REG - Resolute Mining Ltd - A$140m underwritten Raise to enhance balance sheet

Resolute MiningAnnouncement

10/11/2022 07:01

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RNS Number : 9181F  Resolute Mining Limited  10 November 2022

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

10 November 2022

 

A$140m underwritten Equity Raising to strengthen balance sheet

 

Highlights

·    Resolute launches institutional placement and 1-for-1.11 accelerated
non-renounceable entitlement offer to strengthen balance sheet and provide
financial platform for growth

·    Underwritten A$140 million component to be used to pay down debt,
reducing net debt position from US$156 million to US$65 million

·    Up to an additional A$60 million from a non-underwritten retail
entitlement offer component (if fully subscribed) to further reduce debt,
provide general working capital and fund growth initiatives, including the
potential expansion optionality at Syama North

·    Equity Raising provides refreshed management team with financial
flexibility to continue to execute on demonstrated operational turnaround

 

Resolute Mining Limited (ASX/LSE: RSG, "Resolute" or the "Company") is pleased
to announce the launch of a fully underwritten institutional placement and a
partially underwritten 1-for-1.11 accelerated non-renounceable entitlement
offer ("Equity Raising" or the "Offer") of new fully paid ordinary shares in
the Company (New Shares) at an offer price of A$0.16 per New Share to
strengthen the Company's balance sheet and provide a financial platform for
growth.

The Equity Raising comprises an underwritten component of A$140 million which
will be used to pay down the Company's Syndicated Loan Facility. Post Equity
Raising, net debt will be reduced from US$156 million to US$65 million, with
US$84 million remaining outstanding on the Company's Syndicated Loan Facility,
the majority of which is due in March 2024 1 .

Under the non-underwritten retail component of the entitlement offer, in the
event the retail offer is fully subscribed, up to an additional A$60 million
can be raised. These proceeds, in conjunction with pro forma cash reserves of
A$77.3 million and future free cash flow, will be used to further repay debt,
fund general working capital and costs of the Equity Raising, in addition to
supporting the Company's Syama North expansion plan.

The Syama North expansion plans include drilling and test work to convert
Resources to Reserves and completion of the Pre-Feasibility Study in Q1 2023
ahead of the commencement of a Definitive Feasibility Study in Q2 2023.
Development of the Syama North resource is expected to provide ore feed for a
low capex expansion of the Sulphide circuit to achieve economies of scale and
reduce AISC per ounce.

Terry Holohan, CEO and Managing Director commented:

"Resolute's performance has steadily improved with four consecutive quarters
of increased production. This equity raising is the final step in Resolute's
transition to a sustainable gold producer with a de-risked balance sheet. The
Company is now in a strong position to pursue a new open pit operation at
Syama North, together with low capital expansion options for the Sulphide
circuit."

Details of the Equity Raising

The Equity Raising comprises:

·       An underwritten institutional placement of approximately 258
million New Shares to raise approximately A$41 million ("Placement");

·       An underwritten 1-for-1.11 pro-rata accelerated,
non-renounceable institutional entitlement offer of approximately 348 million
New Shares to raise approximately A$56 million ("Institutional Entitlement
Offer"); and

·       A 1-for-1.11 pro-rata non-accelerated, non-renounceable retail
entitlement offer of approximately 646 million New Shares to raise up to
approximately A$103 million ("Retail Entitlement Offer") of which
approximately A$43 million is underwritten.

The Equity Raising will be undertaken at a fixed issue price of A$0.16 per New
Share, which as at the last trading day of 9 November 2022, represents a:

·       22.0% discount to the last closing price of A$0.205 2 ;

·       23.1% discount to the 5-day volume weight average price of
A$0.208(2); and

·       13.6% discount to the Theoretical Ex-Rights Price ("TERP") 3 
of A$0.185.

Eligible institutional shareholders will be invited to participate in the
Institutional Entitlement Offer, which is being conducted today, Thursday, 10
November 2022, along with the Placement. Eligible institutional shareholders
can choose to take up all, part or none of their entitlements under the
Institutional Entitlement Offer. Entitlements not taken up by eligible
institutional shareholders and entitlements that would otherwise have been
offered to ineligible institutional shareholders will be offered to new
institutional investors and existing institutional shareholders concurrently
with the Institutional Entitlement Offer.

