2nd Oct 2014 08:00
LONDON (Alliance News) - Premier African Minerals Ltd Thursday said YA Global Master SPV Ltd has sold its entire holdings in the company after the completion of an equity swap agreement between the parties was accelerated.
The Africa-focused minerals company signed a GBP500,000 subscription deal and a separate GBP300,000 equity swap deal with YA Global in January. It also entered a GBP3 million standby equity distribution facility.
Under the equity swap deal, YA Global agreed to make 15 monthly settlement payments of GBP20,000 each to Premier African, adjusted to reflect the price of the equity swap shares held by YA Global at the time of the payment. Both parties had the right at any time to accelerate the payments due under the equity swap.
"As a result of investor demand the company has exercised this right and YAGM have sold their entire holding in the company," Premier African said.
YA Global will now make a single final payment of GBP144,628 to Premier African and the equity swap agreement will then terminate. Premier African will use the funds for additional working capital and for the continuing development of its RHA Tungsten project in Zimbabwe.
"The company is in a strong financial position with current available funds and a further USD2 million coming from the Circum transaction, with no need in the foreseeable future to call upon the (standby equity distribution facility) facility entered into on 27 January 2014," Premier African Chief Executive George Roach said in a statement.
In May, Premier African exercised an option to buy AgriMinco Corp's entire interest in Mandalore Development Ltd, which had a 30% interest in the Danakil Potash project in Ethiopia, for about GBP2.3 million.
Days later, Circum Minerals Ltd exercised its option to buy the whole of Mandalore Development, consolidating ownership of the Danakil project as a result. Circum paid Premier African USD2.5 million, net of any advance made by Circum to allow Premier African to acquire Mandalore, issued it with USD1.4 million of Circum shares, and said it would pay further USD1 million considerations on July 15, September 15, November 15, and January 15, 2015.
Premier African Minerals shares were up 0.3% at 1.25 pence early Thursday.
By Steve McGrath; [email protected]; @stevemcgrath1
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