Pembridge Resources (PERE.L) Update on the Minto Capital Raise

Update on the Minto Capital Raise, TSXV Listing, Guarantee to Sumitomo and short term financing of Pembridge

London, United Kingdom – Pembridge Resources plc (LSE: PERE) (“Pembridge” or the “Company”) is pleased to announce the closing of Minto Explorations Limited‘s (“Minto”) capital raise as a precursor to its listing via a “reverse takeover” of 1246778 B.C. Ltd. (the “RTO”) under the policies of the TSX Venture Exchange (the “Exchange” or the “TSXV”) and Guarantee to Sumitomo as well as short term financing for Pembridge.

Highlights

· Minto capital raise closed or committed in respect of approximately CAD$ 30.5 million

· Of the capital raised, CAD$ 15.2 million have been received in escrow accounts, where it is to be held until listing approval is received. The remaining CAD$ 15.3 million has been committed, with approximately CAD$ 0.55 million anticipated to be closed in the next week and the remaining approximately CAD$ 14.75 million being closed on concurrent with the completion of the RTO transaction

· Minto application to TSXV to list the shares with expected listing in Q4 2021

· The capital raise values Minto at CAD$ 156.6 million before the financing

· Pembridge provides Sumitomo with guarantee for borrowing by Minto of US$ 495,000

· Short term financing of up to £200,000 provided to Pembridge by major shareholder

Capital Raise and listing application

Pembridge announced on 16 June 2021 that Minto was entering into a reverse take-over (“RTO”) agreement with a publicly listed corporation 1246778 B.C. Ltd, which is a reporting issuer in Canada (“Shellco”) to form the listed issuer (“PublicCo”). PublicCo will be renamed Minto Metals Corp. (“Minto Metals”), and will file an application to the TSXV to list the shares of Minto Metals on the TSXV and, concurrently, raising funds from a private placement. The capital raise has now closed and/or commitments have been received for aggregate subscription proceeds of approximately CAD$ 30.5 million. Of this amount, CAD$ 15.2 million has been received in escrow accounts, approximately CAD$ 0.55 million is anticipated to be closed on in the next week and the remaining CAD$ 14.75 million will be closed on concurrent with the completion of the RTO transaction. The proceeds of the financing will be held in escrow pending closing of the reverse take-over, and upon release of the same, will fund operational improvements, exploration and working capital for Minto Metals.

Of this new capital, CAD$ 3.8 million was invested by Pembridge, which has thus maintained its ownership percentage in Minto Metals at 11.1%, which is subject to change depending on whether additional capital is raised prior to the listing of Minto Metals. Pembridge funded this investment with the USD $3 million of convertible loan notes that it issued in June 2021. Gati Al-Jebouri, the CEO and Chairman of the Board of Directors of the Company will be appointed as a director of Minto Metals and has been nominated as Chairman of the Audit and Risk Committee of the Minto Metals board. Gati Al-Jebouri is investing an additional CAD$ 250,000 of his personal funds in the Minto Metals financing.

As part of the RTO, Pembridge’s shares in Minto will be replaced in a share-for-share exchange whereby all existing Minto shareholders will receive voting shares in PublicCo. As Pembridge will no longer hold all of the voting shares in Minto Metals, with effect from date of listing on TSXV, it is no longer required to treat Minto Metals as a subsidiary in its consolidated financial statements.

Minto valuation

The pricing of CAD$ 2.60 per share applied in the capital raise implies a pre-money valuation of Minto Metals of CAD$ 156.6 million and post money CAD$ 187.1 million. At post-money valuation of Minto Metals, Pembridge’s 11.1% share in Minto Metals is valued at CAD$ 20.8 million. This is approximately £11.8 million at current exchange rates, equal to £0.133 per undiluted Pembridge share based on the Company’s issued share capital of 88,965,516 shares. If all existing options and the conversion rights of the recently issued convertible loan notes were exercised, the Company would have 122,220,856 issued shares.

Guarantee to Sumitomo for Minto borrowing

Minto’s existing US$ 12.5 million prepayment funding with Sumitomo has been drawn in the amount of US$ 8.0 million to date. Although Minto is currently performing with a positive operating cash flow, Minto’s working capital requirements arising as a result of the capital investments in developing the Minto mine necessitate a draw down under the Sumitomo prepayment funding. To enable the drawing down of the remaining US$ 4.5 million under the facility, Sumitomo has requested that the existing shareholders guarantee this amount.

