TIDMHUN
RNS Number : 9470Q
Hunter Resources PLC
05 September 2014
5 September 2014
Hunter Resources plc
("Hunter" or the "Company")
(AIM: HUN)
Half Year Report for the six months to 30 June 2014
REPORT OF THE EXECUTIVE CHAIRMAN
I am pleased to announce the results of the Hunter Resources plc
group (the 'Group') for the six month period ended 30 June 2014.
The Company's focus for this period has been the completion of all
the documentation around the reverse takeover of Gold Hunter SAC
("Gold Hunter") and the associated capital raising to complete the
Re-admission to AIM which occurred after the 30 June 2014 balance
sheet date.
As set out in the Admission Document published on 6 June 2014 (available
on the Company's website at www.hunter-resources.com) and following
Re-admission of the Ordinary Shares to AIM on 4 July 2014, the Company
acquired 100% of the issued share capital of Gold Hunter in Peru
through a reverse takeover. Gold Hunter has entered into a joint
venture agreement with the owners of the Pampamali Project in Peru,
which is a potentially high grade gold and silver project with base
metal credits. Under the joint venture agreement, Gold Hunter has
the right to acquire up to 80% of the project over a three year
period.
On Re-admission the Company raised GBP925,000 (before expenses)
through the issue of 61,666,667 new Ordinary Shares at a price per
share of 1.5p. Prior to Re-admission, the Company was funded by
way of approximately GBP148,000 of convertible loan notes with Marine.
The amount drawn down on these loan notes immediately prior to Re-admission
was converted on Re-admission into 9,850,734 new Ordinary Shares.
The funds raised are to provide the working capital necessary to
enable the Company to complete the detailed exploration and evaluation
activities of the first phase of the Pampamali Project.
The Pampamali Project consists of 8 exploration concessions with
a total area of 3,500 hectares and is located in central Peru in
the Department of Huancavelica, approximately 550 km by road from
the City of Lima. The Pampamali project is a potentially high grade
gold, silver and base metal project, consisting of 36 mineralised
veins identified to date from surface outcrops. Outcrops of between
100 and 2,000 metres in length exist with mineralised widths ranging
from 0.20 to over 3.00 metres.
Progress
As announced on 27 August 2014, Hunter has, since Re-admission,
reviewed and analysed historical exploration work on the Pampamali
Project carried out by Buenaventura, Peru's largest listed mining
company. The Buenaventura Data comprises extensive and detailed
mapping and sampling information from mineralised veins within the
project concessions which include grades up to 70 g/t Au, 2377 g/t
Ag, 44.9% Pb, and 28.9% Zn. The analyses were obtained from rock
chip and channel samples from both surface and underground locations.
This data has been incorporated into the Group's database and has
further confirmed the significant potential of the Pampamali Project.
The data supports the presence of extensive gold, silver, lead and
zinc mineralisation within the veins identified by Gold Hunter's
initial reconaissance sampling. As immediate targets, sections of
between 90m and 350m strike length in several veins (Victoria, Luz,
Gaviota and Santa Domingo) have been prioritised for follow up in
the next phase of exploration; another 515m long section in the
Melita vein will be targeted as soon as access becomes available.
Other veins are also mineralised and will be the subject of future
exploration. Summary details on the veins which are initially being
targeted were:
Victoria vein 500 m mineralised vein exposed of which a 250m section
averages 4.42 g/t Au, 100 g/t Ag, 8.8% Pb and 28.9% Zn.
Luz vein 470 m mineralised vein exposed of which a 200m section
averages 8.84 g/t Au, 97 g/t Ag, 0.39% Pb and 4.16% Zn.
Gaviota vein 1,250 m mineralised vein exposed of which a 90m section
averages 7.93 g/t Au, 138 g/t Ag, 0.57% Pb and 0.41% Zn.
Santa Domingo vein 2,000 m mineralised vein exposed of which a 350m
section averages 0.56 g/t Au, 38 g/t Ag, 30.8% Pb and 10.1% Zn.
Melita vein 515 m mineralised vein exposed of which a 70m section
averages 2.63 g/t Au, 166 g/t Ag, 3.20% Pb and 4.90% Zn.
Current Exploration Programme
The Phase 1 Exploration programme has commenced and is focused on
both (1) following up historical results and known vein targets,
and (2) identifying new targets and concepts in previously unworked
portions of the property.
The Buenaventura Data has identified and highlighted numerous mineralised
veins and is being used to fast track planning of Gold Hunter's
2014 sampling and drilling campaigns. The Group's exploration team
is now planning more detailed mapping from surface and underground
combined with satellite and airphoto interpretation. This work will
allow drill targets to be defined during the 2014 calendar year.
