23rd Oct 2014 08:47
LONDON (Alliance News) - Golden Saint Resources Ltd Chairman Cyril D'Silva Thursday defended the company's decision to enter a funding agreement with Darwin Strategic Ltd to raise essential working capital, as the company continues to suffer from the Ebola outbreak in west Africa.
On October 20, Golden Saint agreed to issue up to GBP2 million of senior unsecured zero coupon convertible bonds to Darwin in order to fund a new wash plant, ancillary plant and equipment and to conduct further exploration work. The company said it would initially issue GBP1 million of bonds, with further tranches of GBP500,000 issued in February and May next year.
"The additional capital allows us to purchase, inter alia, ancillary plant and equipment such as excavators and loaders which would otherwise have to be leased on a day to day basis at far greater cost to the company," D'Silva said at the time.
D'Silva Thursday said the decision to enter the agreement with Darwin was necessary to secure the future of the company.
"Golden Saint currently faces an unusually unstable situation in Sierra Leone with the prevalence of Ebola throughout West Africa... As a board we believe it was important to take steps to secure the future of Golden Saint and its tenements in Sierra Leone. The board, having made an informed decision on how best to safeguard the company and its tenements, entered into the agreement with Darwin," he said in a statement.
"The board believes that the company is now adequately financed to pursue its stated strategy and that it is now the board's responsibility to deliver results to its shareholders," he added.
D'Silva also referred to London Mining PLC, which also operates in Sierra Leone, to demonstrate the severity of the situation.
"As many of you will be aware, AIM quoted London Mining PLC, a mining company operating in Sierra Leone, appointed administrators last week following a longer than expected period of negotiations between senior lenders and the potential acquirers of its Marampa mine, as well as a lack of liquidity due to the dramatic fall in iron ore prices," said D'Silva.
D'Silva issued a plea to shareholders for understanding, and admitted the problems it has been facing could have been handled better in the early stages.
"I need shareholders to understand that Golden Saint, in the view of the board, is both philanthropic and to a certain extent revolutionary in what it is trying to achieve in its early stages, and always dealing with the local population fairly is very important to us," he said.
"I am confident that our vision and our focus is on the right track, although in the early stages I agree that it could have been handled better," said D'Silva.
Still, it wasn't enough to stop Golden Saints shares dropping 14.5% to 1.00 pence per share Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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