Serabi Gold plc Serabi Gold Plc : Increase In Debt Facility With Sprott Resource Lending Partnership

 
TIDMSRB 
 
   For immediate release 
 
   23 January 2018 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   Increase in debt facility with Sprott Resource Lending Partnership 
("Sprott") 
 
   Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian-focused gold mining 
and development company, is pleased to report that following its 
acquisition of Chapleau Resources Ltd ("Chapleau"), and its 370,000 
ounce Coringa gold project ("Coringa") on 21 December 2017 (the 
"Acquisition"), Serabi has now arranged an additional US$3 million 
secured loan (the "New Facility") with its existing lender, Sprott. 
 
   The funds will be used to provide increased working capital for the 
Company and in particular to replace funds it used to make the initial 
US$5 million cash payment upon completion of the Acquisition. 
 
   The Company had an existing US$5 million loan (the "Existing Facility") 
from Sprott repayable in 24 monthly instalments with a final repayment 
date of 31 December 2019.  As part of the revised borrowing arrangements, 
the term for the Existing Facility has been extended to 30 June 2020 and 
is now repayable in 30 equal monthly instalments.  The New Facility may 
be repaid, at the Company's request and with the agreement of Sprott 
(the "Extension Option") in equal monthly instalments commencing 30 
September 2018 with a final payment due 22 months later on 30 June 2020. 
If the Extension Option is not exercised the New Facility must be repaid 
in full on 30 September 2018.  Notwithstanding the above, both the New 
Facility and the Existing Facility may be repaid by Serabi in full 
without penalty at any time. 
 
   Sprott will receive a total fee, for the New Facility and the revision 
to the terms of the Existing Facility, of US$90,000, which is being 
settled through the issue of 2,141,798 new ordinary shares of Serabi 
("New Ordinary Shares").  The New Ordinary Shares will rank pari-passu 
with the existing ordinary shares of the Company in issue and 
applications have been made to both the TSX and AIM for the New Ordinary 
Shares to be admitted to trading.  If the Extension Option is exercised, 
Sprott will be entitled to receive a further fee of US$90,000, payable 
in additional new ordinary shares, based on the prevailing share price 
and exchange rates at that time.  The Existing Facility was, and 
continues to be, secured against the assets of the Company, including 
the shares of its subsidiary companies at that time. These assets are 
now also security for the New Facility and the shares of Chapleau 
acquired on completion of the Acquisition have now also been pledged to 
Sprott as security for both the Existing Facility and the New Facility. 
 
   Following completion of the New Facility the Company now has aggregate 
loans with Sprott of US$8 million which carry an interest rate of 10 per 
cent per annum. 
 
   Michael Hodgson, CEO of Serabi commented. 
 
   "The Company took out its first debt financing with Sprott back in 
September 2014 and during this time has established an excellent working 
relationship with them.  Over this period Sprott have shown great 
flexibility and have been a strong contributor to Serabi's current 
success and platform from which we now hope to build further growth.  As 
a lender they continue to grow and we are very pleased to have their 
on-going support and for the belief they have in the continuing ability 
of Serabi and its management to deliver strong operational performance 
and growth. 
 
   "The Company is continuing the work started by Anfield on the permitting 
and licencing process for Coringa and reviewing the cost estimates 
contained in the Coringa Feasibility Study and optimising these and 
looking at options to enhance the economics of the project. We are also 
evaluating our options for the longer term development finance 
requirements of the Coringa project and the Company's existing organic 
growth prospects.  This New Facility in the meantime allows us to 
continue with all our current programmes and plans." 
 
   Dušan Petkovic, Principal at Sprott commented. 
 
   "As one of the largest investors dedicated to the natural resource 
sector, Sprott is excited to continue its partnership with Serabi. Our 
partnership with the Serabi team is consistent with our strategy of 
supporting exceptional management teams with innovative and flexible 
capital." 
 
   The 2,141,798 New Ordinary Shares, which have been issued at a price of 
3.0375 pence per New Ordinary Share, are expected to be admitted to 
trading on AIM on 26 January 2018. 
 
