REG - Ariana Resources PLC - Strategic Project Financing

Ariana ResourcesAnnouncement

11/11/2024 07:00

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RNS Number : 6271L  Ariana Resources PLC  11 November 2024

 

11 November 2024

AIM: AAU

STRATEGIC PROJECT FINANCING

TO PROGRESS 100%-OWNED DOKWE GOLD PROJECT & CORNERSTONE ASX IPO

 

Ariana Resources plc ("Ariana" or "the Company"), the AIM-listed mineral
exploration and development company with gold project interests in Africa and
Europe, is pleased to announce that it has entered into a Strategic Project
Financing Agreement with an Institutional Investor* (the "Investor") for the
provision of an aggregate loan of up to US$5,000,000 ("Loan"), of which an
initial US$2,000,000 has been advanced to Ariana. Following recent
announcements on the 100% owned Dokwe Gold Project ("Dokwe" or the "Project")
in Zimbabwe, the Company plans to utilise these funds primarily to commence a
Feasibility Study on the Project.

 

Highlights:

·    Financing agreement with the Investor provides an initial advance
(the "Initial Drawdown") of the Loan of US$2,000,000 to Ariana, to enable the
immediate commencement of work towards the Dokwe Feasibility Study.

·    The Investor further agrees to cornerstone, at the appropriate time,
an equity investment of a minimum of A$350,000 and up to A$500,000 into the
planned ASX capital raise as part of the anticipated ASX dual-listing IPO
("ASX IPO").

·    Ariana can utilise additional funds up to an aggregate of
US$5,000,000 over four (4) years, which, combined with future capital
arrangements the Company may separately enter into, provides funding
flexibility as the Dokwe Project is advanced towards construction.

 

Dr. Kerim Sener, Managing Director, commented:

"We are very pleased to enter into this Strategic Project Financing Agreement
arranged by RiverFort Global Capital Ltd*. at this important time in our
development.

"Significantly, this funding is intended to limit dilution and forms a key
part of our strategy in the lead-up to our planned ASX IPO. Ariana intends to
repay the funds advanced under the facility in cash, primarily from cashflow
generated from its business operations in future years. As part of the funding
arrangement, the Investor intends to cornerstone part of the ASX placing to
accompany the IPO.

"Having access to this capital enables the Company immediately to advance the
Dokwe Project into its planned Feasibility Study programme, which will
initially include additional exploration of the project to prove up additional
resource upside. We are confident that the resource base of the Dokwe Project
is capable of further growth, and we are currently targeting a resource in
excess of 2Moz of gold.

"We are extremely confident that our exploration and development plans will
continue to bear fruit as we continue to develop on our path towards becoming
a mid-tier gold producer."

* Investor is Riverfort Global Opportunities PCC Limited.

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014.

 

Strategic Funding Agreement Key Terms

 

 Facility                         Strategic Project Financing Agreement
 Headline Amount                  US$5,000,000
 Availability Period              Four years from the date of first drawdown.
 Initial Drawdown                 The Investor will advance US$2,000,000 to Ariana on the Execution Date. Any
                                  amounts drawn and outstanding shall be known as "Principal".

                                  Further drawdowns in the aggregate up to the Headline Amount shall be by
                                  mutual decision between the Investor and Ariana.
 Equity Placing Participation     The Investor will subscribe for a minimum of A$350,000 and up to A$500,000 of
                                  equity in the Company as part of the ASX IPO.

                                  This is subject to the ASX IPO being completed by no later than 31 March 2025.
 Execution Date                   The date on which the agreement is signed by all relevant parties and is
                                  executed.
 Term                             18 months for each relevant drawdown.
 Interest                         15% per annum paid monthly in cash, with an initial 3-month repayment holiday

                                of Principal and Interest.

 Security                         A first ranking general security over the Company with relevant subsidiaries

                                as guarantors of the Company.

 Drawdown Fee                     6% of each Drawdown paid in cash and deducted from gross proceeds or 8% of the

                                Drawdown if settled in shares (being calculated at the Reference Price).

                                  Ariana has elected to settle the Drawdown Fee in cash for the Initial
                                  Drawdown.

