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11 November 2024
AIM: AAU
STRATEGIC PROJECT FINANCING
TO PROGRESS 100%-OWNED DOKWE GOLD PROJECT & CORNERSTONE ASX IPO
Ariana Resources plc ("Ariana" or "the Company"), the AIM-listed mineral exploration and development company with gold project interests in Africa and Europe, is pleased to announce that it has entered into a Strategic Project Financing Agreement with an Institutional Investor* (the "Investor") for the provision of an aggregate loan of up to US$5,000,000 ("Loan"), of which an initial US$2,000,000 has been advanced to Ariana. Following recent announcements on the 100% owned Dokwe Gold Project ("Dokwe" or the "Project") in Zimbabwe, the Company plans to utilise these funds primarily to commence a Feasibility Study on the Project.
Highlights:
· Financing agreement with the Investor provides an initial advance (the "Initial Drawdown") of the Loan of US$2,000,000 to Ariana, to enable the immediate commencement of work towards the Dokwe Feasibility Study.
· The Investor further agrees to cornerstone, at the appropriate time, an equity investment of a minimum of A$350,000 and up to A$500,000 into the planned ASX capital raise as part of the anticipated ASX dual-listing IPO ("ASX IPO").
· Ariana can utilise additional funds up to an aggregate of US$5,000,000 over four (4) years, which, combined with future capital arrangements the Company may separately enter into, provides funding flexibility as the Dokwe Project is advanced towards construction.
Dr. Kerim Sener, Managing Director, commented:
"We are very pleased to enter into this Strategic Project Financing Agreement arranged by RiverFort Global Capital Ltd*. at this important time in our development.
"Significantly, this funding is intended to limit dilution and forms a key part of our strategy in the lead-up to our planned ASX IPO. Ariana intends to repay the funds advanced under the facility in cash, primarily from cashflow generated from its business operations in future years. As part of the funding arrangement, the Investor intends to cornerstone part of the ASX placing to accompany the IPO.
"Having access to this capital enables the Company immediately to advance the Dokwe Project into its planned Feasibility Study programme, which will initially include additional exploration of the project to prove up additional resource upside. We are confident that the resource base of the Dokwe Project is capable of further growth, and we are currently targeting a resource in excess of 2Moz of gold.
"We are extremely confident that our exploration and development plans will continue to bear fruit as we continue to develop on our path towards becoming a mid-tier gold producer."
* Investor is Riverfort Global Opportunities PCC Limited.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Strategic Funding Agreement Key Terms
| Facility | Strategic Project Financing Agreement |
| Headline Amount | US$5,000,000 |
| Availability Period | Four years from the date of first drawdown. |
| Initial Drawdown | The Investor will advance US$2,000,000 to Ariana on the Execution Date. Any amounts drawn and outstanding shall be known as "Principal". Further drawdowns in the aggregate up to the Headline Amount shall be by mutual decision between the Investor and Ariana. |
| Equity Placing Participation | The Investor will subscribe for a minimum of A$350,000 and up to A$500,000 of equity in the Company as part of the ASX IPO. This is subject to the ASX IPO being completed by no later than 31 March 2025. |
| Execution Date | The date on which the agreement is signed by all relevant parties and is executed. |
| Term | 18 months for each relevant drawdown. |
| Interest
| 15% per annum paid monthly in cash, with an initial 3-month repayment holiday of Principal and Interest. |
| Security
| A first ranking general security over the Company with relevant subsidiaries as guarantors of the Company. |
| Drawdown Fee
| 6% of each Drawdown paid in cash and deducted from gross proceeds or 8% of the Drawdown if settled in shares (being calculated at the Reference Price).
Ariana has elected to settle the Drawdown Fee in cash for the Initial Drawdown.
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| Options on the Initial Drawdown | No later than 31 July 2025, and subject to shareholder approval, the Company will either: a) issue 25 million options over Ordinary Shares with a 4-year maturity and exercise price at a 50% premium to the dual-listing placing price; or b) pay a compensation fee representing the aggregate value of the exercise price of the 25 million options. This exercise price is subject to the ASX IPO completing by 31 March 2025, otherwise the exercise price will be 150% of the Reference Price. |
| Fixed Premium Placing Price | The Investor may elect to convert the balances outstanding into shares or, following the ASX IPO, into CHESS Depository Interests over shares ("CDIs") pursuant to the Loan at a fixed premium placing price representing 140% of the Reference Price for the relevant advance. The Fixed Premium Placing Price for the Initial Drawdown is £0.03929, which will be adjusted to 140% of the ASX Dual-Listing Share Price t if lower. The conversion price will be subject to adjustments for corporate actions and subsequent capital raisings if undertaken at a lower price. |
| Reference Price | Being the average of the 5 daily VWAPs prior to a Drawdown. |
| Repayment Schedule
| The Principal and Interest will be repayable in cash in 16 equal monthly instalments after the initial 3-month holiday. If the Company elects not to repay each monthly instalment in cash on the relevant due date, the Company will grant a 12 month right to convert into shares or CDIs of the Company at the Investor's election at the lower of: a) the Fixed Premium Placing Price; and b) an Adjusted Placing Price representing 10% discount to the lowest 1 VWAP in the 10 preceding trading days. The conversion price will be subject to adjustments for corporate actions and subsequent capital raisings if undertaken at a lower price. |
| Maximum Number of CDIs | To be calculated at the time of the ASX IPO but being limited to the Headline Amount divided by the ASX prescribed floor price for CDIs at the time of an ASX IPO (being, as at the Execution Date, AU$0.20 per CDI). |
| Other
| The Strategic Funding Agreement contains representations, warranties, undertakings and events of default considered by Ariana to be customary for agreements of this nature. |
Contacts:
| Ariana Resources plc | Tel: +44 (0) 20 7407 3616 |
| Michael de Villiers, Chairman | |
| Kerim Sener, Managing Director | |
| Beaumont Cornish Limited (Nominated Adviser) | Tel: +44 (0) 20 7628 3396 |
| Roland Cornish / Felicity Geidt | |
| Ord Minnett Limited (Lead Manager - Australia) | Tel: +61 2 8916 0124 |
| Damien Gullone / Robbie Dowling / Joe Hansen | |
| Panmure Liberum (Joint Broker) | Tel: +44 (0) 20 7886 2500 |
| Kieron Hodgson / Atholl Tweedie / Rauf Munir | |
| Zeus Capital Limited (Joint Broker) Harry Ansell / Katy Mitchell / George Krokos Yellow Jersey PR Limited (Financial PR) | Tel: +44 (0) 203 829 5000
Tel: +44 (0) 7983 521 488 |
| Dom Barretto / Shivantha Thambirajah / |
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them with the proposed arrangements described in this announcement or any matter referred to in it.
