Serabi Gold plc Serabi Gold Plc :notice Of General Meeting And Special Meeting

 
TIDMSRB 
 
   For immediate release 
 
   13 April 2018 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   Notice of General Meeting and Special Meeting(1) 
 
   The Company announces that a General Meeting will be held on Friday 11 
May 2018, at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 
2AL England at 10.00 am (BST). The Company has published the formal 
notice of the meeting (the "Notice") on its website which can be 
accessed using the following link https://bit.ly/2JyNOSS.  Proxy voting 
forms are being posted to all shareholders providing details of how to 
access the Notice and instructions for voting.  A copy of the Notice 
together with proxy voting forms is being posted to all shareholders who 
are required to receive or have formally requested to receive these 
documents. 
 
   The Notice contains a letter from the Chairman of the Company, Mr Melvyn 
Williams, which is set out below in the Appendix. 
 
   (1)           Certain resolutions to be proposed at the meeting will be 
special resolutions requiring approval of more than 75% of the votes 
cast. Under Canadian National Instrument 54-101, the meeting therefore 
also constitutes a Special Meeting. 
 
   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 
Roland Cornish                 Tel: [phone] 
Michael Cornish                Tel: [phone] 
 
Peel Hunt LLP 
 UK Broker 
Ross Allister                  Tel: [phone] 
James Bavister                 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. 
 
   Appendix 
 
   The letter from the Chairman of the Company included in the Notice is 
reproduced below (without material adjustment): 
 
   Dear Shareholder 
 
   Introduction 
 
   On 29 March 2018, the Company announced it had raised GBP6.36 million 
(approximately US$9.0 million) (before expenses) by way of a Placing to 
institutional and other investors at a price of 3.6 pence per Ordinary 
Share (the "Placing"). 
 
   The Placing will raise a total of cGBP5.94 million (after expenses) for 
the Group and result in the issue of 176,678,445 Ordinary Shares.  The 
Placing is conditional upon, among other things, approval of the 
Resolutions to authorise the Directors to issue the Placing Shares at 
the General Meeting. 
 
   The purpose of this document is to explain the background to and reasons 
for the Placing and to provide the formal notice (the "Notice") of the 
General Meeting to be held at the offices of Travers Smith LLP, 10 Snow 
Hill, London EC1A 2AL, England on 11 May 2018 at 10 a.m. (London time) 
at which the Resolutions to approve the Placing will be proposed.  This 
document also includes additional information that the Company as a 
reporting issuer in Canada is required to make available pursuant to the 
requirements of National Instrument 51-102 - Continuous Disclosure 
Obligations ("NI 51-102") of the Canadian Securities Administrators. 
 
   Background to and reasons for the Placing 
 
   On 23 March 2018, the Company announced that Greenstone, a leading 
mining focussed private equity group, had agreed to invest US$15.0 
million in the Company by way of a subscription for 297,759,419 shares 
at a price of 3.6 pence per share (the "Greenstone Subscription"). 
 
   As announced on 23 March 2018, the Greenstone Subscription was in 
response to the Company's view that whilst it can be cash generative and 
profitable at current levels of production, it needs to grow in order to 
attract a wider investor base and generate long term value for 
shareholders. Under the terms of the Subscription Agreement, 297,759,419 
Ordinary Shares were issued to Greenstone at the 3.6 pence per Ordinary 
Share pursuant to the Subscription on 12 April 2018. 
 
   The Greenstone Subscription is considered to be an endorsement of Serabi, 
its management, its projects and its strategy for achieving growth and 
building value as Greenstone is a respected and experienced private 
equity fund focussed solely on mining. 
 
   Following positive feedback from the Greenstone Subscription, the 
Company decided to pursue a placing to give access to further capital 
and to widen its shareholder base through the introduction of new 
institutional investors who are also supportive of the Company's plans 
and ambitions. The  further funds raised pursuant to the Placing will 
allow the Company to accelerate further exploration and evaluation work 
at Palito, Sao Chico and Coringa and develop additional growth 
opportunities as the Company moves towards its targeted production of 
100,000 ounces of gold per annum. 
 
   As announced on 23 March 2018, as well as providing working capital for 
the Company's recently acquired Coringa Gold Project, the Greenstone 
Subscription will allow the Company to expand its current 8,000 metre 
drill programme. This current programme is focusing on step-out drilling 
on the current Palito mineral resources, and the Greenstone Subscription 
allows the Company to continue this programme at Palito beyond the 
current 8,000 metres, as well as commence drilling at Sao Chico, where 
drilling will focus on step-out drilling within the mining tenement as 
well as drilling the geophysical anomalies identified in 2016.  The 
Company intends to use part of the Placing proceeds to complete a Phase 
2 drilling programme, which comprises drilling the 2011 discoveries at 
Palito which do not currently form part of the Group's mineral resources, 
whilst at Sao Chico step out drilling will be undertaken along strike 
and beyond the limits of the current mining tenement. 
 
   The Placing proceeds will also enable Serabi to accelerate its regional 
exploration programme and enable the early repayment of US$3 million of 
the Company's total US$8 million loan with Sprott Resource Lending 
Partnership. 
 
