TIDMBKY
RNS Number : 6522A
Berkeley Energia Limited
08 June 2016
BERKELEY ENERGIA LIMITED
NEWS RELEASE | 8 June 2016 | AIM: BKY
Premium Financing Update
Berkeley Energia Limited is pleased to announce that the equity
component of the recently announced financing with Resource Capital
Funds (RCF) has successfully completed.
The equity financing comprised the issue of US$5 million worth
of ordinary shares in the Company at a price of 32 pence per share
which represented a premium of approximately 9% to the 10-day VWAP
and 15% to the 30-day VWAP, highlighting the strength of the
project and its robust economics even at the current low uranium
prices. The material terms of the subscription agreement are
described in Appendix 1.
Previously announced as part of the financing, RCF has also
agreed to provide an additional US$5 million through the sale of a
0.375% fully secured net smelter royalty over the project, with
formal documentation currently being completed. The royalty is
consistent with the Company's focus on minimising dilution in order
to protect the equity value of its shareholders.
Managing Director Paul Atherley commented:
"The funding allows us to undertake the initial infrastructure
development ahead of the commencement of main construction and
financing later in the year.
In addition it has allowed us to recommence drilling at a number
of the previously identified high potential exploration targets,
including extensions to the Zona 7 deposit to the south and at
depth.
The results of the optimization studies being undertaken as part
of the definitive feasibility study to be published in the next
couple of months are expected to demonstrate the Salamanca
project's robust economics even at the current low uranium
prices."
Key terms of the royalty financing include the following:
Cash Investment: US$5 million to Berkeley in return for the sale
of a 0.375% fully secured net smelter royalty over future revenues
from the Salamanca project.
Net Smelter Royalty: The royalty will be calculated based on
0.375% of revenue received by Berkeley from uranium ore sold, less
permitted deductions. Any sales of uranium ore made other than on
arm's length terms, will be deemed to have been made on arm's
length terms at a deemed sales price.
Royalty Payments: Berkeley will pay the 0.375% net smelter
royalty within 60 days of the end of each quarter.
Security: Berkeley to provide a mortgage or other forms of
security including pledges or liens where applicable to RCF over
its interests in the Salamanca project tenements.
Conditions Precedent: Entry into the formal documentation which
is currently being finalised between the companies and satisfaction
of certain other conditions including delivery and lodgement of the
security to RCF.
Transfer of Interests: Berkeley may not sell, assign, transfer
or dispose of part or all of the project tenements unless the
incoming party executes a deed of covenant agreeing to comply with
the terms of the royalty, including the provision of security over
the project tenements and a guarantee and indemnity from its
holding company.
Project financiers: The terms of the royalty do not restrict
Berkeley's ability to incur debt or grant additional royalties,
including the ability for Berkeley to grant prior ranking security
in favour of third party financiers of the Salamanca project,
subject to appropriate intercreditor arrangements recognising the
royalty payable to RCF.
First Right of Refusal: Berkeley has a first right of refusal to
purchase the royalty if RCF proposes to sell or transfer the
royalty, other than a transfer to a related entity of RCF.
Undertakings: Berkeley provides RCF with various undertakings in
respect of the Salamanca project including maintaining the
Salamanca project tenements in good standing and in compliance with
applicable laws, not commingling uranium ore from the Salamanca
project tenements with other products, keeping royalty records and
notifying RCF of any intention to relinquish the Salamanca project
tenements to enable RCF to acquire those tenements, to the extent
permitted.
RCF Information Rights: Berkeley agrees to provide RCF with
rights to information such as financial statements, information
relating to mining operations, the right to inspect the books and
records of Berkeley relating to the Salamanca project tenements and
royalty and the right to conduct technical audits of the
project.
Events of Default: The events of default include non-payment by
Berkeley of the royalty which is not remedied, Berkeley failing to
comply with the material terms of the royalty agreement and an
insolvency event occurring in relation to Berkeley. An event of
default entitles RCF to enforce its security over the Salamanca
project tenements.
The terms of the royalty were documented in a binding term sheet
executed by Berkeley and RCF. The term sheet was executed at the
same time as the subscription agreement and prior to RCF holding
10% of the ordinary shares and becoming a substantial shareholder
in Berkeley. The parties agreed to enter into long form
documentation incorporating the above material terms of the royalty
and also include usual representations and warranties, including
that Berkeley has valid title to the Salamanca project tenements
and has complied with relevant laws relating to the project
tenements, and other undertakings which are considered standard for
a royalty of this nature.
For further information please contact:
Paul Atherley Hugo Schumann Paul Shackleton / Nick
Prowting (Nomad)
Managing Director Corporate Jay Ashfield (Broker)
Manager
+44 207 478 +44 207 478
3900 3900 WH Ireland Limited
info@berkeleyenergia.com +44 207 220 1666
About RCF
RCF is one of the Company's largest shareholders holding around
13.2% (upon completion of the subscription agreement) of the issued
capital. Since inception, RCF has supported 148 mining companies,
with projects located in 47 countries and across 29 commodities.
Further information about RCF can be found on its website
(www.resourcecapitalfunds.com).
RCF has a strong team of investment professionals, with wide
ranging industry and technical expertise and a demonstrated history
of investments in mining globally. RCF's track record is based on
its ability to pick technically and commercially compelling assets
and support management to achieve desired outcomes whilst remaining
throughout a source of patient capital. RCF aims to partner with
companies to build strong, successful and sustainable businesses
and in doing so strives to earn superior returns for all
shareholders.
Appendix 1: Material Terms of Completed Subscription
Agreement
-- Subscription Amount: US$5 million
-- Subscription Price: A$0.625 (GBP0.32) per share
-- Number of Subscription Shares issued: 11,011,700 ordinary fully paid shares
-- Completion Date: 19 May 2016
-- On the Completion Date, RCF paid the Subscription Amount to
Berkeley and Berkeley issued the Subscription Shares to RCF (or its
nominated custodian).
-- The Subscription Shares are fully paid ordinary shares in
Berkeley and rank equally in all respects, including for dividends,
distributions, rights and other benefits, with existing shares.
-- Berkeley applied for quotation of the Subscription Shares on
ASX and AIM and ensured that the Subscription Shares were freely
tradable following issue.
-- Berkeley provided representatives and warranties to RCF
including that the Subscription Shares would rank equally with
existing fully paid ordinary shares, be freely tradable, that
Berkeley was in compliance with its continuous disclosure
obligations, there was no material change in the financial position
of Berkeley since its last financial statements and there was no
pending or threatened litigation against Berkley which would have a
material adverse effect on the company.
-- RCF provided representatives and warranties to Berkeley
including that RCF made its own assessment of Berkeley and
conducted its own investigations into the company in deciding to
subscribe for the Subscription Shares, RCF is in compliance with
all relevant laws and regulations upon entering into the
subscription agreement and subscribing for the Subscription Shares
(including in respect to section 606 of the Corporations Act, if
applicable), RCF agrees to be bound by Berkeley's constitution upon
the issue of the Subscription Shares and RCF is an 'accredited
investor' (as defined in Rule 501(a) of Regulation D promulgated by
the U.S. Securities Act) and has the knowledge and experience to
evaluate an investment in the Subscription Shares and has the
financial resources to allow it to make the investment in the
Subscription Shares and to tolerate any losses therefrom.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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