Editors' Note:
The information in this announcement that relates to exploration results is based on information compiled by Dr. Kerim Sener BSc (Hons), MSc, PhD, Managing Director of Ariana Resources plc. Dr. Sener is a Fellow of The Geological Society of London and a Member of The Institute of Materials, Minerals, and Mining and has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration and to the activity that has been undertaken to qualify as a Competent Person as defined by the 2012 edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) and under the AIM Rules - Note for Mining and Oil & Gas Companies. Dr. Sener consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
About Ariana Resources:
Ariana is an AIM-listed mineral exploration and development company with an exceptional track record of creating value for its shareholders through its interests in active mining projects and investments in exploration companies. Its current interests include a major gold development project in Zimbabwe, gold production in Türkiye, and copper-gold exploration and development projects in Cyprus and Kosovo.
Ariana owns 100% of the Dokwe Gold Project ("Dokwe") in Zimbabwe. Dokwe is made up of the Dokwe North and Dokwe Central gold deposits which are located in the Tsholotsho District near the city of Bulawayo. The deposits have a combined JORC Measured, Indicated, and Inferred Resource of over 1.83 million ounces of gold (as at June 2024) and the project represents the largest undeveloped gold project in Zimbabwe.
The Company holds a 23.5% interest in Zenit Madencilik San. ve Tic. A.S. a joint venture with Ozaltin Holding A.S. and Proccea Construction Co. in Türkiye which contains a depleted total of c. 2.2 million ounces gold equivalent (as at March 2024, using a price ratio of 90 Ag to 1 Au). The joint venture comprises the Kiziltepe Mine and the Tavsan and Salinbas projects.
The Kiziltepe Gold-Silver Mine is located in western Türkiye and contains a depleted JORC Measured, Indicated and Inferred Resource of 171,700 ounces gold and 3.3 million ounces of silver (as of March 2024). The mine has been in profitable production since 2017 and has been producing at an average rate of c.22,000 ounces of gold per annum. A Net Smelter Return ("NSR") royalty of 2.5% on production is being paid to Franco-Nevada Corporation.
The Tavsan Gold Mine is located in western Türkiye and contains a JORC Measured, Indicated, and Inferred Resource of 311,000 ounces of gold and 1.1 million ounces of silver (as of March 2024). Following the approval of its Environmental Impact Assessment and associated permitting, Tavsan is being developed as the second gold mining operation in Türkiye and is currently in construction. An NSR royalty of up to 2% on future production is payable to Sandstorm Gold.
The Salinbas Gold Project is located in northeastern Türkiye and contains a JORC Measured, Indicated, and Inferred Resource of 1.5 million ounces of gold (as at July 2020). It is located within the multi-million ounce Artvin Goldfield, which contains the "Hot Gold Corridor" comprising several significant gold-copper projects including the 4 million ounce Hot Maden project, which lies 16km to the south of Salinbas. An NSR royalty of up to 2% on future production is payable to Eldorado Gold Corporation.
Ariana owns 76% of UK-registered Western Tethyan Resources Ltd ("WTR"), which operates across south-eastern Europe and is based in Pristina, Republic of Kosovo. The company is targeting its exploration on major copper-gold deposits across the porphyry-epithermal transition. WTR is being funded through a five-year Alliance Agreement with Newmont Mining Corporation (www.newmont.com) and is separately earning-in to up to 85% of the Slivova Gold Project.
Ariana owns 61% of UK-registered Venus Minerals PLC ("Venus") which is focused on the exploration and development of copper-gold assets in Cyprus which contain a combined JORC Indicated and Inferred Resource of 16.6Mt @ 0.45% to 0.80% copper (excluding additional gold, silver and zinc.
Ariana owns several investments in listed and private companies via its Australian subsidiary Asgard Metals Pty. Ltd. ("Asgard"), which also provides technical input into the various investee company exploration programmes. Investments have been made in high-value potential, discovery-stage mineral exploration companies located across the Eastern Hemisphere and within easy reach of Ariana's operational hubs in Australia, Türkiye, the UK, and Zimbabwe. Its most advanced interest is through a 5.5% holding of Panther Metals Limited (ASX: PNT).
Panmure Liberum Limited and Zeus Capital Limited are brokers to the Company and Beaumont Cornish Limited is the Company's Nominated Adviser.
For further information on Ariana, you are invited to visit the Company's website at www.arianaresources.com.
Ends.
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