 Options on the Initial Drawdown  No later than 31 July 2025, and subject to shareholder approval, the Company
                                  will either:

                                  a)   issue 25 million options over Ordinary Shares with a 4-year maturity
                                  and exercise price at a 50% premium to the dual-listing placing price; or

                                  b)   pay a compensation fee representing the aggregate value of the exercise
                                  price of the 25 million options.

                                  This exercise price is subject to the ASX IPO completing by 31 March 2025,
                                  otherwise the exercise price will be 150% of the Reference Price.
 Fixed Premium Placing Price      The Investor may elect to convert the balances outstanding into shares or,
                                  following the ASX IPO, into CHESS Depository Interests over shares ("CDIs")
                                  pursuant to the Loan at a fixed premium placing price representing 140% of the
                                  Reference Price for the relevant advance.

                                  The Fixed Premium Placing Price for the Initial Drawdown is £0.03929, which
                                  will be adjusted to 140% of the ASX Dual-Listing Share Price t if lower.

                                  The conversion price will be subject to adjustments for corporate actions and
                                  subsequent capital raisings if undertaken at a lower price.
 Reference Price                  Being the average of the 5 daily VWAPs prior to a Drawdown.
 Repayment Schedule               The Principal and Interest will be repayable in cash in 16 equal monthly

                                instalments after the initial 3-month holiday.

                                  If the Company elects not to repay each monthly instalment in cash on the
                                  relevant due date, the Company will grant a 12 month right to convert into
                                  shares or CDIs of the Company at the Investor's election at the lower of:

                                  a)   the Fixed Premium Placing Price; and

                                  b)   an Adjusted Placing Price representing 10% discount to the lowest 1
                                  VWAP in the 10 preceding trading days.

                                  The conversion price will be subject to adjustments for corporate actions and
                                  subsequent capital raisings if undertaken at a lower price.
 Maximum Number of CDIs           To be calculated at the time of the ASX IPO but being limited to the Headline
                                  Amount divided by the ASX prescribed floor price for CDIs at the time of an
                                  ASX IPO (being, as at the Execution Date, AU$0.20 per CDI).
 Other                            The Strategic Funding Agreement contains representations, warranties,

                                undertakings and events of default considered by Ariana to be customary for
                                  agreements of this nature.

 

Contacts:

 

 Ariana Resources plc                            Tel: +44 (0) 20 7407 3616
 Michael de Villiers, Chairman
 Kerim Sener, Managing Director
 Beaumont Cornish Limited (Nominated Adviser)    Tel: +44 (0) 20 7628 3396
 Roland Cornish / Felicity Geidt
 Ord Minnett Limited (Lead Manager - Australia)  Tel: +61 2 8916 0124
 Damien Gullone / Robbie Dowling / Joe Hansen
 Panmure Liberum (Joint Broker)                  Tel: +44 (0) 20 7886 2500
 Kieron Hodgson / Atholl Tweedie / Rauf Munir
 Zeus Capital Limited (Joint Broker)             Tel: +44 (0) 203 829 5000

 Harry Ansell / Katy Mitchell / George Krokos

 Yellow Jersey PR Limited (Financial PR)         Tel: +44 (0) 7983 521 488
 Dom Barretto / Shivantha Thambirajah /          arianaresources@yellowjerseypr.com (mailto:arianaresources@yellowjerseypr.com)

Bessie Elliot

 

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them with the
proposed arrangements described in this announcement or any matter referred to
in it.

 

Editors' Note:

 

The information in this announcement that relates to exploration results is
based on information compiled by Dr. Kerim Sener BSc (Hons), MSc, PhD,
Managing Director of Ariana Resources plc. Dr. Sener is a Fellow of The
Geological Society of London and a Member of The Institute of Materials,
Minerals, and Mining and has sufficient experience relevant to the styles of
mineralisation and type of deposit under consideration and to the activity
that has been undertaken to qualify as a Competent Person as defined by the
2012 edition of the Australasian Code for the Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC Code) and under the AIM
Rules - Note for Mining and Oil & Gas Companies. Dr. Sener consents to the
inclusion in the report of the matters based on his information in the form
and context in which it appears.

