REG - Goldstone Resources - Conversion of Loan

Goldstone ResourcesAnnouncement

13/07/2022 14:00

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RNS Number : 3720S  Goldstone Resources Ltd  13 July 2022

13 July 2022

 

GOLDSTONE RESOURCES LIMITED

("GoldStone" or the "Company")

 

Conversion of Loan

Issue of Equity

 

GoldStone Resources Limited (AIM: GRL), the emerging gold producer and
developer focussed on Ghana,

is pleased to announce that it has reached agreement with Paracale Gold
Limited ("Paracale") for the conversion of its total outstanding loan and
associated interest into fully paid new ordinary shares of 1p each in the
Company ("Ordinary Shares") (the "Loan Conversion").

 

As announced 28 December 2018, Paracale, a company associated with Bill Trew,
Chairman of Goldstone, provided the Company with a loan of US$1.224 million
which accrues interest at 6% per annum (the "Loan"). On 29 July 2021, Paracale
reduced the principal amount and interest due by the exercise of warrants to
subscribe for 20,000,000 new Ordinary Shares at a price of 1.2 pence per
Ordinary Share (the "Warrant Conversion Exercise") at nil cost, with the
Warrant Conversion Exercise proceeds being set off against the Loan.
Accordingly, following the Warrant Conversion Exercise, the balance of the
Loan was reduced to US$723,669. Interest continued to accrue on this
outstanding principal balance in accordance with the terms of the Loan
agreement.

 

The outstanding Loan, totalling US$766,522 (including the accrued interest of
US$42,853), which equates to GBP642,085 at an exchange rate of 0.83766, will
be converted into 9,802,821 new Ordinary Shares (the "Conversion Shares") at a
price of 6.55 p per Ordinary Share, being the closing mid-market price per
share on 12 July 2022, being the latest practicable date at the time of
signing.

 

Following the Loan Conversion, there are no outstanding loans or warrants held
by Paracale.

 

Emma Priestley, CEO of GoldStone, commented:

"Paracale Gold share our vision for the development of the Akrokeri-Homase
Project in Ghana and have been a tremendous support to GoldStone in recent
years and continue to be so following the conversion of their outstanding loan
to equity.

 

"As the Company has transitioned from explorer and developer to commercial
gold producer, the future of GoldStone is very encouraging. The elimination of
Paracale's loan will reduce debt on the balance sheet and will further support
the growth of the Company. With sufficient cash being generated from gold
sales already, this latest conversion will go further to maintain the
Company's cash position for operational developments and the Board is
confident that it remains well positioned to continue the ramp up of
production at Homase."

 

 

Admission and Total Voting Rights

 

The Conversion Shares will rank pari passu with the existing Ordinary Shares
and application will be made for the 9,802,821 Conversion Shares to be
admitted to trading on AIM ("Admission").  It is expected that Admission will
become effective and dealings in the Conversion Shares will commence at 8.00
a.m. on or around 19 July 2022.

 

On Admission, Paracale, which currently holds 115,853,754 Ordinary Shares in
GoldStone, representing 24.0% of the Company's current issued share capital,
will hold 125,656,575 Ordinary Shares representing 25.52% of the Company's
enlarged share capital. Together with his direct interest in the Company of
4,000,000 Ordinary Shares, Bill Trew, as a director and shareholder of
Paracale, will, in aggregate, hold an interest in 129,656,575 Ordinary Shares
representing approximately 26.33% of the Company's enlarged share capital on
Admission.

 

Upon Admission, the Company's issued ordinary share capital will consist of
492,436,817 Ordinary Shares with one voting right each. The Company does not
hold any Ordinary Shares in treasury, therefore the total number of Ordinary
Shares and voting rights in the Company on Admission will be 492,436,817. With
effect from Admission, this figure may be used by shareholders in the Company
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 share capital of the Company under the FCA's Disclosure Guidance and
Transparency Rules.

 

 

Related Party Transactions

Paracale, a company of which Bill Trew, Chairman of Goldstone, is a director
and substantial shareholder, is a substantial shareholder of the Company and
is a related party of the Company as defined in the AIM Rules for Companies
("AIM Rules").

Accordingly, the Loan Conversion is deemed to be a related party transaction
pursuant to Rule 13 of the AIM Rules and the independent directors, being Emma
Priestley, Richard Wilkins and Orrie Fenn, consider, having consulted with the
Company's nominated adviser, Strand Hanson Limited, that the terms and
conditions of the Loan Conversion are fair and reasonable insofar as the
shareholders of the Company are concerned.

 

 

- ENDS-

 

For further information, please contact:

 

 GoldStone Resources Limited
 Bill Trew / 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

 

 

About GoldStone Resources Limited

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

 

The Company is focused on developing the Akrokeri-Homase project in
south-western Ghana, which hosts a JORC Code compliant 602,000 oz 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.  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.

 

 

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.

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