The Group is concurrently preparing the statutory agreements and
proposals to obtain drilling approvals to commence drilling as soon
as possible during the current financial year.
A large number of additional mineralised veins have also been identified
from the mapping of the property by Gold Hunter that were not sampled
by Buenaventura. These areas will be further mapped and sampled
during the upcoming field program.
Financial Review
The Group's loss for the six month period ended 30 June 2014, excluding
one off expenditure of GBP51,000 (2013: GBPnil) related to the Re-admission,
was GBP109,000 (2013: GBP 138,000).
Outlook
We are very encouraged by the excellent results from the initial
review of the Buenaventura Data on Pampamali. It enables us to fast
track our exploration programme as well as our understanding of
the controls and known mineralisation, all of which will assist
in identifying our first stage drilling targets. We are planning
to commence drilling before year end.
Simon D Hunt
Executive Chairman
For further information, please contact:
Hunter Resources plc Allenby Capital Limited
Simon Hunt (Nominated Adviser and Broker)
(Chairman) Nick Harriss/Nick Naylor
+44 7733 337 755 +44 20 3328 5656
www.hunter-resources.com www.allenbycapital.com
------------------------- -------------------------------
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
12 months ended
6 months ended 30 June 6 months ended 30 June 31 December
2014 2013 2013
(Unaudited) (Unaudited) (Audited)
Note GBP'000 GBP'000 GBP'000
---- ---------------------- ---------------------- ---------------
Administrative expenses (101) (59) (138)
Expenditure incurred in connection
with the Re-admission of the
Company's Ordinary Shares
to AIM 2 (51) - -
Share based payments - (76) (76)
Finance costs (8) (3) (6)
---------------------- ---------------------- ---------------
Loss before taxation (160) (138) (220)
Taxation - - -
---------------------- ---------------------- ---------------
LOSS AND TOTAL COMPREHENSIVE LOSS FOR
THE PERIOD (160) (138) (220)
---------------------- ---------------------- ---------------
LOSS PER SHARE
Basic and diluted loss per share -
pence 3 (0.43) (0.38) (0.59)
---------------------- ---------------------- ---------------
All results derive from continuing operations. The loss and the
total comprehensive loss for all periods presented are wholly
attributable to equity holders of the parent Company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June
2014 2013 31 December 2013
(Unaudited) (Unaudited) (Audited)
Note GBP'000 GBP'000 GBP'000
----- ------------- ------------- -----------------
ASSETS
Non-current assets
Intangible assets 4 45 - -
45 - -
------------- ------------- -----------------
Current Assets
Prepayments 2 118 20 8
Other receivables 32 9 5
Cash and cash equivalents 373 96 14
523 125 27
------------- ------------- -----------------
TOTAL ASSETS 568 125 27
------------- ------------- -----------------
LIABILITIES
Current liabilities
Convertible loan notes 6.1 176 23 26
Advances against equity subscriptions 5 364 - -
Trade and other payables 203 40 21
------------- ------------- -----------------
TOTAL LIABILITIES 743 63 47
------------- ------------- -----------------
NET CURRENT (LIABILITIES) / ASSETS (220) 62 (20)
------------- ------------- -----------------
NET (LIABILITIES) / ASSETS (175) 62 (20)
------------- ------------- -----------------
Share capital 7 1,216 1,216 1,216
Share premium 5,187 5,187 5,187
Convertible loan note reserve 6.1 10 5 5
Currency translation reserve 471 471 471
Accumulated losses (7,059) (6,817) (6,899)
------------- ------------- -----------------
(DEFICIT) / EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT COMPANY (175) 62 (20)
------------- ------------- -----------------
These Interim financial statements were approved by the Board of
Directors and authorised for issue on 5 September 2014. Signed on
behalf of the Board of Directors by:
Simon Hunt
Director and Executive
Chairman
5 September 2014
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Convertible loan Currency
note reserve translation Accumulated
Note Share capital Share premium reserve losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----- -------------- -------------- ----------------- ----------------- ------------ --------
Balance at 1
January 2013
(Audited) 932 5,202 - 471 (6,755) (150)
Total
comprehensive
loss for the
period - - - - (138) (138)
Share based
payments - - - - 76 76
Issue of
Ordinary Shares 284 - - - - 284
Expenses
incurred in
issuing
Ordinary Shares - (15) - - - (15)
Allocation of
proceeds
received from
the issue of
convertible
loan notes 6.1 - - 5 - - 5
Balance at 30
June 2013
(Unaudited) 1,216 5,187 5 471 (6,817) 62
Total
comprehensive
loss for the
period - - - - (82) (82)
Balance as at 31
December 2013
(Audited) 1,216 5,187 5 471 (6,899) (20)
Total
comprehensive
loss for the
period - - - - (160) (160)
