Savannah Resources plc (LON:SAV), the AIM quoted resource development company, announced this morning that it has raised approximately GBP1.3 million through the subscription of 25,085,954 new ordinary shares (‘Subscription Shares’) at a subscription price of 5.25p per ordinary share and the issue of one warrant per two Subscription Shares having an exercise price of 6.0p with both new and existing investors.
HIGHLIGHTS:
-- Raised gross proceeds of approximately GBP1.3 million cash -- Funds to be used predominately to support:
o Development of the newly acquired lithium projects in Portugal – drilling due to commence in the coming weeks at Mina do Barroso
o Continued progression of the world-class Mutamba Heavy Mineral Sands Project in Mozambique – tender process underway to commission a group to undertake Pre-Feasibility Study
o Advancement of Block 4 and 5 copper projects in Oman into production – mining expected to commence in H1 2018
o General working capital purposes
Matthew King, Savannah’s Chairman said today, “Following the recent acquisition of our very exciting lithium projects in Portugal, we have augmented our funds with this capital raising, which was strongly led by our largest shareholder Al Marjan Ltd. We are excited that a drilling programme at our Mina do Barroso mining licence will start in the next few weeks and look forward to providing shareholders with further updates as appropriate.”
Details of Subscription
The Company will have a pro-forma cash balance of approximately GBP2.5 million following the receipt of the gross Subscription proceeds of GBP1.3 million, specifically:
— Al Marjan Ltd, the Company’s largest shareholder, has increased its shareholding to 29.26% with a cash subscription of GBP520,000;
— Manohar Shenoy, an Alternate Director of the Company, has subscribed for GBP200,000 worth of Subscription Shares which shall, when combined with the Al Marjan holding, not exceed a holding of 29.99% of the Company’s shares from time to time; and
— David Archer, CEO of Savannah, has subscribed for GBP300,000 worth of Subscription Shares in cash, providing him with a total holding of 5.65% of the Company’s total voting rights following the Subscription.
The net proceeds of the Subscription will be used by Savannah to fund work on its Portuguese lithium projects, to advance the Company’s Mutamba Project in joint venture with Rio Tinto in Mozambique, further work on the Oman Copper-Gold Project as well as for general working capital purposes to support the Company.
Issue of Share Options
The Company has also granted options over 500,000 ordinary shares of 1 pence each in the Company. The Share Options are being issued to an employee in recognition of both his significant contribution towards progressing Savannah’s portfolio of development projects in 2017 and also as part of policy of retaining talented personnel in the Company.
The Share Options have an exercise price of 6.75p, an exercise period limit of four years: 50% vesting after 12 months of completed service and 50% after 24 months of completed service (measured from time of issue). The exercise price represents a premium of 35% to the closing price on 6 July 2017.
Related Party Transaction
David Archer, Manohar Shenoy and Al Marjan are respectively directors and substantial shareholders of the Company. The Subscription by the Related Parties constitutes a related party transaction in accordance with AIM Rule 13. Matthew King and Dale Ferguson, who are not subscribing for Subscription Shares and are therefore independent Directors for these purposes, having consulted with the Company’s Nominated Adviser, consider the Subscription by the Related Parties to be fair and reasonable insofar as Savannah’s Shareholders are concerned.
Voting Rights and Regulatory Information
Application will be made for the Subscription Shares, which will rank pari passu with the existing ordinary shares of 1p each (‘Ordinary Shares’) in the Company, to be admitted to trading on AIM (‘Admission’). It is expected that Admission will become effective and dealings will commence at 8.00 a.m. on or around 13 July 2017. The Warrants are to be issued one business day following Admission, having an exercise price of 6.0p and being exercisable within three years from the date of issue.
Following the Subscription, the percentage holding of certain directors and significant shareholders will increase as per the table below:
Shareholder Holding Percentage Number Holding Percentage
prior of Ordinary of Subscription following of Ordinary
to the Shares Shares Subscription Shares
Subscription prior subscribed following
to the for Subscription
Subscription
David Archer 25,931,251 4.85% 5,714,286 31,645,537 5.65%
Al Marjan 153,845,417 28.78% 9,904,762 163,750,179 29.26%
Manohar
Shenoy 0 0% 3,809,524 3,809,524 0.68%
In addition, the Company’s Chief Financial Officer, Michael McGarty, has subscribed for 95,283 Subscription Shares in cash at the Subscription Price, providing him with a total holding of 0.017% of the Company’s issued share capital with voting rights following Admission.
