REG - Keras Resources PLC - Placing and Corporate Update

Keras ResourcesAnnouncement

26/04/2022 07:16

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RNS Number : 3388J  Keras Resources PLC  26 April 2022

 
                        26 April 2022

 

Keras Resources plc ('Keras' or 'the Company')

 

Placing of £1.2m and Broker Option of £0.75m, Cornerstone Investment in
Keras & Management Change

 

·    £1.2m placed with cornerstone investor and Board at a premium to
current share price

·    Broker Option available to raise a further £0.75m to allow new and
existing shareholders to participate

·    Graham Stacey appointed as CEO with Russell Lamming moving to
Non-Exec Chairman to ensure key management is based in US

·    Funds will be utilised to enhance current operations and maximise
future potential of the Diamond Creek asset

 

Keras Resources plc (AIM: KRS) is pleased to announce that, post securing 100%
of Falcon Isle Resources LLC and Falcon Isle Holdings LLC (collectively
'Falcon Isle') on 30 March 2022, which owns the high-grade Diamond Creek
organic phosphate mine ("Diamond Creek'), the Company intends to raise a total
of £1,950,000 (before expenses) (the 'Fund Raising') by the issue of up to
1,625,000,000 new ordinary shares of 0.01p each ('Ordinary Shares') at a price
of 0.12p per Ordinary Share ('Placing Price'). 1,000,000,000 new Ordinary
Shares have been placed for cash consideration to raise £1,200,000 (the
'Placing Shares') (the 'Placing') and the balance of up to 625,000,000 new
Ordinary Shares are intended to be issued through a Broker Option (the 'Broker
Option Shares'). The purpose of the Broker Option is to allow existing
shareholders and other investors to participate in the Fund Raising.

 

Each Placing Share and Broker Option Share subscribed will receive a warrant
to subscribe for 1 new Ordinary Share at any time up to 31 May 2024, at an
exercise price of 0.18p per new Ordinary Share ('Warrants').

 

Shareholders should note that the placing price of 0.12p per share represents
a premium of approx. 7% over the closing price of 0.1125p and 20% over the
5-Day VWAP of 0.1004p on 25 April 2022, the day before the Placing was
announced.

 

As part of the Placing, the Company has secured a cornerstone investor, with
First Uranium Resources (CSE: URNM) (KMMIF:OTC) ('First Uranium') subscribing
for 800,000,000 Placing Shares, raising funds of £960,000.  First Uranium
recently raised C$10m to develop a portfolio of assets in the North American
phosphate market as it sees this as a key growth commodity within the resource
sector.

 

In addition, the Keras Board of Directors have again co-invested in the Fund
Raising and have subscribed for 200,000,000 Placing Shares in aggregate.
Brian Moritz, Russell Lamming and Dave Reeves, have subscribed for 35,000,000
(£42,000), 45,000,000 (£54,000) and 120,000,000 (£144,000) new Ordinary
Shares respectively (the 'Director Subscription Shares'), (the 'Director
Subscription').

 

While it remains the intention that payments for the Falcon Isle transaction
will be financed primarily from Falcon Isle cashflow, the funds being raised
will be used for the First Tranche of US$800,000, the establishment of a N1
43-101 compliant Mineral Resource at Diamond Creek, expansion of the Falcon
Isle business into other fields of activity and general working capital.

 

As Keras now focusses on the North American phosphate market, it intends to
locate its key management in that region and reduce the costs outside of the
US.  As such, from 1 June 2022 Graham Stacey (Chief Operating Officer) will
be appointed Chief Executive Officer of the Company and Russell Lamming will
become a Non-Executive Director. On 1 September 2022, Russell will assume the
role of Non-Executive Chairman.  Brian Moritz, current Non-Executive
Chairman, will continue his role as Non-Executive Director and Company
Secretary post the transition and will continue to provide oversight of the
Company's finances.

 

Russell Lamming, CEO of Keras, commented, "The past few months have been a
transformative period for Keras.  We recently secured 100% of Falcon Isle -
the strategically located, high grade organic phosphate mine - which is now
past its capex peak-funding period and poised to start ramping up production
into the growing organic agricultural sector underpinned by the macro-economic
tailwinds of the global fertiliser markets. We are now delighted to have
secured a cornerstone investor with First Uranium at a premium to our current
share price, who shares our conviction in the upward trajectory of the
phosphate market and the inherent value of the Diamond Creek project within
this sector.

 

We as a Board remain very much aligned with shareholders as we continue to
invest in the Company and we welcome the opportunity for other investors to
participate alongside us. This placing ensures we have a solid cash position
to enhance our current operations and consolidate the long term future of both
the project and Company. We are fully focussed on building this platform and
driving further shareholder value through maximizing the asset potential,
optimizing efficiencies and generating cash flows.

