The phase one fundraising requirement of $4.0 million will enable the company to continue to work towards delivering an economically and operationally robust project ahead of construction.
Work programmes employing phase one fundraising will include:
- initial front end engineering and design;
- early development of the Namib project North decline;
- sourcing of plant and equipment;
- on-going underground development programme required to establish access for the next phase of resource expansion drilling; and
- recruitment of technical and operational staff at the Namib project
Proposed placing plan
The phase one fundraising is proposed to be raised in two stages, an initial placing of unsecured 10% convertible loan notes 2018 (tranche one notes) and a subsequent placing and open offer of new ordinary shares to new and certain existing shareholders of the company.
Greenstone Resources, the company’s largest shareholder, will conditionally subscribe or underwrite the full $4.0 million phase one fundraising. Greenstone will subscribe $1.2 million for the tranche one notes immediately following a general meeting to be held on 28 August 2015, subject to shareholder approval.
A placing and an open offer open to all qualifying shareholders to raise up to $2.8 million is intended to be launched in September 2015, conditionally underwritten by Greenstone and together with the placing of the tranche one notes, subject to shareholder approval.
Assuming the placing and open offer proceed to raise $2.8 million from investors other than Greenstone, the tranche one notes will be converted such that Greenstone will hold no more than 29.99% of the then issued share capital.
The Greenstone placing provides North River Resources with critical funding to continue operations, while also providing certainty of funding to allow the company to continue advancing the development of the Namib project simultaneously with preparations for the placing and open offer
The phase one fundraising requirement nominally assumes for planning purposes that the company will receive the mining licence on or before the 31 October 2015.
“The proposed fundraising, which has been structured to allow qualifying shareholders the opportunity to participate, will enable the company to commence initial front end engineering and design and continue mine development work ahead of receipt of the mining licence.
“This is in line with our vision to develop the Namib project into an efficient and commercial production asset in Namibia for relatively low capital expenditure,” says North River Resources CEO James Beams.
“While the licence application process has prompted some slippage in the development schedule, we are confident that this will soon be forthcoming. As demonstrated by Greenstone’s on-going support for the Namib project, we are not alone in this belief, and I am hopeful that our shareholders share this confidence in what is a stand-out brownfield asset located in a highly attractive mining environment,” Beams said.
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