REG - Oriole Resources PLC - Lanstead Subscription and Sharing Agreement

Oriole ResourcesAnnouncement

01/08/2023 07:00

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RNS Number : 8265H  Oriole Resources PLC  01 August 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN. IN ADDITION, MARKET
SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT,
WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION.
UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE
TO BE IN POSSESSION OF INSIDE INFORMATION.

1 August 2023

Oriole Resources PLC

("Oriole Resources", the "Company" or the "Group")

Lanstead Subscription and Sharing Agreement

Oriole Resources (AIM: ORR), the AIM-quoted exploration company focussed on
West Africa, is pleased to announce a conditional subscription to raise
£1,767,000 (the "Subscription") through the issue of 930,000,000 new ordinary
shares of 0.1 pence each in the Company ("Ordinary Shares") at a price of 0.19
pence per Ordinary Share (the "Issue Price") to institutional investor
Lanstead Capital Investors L.P. ("Lanstead"), together with a related sharing
agreement ("Sharing Agreement") pursuant to which the Company pledges the
gross proceeds of the Lanstead Subscription.

 

Highlights

·    Subscription for 930,000,000 new Ordinary Shares (the "Lanstead
Subscription Shares") by Lanstead at an Issue Price of 0.19 pence to raise
£1,767,000 (the "Lanstead Subscription").

 

The Issue Price of 0.19 pence represents a 21% premium to the closing
mid-market price (of 0.15 pence) of the Ordinary Shares on 31 July 2023, the
latest business date prior to the announcement of the Subscription.

 

·    The £1,767,000 gross proceeds of the Lanstead Subscription will be
pledged to Lanstead by the Company pursuant to a Sharing Agreement with
Lanstead. The Sharing Agreement, details of which are set out below, entitles
the Company to receive back those proceeds on a pro rata monthly basis over a
period of 24 months, subject to adjustment upwards or downwards each month
depending on the Company's share price at the time relative to the Benchmark
Price of 0.2533 pence per share. The monthly settlement amounts for the
Sharing Agreement are structured to commence approximately six weeks following
Admission.

 

·    The Sharing Agreement provides the opportunity for the Company to
benefit from positive future share price performance; an underlying reason for
undertaking the fund raise in this way.

 

·    The proceeds of the Sharing Agreement will be used primarily to
provide funding for the Group, as Oriole continues its strategy of seeking
joint-venture partnerships and project-level financing.

 

·    Immediately following completion of the Subscription, Lanstead will
hold a 26.23% interest in the Company.

 

Oriole Resources CEO, Tim Livesey, commented: "We are delighted to have
brought Lanstead onto the shareholder register. The mechanics of the Sharing
Agreement provide the Company with significant upside to the proceeds that can
be received, which a traditional market placing would not have provided.
Ongoing discussions around project-level financing for the Eastern CLP, and a
partnership deal on Bibemi, will be greatly strengthened by having an
institutional investor on board, whilst we continue to await the trigger
events that will enable the monetisation of the legacy asset portfolio.

"The Sharing Agreement is designed to remove the market's customary
nervousness about cash availability, and we are hopeful that we can move to a
position whereby good news increases the share price, which will drive
increased proceeds from the Sharing Agreement, which we can use to drive
further exploration success."

 

Background to the Subscription and Sharing Agreement

 

Lanstead has conditionally agreed to subscribe for the Lanstead Subscription
Shares at the issue price of 0.19 pence for gross proceeds of £1,767,000. The
Subscription proceeds will be pledged to Lanstead under the Sharing Agreement
pursuant to which the Company is entitled to receive back those proceeds on a
pro rata monthly basis over a period of 24 months, subject to adjustment
upwards or downwards each month depending on the Company's share price at the
time.

 

A significant factor in Oriole's decision to enter into the Subscription is
that the Sharing Agreement provides the opportunity for the Company to benefit
from positive future share price performance.  There is no upper limit placed
on the additional proceeds which could be received by the Company as part of
the monthly settlements and the amount available in subsequent months is not
affected.  Whilst the Company notes the corresponding risk that a fall in
Oriole Resources' share price could reduce the amount of proceeds received, as
explained below, the Directors expect the Company's projects to make
considerable positive advancements over the 24-month term of the Sharing
Agreement. If these advancements are successful, and if the success of these
advancements is reflected in Oriole Resources' share price, the Company
expects the proceeds to be received from Lanstead to exceed the amount pledged
under the Sharing Agreement.

 

The proceeds will primarily be used to provide funding for the Group, as
Oriole continues its strategy of seeking joint-venture partnerships and
project-level financing. Any additional proceeds received, beyond those needed
for corporate purposes, will be used towards direct exploration at the
Company's projects in Cameroon.

