9th Jul 2019 16:02
(Alliance News) - Shefa Gems Ltd said Tuesday it has performed a series of actions designed to "strengthen" its balance sheet and provide access to possible future funding at a "significant" premium to its current share price.
Shares in Shefa Gems were down 15% in afternoon trade in London at 5.50 pence each.
The Israeli diamond miner has, among other things, extended the life of certain warrants, issued at its initial public offering in December 2017, by six months. Shefa has also issued 600,000 new warrants, converted loans totalling GBP253,053 and issued further warrants to loan providers.
The company issued 65.9 million warrants at the time of its IPO to certain investors who converted loans into shares. These warrants had expiry dates ranging from June 2019 to December 2020.
At the request of the warrant holders, the expiry dates for all of these warrants have been extended by six months.
Now, 20.5 million warrants exercisable at 9.35p expire on December 18 2019, with another 4.3 million warrants exercisable at 11.00p expiring the same day. On June 18, 2020, 20.5 million warrants exercisable at 11.00p will expire with a further 20.5 million warrants exercisable at 13.75p expiring on June 18, 2021.
"Through the continued support of our long-term shareholders, Shefa Gems has strengthened its balance sheet which will support an acceleration of our operational activities," said Chief Executive Avi Taub.
In order to "conserve cash for operation programmes", Shefa said one of its service providers has agreed to receive new warrants in exchange for a lower cash fee. The company has issued 600,000 new warrants to the service provider, valid until the end of 2020, exercisable at 5.00p.
Additionally, Shefa said it has been in discussions with certain shareholders who have previously funded the company's activities through loan provisions.
As a result of these discussions, and based on Shefa's "positive trajectory", the lenders of a GBP253,053 loan have agreed to convert the loan notes into 5.1 million new shares in the company, at a conversion price of 5.0p per share.
As part of the loan conversion, Shefa has also issued one new warrant for each share issued, at an exercise price of 10.0p per share valid until the end of June 2021.
Taub added: "The company is well placed to progress towards its target of starting trial mining in Kishon mid-reach zone 1 in 2020, while also expanding our exploration activities in zone 2 and zone 3. In addition, we will continue to progress our Mine to Market strategy following the launch of Yossi Harari's unique Heaven on Earth jewellery collection using Shefa Gems gemstones."
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