Allocation of
proceeds
received from
the issue of
convertible
loan notes 6.1 - - 5 - - 5
Balance as at 30
June 2014
(Unaudited) 1,216 5,187 10 471 (7,059) (175)
-------------- -------------- ----------------- ----------------- ------------ --------
CONSOLIDATED CASH FLOW STATEMENT
6 months ended 6 months ended 12 months ended
30 June 30 June 31 December
2014 2013 2013
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
--------------- --------------- ----------------
Cash flows from operating activities
Loss for the period (160) (138) (220)
Adjustments for:
Share based payments - 76 76
Finance costs 8 3 6
Operating cash flows before movements in working
capital (152) (59) (138)
(Increase) /decrease in receivables (38) (16) -
Decrease in trade and other payables 180 (146) (165)
--------------- --------------- ----------------
Cash used in operating activities (10) (221) (303)
--------------- --------------- ----------------
Cash flows from investing activities
Acquisition of intangible assets (45) - -
Net cash used in investing activities (45) - -
--------------- --------------- ----------------
Cash flows from financing activities
Advances against the Subscription of new Ordinary
Shares completed in July 2014 5 364 - -
Deferred issue expenses of new Ordinary Shares
(issued in July 2014) 2 (98) - -
Proceeds from the issue of new Ordinary Shares - 284 284
Issue expenses of new Ordinary Shares - (15) (15)
Proceeds from the issue of convertible loan notes 148 26 26
Issue expenses of convertible loan notes - (1) (1)
Net cash provided by financing activities 414 294 294
--------------- --------------- ----------------
Net increase / (decrease) in cash and cash
equivalents 359 73 (9)
Cash and cash equivalents at the beginning of the
period 14 23 23
--------------- --------------- ----------------
Cash and cash equivalents at the end of the
period 373 96 14
--------------- --------------- ----------------
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The Company was incorporated and domiciled in the Isle of Man
under the Companies Acts 1931 to 2004 with registered number
115011C. On 1 July 2014 the Company re-registered under the
Companies Act 2006, with registered number 011261V.
The Interim financial statements, which are unaudited and have
not been reviewed by the Company's auditor, have been prepared in
accordance with the IFRS accounting policies adopted by the Group
and set out in the 2013 Financial Statements. The Group does not
anticipate any change in these accounting policies for the year
ended 31 December 2014.
This Interim report has been prepared to comply with the
requirements of the AIM Rules. In preparing the Interim financial
statements, the Group has adopted the guidance in the AIM Rules for
interim accounts which do not require that the Interim financial
statements are prepared in accordance with IAS 34, 'Interim
financial reporting'. While the financial figures included in this
report have been computed in accordance with IFRSs applicable to
interim periods, this report does not contain sufficient
information to constitute an interim financial report as that term
is defined in IFRSs.
The financial information contained in this Interim report also
does not constitute statutory accounts under the Isle of Man
Companies Acts 1931 to 2004 or the Isle of Man Companies Act 2006.
The financial information for the year ended 31 December 2013 is
based on the 2013 Financial Statements. The auditors reported on
those accounts: while their report was unqualified it included a
statement of emphasis of matter regarding the Company and Group's
going concern status. Readers are referred to the auditors' report
to the 2013 Financial Statements (available at
www.hunter-resources.com).
These Interim financial statements have been prepared in
accordance with the IFRS principles applicable to a going concern,
which contemplate the realisation of assets and liquidation of
liabilities during the normal course of operations. Having carried
out a going concern review in preparing these Interim financial
statements, and considering the new monies provided by the July
2014 Funding (refer to note 9.2), the Directors have concluded that
there is a reasonable basis to adopt the going concern
principle.
The Group's presentation currency is Great British Pounds ('GBP'
or GBP') which is the functional currency of the Company and the
currency of the country in which the Company's Ordinary Shares are
listed on AIM. Except where otherwise noted, amounts are presented
in this Interim report in rounded thousands of GBP's.
2. Expenditure incurred in connection with the re-admission of
the Company's Ordinary Shares to AIM
The Company's Ordinary Shares were re-admitted to trading on AIM
on 4 July 2014 following the acquisition of Gold Hunter and the
Company securing new funding of GBP925,000 (before issue expenses)
through the July 2014 Funding (refer to note 9.2).
