Condor Gold PLC (CNR.L) Raises £4.0m Via a Private Placement

Condor Gold Raises £ 4.0 Million Via a Private Placement of New Ordinary Shares

Condor Gold (AIM: CNR; TSX: COG) is pleased to announce a placing of 9,523,810 new ordinary shares in the Company of 20p each (“Placing Shares”) at a price of 42p per Placing Share (the “Placing Price”), including a Directors & CFO subscription of 4,871,414 Placing Shares (“Directors & CFO Subscription”), to raise in aggregate gross proceeds of £4,000,000 (the “Placing”) before expenses. The Placing has been arranged directly by the Company with institutional and other investors.

Completion of the Placing is conditional, inter alia, upon receipt of funds by close of business on 24 February 2021 and admission of the Placing Shares to trading on AIM, expected to be on or around 1 March 2021. The Company has received conditional approval from the Toronto Stock Exchange (the “TSX”) for the Placing.

The Placing Shares are subject to resale restrictions into Canada which will expire four months and one day from the date of Admission of the Placing Shares to AIM. There are no restrictions on selling Placing Shares not sold to Canadian investors.

Mark Child, Chairman and Chief Executive Officer of Condor, commented:

“Condor Gold has conducted a private placement, issuing new ordinary shares representing 7.9% of the Company’s existing issued share capital, to raise gross proceeds of £4.0 million. The Placement was oversubscribed. Following the placement Condor will have a net cash position of approximately £8 million. The Placement has been conducted quickly following an offer by Jim Mellon, Condor’s largest shareholder, to invest a further £2 million in the Company. The Board decided to accept further £2 million primarily from existing shareholders.

“The placement proceeds will be used to advance the La India Project towards production and expand the gold mineral resource. Condor has successfully permitted 3 open pits at La India. Following the permitting of the Mestiza and America open pits, together with the La India open pit, Condor has 1.12M oz gold open pit Mineral Resources permitted for extraction, inclusive of a Mineral Reserve of 6.9Mt at 3.0g/t gold for 675,000 oz gold.

“La India Project has total Indicated Mineral Resources of 9.85Mt at a grade of 3.6 g/t gold, for a total contained ounces of 1,140,000 oz gold and total Inferred Mineral Resources of 8.48Mt at a grade of 4.3 g/t gold, for a total contained ounces of 1,179,000 oz gold. A processing plant and associated mine site infrastructure is also permitted.

“The placement proceeds will be used to complete engineering and other technical studies, purchase the remaining 5% of the land in and around the minesite infrastructure, place a deposit on a processing plant, finance a 4,000m infill drilling program currently underway with two drill rigs within the high grade starter pits within the permitted la India open pit. The extra cash also allows Condor to continue with exploration activity aimed at demonstrating the potential for a 5 million oz Gold District at La India Project: the Company will commence a 5,000m drilling program on the Cacao vein in the near future.”

Details of the Placing and Directors & CFO Subscription

A total of 9,523,810 Placing Shares have been placed with placees at the Placing Price to raise gross proceeds of £4,000,000. Total fees or commissions payable to agents amount to £8,204.

As part of the Placing, the Company advises that through the Directors & CFO Subscription, four Directors of the Company, namely Mark Child, Andrew Cheatle, Ian Stalker and Jim Mellon, along with Jeffrey Karoly (Chief Financial Officer), have subscribed for 14,270, 11,905, 71,429, 4,761,905 and 11,905 Placing Shares respectively, for a total of 4,871,414 Placing Shares.

Jim Mellon has subscribed (the “Mellon Subscription”), through Galloway Limited, a limited company which is wholly owned by Burnbrae Group Limited, which is in turn wholly owned by Jim Mellon, for a total of 4,761,905 Placing Shares (the “Mellon Shares”) for a sum of £ 2,000,000 . Following completion of the Mellon Subscription, Jim Mellon shall own a direct and indirect aggregate shareholding of 25,051,368 Ordinary Shares or 19.2% of the Company. His direct interest will be in 2,889,883 Ordinary Shares and the indirect interest will be in 22,161,485 Ordinary Shares held through Galloway Limited.

Andrew Cheatle has subscribed (the “Cheatle Subscription”) for a total of 11,905 Placing Shares). Following completion of the Cheatle Subscription, Andrew Cheatle shall own directly and indirectly a shareholding of 130,955 Ordinary shares of the Company, representing 0.1% of the resultant issued share capital.

Ian Stalker has subscribed (the “Stalker Subscription”) through Promaco Consulting Services Limited, a limited company which is wholly owned by a trust for the Stalker family, for a total of 71,429 Placing Shares. Following completion of the Stalker Subscription, Ian Stalker shall have a direct or indirect interest in 238,799 Ordinary shares of the Company, representing 0.2% of the resultant issued share capital.

Mark Child has subscribed (the “Child Subscription”) for a total of 14,270 Placing Shares. Following completion of the Child Subscription, Mark Child shall own directly and indirectly a shareholding of 4,215,000 Ordinary shares of the Company, representing 3.2% of the resultant issued share capital.

Jeffrey Karoly has subscribed (the “Karoly Subscription”) for a total of 11,905 Placing Shares. Following completion of the Karoly Subscription, Jeffrey Karoly shall own directly and indirectly a shareholding of 160,983 Ordinary shares of the Company, representing 0.1% of the resultant issued share capital.

Application will be made for the Placing Shares to be admitted to trading on AIM (“Admission”), with Admission of the Placing Shares expected to occur on or around 1 March 2021.

The Placing Shares will rank pari passu with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared after the date of their issue.

Following Admission of the Placing Shares, the Company will have 130,519,401 ordinary shares of 20p each in issue with voting rights and admitted to trading on AIM and this figure may be used by shareholders in the Company as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.

Related Party Transaction

The subscription by each of Jim Mellon (through Galloway Limited), Mark Child, Ian Stalker and Andrew Cheatle (“Directors Subscriptions”) is a Related Party Transaction under Rule 13 of the AIM Rules for Companies by virtue of Jim Mellon, Andrew Cheatle, Ian Stalker and Mark Child being Directors of the Company and in the case of Jim Mellon being a 16.8% direct and indirect shareholder. Accordingly, the Independent Director, being Kate Harcourt, considers that, having consulted with the Company’s Nominated Adviser, the terms of the Directors Subscriptions are fair and reasonable insofar as the Company’s shareholders are concerned.

Canadian Securities Law Matters

The Directors’ Subscription will constitute a related party transaction pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is exempt from the requirements to obtain a formal valuation and minority shareholder approval in connection with the Directors’ Subscription in reliance on sections 5.5(a) and 5.7(a), respectively, of MI 61-101, as neither the fair market value of the securities received by such parties nor the proceeds for such securities received by the Company exceeds 25% of the Company’s market capitalisation as calculated in accordance with MI 61-101. The board of directors of the Company has approved the Placing, with Jim Mellon abstaining from voting.

A material change report with respect to the Placing is expected to be filed less than 21 days prior to the closing of the Placing. This time period is reasonable and necessary in the circumstances as the Company wishes to complete the transaction on an expedited basis for sound business reasons.


Special note concerning the Market Abuse Regulation

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the C ompany’s obligations under Article 17 of MAR. Market soundings, as defined in MAR, were taken in respect of the Placing, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.


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