 

Further information on the Lanstead Subscription

 

Pursuant to the subscription agreement between the Company and Lanstead (the
"Lanstead Subscription Agreement"), 930,000,000 new Ordinary Shares have today
been allotted and will be issued, conditional upon Admission, to Lanstead at
0.19 pence per Lanstead Subscription Share for an aggregate subscription value
of £1,767,000.

 

The Lanstead Subscription proceeds of £1,767,000 will immediately following
Admission be pledged to Lanstead under the Sharing Agreement under which
Lanstead will then make, subject to the terms and conditions of that Sharing
Agreement, monthly settlements (subject to adjustment upwards or downwards) to
the Company over 24 months, as detailed below. As a result of entering into
the Sharing Agreement, the aggregate amount ultimately received by the Company
under the Lanstead Subscription and the Sharing Agreement may be more or less
than £1,767,000, as further explained below.

 

Notwithstanding the Subscription Price of 0.19 pence, shareholders should note
that the share price of the Company needs to be on average over the 24 months
of the Sharing Agreement at or above the Benchmark Price of 0.2533 pence per
share for the Company to receive at least, or more than, the gross
Subscription of £1,767,000.

 

The Lanstead Subscription Shares will be issued credited as fully paid and
will rank pari passu in all respects with the Company's existing issued
Ordinary Shares. The Lanstead Subscription is conditional, inter alia, on
admission of the Lanstead Subscription Shares to trading on AIM, and there
being: (i) no breach of certain customary warranties given by the Company to
Lanstead at any time prior to Admission (which is expected on or around 7
August 2023); and (ii) no force majeure event occurring prior to Admission.

 

The Sharing Agreement

 

In addition to the Lanstead Subscription, the Company has entered into the
Sharing Agreement, pursuant to which Oriole will pledge the £1,767,000 gross
proceeds of the Lanstead Subscription to Lanstead.  The Sharing Agreement
will enable the Company to share in any share price appreciation over the
Benchmark Price (as defined below).  However, if the Company's share price is
less than the Benchmark Price then the amount received by the Company under
the Sharing Agreement will be less than the gross proceeds of the Lanstead
Subscription which were pledged by the Company to Lanstead at the outset.

 

The Sharing Agreement provides that the Company will receive 24 monthly
settlement amounts as measured against a benchmark share price of 0.2533 pence
per Ordinary Share (the "Benchmark Price"). The monthly settlement amounts for
the Sharing Agreement are structured to commence approximately six weeks
following Admission.

 

If the measured share price (the "Measured Price"), calculated as the average
of each day's volume weighted share price ("VWAP") of the Company's Ordinary
Shares over a 20-day period prior to the monthly settlement date, exceeds the
Benchmark Price, the Company will receive more than 100% of that monthly
settlement due on a pro rata basis according to the excess of the Measured
Price over the Benchmark Price. There is no upper limit placed on the
additional proceeds receivable by the Company as part of the monthly
settlements and the amount available in subsequent months is not affected.
 Should the Measured Price be below the Benchmark Price, the Company will
receive less than 100% of the monthly settlement calculated on a pro rata
basis and the Company will not be entitled to receive the shortfall at any
later date. As such, the final determination of the total amounts to be
received under the Sharing Agreement will only be known after the 24 months
have elapsed.

 

For example, if on a monthly settlement date the calculated Measured Price
exceeds the Benchmark Price by 10%, the settlement on that monthly settlement
date will be 110% of the amount due from Lanstead on that date.  If on the
monthly settlement date the calculated Measured Price is below the Benchmark
Price by 10%, the settlement on the monthly settlement date will be 90% of the
amount due on that date. Each settlement as so calculated will be in final
settlement of Lanstead's obligation on that settlement date.

 

Assuming the Measured Price equals the Benchmark Price on the date of each and
every monthly settlement, Oriole Resources would receive 24 monthly settlement
amounts of £73,625, totalling in aggregate proceeds of £1,767,000 (before
expenses) from the Lanstead Subscription and Sharing Agreement. Examples of
the proceeds from the Sharing Agreement to be received each month, based upon
varying levels of average share price in the month, are shown in the Appendix
to this announcement.

 

In addition, the Company has agreed to issue to Lanstead 83,700,000 new
Ordinary Shares ("Value Payment Shares") in connection with entering into the
Sharing Agreement.

 

In no event will fluctuations in the Company's share price result in any
increase in the number of Lanstead Subscription Shares issued by the Company
or received by Lanstead. The Sharing Agreement allows both Lanstead and the
Company to benefit from future share price appreciation.