During H1-2014 the Company incurred expenditure of GBP149,000 in
connection with the Re-admission, principally comprising legal,
geological, reporting accountants, corporate finance and other
related fees and expenses. As required by IFRS, this expenditure
has been allocated pro-rata to the issue of new Ordinary Shares
under the July 2014 Funding, and the re-admission of the Ordinary
Shares in issue immediately preceding the July 2014 Funding. Of
this total, GBP51,000 has accordingly been expensed to profit and
loss in H1-2014 and GBP98,000 has been recorded within prepayments
and subsequently transferred to the Share Premium account on
Re-admission.
3. LOSS PER ORDINARY SHARE
There is no difference between the diluted loss per share and
the basic loss per share presented as the Group is loss making in
all periods presented and the convertible loan notes (refer to note
6) are anti-dilutive.
The calculation of basic and diluted loss per share is based on
the following data:
6 months ended 6 months ended 12 months ended
30 June 30 June 31 December
2014 2013 2013
(Unaudited) (Unaudited) (Audited)
(represented for the Share Consolidation - note 7.1) (represented for the Share Consolidation - note 7.1)
Loss for the
period -
GBP'000 (160) (138) (220)
Weighted
average
number of
Ordinary
Shares 37,729,678 36,787,804 37,262,612
--------------- ------------------------------------------------------ ------------------------------------------------------
Basic and
diluted loss
per Ordinary
Share - pence (0.43) (0.38) (0.59)
--------------- ------------------------------------------------------ ------------------------------------------------------
4. INTANGIBLE ASSETS
Intangible assets comprise the Group's initial investment of
GBP24,000 ($40,000) to participate in Project Pampamali (note 9.1)
and related legal and other expenditure.
5. Advances against equity subscriptions
Prior to 30 June 2014, the Company received GBP364,000 in
advance against amounts due under the GBP925,000 July 2014 Funding
which were recorded within current liabilities pending the
fulfilment of all conditions precedent to the July 2014 Funding,
including Re-admission. Following Re-admission the advanced equity
subscriptions were transferred to equity and recorded within the
Shares Capital and Share Premium accounts.
6. CONVERTIBLE LOAN NOTES
6.1. Carrying value
The following summarises the movements in the convertible loan
notes liability and equity components during the period:
Liability Equity Total
GBP'000 GBP'000 GBP'000
---------- -------- --------
At 1 January 2013 (audited) - - -
Initial measurement 21 5 26
Allocation of issue expenses (1) - (1)
Interest accrued at effective interest rate 3 - 3
---------- -------- --------
At 30 June 2013 (unaudited) 23 5 28
Interest accrued at effective interest rate 3 - 3
---------- -------- --------
At 31 December 2013 (audited) 26 5 31
Initial measurement 143 5 148
Interest accrued at effective interest rate 8 - 8
Foreign exchange gain (1) - (1)
---------- -------- --------
At 30 June 2014 (unaudited) 176 10 186
---------- -------- --------
6.2. Convertible Loan Notes in Issue
As at 30 June 2014 the Company had three convertible loan notes
in issue with Marine, the principal terms of which are summarised
below.
6.2.1. The First Loan Note
In January 2013, the Company secured the placing of The First
Loan Note raising gross proceeds of GBP25,868 before expenses. The
First Loan Note, as amended, carries no interest charge, is
unsecured and repayable by 31 December 2014 and is convertible (in
part or in full) into Ordinary Shares in the Company at the holders
request at any time and at a conversion price equal to the par
value per Ordinary Share.
Upon Re-admission and following the period end, the First Loan
Note was converted in full into 2,586,800 new Ordinary Shares (note
9.2.2).
6.2.2. The Second Loan Note
In March 2014 the Company issued The Second Loan Note with a
face value of GBP100,000. The Second Loan Note, as amended, carries
interest at the rate of 8% per annum (such interest to be
accumulated and paid in cash upon conversion or repayment of The
Second Loan Note), is unsecured and repayable, if not converted, on
Re-admission. The Second Loan note is convertible in whole or in
part at the note holder's request into Ordinary Shares at the price
at which new Ordinary Shares are issued pursuant to the fundraise
completed upon Re-admission. In the event that the note holder
elects to convert part or all of The Second Loan Note into Ordinary
Shares, the Company will issue the note holder with warrants over
one new Ordinary Share for every 1.25 new Ordinary Shares issued on
conversion of The Second Loan Note, exercisable at a price per
warrant equal to the price at which new funds are raised on AIM
upon Re-admission plus 15%, for three years from the date of
conversion of the New Loan Notes.
As at 30 June 2014, the Second Loan Note was fully drawn by the
Company. Upon Re-admission and following the period end, the Second
Loan Note was converted into 6,666,667 new Ordinary Shares (note
9.2.2).
