15th Feb 2016 07:00
LONDON (Alliance News) - Savannah Resources PLC Monday said a privately-owned investment trust has become the company's largest shareholder after purchasing a substantial amount of shares at a premium, and will now appoint a representative to the company's board.
The company said Al Marjan Ltd holds a 29.99% stake in the company after purchasing 98.3 million shares at a price of 1.777778 pence per share to raise gross proceeds of more than GBP1.7 million.
"We are delighted to see very solid support for Savannah?s investment case with this significant follow on investment by Al Marjan Ltd, who joined the share register in late 2015 and is strongly supportive of the Company?s growth strategy," said Chief Executive David Archer.
"This placing puts Savannah in an excellent position to continue executing its business plan, targeting early copper production in Oman in late 2017 and progressing our mineral sands initiative in Mozambique," he added.
Importantly, the placing will be conducted in two tranches, the first of which will consist of 70.9 million shares. The second tranche of 27.4 million shares will need approval at the company;s forthcoming annual general meeting.
Prior to the transaction, Al Marjan already held just under 17.0 million shares in the company, which was equal to a 5.93% stake in Savannah. Once the first tranche has been issued its stake will increase to 24.62% before reaching a touch under 30% if the second tranche is approved by shareholders.
The placing price is an 11% premium to the 50-day volume weighted average price, the company said, with the proceeds being used to fund the development of its copper projects in Oman.
Al Marjan will now appoint two nominees to Savannah's board.
Following the placing, Savannah said it will have a cash balance of around GBP2.0 million.
By Joshua Warner; [email protected]; @JoshAlliance
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