 

In total, Lanstead will be issued with 1,013,700,000 new Ordinary Shares
(including the 83,700,000 Value Payment Shares) pursuant to the Lanstead
Subscription which, when issued, will equate to approximately 26.23% of the
Company's enlarged issued share capital following Admission.

 

No shares, warrants or additional fees are owed to Lanstead at any point
during this agreement other than those disclosed above.

 

The Directors believe that the Sharing Agreement potentially provides a number
of benefits to the Company and its shareholders including: the certainty of
additional investment, albeit the amount of proceeds to be received under the
agreements is wholly dependent on the Company's share price each month over
the term of the Sharing Agreement; the opportunity to benefit from positive
future share price performance; and that the amount of shares issued is fixed,
together with the cost of their issue.

 

Authority to allot shares

 

The allotment of the Lanstead Subscription Shares, and the Value Payment
Shares is being made pursuant to existing authorities to allot shares and
other relevant securities and to disapply pre-emption rights under section 551
of the Companies Act 2006, which the Directors were given at the Company's
Annual General Meeting held on 8 June 2023.

 

Admission and Total Voting Rights

 

Application will be made for the Lanstead Subscription Shares and the Value
Payment Shares to be admitted to trading on the AIM market of the London Stock
Exchange ("Admission"). It is anticipated that Admission to AIM will occur at
8.00 am, on or around 7 August 2023.

 

Following Admission the Company will have 3,864,539,005 Ordinary Shares in
issue. The figure of 3,864,539,005 may be used by the Company's shareholders
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 Company under the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.

 

About Lanstead

 

Lanstead is a global investment firm that provides funding for ongoing
business objectives to listed small and mid-cap growth companies. In London,
Lanstead focus on equity investments in companies already listed or quoted on
the London Stock Exchange or European exchanges and on management teams with a
clear growth strategy.

 

Lanstead's extensive experience allows it to invest in most industries,
focusing on providing supportive, longer-term capital that rewards company
growth. Companies with Lanstead on the shareholder register via an equity
placement to Lanstead with an accompanying Lanstead sharing agreement can
benefit from a unique and flexible approach to finance growth. This provides
the opportunity for companies to benefit from additional cash beyond the
original placing proceeds without having to issue additional shares.

 

Further information is available at www.Lanstead.com (http://www.Lanstead.com)

 

Appendix - example returns from the Lanstead Sharing Agreement

 

In relation to each of the months in the 24 month calculation period:

 

 Average 20 Day VWAP                                                            0.1900p      0.2533p      0.3166p
 Benchmark Price                                                                0.2533p      0.2533p      0.2533p
 20-day VWAP as % of Benchmark Price                                            75%          100%         125%
 Settlement from Lanstead in the month                                          £55,219      £73,625      £92,031
 Proceeds over 24-month period if Average 20 Day VWAP is at this level for the  £1,325,250   £1,767,000   £2,208,750
 entire period

 

 

For further information please visit www.orioleresources.com
(http://www.orioleresources.com) , @OrioleResources on Twitter, or contact:

 

 Oriole Resources Plc                        Tel: +44 (0)23 8065 1649
 Tim Livesey / Bob Smeeton / Claire Bay

 BlytheRay (IR/PR Contact)                   Tel: +44 (0)20 7138 3204
 Tim Blythe / Megan Ray

 Grant Thornton UK LLP                       Tel: +44 (0)20 7383 5100
 Samantha Harrison / George Grainger / Ciara Donnelly
 SP Angel Corporate Finance LLP              Tel: +44 (0)20 3470 0470

 Ewan Leggat / Harry Davies-Ball

 

Notes to Editors:

 

Oriole Resources PLC is an AIM-listed gold exploration company, operating in
West Africa. It is focussed on early-stage exploration in Cameroon, where the
Company has a maiden Resource of 305,000 oz Au in the JORC Inferred category
at the Bibemi project and has identified multi-kilometre gold and lithium
anomalism within the district-scale Central Licence Package project. At the
more advanced Senala gold project in Senegal, Oriole was advised by IAMGOLD on
26 April 2023 that AGEM Senegal Exploration Suarl ('AGEM') was now a
wholly-owned subsidiary of Managem Group. As previously announced, AGEM has
earned an initial 51% beneficial interest by spending US$4 million and has the
option to spend up to a further US$4 million by 28 February 2024 to earn a
further 19% interest. Reverse Circulation drilling is planned as part of
AGEM's Year 6 programme at Senala. The Company also has several interests and
royalties in companies operating in East Africa and Turkey that could deliver
future cash flow.

 

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