REG - Metals One PLC - Convertible Loan & Proposed Equity Fundraise

Metals OneAnnouncement

31/01/2025 07:15

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RNS Number : 3691V  Metals One PLC  31 January 2025

31 January 2025

 

Metals One Plc

("Metals One" or the "Company")

 

Convertible Loan,

Proposed Equity Fundraise

&

Share Consolidation

 

Metals One (AIM: MET1), which is advancing strategic minerals projects in
Finland and Norway, announces that it has entered into a convertible loan note
instrument ("CLN") and, conditionally, as set out below, an equity fundraise
pursuant to a warrant instrument ("Equity Fundraise") to raise up to £5.0
million in gross proceeds in aggregate (net £3.0 million after associated
costs as detailed below) with a syndicate of investors in two stages. The
Company also intends to conduct a retail offer (or similar) ("Retail Offer")
to existing shareholders for up to a further £100,000.

 

At the same time the Company has undertaken to seek shareholder approval for a
10:1 share consolidation. References to the terms of the Equity Fundraise
relate to a post-share consolidation share price.

 

Key Points:

 

·    Stage 1 - CLN delivers £600,000 gross proceeds of interest-free
working capital in the immediate term for licence commitments and working
capital while the parties conclude the Equity Fundraise

 

·    Stage 2 - Equity Fundraise delivers £4.4 million gross proceeds via
a warrant instrument (explained below), putting the Company in a strong
financial position from which to advance its current projects and diversify
its commodity base and geographic footprint through opportunistic acquisitions

 

·    Retail Offer for up to a further £100,000 to enable existing
shareholders to participate on equivalent pricing terms as the Equity
Fundraise

 

Alastair Clayton, Non-Executive Chairman, commented:

 

"Capital for junior resource exploration companies is scarce at the moment -
especially for nickel projects. We have exceptional exposure to a future
rebound in the nickel market with our Finland Black Schist Project but, faced
with the inevitable prospect of heavy dilution through hand-to-mouth
fundraisings to keep the project moving forward, we have sourced an
alternative in the CLN, to meet the Company's immediate cash needs, and the
larger Equity Fundraise, to put to shareholders which we believe offers the
best prospect of recovering value.

 

We recognise this financing results in significant dilution for shareholders.
The board includes the Company's founders and project vendors who have all
been disappointed with the lack of liquidity since our IPO in 2023. This
financing package secures the future of the Company's existing projects, while
allowing it to potentially diversify its exposure to a wider basket of
commodities with a war chest for opportunistic acquisitions. Importantly, it
also introduces a new source of future capital and enthusiasm to our
register."

 

Stage 1: Convertible Loan Note Instrument

 

Pursuant to Stage 1, Metals One has entered into an interest-free CLN with a
principal amount of £600,000. The subscriber under the CLN is Big Sky
Management Limited, a company controlled by Canadian based corporate financier
Eric Boehnke. The CLN is intended as a working capital bridge until completion
of the financing under the Equity Fundraise. Upon shareholder approval and
completion of the Equity Fundraise, the CLN will convert on the same terms as
the Equity Fundraise at Stage 2 detailed below. In the unlikely event the
Equity Fundraise does not complete within 90 days, the notes under the CLN
become repayable in cash or convertible (at the Company's election) into
shares at a 20% discount to the closing share price on the trading day
immediately preceding the date of conversion. Further details on the
conditions and restrictions under the CLN are included below and will be
included in the notice of general meeting.

 

The net proceeds from the CLN will be used to meet near term licence
commitments in Finland and for ongoing working capital.

 

Stage 2: Equity Fundraise

 

Pursuant to Stage 2, the Company has entered into a warrant instrument and has
received conditional subscription letters from investors introduced by MavDB
Consulting LLC ("MavDB") totalling £4.4 million. The Equity Fundraise is
conditional upon, amongst other matters, shareholder approval at a general
meeting. A further announcement with details in respect of the general meeting
will be notified in due course. The material terms of the Equity Fundraise are
set out below.

 

·    The Equity Fundraise is structured as prepaid warrants and ordinary,
standard cash warrants. Each warrant, on exercise, entitles each subscriber to
one new fully paid ordinary share in the capital of the Company.

 

·    In return for their prepayment of an aggregate of £4.4 million
(excluding the CLN), each subscriber under the Equity Fundraise is entitled to
receive prepaid warrants ("Prepaid Warrants") in the Company exercisable at a
fixed price of 2p per warrant along with two attaching cash warrants ("Cash
Warrants"), also exercisable at 2p per warrant (the Prepaid Warrants and the
Cash Warrants together the "Warrants") as set out in the schedule in the
Appendix below. The Cash Warrants are exercisable for a period of six months
from the date of grant and, if exercised, would bring in substantial
additional proceeds to the Company (see Appendix).

 

·    The Equity Fundraise is conditional on the following conditions being
satisfied on or before 30 April 2025:

 

(i)            The Company convening a general meeting within 21
business days of the date of the warrant instrument to approve:

 

a.    share authorities to enable the full and unconditional exercise of
the Warrants (subject to the relevant terms of the warrant instrument); and

 

b.    a share capital reorganisation by consolidating every ten ordinary
shares into 1 new ordinary share.

 

(ii)           The entry into a 24-month consulting agreement, in
agreed form, by the Company and MavDB for business development and support
services totalling £2 million, which is being deducted from the proceeds of
the CLN and the Equity Fundraise.

 

(iii)          The entry into of a relationship agreement, in agreed
form, between the Company and each of the investors.

