REG - Goldstone Resources - Conditional Fundraising and Notice of AGM

Goldstone ResourcesAnnouncement

10/04/2024 07:00

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RNS Number : 9421J  Goldstone Resources Ltd  10 April 2024

10 April 2024

 

GOLDSTONE RESOURCES LIMITED

("Goldstone" or the "Company")

 

Conditional Fundraising

Gold Loan Standstill Amendment and

Notice of Annual General Meeting

 

Goldstone Resources Limited (AIM: GRL) is pleased to announce that it has
conditionally raised £1.82 million before expenses by way of a subscription
by new and existing investors (the "Subscription") for, in aggregate,
182,000,000 new ordinary shares of 1 penny par value each in the capital of
the Company ("Ordinary Shares") (the "Subscription Shares") at a price of 1
penny per share (the "Subscription Price"). Participants in the Subscription
will also receive, for each Subscription Share, one warrant over a further new
Ordinary Share exercisable at a price of 2 pence per share for 24 months from
the date of issue (the "Warrants").

 

In addition, the Company has entered into an agreement (the "Amendment
Agreement") with Asian Investment Management Services Limited ("AIMSL") to
extend to 31 December 2025 the standstill period in the Standstill Agreement
dated 29 December 2023 relating to the exercise of certain of AIMSL's rights
under the gold loan agreement entered into with the Company on 19 June 2020
("Gold Loan Agreement").  Pursuant to the Amendment Agreement, AIMSL has also
agreed to accept settlement of the interest accrued under the Gold Loan
Agreement to 31 December 2023 by the issue to AIMSL of 101,803,680 new
Ordinary Shares (the "Conversion Shares"). Following and subject to issue of
the Conversion Shares, the outstanding balance in respect of the Gold Loan and
accrued interest will be reduced to the principal of 1,871.43 troy ounces and
will accrue interest at 14% from 1 January 2024.

 

The Subscription Shares and Conversion Shares represent approximately 23% and
13% respectively of the Company's share capital as enlarged by the issue of
the Subscription Shares and the Conversion Shares.

 

The Subscription Price of 1 penny represents a discount of approximately 53%
to the mid-market closing price on AIM of 2.15 pence per Ordinary Share on 30
June 2023, being the latest trading day prior to suspension of the Company's
Ordinary Shares from trading on AIM.

 

The issue of the Subscription Shares, the Warrants and the Conversion Shares
will be conditional, inter alia, on the Company obtaining the requisite
shareholder approvals in respect of the issue of such shares from
its shareholders at the Company's forthcoming annual general meeting to be
convened shortly (the "AGM").

 

The net proceeds of the Subscription will be used to partially settle the
Company's overdue creditor balances in line with payment plans agreed with the
Company's major creditors, to progress the Company's strategy of developing
and improving production at its Homase Mine in Ghana and for general working
capital purposes.

 

It is noted that, in the event the resolutions related to the Subscription
(the "Resolutions") are not passed at the AGM, the Board would, in light of
the Company's significant overdue creditor balances, likely have to file
insolvency of the Company under Jersey Law. Accordingly, the Board strongly
encourages all shareholders to vote in favour of the resolutions to be
proposed at the AGM.

 

Directors' Anticipated Participation

It is noted that certain of the Company's directors and a senior employee also
intend to convert certain outstanding cash fees on the same terms as the
Subscription, following publication of the Company's Annual Report and
Accounts in respect of the year to 31 December 2022 and interim results for
the 6 months to 30 June 2023 (the "Accounts"), expected later today (the
"Director Subscription").

 

Recommendation and Irrevocable Undertakings

The Board intends to recommend that shareholders vote in favour of the
Resolutions at the AGM and each director intends to vote in favour of the
Resolutions in respect of the shareholdings owned or controlled by them.

 

It is also noted that the Company has received irrevocable undertakings to
vote in favour of the Resolutions to be proposed at the AGM from Paracale Gold
Limited and AIMSL in respect of their holdings of, in aggregate, 247,656,575
Ordinary Shares representing approximately 49.7% or the Company's currently
issued share capital.