   Total Voting Rights 
 
   Following the issue of the New Ordinary Shares, the Company's issued 
share capital will consist of 700,843,570 Ordinary Shares, with voting 
rights. This figure may be used by shareholders in the Company as the 
denominator for the calculation by which they will determine if they are 
required to notify their interest in, or a change to their interest in, 
the share capital of the Company under the Financial Conduct Authority's 
Disclosure Guidance and Transparency Rules and pursuant to Regulation 23 
of the Company's articles of association.  The Company does not hold any 
Ordinary Shares in treasury. 
 
   Enquiries: 
 
   Serabi Gold plc 
 
   Michael Hodgson             Tel: [phone] 
 
   Chief Executive                 Mobile: [phone] 
 
   Clive Line                             Tel: [phone] 
 
   Finance Director               Mobile: [phone] 
 
   Email: [e-mail] 
 
   Website:  www.serabigold.com 
 
   Beaumont Cornish Limited 
 
   Nominated Adviser and Financial Adviser 
 
   Roland Cornish                  Tel: [phone] 
 
   Michael Cornish                                Tel: [phone] 
 
   Peel Hunt LLP 
 
   UK Broker 
 
   Ross Allister                        Tel: [phone] 
 
   Chris Burrows                    Tel: [phone] 
 
   Blytheweigh 
 
   Public Relations 
 
   Tim Blythe                           Tel: [phone] 
 
   Camilla Horsfall                 Tel: [phone] 
 
   Copies of this announcement are available from the Company's website at 
www.serabigold.com. 
 
   Neither the Toronto Stock Exchange, nor any other securities regulatory 
authority, has approved or disapproved of the contents of this 
announcement. 
 
   This announcement is inside information for the purposes of Article 7 of 
Regulation 596/2014. The person who arranged for the release of this 
announcement on behalf of the Company was Clive Line, Director 
 
   Qualified Persons Statement 
 
   The scientific and technical information contained within this 
announcement has been reviewed and approved by Michael Hodgson, a 
Director of the Company. Mr Hodgson is an Economic Geologist by training 
with over 30 years' experience in the mining industry. He holds a BSc 
(Hons) Geology, University of London, a MSc Mining Geology, University 
of Leicester and is a Fellow of the Institute of Materials, Minerals and 
Mining and a Chartered Engineer of the Engineering Council of UK, 
recognising him as both a Qualified Person for the purposes of Canadian 
National Instrument 43-101 and by the AIM Guidance Note on Mining and 
Oil & Gas Companies dated June 2009. 
 
   Forward Looking Statements 
 
   Certain statements in this announcement are, or may be deemed to be, 
forward looking statements. Forward looking statements are identified by 
their use of terms and phrases such as "believe", "could", "should" 
"envisage", "estimate", "intend", "may", "plan", "will" or 
the negative of those, variations or comparable expressions, including 
references to assumptions. These forward looking statements are not 
based on historical facts but rather on the Directors' current 
expectations and assumptions regarding the Company's future growth, 
results of operations, performance, future capital and other 
expenditures (including the amount, nature and sources of funding 
thereof), competitive advantages, business prospects and opportunities. 
Such forward looking statements reflect the Directors' current beliefs 
and assumptions and are based on information currently available to the 
Directors. A number of factors could cause actual results to differ 
materially from the results discussed in the forward looking statements 
including risks associated with vulnerability to general economic and 
business conditions, competition, environmental and other regulatory 
changes, actions by governmental authorities, the availability of 
capital markets, reliance on key personnel, uninsured and underinsured 
losses and other factors, many of which are beyond the control of the 
Company. Although any forward looking statements contained in this 
announcement are based upon what the Directors believe to be reasonable 
assumptions, the Company cannot assure investors that actual results 
will be consistent with such forward looking statements. 
 
   ENDS 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Serabi Gold plc via Globenewswire 
 
 
  http://www.serabigold.com 
 

(END) Dow Jones Newswires

January 23, 2018 02:00 ET (07:00 GMT)

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