6.2.3. The Third Loan Note
In March 2014 the Company issued The Third Loan Note with a face
value of $150,000. Other than for the face value of the instrument,
The Third Loan Note, as amended, has the same terms as The Second
Loan Note.
As at 30 June 2014, $80,000 of the Second Loan Note was drawn by
the Company. Subsequent to the period end a further $70,000 was
drawn under the Third Loan Note as part of the July 2014 Funding.
Upon Re-admission and following the period end, $150,000 of the
Second Loan Note was converted into 5,970,134 new Ordinary Shares
at an agreed exchange rate of $1.675 per GBP1.0 (note 9.2.2).
6.3. Measurement
While in legal form the Loan Notes are liabilities of the Group,
the Loan Notes include components with liability and equity
features as defined under IFRS. IAS 32, 'Financial Instruments:
Presentation', requires the Group to identify the equity and
liability component parts of the instruments and assign a value to
each. In each of the Loan Notes the material components have been
identified as the host debt contract and a holder call option to
convert to Ordinary Shares. The fair value of the host debt
component has been determined for each Loan Note based on the
present value of the contractual stream of future cash flows (being
the redemption amount and interest due where applicable) discounted
at the market rate of interest that would have applied to an
instrument of comparable credit quality with substantially the same
cash flows, on the same terms, but without the conversion feature.
The relevant market interest rate applicable to the Company has
been estimated at 25%. The balance of the gross proceeds received
has been established as the equity component of the Loan Notes.
Where applicable, issue expenses have been allocated pro-rata to
the initial carrying value of each component. The liability
component is subsequently measured at amortised cost using the
effective interest rate method and an effective interest rate of
between 25% and 31.58%. The equity component is not
re-measured.
7. SHARE CAPITAL AND SHARE PREMIUM
7.1. Share Consolidation
On 30 June 2014 the Company completed the Share Consolidation
pursuant to which the Company's:
1. 377,296,778 issued Ordinary Shares of GBP0.001 each were
consolidated into 37,729,678 Ordinary Shares of GBP0.01 each on a
one for ten basis; and
2. issued 93,164,834 Deferred Shares of GBP0.009 each were
consolidated into 9,316,483 Deferred Shares of GBP0.09 each on a
one for ten basis.
7.2. Authorised share capital and rights attaching to shares
The authorised share capital of the Company is comprised of the
following:
At 30 June 2014 At 31 December 2013 and 30 June 2013
No. GBP No. GBP
------------ ---------- --------------------- ----------------
Ordinary Shares of GBP0.001 each - - 700,000,000 700,000
Deferred Shares of GBP0.009 each - - 200,000,000 1,800,000
Ordinary Shares of GBP0.01 each 300,000,000 3,000,000 - -
Deferred Shares of GBP0.09 each 20,000,000 1,800,000 - -
------------ ---------- --------------------- ----------------
320,000,000 4,800,000 900,000,000 2,500,000
------------ ---------- --------------------- ----------------
The Company's Ordinary Shares carry no right to fixed income.
Each Ordinary Share carries the right to one vote at the general
meetings of the Company. The Company's Deferred Shares do not carry
voting rights or a right to receive a dividend. The holders of
Deferred Shares do not have the right to receive notice of any
general meeting of the Company, nor have any right to attend, speak
or vote at any such meeting. In addition, holders of Deferred
Shares will only be entitled to a payment on a return of capital or
on a winding up of the Company after each of the holders of
Ordinary Shares has received a payment of GBP100,000 in respect of
each Ordinary Share. Accordingly, the Deferred Shares have no
economic value. The Deferred Shares are not admitted to trading on
any stock exchange.
7.3. Shares in issue
Between 30 June 2014 and the date of this report, the Company
has issued the following new Ordinary Shares of GBP0.01:
No.
------------
Ordinary Shares in issue at 30 June 2014, 31 December 2013 and 30 June 2013 37,729,678
New Ordinary Shares issued in July 2014:
Subscription 36,408,467
Placing 22,472,133
Conversion of the Loan Notes 15,223,601
Marine Mandate 5,333,333
Acquisition of Gold Hunter 13,277,838
Commission and other Re-admission fees settled in Ordinary Shares 2,749,985
------------
Ordinary Shares in issue at the date of this report 133,195,035
------------
For further details on the new Ordinary Shares issued subsequent
to the period end, refer to note 9.
8. ULTIMATE CONTROLLING PARTY
As at the date of this report, the Directors are of the opinion
that there is no ultimate controlling party of the Company.
9. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
9.1. Acquisition of Gold Hunter and arrangements with Global Pearl
On 4 July 2014 the Company completed the acquisition of Gold
Hunter in exchange for the issue of 13,277,838 new Ordinary Shares
in the Company with a market value, at that date, of GBP199,000.
The acquisition constituted a Reverse Takeover (as such term if
defined in the AIM Rules for Companies) permitting the Re-admission
of the Company's Ordinary Shares to trading on AIM.
Through Gold Hunter, the Company acquired an interest in the
Pampamali Project in Peru whereby, in return for a combination of
cash payments to the existing owners of the Pampamali Project and
making additional investment in exploration activities on the
project concessions, the Group can over time and in various stages
acquire an economic interest of up to 80% of the Pampamali Project.
The Directors believe that, subject to exploration results being
satisfactory, the funds secured under the July 2014 Funding (refer
to note 9.2) will be sufficient to pursue the Pampamali Project
through to the end of its first stage which would include the Group
exercising its option to hold a 20% stake in the Project.
Further details on the Pampamali Project are provided in the
Admission Document dated 6 June 2014 and available at the Company's
website www.hunter-resources.com.
Gold Hunter was acquired from Global Pearl, a company controlled
by the Management Team. The Management Team was identified by the
Board as having the technical and financial management capabilities
needed to see a project through development and into operation,
combined with extensive experience in Peru. The Company has entered
the Global Pearl Consultancy Agreement under which the Management
Team will provide assistance in connection with the operations of
Gold Hunter in Peru. The Company has agreed to pay Global Pearl a
fee to be determined in due course in accordance with the budget to
be agreed for the services to be provided generally. Further and
pursuant to the Global Pearl Consultancy Agreement, Global Pearl
received the Global Pearl Warrants, being warrants over 15,000,000
new Ordinary Shares with the following vesting conditions:
-- 5,000,000 warrants vest on establishment of a gold equivalent
JORC Code compliant resource of not less than 300,000 ounces, as
estimated by a qualified and independent third party engaged by the
Board, which estimate is acceptable, as determined by a qualified
and independent third party engaged by the Board, to be used in the
completion of a Preliminary Feasibility Study; and
-- 10,000,000 warrants vest on completion of a Bankable
Feasibility Study by a qualified and independent third party
engaged by the Board that estimates that a gold equivalent JORC
Code compliant measured and indicated resource of not less than
500,000 ounces exists and concludes that such resource will support
the economic development of the resource at a minimum annual
production of 50,000 ounces for not less than five years.
9.2. Re-admission, The July 2014 Funding, the conversion of Loan
Notes and arrangements with Marine
9.2.1. Re-admission and The July 2014 Funding
On 4 July 2014 the Company's Ordinary Shares were re-admitted to
trading on AIM. On that date and conditional on the Re-admission,
the Company completed the Subscription of 36,408,467 new Ordinary
Shares at GBP0.015 each and the Placing of 22,472,133 new Ordinary
Shares at GBP0.015 each raising gross proceeds before issue
expenses of GBP883,000. At the same time, the Company, by agreement
with Marine, completed the final drawdown on the Third Loan Note
providing additional funds of GBP42,000 bringing the total for The
July 2014 Funding to GBP925,000 of new monies. Total fees and
expenses incurred in connection with the Re-admission, including
fees due to Marine under the Marine Mandate Agreement (refer to
note 9.2.3) were approximately GBP340,000 or which GBP121,000 was
settled through the issue of 8,083,318 new Ordinary Shares and
GBP219,000 was settled in currency. GBP149,000 of these fees and
expenses was recorded in H1-2014 (refer to note 2).
In addition the Company issued Allenby with warrants over
1,327,784 new Ordinary Shares, being equal to 1% of the Company's
issued Ordinary Share capital immediately following Re-admission,
exercisable at a price of GBP0.01725 per Ordinary Share (being the
price equal to the price at which new funds were raised under the
Subscription and Placing plus 15%) for a period of three years.
9.2.2. Conversion of Loan Notes
On 4 July 2014, at Marine's election and in accordance with the
terms of the Loan Notes (refer to note 6.2):
1. the First Loan Note, the Second Loan Note and the Third Loan
Note were converted into new Ordinary Shares in the Company
resulting in the issue of 15,223,601 new Ordinary Shares to
extinguish the outstanding amounts on the Loan Notes, excluding
accrued interest, of GBP215,000 at that date; and
2. the Company issued Marine with warrants over 7,880,596 new
Ordinary Shares at a price of GBP0.01725 per Ordinary Share (being
the price equal to the price at which new funds were raised under
the Subscription and Placing plus 15%) for a period of three
years.