 

Related Party Transaction

Entering into the Amendment Agreement (including the agreement to accept the
Conversion Shares in settlement of accrued interest) with AIMSL, as a
substantial shareholder of the Company, is deemed to constitute a related
party transaction under the AIM Rules for Companies. Having consulted with the
Company's Nominated Adviser, Strand Hanson Limited, the directors consider the
terms of such arrangement to be fair and reasonable insofar as the Company's
shareholders are concerned.

 

Circular and Notice of AGM

A circular relating, inter alia, to the Subscription (the "Circular") will be
posted to shareholders shortly and will be made available to view on the
Company's website at: www.goldstoneresources.com, once published. The
Circular will contain formal notice convening the AGM to approve, inter alia,
issue of the Subscription Shares and the Conversion Shares. The AGM is to be
held on Friday, 26 April 2024 at 11.00 a.m. at the offices of Faegre Drinker
Biddle & Reath LLP, at 7 Pilgrim Street, London EC4V 6LB.

 

Admission and Total Voting Rights

Completion of the Subscription is conditional, inter alia, on receipt by the
Company of the Subscription proceeds and admission of the Subscription Shares
to trading on AIM by 8.00 a.m. on Thursday 2 May 2024 (or such later time as
the Company may agree, being not later than 8.30 a.m. on Tuesday 7 May 2024).

 

Application will be made for the Subscription Shares to be admitted to trading
on AIM. A further announcement regarding the enlarged share capital following
the Subscription for the purposes of the Financial Conduct Authority's
Disclosure Guidance and Transparency Rules will be made following publication
of the Accounts.

 

Operational Update

 

During 2023 and Q1 2024 the Company has continued to maintain operations and
has produced some 1,900 troy ounces of gold. The Subscription is expected to
enable the Company to improve recovery rates and increase total production
over the coming months, by bringing in new operational managers and
accelerating operational developments on site at the Homase Mine. The Company
will provide further operational updates in due course, as appropriate.

 

Emma Priestley, Chief Executive Officer, commented:

"Despite a period of significant challenges during 2023 and into the start of
this year, I believe the opportunity exists for the Company to reset its goals
and restore value for shareholders. The Board of Directors are confident that
we will have a year of progress in the remainder of 2024.  We very much
appreciate the continued patience and support of our shareholders during this
difficult period and look forward to installing a new operational team and
accelerating operational progress during the remainder of 2024."

 

 

 

For further information, please contact:

 

 GoldStone Resources Limited
 Emma Priestley                      Tel: +44 (0)1534 487 757

 Strand Hanson Limited
 James Dance / James Bellman         Tel: +44 (0)20 7409 3494

 S. P. Angel Corporate Finance LLP
 Ewan Leggat / Charlie Bouverat      Tel: +44 (0)20 3470 0501
                                     Tel: +44 (0)20 7236 1177

 St Brides Partners Ltd

 Susie Geliher

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.

 

 

About GoldStone Resources Limited

GoldStone Resources Limited (AIM: GRL) is an AIM quoted mining and development
company with projects in Ghana that range from grassroots exploration to
production.

 

The Company is focused on developing the Akrokeri-Homase project in
south-western Ghana, which hosts a JORC Code compliant 602,000oz gold resource
at an average grade of 1.77 g/t.  The existing resource is confined to a 4km
zone of the Homase Trend, including Homase North, Homase Pit and Homase South.

 

The project hosts two former mines, the Akrokerri Ashanti Mine Ltd, which
produced 75,000 oz gold at 24 g/t recovered grade in the early 1900s, and the
Homase Pit which AngloGold Ashanti developed in 2002/03 producing 52,000 oz
gold at 2.5 g/t recovered.  Production is currently focussed on the Homase
Mine however it is the Company's intention to build a portfolio of
high-quality gold projects in Ghana, with a particular focus on the highly
prospective Ashanti Gold Belt.

 

 

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