 

The Equity Fundraise is expected to operate as follows: the five investors
introduced by MavDB (the "Investors") will, subject to the conditions
described below having been satisfied, pay the subscription price for the
Prepaid Warrants as a pre-payment (at which time the Company receives the
£4.4 million in cash); however, the Prepaid Warrants shall remain unexercised
until such time as the Investors provide an exercise notice to the Company.
The Investors expect that, having invested sufficient capital to advance the
business strategy, the Company's share price and liquidity will improve
significantly. Accordingly, the Investors then expect to see demand for the
Company's shares and be able to exercise their Warrants (within the agreed
ownership thresholds detailed in the Appendix) and trade their shares.

Further details on the conditions and restrictions under of the Equity
Fundraise are included in the Appendix below.

 

In conjunction with the Equity Fundraise, Metals One intends to facilitate a
Retail Offer of up to £100,000 in order that existing shareholders may
participate on equivalent pricing terms as the Equity Fundraise, being 2p per
share (post-consolidation), representing a discount of approximately 53% to
the closing share price on 30 January 2025 of 0.43p (equivalent to 4.3p
post-consolidation), being the last practicable date prior to the date of this
announcement. Further details of the Retail Offer will be announced in due
course.

 

The proceeds of the CLN and Equity Fundraise are sufficient to cover the
Company's existing project commitments and work programmes, as well as general
working capital, for at least the next 18 months, while providing additional
capital for acquisitions.

 

Enquiries:

 

 Metals One Plc                                                       via Vigo Consulting

 Jonathan Owen, Chief Executive Officer                               +44 (0)20 7390 0234

 Alastair Clayton, Chairman

 Beaumont Cornish Limited (Nominated Adviser)                         +44 (0)20 7628 3396

 James Biddle / Roland Cornish

 www.beaumontcornish.com (http://www.beaumontcornish.com)

 SI Capital Limited (Joint Broker)                                    +44 (0)14 8341 3500

 Nick Emerson

 Capital Plus Partners Limited (Joint Broker)                         +44 (0)20 3821 6169

 Keith Swann

 https://www.capplus.co.uk/ (https://www.capplus.co.uk/)

 Vigo Consulting (Investor Relations)                                 +44 (0)20 7390 0234

 Ben Simons / Kendall Hill / Anna Stacey

 metalsone@vigoconsulting.com (mailto:metalsone@vigoconsulting.com)

 

About Metals One

 

Metals One is developing strategic metals projects in Finland (Black Schist
Project) and Norway (Råna Project). Metals One is aiming to help meet the
significant demand for strategic minerals by defining resources on the
doorstep of Europe's major electric vehicle OEMs and battery manufacturers.
Metals One's Black Schist Project in Finland, totalling 706 km(2) across three
licence areas, has a total Inferred Resource of 57.1 Mt
nickel-copper-cobalt-zinc and is located adjacent to one of Europe's largest
strategic minerals producers, Terrafame. Metals One's fully carried Råna
Project in Norway covers 18.14 km² across three contiguous exploration
licences, with significant opportunity for exploration of the Råna intrusion,
and proven potential for massive sulphide nickel-cobalt-copper mineralisation.

 

Follow us on social media:

 

LinkedIn: https://www.linkedin.com/company/metals-one-plc/
(https://www.linkedin.com/company/metals-one-plc/)

X: https://twitter.com/metals_one_PLC (https://twitter.com/metals_one_PLC)

 

Subscribe to our news alert service on the Investors page of our website at:
https://metals-one.com (https://metals-one.com)

 

Market Abuse Regulation (MAR) Disclosure

 

The information set out below is provided in accordance with the requirements
of Article 19(3) of the Market Abuse Regulations (EU) No. 596/2014 which forms
part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018
('MAR').

 

Nominated Adviser

 

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 in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.

 

APPENDIX

 

Additional Key Terms of the CLN

 

·    As stated above, in the unlikely event the Equity Fundraise does not
complete within 90 days, the notes under the CLN become repayable in cash or
convertible (at the Company's election) into shares at a 20% discount to the
closing share price on the trading day immediately preceding the conversion
date.

·    The CLN is unsecured and interest free.

·    No Investor is permitted to exercise notes to the extent that, as a
result of such exercise, the Investor will own or control more than 2.99% of
the issued ordinary shares of the Company.

·    No Investor is permitted to exercise notes (in whole or in part) held
by it to the extent that, as a result of such exercise, the Investor (together
with persons "acting in concert" with it, as such term is applied for the
purposes of the City Code on Takeovers and Mergers) will own or control more
than 29.99% of the issued ordinary shares of the Company.

·    The Company is subject to a 90-day standstill from the date of the
CLN on general equity issuances, subject to carve outs in respect of, amongst
other things, issues in connection with existing options and warrants and
issues to the Company's employee benefit trust.

·    For a period of 180 days from the date of the CLN, each Investor has
a right to participate in further fundraisings by the Company up to a maximum
aggregate value of £5 million.

·    The CLN includes standard terms relating to events of default,
warranties by the Company to the Investor, change of control provisions and
negative covenants.

 

 

Additional Key Terms of the Equity Fundraise

 

·    The Company is subject to a six month standstill from the date of the
warrant instrument on general equity issuances, subject to carve outs in
respect of, amongst other things, issues in connection with existing options
and warrants, issues to the Company's employee benefit trust and the Company
undertaking an open offer or similar structure to existing shareholders as
described above.

·    No Investor is permitted to exercise warrants to the extent that, as
a result of such exercise, such Investor will own or control more than 2.99%
of the issued ordinary shares of the Company.

·    No Investor is permitted to exercise warrants (in whole or in part)
held by it to the extent that, as a result of such exercise, such Investor
(together with persons "acting in concert" with it, as such term is applied
for the purposes of the City Code on Takeovers and Mergers) will own or
control more than 29.99% of the issued ordinary shares of the Company.

 

Illustrative Schedule of Warrant Instrument and Retail Offer Shares

 

 

 

 

 

 

 

 

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