------- 
 Karl-Erik 
  von Bahr               20,523,380           3.66%          1,750,000      22,273,380           3.50% 
-------------------  --------------  --------------  -----------------  --------------  -------------- 
 Rémy 
  Welschinger            17,098,759           3.05%          1,350,000      18,448,759           2.90% 
-------------------  --------------  --------------  -----------------  --------------  -------------- 
 

Following Admission, the total issued share capital will consist of 635,850,386 Ordinary Shares. As such, the total number of voting rights in the Company will be 635,850,386 Ordinary Shares. This number may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure and Transparency Rules.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014. Market soundings, as defined in MAR, were taken in respect of the Subscription with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

**ENDS**

For further information please visit www.savannahresources.com or contact:

 
    David Archer                Savannah Resources       Tel: +44 20 
                                 plc                      7117 2489 
    David Hignell / Gerry       Northland Capital        Tel: +44 20 
     Beaney (Nominated           Partners Ltd             3861 6625 
     Adviser) 
    Christopher Raggett         finnCap Ltd              Tel: +44 20 
     / Emily Morris (Joint                                7220 0500 
     Broker) 
    Jon Belliss                 Beaufort Securities      Tel: +44 20 
     (Joint Broker)              Ltd                      7382 8300 
    Charlotte Page /            St Brides Partners       Tel: +44 20 
     Lottie Wadham               Ltd                      7236 1177 
 

About Savannah

Notes

We are a diversified resources group (AIM: SAV) with a portfolio of energy metals projects - lithium in Portugal and copper in Oman - together with the world-class Mutamba Heavy Mineral Sands Project in Mozambique, which is being developed in a consortium with the global major Rio Tinto. We are committed to serving the interests of our shareholders and to delivering outcomes that will improve the lives of our staff and the communities we work with.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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October 25, 2017 09:18 ET (13:18 GMT)