9.2.3. Arrangements with Marine
On 4 December 2012, the Company had entered into an agreement
with Marine under which the Company agreed (i) to pay a fee of
GBP50,000 to Marine, and (ii) to issue 2,000,000 Ordinary Shares
(as adjusted for the Share Consolidation) to Marine, if Marine
introduced a project or transaction to the Company which resulted
in:
a) the acquisition by the Company of an asset considered by the
Board to be valued at GBP500,000 or more; or
b) a reverse takeover by the Company (as defined in Rule 14 of the AIM Rules).
Given the terms of the acquisition of Gold Hunter, the Company's
obligations under this agreement with Marine were triggered at
Re-admission. The Company issued an aggregate of 5,333,333 Ordinary
Shares to Marine at the Subscription Price in settlement of such
obligations being (1) 2,000,000 new Ordinary Shares contractually
due and (2) 3,333,333 new Ordinary Shares through mutual agreement
with Marine to pay the GBP50,000 referred to above in Ordinary
Shares rather than in cash.
In June 2014, the Company entered into an agreement with Marine
to (1) procure the services of Mr Peter Lalor to conduct due
diligence on new projects and acquisitions, (2) review the
Company's exploration and production programs, (3) assist the Board
in all matters relating to exploration for and production of and
marketing of minerals designated by the Company, (4) provide the
Board with the benefit of his knowledge of the mining industry and
(5) evaluate the performance of Global Pearl (and the Management
Team) under the Global Pearl Consultancy Agreement, including
monitoring when payment milestones have been achieved and when
payments should be made as against the agreed budget. In
consideration for providing these services to the Company, and
following Re-admission, the Company granted Marine 4,000,000
warrants to subscribe for new Ordinary Shares at a price of
GBP0.01725 per Ordinary Share (being the price equal to the price
at which new funds were raised under the Subscription and Placing
plus 15%) for a period of three years.
9.3. Cancellation and replacement of existing warrants and issue
of new warrants to the Directors
9.3.1. Underwriting Warrants
On 4 December 2012, the Company entered into an underwriting
agreement with Marine in accordance with which, on 28 February
2013, the Company issued Marine with the Underwriting Warrants,
being 6,200,000 warrants (as adjusted for the Share Consolidation)
over new Ordinary Shares. Each Underwriting Warrant conferred the
right (but not the obligation) to subscribe for one new Ordinary
Share prior to 8 January 2018 at a price of GBP0.05 per Ordinary
Share (as adjusted for the Share Consolidation).
Pursuant to an agreement dated 6 June 2014, and conditional upon
Re-admission, the Company agreed with Marine that with effect from
Re-admission the Underwriting Warrants would be cancelled and
replaced with 6,200,000 warrants over New Ordinary Shares
exercisable at a price of GBP0.01725 per Ordinary Share (being the
price equal to the price at which new funds were raised under the
Subscription and Placing plus 15%) for a period of three years from
Re-admission.
9.3.2. Allenby Warrants
On 25 February 2013 the Company issued Allenby the Allenby
Warrants, being 300,000 warrants (as adjusted for the Share
Consolidation) over new Ordinary Shares, as part of the fee
agreement between the Company and Allenby. The Allenby Warrants had
the same terms as the Underwriting Warrants.
Pursuant to an agreement dated 6 June 2014, and conditional upon
Re-admission, the Company agreed with Allenby that with effect from
Re-admission the Allenby Warrants would be cancelled and replaced
with 300,000 warrants over New Ordinary Shares exercisable at a
price of GBP0.01725 per Ordinary Share (being the price equal to
the price at which new funds were raised under the Subscription and
Placing plus 15%) for a period of three years from
Re-admission.
9.3.3. Director Warrants
On 25 February 2013 the Company issued 3,600,000 warrants (as
adjusted for the Share Consolidation) to the Directors (the
'Directors Warrants'), as follows:
a) Simon Hunt (through Cornerstone Capital Limited) - 2,000,000 warrants;
b) David Paull - 800,000 warrants; and
c) John Molyneux - 800,000 warrants.
Each Directors Warrant conferred the right (but not the
obligation) to subscribe for one Ordinary Share prior to 28
February 2018 at a price of GBP0.045 (as adjusted for the Share
Consolidation). Half of the Directors Warrants could only be
exercised if, in addition, (i) the Company has first completed
either a reverse takeover (as defined in Rule 14 of the AIM Rules)
or acquired an asset valued in excess of GBP500,000 (at the date of
the acquisition), and (ii) the 30-day average VWAP of the Ordinary
Shares (as calculated in accordance with the warrant instrument) is
equal to or in excess of GBP0.0625 pence per share at the time of
exercise (as adjusted for the Share Consolidation).