   With a clear pathway to achieving growth, a strong balance sheet and a 
supportive shareholder base, the Company considers the Subscription and 
the Placing collectively represent a transformative event, that will 
allow it to accelerate its growth plans, place it in a strong position 
when considering further acquisitions and create the critical mass that 
is important when looking to maximise the financing options available to 
the Company to advance, develop and grow its gold projects. 
 
   The Placing 
 
   As announced on 29 March 2018, the Placing has been conducted through an 
accelerated bookbuilding process undertaken by Peel Hunt acting as sole 
bookrunner. The Placing is not underwritten and is subject to the 
conditions and termination rights set out in the Placing Agreement. 
 
   The Placing is conditional upon, among other things, the approval of the 
Resolutions at the General Meeting, Placing Admission becoming effective 
and the Placing Agreement becoming unconditional and not being 
terminated in accordance with its terms. 
 
   The Ordinary Shares to be issued pursuant to the Placing will rank pari 
passu with the Existing Ordinary Shares. 
 
   Subject to shareholder approval at the General Meeting and the 
satisfaction or waiver of the other conditions, application will be made 
to the London Stock Exchange for the Placing Shares to be admitted to 
trading on AIM ("Placing Admission"). It is expected that Placing 
Admission will take place at 8 a.m. on or around 14 May 2018 and in any 
event no later than 14 June 2018. Concurrently the Placing Shares will 
be listed for trading on the TSX. 
 
   At the General Meeting, the Company will be seeking to pass both an 
ordinary and special resolution (which will require votes in favour from 
at least 75% of the Ordinary Shares present and voting at the General 
Meeting) in order to give the Directors authority to allot the Placing 
Shares on a non-pre-emptive basis. 
 
   Use of proceeds 
 
   The Directors intend to use the proceeds from the Placing as follows: 
 
 
 
 
Use of Placing proceeds 
Coringa Drilling                                   US$2m 
Regional Exploration (airborne geophysics)         US$1m 
Drilling programme Palito and Sao Chico - Phase 2  US$2m 
Retirement of Sprott Loan                          US$3m 
Corporate Working Capital                          US$1m 
Total                                              US$9m 
 
 
   As announced on 23 March 2018, the proceeds of the Greenstone 
Subscription will be used as follows: 
 
 
 
 
Use of proceeds 
Second Installment of acquisition payment for Coringa  US$5m 
 project which following agreement with the vendors 
 is now due on 16 April 2018 
2018 Working Capital for Coringa                       US$4m 
Expansion of Drilling programme Palito and Sao Chico   US$4m 
 - Phase 1 
Corporate Working Capital                              US$2m 
Total                                                  US$15m 
 
 
   Relationship Agreements 
 
   Following completion of the Placing, Fratelli will hold a 32.88% 
interest and Greenstone will hold a 25.34% interest in the Enlarged 
Issued Share Capital.  Accordingly, both will remain bound by their 
relationship agreements, the terms of which were announced on 23 March 
2018 ("Relationship Agreements"). 
 
   These agreements include protections to ensure Serabi is able to 
continue to operate independently of these two major shareholders and 
ensure that the Company always has two independent non-executive 
directors but also provides Greenstone and Fratelli with certain rights 
with respect to the Company. 
 

   Under the terms of the Relationship Agreements: 
 
 
   -- Each of Fratelli and Greenstone shall have, for as long as it holds an 
      interest of 23% or more in the share capital of the Company, the right to 
      appoint two directors to the Board and, for so long as it holds an 
      interest of 15% or more but less than 23% of the share capital of the 
      Company, the right to appoint one director to the Board. 
 
   -- Each of Fratelli and Greenstone shall have, for as long as it holds an 
      interest of 15% or more in the share capital of the Company: 
 
 
   -- certain information rights regarding the Company's business; and 
 
   -- anti-dilution rights such that they will have the right, but not the 
      obligation, to participate in new placings of Ordinary Shares (including 
      placings in connection with an acquisition or for non-cash consideration) 
      in order to retain their ownership percentage. Where Greenstone and/or 
      Fratelli elect to exercise this anti-dilution right: 
 
          1. if the new placing is for cash, each of Fratelli and Greenstone 
             will participate on substantially the same terms as any other 
             participant in the new placing; or 
 
          2. if the new placing is for non-cash consideration, Fratelli and 
             Greenstone will each have the right to subscribe for such number 
             of shares as are required to maintain their current percentage 
             holdings at a price per Ordinary Share equal to the VWAP of the 
             Company's Ordinary Shares for the 5-day period ending on the date 
             ending two business days prior to the announcement of that new 
             placing. 
 
 
   -- Unless otherwise approved by Greenstone and Fratelli, the Company has 
      agreed not to undertake, for a period of six months commencing on the 
      completion of the Subscription, any further issue of Ordinary Shares 
      (other than exercise of share options to employees) unless such further 
      issue is undertaken at a price greater than the Placing Price. 
 
