Strategic Project Financing
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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.
- 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.
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. |
| 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. |
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:
Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.