Pursuant to an agreement dated 6 June 2014, and conditional upon
Re-admission, the Company agreed with each of the Directors that
with effect from Re-admission the Directors Warrants would be
cancelled and replaced with 9,000,000 warrants over new Ordinary
Shares exercisable at a price of GBP0.01725 per Ordinary Share
(being the price equal to the price at which new funds were raised
under the Subscription and Placing plus 15%) for a period of three
years from Re-admission (the 'New Directors Warrants'), allocated
as follows:
a) Simon Hunt (through Cornerstone Capital Limited) - 5,000,000 warrants;
b) David Paull - 2,000,000 warrants; and
c) John Molyneux - 2,000,000 warrants.
In addition, 2,000,000 warrants were issued to Andrew Richards
with effect from Re-admission, with the same terms as the New
Directors Warrants.
TERMS USED IN THIS REPORT
'2013 Financial Statements' the Group and Company audited financial statements for the year ended 31 December
2013;
'AIM' the market of that name operated by the London Stock Exchange;
'AIM Rules' the rules which set out the obligations and responsibilities in relation to
companies whose
shares are admitted to AIM as published and amended from time to time by the London
Stock
Exchange;
'Allenby' Allenby Capital Limited, the Company's nominated advisor and broker;
'Bankable Feasibility Study' a study completed in accordance with industry standards that is of a standard
suitable to
be submitted to a financial institution as the basis for lending of funds for the
development
and operation of the mine contemplated in the study and is capable of supporting a
decision
to commence mining operations;
'Board' or 'Directors' the directors of the Company;
'Company' or 'Hunter' Hunter Resources PLC;
'Deferred Shares' Deferred shares of GBP0.009 each in the share capital of the Company, or, following
the Share
Consolidation, Deferred shares of GBP0.09 each in the share capital of the Company;
'First Loan Note' the GBP25,868 loan note issued by the Company to Marine, further details of which
are provided
in note 6.2.1;
'Global Pearl' Global Pearl Limited, a company incorporated in the British Virgin Islands, with
company number
1744814 and controlled by the Management Team;
'Gold Hunter' Gold Hunter S.A.C., a company incorporated in Peru with certificate number 13164856;
'Group' the Company and its subsidiary undertakings;
'H1-2014' the six month period ended 30 June 2014;
'Interim financial statements' the condensed consolidated financial statements of the Group for the six months
ended 30 June
2014;
'Interim report' the Interim financial statements, collectively with the Report of the Executive
Chairman;
'JORC Code' 'The Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves'
published by the Australasian Joint Ore Reserves Committee;
'July 2014 Funding' the new funding obtained by the Company in July 2014 through the Subscription,
Placing and
final drawdown on the Third Loan Note;
'Loan Notes' collectively the First Loan Note, the Second Loan Note and the Third Loan Note;
'Management Team' the Global Pearl team comprising David Fowler, Sam Pierce and Tim Adams (further
details of
whom are given in the Admission Document dated 6 June 2014);
'Marine' Marine Investments (WA) Pty Limited, a company incorporated in Western Australia,
with (ABN
number 57 315 206 483);
'Ordinary Shares' ordinary shares of GBP0.001 each in the share capital of the Company, or, following
the Share
Consolidation, ordinary shares of GBP0.01 each in the share capital of the Company;
'Pampamali Project' the 8 Pampamali mineral exploration concessions located in central Peru in the
department
of Huancavelica;
'Placing' the July 2014 placing of 22,472,133 new Ordinary Shares at 1.15 pence per new
Ordinary Shares,
such new Ordinary Shares admitted to trading on AIM on 4 July 2014;
'Re-admission' re-admission of the Company's Ordinary Shares to trading on AIM becoming effective
in accordance
with Rule 6 of the AIM Rules, on 4 July 2014;
'Second Loan Note' the GBP100,000 loan note issued by the Company to Marine, further details of which
are provided
in note 6.2.2;
'Share Consolidation' the one for ten consolidation of the Company's Ordinary Shares and Deferred Shares,
effective
30 June 2014;
'Shareholders' holders of the Company's Ordinary Shares and / or Deferred Shares;
'Subscription' the July 2014 subscription of 36,408,467 new Ordinary Shares at 1.15 pence per new
Ordinary
Shares, such new Ordinary Shares admitted to trading on AIM on 4 July 2014;
'Third Loan Note' the $150,000 loan note issued by the Company to Marine, further details of which are
provided
in note 6.2.3;
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UGUPWBUPCURA
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