 

About Ariana Resources:

Ariana is an AIM-listed mineral exploration and development company with an
exceptional track record of creating value for its shareholders through its
interests in active mining projects and investments in exploration companies.
Its current interests include a major gold development project in Zimbabwe,
gold production in Türkiye, and copper-gold exploration and development
projects in Cyprus and Kosovo.

 

Ariana owns 100% of the Dokwe Gold Project ("Dokwe") in Zimbabwe.  Dokwe is
made up of the Dokwe North and Dokwe Central gold deposits which are located
in the Tsholotsho District near the city of Bulawayo. The deposits have a
combined JORC Measured, Indicated, and Inferred Resource of over 1.83 million
ounces of gold (as at June 2024) and the project represents the largest
undeveloped gold project in Zimbabwe.

 

The Company holds a 23.5% interest in Zenit Madencilik San. ve Tic. A.S. a
joint venture with Ozaltin Holding A.S. and Proccea Construction Co. in
Türkiye which contains a depleted total of c. 2.2 million ounces gold
equivalent (as at March 2024, using a price ratio of 90 Ag to 1 Au). The joint
venture comprises the Kiziltepe Mine and the Tavsan and Salinbas projects.

 

The Kiziltepe Gold-Silver Mine is located in western Türkiye and contains a
depleted JORC Measured, Indicated and Inferred Resource of 171,700 ounces gold
and 3.3 million ounces of silver (as of March 2024). The mine has been in
profitable production since 2017 and has been producing at an average rate of
c.22,000 ounces of gold per annum. A Net Smelter Return ("NSR") royalty of
2.5% on production is being paid to Franco-Nevada Corporation.

 

The Tavsan Gold Mine is located in western Türkiye and contains a JORC
Measured, Indicated, and Inferred Resource of 311,000 ounces of gold and 1.1
million ounces of silver (as of March 2024). Following the approval of its
Environmental Impact Assessment and associated permitting, Tavsan is being
developed as the second gold mining operation in Türkiye and is currently in
construction. An NSR royalty of up to 2% on future production is payable to
Sandstorm Gold.

 

The Salinbas Gold Project is located in northeastern Türkiye and contains a
JORC Measured, Indicated, and Inferred Resource of 1.5 million ounces of gold
(as at July 2020). It is located within the multi-million ounce Artvin
Goldfield, which contains the "Hot Gold Corridor" comprising several
significant gold-copper projects including the 4 million ounce Hot Maden
project, which lies 16km to the south of Salinbas. An NSR royalty of up to 2%
on future production is payable to Eldorado Gold Corporation.

 

Ariana owns 76% of UK-registered Western Tethyan Resources Ltd ("WTR"),
which operates across south-eastern Europe and is based in Pristina, Republic
of Kosovo. The company is targeting its exploration on major copper-gold
deposits across the porphyry-epithermal transition. WTR is being funded
through a five-year Alliance Agreement with Newmont Mining Corporation
(www.newmont.com) and is separately earning-in to up to 85% of the Slivova
Gold Project.

 

Ariana owns 61% of UK-registered Venus Minerals PLC ("Venus") which is
focused on the exploration and development of copper-gold assets in Cyprus
which contain a combined JORC Indicated and Inferred Resource of 16.6Mt @
0.45% to 0.80% copper (excluding additional gold, silver and zinc.

 

Ariana owns several investments in listed and private companies via its
Australian subsidiary Asgard Metals Pty. Ltd. ("Asgard"), which also provides
technical input into the various investee company exploration programmes.
Investments have been made in high-value potential, discovery-stage mineral
exploration companies located across the Eastern Hemisphere and within easy
reach of Ariana's operational hubs in Australia, Türkiye, the UK, and
Zimbabwe.  Its most advanced interest is through a 5.5% holding of Panther
Metals Limited (ASX: PNT).

 

Panmure Liberum Limited and Zeus Capital Limited are brokers to the Company
and Beaumont Cornish Limited is the Company's Nominated Adviser.

 

For further information on Ariana, you are invited to visit the Company's
website at www.arianaresources.com.

 

 

Ends.

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