The Retail Entitlement Offer will be conducted at the same fixed issue price
and offer ratio as the Institutional Entitlement Offer. Under the Retail
Entitlement Offer, eligible retail shareholders with a registered address in
Australia or New Zealand and who are outside the United States will be
entitled to subscribe for 1 New Share for every 1.11 existing fully paid
ordinary shares in Resolute held at 7:00pm (Sydney time) on Monday, 14
November 2022 ("Record Date"), The Retail Entitlement Offer includes an
oversubscription facility, pursuant to which eligible retail shareholders who
take up all of their entitlement (and who are not a related party of Resolute)
may apply for up to 50% of their entitlement, in addition to their
entitlement, as additional New Shares. The Retail Entitlement Offer will be
open from Thursday, 17 November 2022 to eligible retail shareholders in
Australia and New Zealand, as at 7:00pm (Sydney time) on the Record Date and
is expected to close at 5:00pm (Sydney time) on Monday, 5 December 2022. Offer
documents in respect of the Retail Entitlement Offer will be lodged with the
ASX on Thursday, 17 November 2022, with details on how to access those
documents to be sent in a letter to eligible retail shareholders on Thursday,
17 November 2022.

Each New Share issued under the Equity Raising will rank pari passu with
existing fully paid ordinary shares in Resolute on issue.

The Entitlement Offer is non-renounceable and entitlements will not be
tradeable or otherwise transferrable.

Important information regarding the Equity Raising, including the offer
restrictions applicable to the Equity Raising, is outlined in the Resolute
Investor Presentation released today.

 

TEMPORARY SUSPENSION OF TRANSFER OF SHARES BETWEEN ASX AND LSE

Resolute has been granted a waiver of ASX Settlement Operating Rules 13.9.4
and 13.9.9 in respect of transmutations of securities from the Company's
Australian register to the Company's United Kingdom register to ensure that
transfers of the Company's shares from ASX to LSE will be deferred from the
date that the New Shares are issued under the Placement and Institutional
Entitlement Offer (expected to be Thursday, 17 November 2022) until the
Company releases a UK admission prospectus in respect of the Equity Raising
(expected to be on or before Friday, 9 December 2022) (Relevant Period). The
Relevant Period is estimated to be a period of 18 business days.

( )

 

 

Advisors

Canaccord Genuity (Australia) Limited ("Canaccord") and Sprott Capital
Partners LP ("Sprott") are acting as Joint Lead Managers, Underwriters &
Bookrunners (together, the "Joint Lead Managers"). Joh. Berenberg, Gossler
& Co. KG and Euroz Hartleys Limited are acting as Co-Managers (together
the "Co-Managers").

Treadstone Resource Partners are acting as strategic and financial advisor and
Allen & Overy are acting as legal advisor to Resolute in Australia and the
United Kingdom.

Additional Information

Further information concerning the Equity Raising is contained in the Resolute
Investor Presentation released to the ASX and LSE today or is available on the
ASX website
(https://www2.asx.com.au/markets/trade-our-cash-market/announcements.rsg) .
Nothing contained in this announcement constitutes investment, legal, tax or
other advice. You should seek appropriate professional advice before making
any investment decision.

Disclaimer

This announcement has been prepared for publication in Australia and may not
be released or distributed in the United States. This announcement does not
constitute an offer to sell, or a solicitation of an offer to buy, any
securities in the United States or any other jurisdiction. The entitlements
and New Shares referred to in this announcement have not been, and will not
be, registered under the US Securities Act of 1933 (US Securities Act) or the
securities laws of any state or other jurisdiction of the United States, and
the entitlements may not be taken up by, and the New Shares may not be offered
or sold to, any person in the United States except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
US Securities Act and any other applicable securities laws of any state or
other jurisdiction of the United States. The Company does not intend to
register any portion of the Offer under the US Securities Act or to conduct a
public offering in the United States.

The release, publication or distribution of this announcement (including in
electronic copy) outside Australia may be restricted by law. If you come into
possession of this announcement, you should observe such restrictions and
should seek your own advice on such restrictions. Any non-compliance with
these restrictions may contravene applicable securities laws.

General

In addition, this announcement is subject to the same "Important Notice and
Disclaimer" as appears on slides 2 to 7 of the Investor Presentation with any
necessary contextual changes.