 
   As a further undertaking and subject to certain customary exemptions, 
Greenstone has undertaken that it will not, for a period of six months 
from admission of the Greenstone Subscription Shares, offer, lend, 
mortgage, assign, charge, pledge, sell or contract to sell or issue any 
interest in any Ordinary Shares held by it. 
 
   The General Meeting 
 
   The Placing is conditional upon the approval of the Resolutions by 
Shareholders at the General Meeting to be held at the offices of Travers 
Smith LLP, 10 Snow Hill, London EC1A 2AL, England, on 11 May 2018 at 10 
a.m. The notice convening the General Meeting is incorporated in this 
document. 
 
   At the 2017 Annual General Meeting, the Directors were authorised to 
allot 350 million Ordinary Shares on a non-pre-emptive basis.  Since the 
2017 Annual General Meeting, the Company has allotted 299,901,217 
Ordinary Shares (including the Greenstone Subscription Shares) and, as a 
consequence, the Directors do not have sufficient authority to allot all 
of the Placing Shares for cash on a non-pre-emptive basis.  The Company 
is therefore proposing to seek specific authorities to allot the Placing 
Shares at the General Meeting.  The Directors intend to propose 
resolutions to renew the general authorities at the 2018 Annual General 
Meeting. 
 
   Resolution 1 provides the Company with authority to allot the Placing 
Shares and Resolution 2 disapplies the statutory pre-emption rights 
applicable to those Placing Shares. 
 
   Resolution 1 will be proposed as an ordinary resolution requiring a 
majority of votes cast at the General Meeting to be in favour of it in 
order for it to be passed.  Resolution 2 will be proposed as a special 
resolution requiring 75% of the votes cast at the General Meeting to be 
in favour of it for it to be passed. 
 
   Shareholders should note that the Resolutions in relation to the Placing 
to be proposed at the General Meeting are inter-conditional and if any 
one of them is not passed the Placing will not proceed. 
 
   Fratelli Investments Limited, which holds shares representing 
approximately 38.69% of the Existing Ordinary Shares has irrevocably 
undertaken to vote in favour of the Resolutions. 
 
   Greenstone Resources II LP, which holds shares representing 
approximately 29.82% of Existing Ordinary Shares has irrevocably 
undertaken to vote in favour of the Resolutions. 
 
   Action to be taken by Shareholders 
 
   A Form of Proxy for use by Shareholders at the General Meeting 
accompanies this document. To be valid, Forms of Proxy must be completed 
and returned so as to be received at either the offices of the Company's 
UK Registrar, Computershare Investor Services Plc, The Pavilions, 
Bridgwater Road, Bristol, BS99 6ZZ or the offices of the Company's 
Canadian Registrar, Computershare Investor Services Inc., 100 University 
Avenue, 8(th) Floor, Toronto, Ontario M5J 2Y1 by not later than 10 a.m. 
(BST)  (5 am Eastern time) on 9 May 2018.  Alternatively, holders of 
Shares can submit their Proxy to Computershare UK through CREST by not 
later than not later than 10 a.m. (BST) on 9 May 2018 in accordance with 
the procedures set out in the Form of Proxy. 
 
   Completion and return of a Form of Proxy will not prevent Shareholders 
from attending and voting in person at the General Meeting should they 
so wish. 
 
   Beneficial Shareholders should note that only registered Shareholders or 
their duly authorised proxy holders are entitled to vote at the General 
Meeting.  Each Beneficial Shareholder should ensure that their voting 
instructions are communicated to the appropriate person well in advance 
of the General Meeting. 
 
   Further details of the restrictions and steps to be taken with respect 
to voting are set out in the Notice and Management Information Circular 
accompanying this document. 
 
   Admission, settlement and CREST 
 
   Application will be made to the London Stock Exchange for each of the 
Placing Shares to be admitted to trading on AIM on or around 14 May 
2018. 
 
   The Placing Shares have been conditionally approved for listing on the 
TSX, subject to satisfaction of certain customary conditions. 
 
   It is expected that Placing Admission will become effective on or around 
14 May 2018 and that dealings in the Placing Shares will commence at 8 
a.m. (BST) on that date. 
 
   Recommendation and importance of vote 
 
   Shareholders should be aware that, if the Resolutions are not approved 
at the General Meeting, the net proceeds of the Placing will not be 
received by the Company. 
 
   The Directors consider that the Resolutions set out in the Notice and 
being put to the General Meeting are in the best interests of the 
Company and its Shareholders and are most likely to promote the success 
of the Company for the benefit of the Shareholders as a whole. 
Accordingly, the Directors unanimously recommend that Shareholders vote 
in favour of the proposed Resolutions as they intend to do in respect of 
their own holdings, where relevant, amounting to an aggregate of 
25,246,920 Ordinary Shares, representing approximately 2.53% of the 
Company's Existing Ordinary Shares. 
 
   Yours faithfully 
 
   (Signed) "Melvyn Williams" 
 
   Melvyn Williams 
 
   Non-executive Chairman 
 
   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

April 13, 2018 04:00 ET (08:00 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.