 

I believe Graham's appointment as CEO is key to the Company's transition to a
US focussed business.  His role in the development of Diamond Creek has been
integral since the initial acquisition in 2020 and the Board will continue to
support his efforts as he builds Falcon Isle into the premier organic
phosphate producer in the US."

 

Fee Shares and Fee Warrants

The Company has agreed to issue 12,500,00 new Ordinary Shares to SP Angel at a
deemed price of 0.12 pence per share in lieu of fees due to SP Angel and to
issue 40,000,000 new Ordinary Shares to Shard Capital at a deemed price of
0.12 pence per share in lieu of fees due to Shard Capital (together "Fee
Shares"). Each Fee share will have a warrant attached to subscribe for 1 new
Ordinary Share at any time up to 31 May 2024, at an exercise price of 0.18p
per new Ordinary Share ("Fee Warrants"). The issue of, in aggregate,
52,500,000 Fee Shares and new Ordinary Shares in respect of any Fee Warrants
will be conditional upon shareholders providing new authorities for the
Directors to issue such shares.

 

General Meeting

At the Annual General Meeting held on 30 March 2021 the Directors were
authorised to issue 1,000,000,000 new Ordinary Shares for cash consideration.
This is insufficient for the purposes of the issue of Fee Shares, Broker
Option Shares and new Ordinary Shares in connection with the Fee Warrants.
 The issue of the Fee Shares, Broker Option Shares and new Ordinary Shares
associated with the Warrants and Fee Warrants, are subject to the passing of
resolutions at a general meeting to be held by the Company at 10am on 16 May
2022.

 

Broker Option

Under the Broker Option, up to 625,000,000 Broker Option Shares are intended
to be placed at 0.12p per share by the Company's joint brokers, Shard Capital
Partners LLP ('Shard') and SP Angel Corporate Finance LLP ('SP Angel'), to
raise up to £750,000 (before expenses).

 

To subscribe under the Broker Option, Shareholders should communicate their
interest to the Company, Shard or SP Angel by 5:00 pm on 29 April 2022 via
their independent financial adviser, stockbroker or other firm authorised by
the Financial Conduct Authority, as Shard cannot take orders from persons that
are not its clients and SP Angel cannot take direct orders from individual
private investors.

 

There is no guarantee that Shard or SP Angel will exercise the Broker Option
or that shareholders and investors will be able to acquire any Broker Option
Shares.

 

Application for admission

Application will be made for admission of the 1,000,000,000 Placing Shares to
trading on the AIM market of the London Stock Exchange ("AIM") which is
expected to occur on or around 4 May 2022.  The Placing Shares will
rank pari passu with the existing Ordinary Shares, which are currently
traded on AIM.

 

Total voting rights

Following the admission of the Placing Shares, there will be 7,296,073,068
Ordinary Shares in issue with each share carrying the right to one vote.
 There are no shares currently held in treasury.  The total number of voting
rights in the Company will therefore be 7,296,073,068 and this figure may be
used by shareholders as the denominator for the calculations by which they
determine if they are required to notify their interest in, or a change to
their interest in, the Company under the Financial Conduct
Authority's Disclosure Rules and Transparency Rules.

 

Related Party

The Director Subscription by Dave Reeves, Russell Lamming and Brian Moritz
constitutes a related party transaction pursuant to Rule 13 of the AIM Rules
for Companies. Graham Stacey being the director independent of the Director
Subscription considers, having consulted with the Company's Nominated Adviser,
that the Director Subscription by Dave Reeves, Russell Lamming and Brian
Moritz is fair and reasonable insofar as the shareholders of the Company are
concerned.

 

Following these Director Subscription and the admission of the Placing Shares,
the beneficial interests of the Directors in the issued Ordinary Shares is as
follows:

 

 Director         Interest in Ordinary Shares following Admission  % interest in Ordinary Shares following Admission

 Dave Reeves      981,942,616                                      13.46%
 Russell Lamming  461,184,497                                      6.32%
 Brian Moritz     212,582,118                                      2.91%
 Total            1,655,709,231                                    22.69%

 

See the Appendix below for further information on dealings by persons
discharging managerial responsibilities.

 

The information contained within this Announcement is deemed by the Company to
constitute inside information as stipulated under Article 7 of the Market
Abuse Regulation (EU) No. 596/2014 (as amended) as it forms part of the
domestic law of the United Kingdom by virtue of the European Union
(Withdrawal) Act 2018 (as amended). Upon the publication of this Announcement
via the Regulatory Information Service, this inside information is now
considered to be in the public domain.