These guaranteed liabilities shall be payable severally and not jointly by each Guarantor on a pro rata basis in proportion to their current shareholding ownership. With the current Pembridge shareholding in Minto at 11%, this means that the Company is to guarantee Minto’s liability towards Sumitomo in the amount of US$ 495,000. This guarantee will automatically be discharged upon (i) the completion of the RTO, with Minto receiving minimum gross proceeds of CAD$ 25 million, or (ii) Sumitomo being repaid in full of the Additional Advance, whichever is earlier.

Pembridge short term financing

The capital raise and listing of Minto Metals on the TSXV were expected to be completed by the end of July 2021. As a result of conditions outside the control of Minto’s management, the capital raise and listing have been delayed until now. Repayment of the CAD $4 million receivable by Pembridge from Minto is to commence after the capital raise and is to be repaid in 4 equal quarterly payments. Due to the delay in the capital raise, the first repayment is now expected in Q4 2021 instead of Q3 2021.

This has impacted the cash flow of Pembridge and, to ensure that the company has sufficient funds to meet all its ongoing obligations, Pembridge’s Chairman and CEO, Gati Al-Jebouri, has provided an additional facility of up to £200,000 to cover any cash shortfall until the end of 2021. This facility has been approved by the Pembridge Board of Directors and entered into on 21 September 2021. The Facility carries interest at an annual rate of 14%, to be paid upon repayment, and an arrangement fee in the amount of 6% of the amounts drawn down .

Gati Al-Jebouri, Chief Executive Officer and Chairman of the Board of Pembridge said:

“This capital raise by Minto Metals, resulting in investment by new and existing shareholders at a pre-money valuation of CAD$ 156.6 million, confirms the true value of our investment in Minto. This additional capital will enable Minto Metals to further increase production, to benefit from the resulting economies of scale as well as the current strong price of copper and to extend its life of mine with further exploration. The capital raise and listing of Minto Metals provides a transparent third party valuation of our investment. I trust that the market will now recognise the value of Pembridge’s investment and reflect this in the Company’s market valuation. We are proud to have been involved in re-starting the mine and pleased that it is now able to move into a new phase of development with the upcoming listing and new capital and look forward to seeing the value of our investment increase as Minto Metals delivers on its long term objectives. With the expected cash inflows from Minto Metals and higher valuation of our company, I believe that we will be ready to execute on the fourth stage of Pembridge development, which I outlined in 2019 when I took over the leadership of the company. This stage is the identification of new projects to invest in and grow our business.”

Cautionary Statement

This News Release includes certain “forward-looking statements” which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company, or management, expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes, but is not limited to, the anticipated amount of additional funds to be raised in future closings of financing, the anticipated use of proceeds of the financings and the Company’s intentions regarding its objectives, goals or future plans and statements. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, the Company’s ability to predict or counteract the potential impact of COVID-19 coronavirus on factors relevant to the Company’s business, failure to identify additional mineral resources, failure to convert estimated mineral resources to reserves with more advanced studies, the inability to eventually complete a feasibility study which could support a production decision, the preliminary nature of metallurgical test results may not be representative of the deposit as a whole, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital, operating and reclamation costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, and those risks set out in the Company’s public documents. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

NOTES TO EDITORS

About Pembridge Resources plc

Pembridge is a mining company that is listed on the standard segment of the Official List of the FCA and trading on the main market for listed securities of London Stock Exchange plc. Pembridge has an investment in Minto Explorations Ltd, a British Columbia incorporated business operating the Minto mine in Yukon, Canada.

About Minto Explorations Limited

Minto operates the underground copper-gold-silver mine located in central Yukon, approximately 240 kilometres north of the capital Whitehorse along the Klondike Highway. In excess of US$350 million of capital expenditure has been invested into Minto operations since site construction began in 2006. The Minto mine was in continuous production between 2007 and 2018, when the mine was placed onto temporary care and maintenance. Pembridge acquired Minto from Capstone Mining Corporation in June 2019 and restarted operations in October 2019.

Enquiries:

Pembridge Resources plc: +44 (0) 20 7917 2968

Gati Al-Jebouri,

Chief Executive Officer and Chairman of the Board

David James, Chief Financial Officer


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