 

Cautionary Statement about Forward-Looking Statements

This announcement contains certain "forward-looking statements" including
statements regarding our intent, belief, or current expectations with respect
to Resolute's business and operations, market conditions, results of
operations and financial condition, and risk management practices. The words
"likely", "expect", "aim", "should", "could", "may", "anticipate", "predict",
"believe", "plan", "forecast" and other similar expressions are intended to
identify forward-looking statements. Indications of, and guidance on, future
earnings, anticipated production, life of mine and financial position and
performance are also forward-looking statements. These forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause Resolute's actual results, performance and achievements or
industry results to differ materially from any future results, performance or
achievements, or industry results, expressed or implied by these
forward-looking statements. Relevant factors may include (but are not limited
to) changes in commodity prices, foreign exchange fluctuations and general
economic conditions, increased costs and demand for production inputs, the
speculative nature of exploration and project development, including the risks
of obtaining necessary licences and permits and diminishing quantities or
grades of reserves, political and social risks, changes to the regulatory
framework within which Resolute operates or may in the future operate,
environmental conditions including extreme weather conditions, recruitment and
retention of personnel, industrial relations issues and litigation.

Forward-looking statements are based on Resolute's good faith assumptions as
to the financial, market, regulatory and other relevant environments that will
exist and affect Resolute's business and operations in the future. Resolute
does not give any assurance that the assumptions will prove to be correct.
There may be other factors that could cause actual results or events not to be
as anticipated, and many events are beyond the reasonable control of Resolute.
Readers are cautioned not to place undue reliance on forward-looking
statements, particularly in the current economic climate with the significant
volatility, uncertainty and disruption caused by the COVID-19 pandemic.
Forward-looking statements in this document speak only at the date of issue.
Except as required by applicable laws or regulations, Resolute does not
undertake any obligation to publicly update or revise any of the
forward-looking statements or to advise of any change in assumptions on which
any such statement is based. Except for statutory liability which cannot be
excluded, each of Resolute, its officers, employees and advisors expressly
disclaim any responsibility for the accuracy or completeness of the material
contained in these forward-looking statements and excludes all liability
whatsoever (including in negligence) for any loss or damage which may be
suffered by any person as a consequence of any information in forward-looking
statements or any error or omission.

About Resolute

Resolute Mining (ASX/LSE: RSG) is an African gold miner, developer and
explorer with more than 30 years of experience across Australia and Africa. To
date the company has produced over nine million ounces of gold. It currently
operates the Syama Gold Mine in Mali and the Mako Gold Mine in Senegal.
Resolute's gold production and cost guidance for FY2022 is 345,000oz at an
All-In Sustaining Cost of $1,425/oz.

Through all its activities, sustainability is the core value at Resolute. This
means that protecting the environment, providing a sage and productive working
environment for employees, uplifting host communities, and practicing good
corporate governance are non-negotiable priorities. Resolute's commitment to
sustainability and good corporate citizenship has been cemented through its
adoption of and adherence to the Responsible Gold Mining Principles (RGMPs).
This framework, which sets out clear expectations for consumers, investors,
and the gold supply chain as to what constitutes responsible gold mining, is
an initiative of the World Gold Council of which Resolute has been a member
since 2017. The Company is on track to reach full compliance with the RGMPs in
2023.

Contact

 Resolute                                         Public Relations

 James Virgo, GM Finance and Investor Relations   Jos Simson / Emily Moss, Tavistock

 contact@rml.com.au                               resolute@tavistock.co.uk

 +61 8 9261 6100                                  +44 207 920 3150 / +44 7788 554 035

 Australian Media                                 Corporate Broker

 Cameron Morse, FTI Consulting                    Jennifer Lee, Berenberg

 cameron.morse@fticonsulting.com                  +44 20 3753 3040

 +61 433 886 871

 

Authorised by Mr Terry Holohan, Managing Director and Chief Executive Officer

 1  Of the remaining US$84m, US$74m will be due in March 2024 and US$10m is
payable on receipt of the final instalment of US$10m from the sale of Bibiani
(due 18 November 2022)

 2  Based on ASX trading only, not LSE.

 3  The TERP is the theoretical price at which Resolute shares should trade
immediately after the ex-date for the Entitlement Offer. TERP is a theoretical
calculation only and the actual price at which Resolute's shares trade
immediately after the ex-date for the Entitlement Offer will depend on many
factors and may not equal to TERP. TERP is calculated by reference to
Resolute's closing price of A$0.205 on 9 November 2022 and the A$140 million
underwritten component of the Equity Raising

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