 

For further information please visit www.kerasplc.com
(http://www.kerasplc.com) , follow us on Twitter @kerasplc or contact the
following:

 

 Russell Lamming                       Keras Resources plc             annabel (mailto:annabel@kerasplc.com) @kerasplc.com

                                                                     (mailto:annabel@kerasplc.com)
 Annabel Redford

 Nominated Adviser & Joint Broker      SP Angel Corporate Finance LLP  +44 (0) 20 3470 0470

 Ewan Leggat / Charlie Bouverat

 Joint Broker                          Shard Capital Partners LLP      +44 (0) 207 186 9900

 Damon Heath / Erik Woolgar

 Appendix

 

 1.  Details of the person discharging managerial responsibilities/person closely
     associated
 a)  Name:                                                         1.     Dave Reeves

                                                                   2.     Brian Moritz

                                                                   3.     Russell Lamming
 2.  Reason for the notification
 a)  Position/status:                                              1.     Non-executive Director

                                                                   2.     Non-Executive Chairman

                                                                   3.     CEO
 b)  Initial notification/amendment:                               Initial notification
 3.  Details of the issuer emission allowance market participant, auction
     platform, auctioneer or auction monitor
 a)  Name:                                                         Keras Resources plc
 b)  LEI:                                                          213800OZFKFM2N4R4F47
 4.  Details of the transaction(s): section to be repeated for (i) each type of
     instrument; (ii) each type of transaction; (iii) each date; and (iv) each
     place where transactions have been conducted
 a)  Description of the financial instrument, type of instrument:  Ordinary shares of 0.01 pence each

     Identification code:                                          ISIN:    GB00B649J414
 b)  Nature of the transaction:                                    Acquisition of Placing Shares
 c)  Price(s) and volume(s):

      Prices(s)  Volume(s)
                                                                   1.          0.12p      120,000,000

                                                             2.          0.12p      35,000,000
                                                                   3.          0.12p      45,000,000
 d)  Aggregated information:

      Prices(s)  Volume(s)
                                                                   1.          0.12p      120,000,000

                                                             2.          0.12p      35,000,000
     Aggregated volume:                                            3.          0.12p      45,000,000

 

     Price:

 e)  Date of transaction:                                          25/04/2022
 f)  Place of transaction                                          Outside a trading venue

d)

Aggregated information:

 

Aggregated volume:

 

Price:

 

             Prices(s)  Volume(s)
 1.          0.12p      120,000,000
 2.          0.12p      35,000,000
 3.          0.12p      45,000,000

 

 

 

e)

Date of transaction:

25/04/2022

f)

Place of transaction

Outside a trading venue

 

 1.  Details of the person discharging managerial responsibilities/person closely
     associated
 a)  Name:                                                         1.     Dave Reeves

                                                                   2.     Brian Moritz

                                                                   3.     Russell Lamming
 2.  Reason for the notification
 a)  Position/status:                                              1.     Non-executive Director

                                                                   2.     Non-Executive Chairman

                                                                   3.     CEO
 b)  Initial notification/amendment:                               Initial notification
 3.  Details of the issuer emission allowance market participant, auction
     platform, auctioneer or auction monitor
 a)  Name:                                                         Keras Resources plc
 b)  LEI:                                                          213800OZFKFM2N4R4F47
 4.  Details of the transaction(s): section to be repeated for (i) each type of
     instrument; (ii) each type of transaction; (iii) each date; and (iv) each
     place where transactions have been conducted
 a)  Description of the financial instrument, type of instrument:  Ordinary shares of 0.01 pence each

     Identification code:                                          ISIN:    GB00B649J414
 b)  Nature of the transaction:                                    Grant of Warrants pursuant to the Placing
 c)  Price(s) and volume(s):

          Prices(s)  Volume(s)
                                                                   1.                  0.18p      120,000,000

                                                             2.                  0.18p      35,000,000
                                                                   3.                  0.18p      45,000,000
 d)  Aggregated information:

      Prices(s)  Volume(s)
                                                                   1.          0.18p      120,000,000

                                                             2.          0.18p      35,000,000
     Aggregated volume:                                            3.          0.18p      45,000,000

 

     Price:

 e)  Date of transaction:                                          25/04/2022
 f)  Place of transaction                                          Outside a trading venue

d)

Aggregated information:

 

Aggregated volume:

 

Price:

 

             Prices(s)  Volume(s)
 1.          0.18p      120,000,000
 2.          0.18p      35,000,000
 3.          0.18p      45,000,000

 

 

 

e)

Date of transaction:

25/04/2022

f)

Place of transaction

Outside a trading venue

 

 

 

 

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