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Richland Resources Ltd’s shares were suspended from trading

on 1 July 2020 pursuant to AIM Rule 40.  

 

On 27 July 2020 the Company announced a Proposed Reverse Takeover Transaction: A full copy of the announcement is on the Announcement section of the Company’s website and a copy of the initial summary of the Proposed Reverse Takeover Transaction in the announcement is copied below:

START OF EXTRACT FROM 27 July 2020 ANNOUNCEMENT

Proposed Acquisition of Global Asset Resources Ltd, Board Changes, Proposed Fundraising, Proposed Change of Name and  Proposed Share Capital Consolidation

Richland (AIM: RLD) is pleased to announce, further to the Company’s announcement of 1 July 2020, that it has entered into a binding share purchase agreement (“SPA”) with the existing shareholders of Global Asset Resources Ltd (“GAR”) for the conditional acquisition of GAR, which, via its wholly owned subsidiary, Global Asset Resources Holdings, Inc., holds a 51 per cent. interest in and operatorship of four gold exploration projects in North and South Carolina in the United States (the “Proposed Transaction” or “Acquisition”). The Proposed Transaction constitutes a reverse takeover transaction pursuant to Rule 14 of the AIM Rules for Companies (the “AIM Rules”).

The consideration for the Proposed Transaction comprises an aggregate payment on completion of the Proposed Transaction (“Completion”) to the sellers and GAR’s joint venture partner, Uwharrie Resources Inc. (“URI”), of AU$60,000 (approximately US$42,500; £33,250) in cash and AU$1.04m (approximately US$737,500; £576,750) in new common shares in the capital of the Company (“Common Shares”). In addition, Richland is required to make two non-refundable cash payments to GAR of US$29,340 on 31 July 2020 and US$22,818 on 30 September 2020, regardless of whether or not Completion has occurred by these dates, with such payments to be utilised to cover certain project costs pending Completion. Furthermore, the Company may also be required to make two additional future conditional deferred consideration payments to the sellers and URI, in cash or new Common Shares at Richland’s sole discretion, of, in aggregate, AU$1.5m and AU$3m, linked to the achievement of certain performance milestones or the occurrence of certain vesting events during the five year period following Completion, as detailed below.

The Board intends to fund the initial cash consideration in respect of the Proposed Transaction and the enlarged group’s planned initial two year work programme and requisite working capital requirements via the issue of new equity by way of a proposed private placing to be conducted in the short term in connection with the Proposed Transaction (the “Proposed Placing”).

In accordance with Rule 14 of the AIM Rules and the SPA, completion of the Proposed Transaction is subject, inter alia, to approval by the Company’s shareholders at a general meeting to be convened in due course (the “General Meeting”) and successful completion of the Proposed Placing. In order to convene the General Meeting and obtain the requisite shareholder approvals, the Company is required to publish an AIM admission document in respect of the proposed enlarged group which will detail, inter alia, the Proposed Transaction. It is currently intended that the requisite admission document will be published during Q3 2020.

In conjunction with the Proposed Transaction, the Company is today making certain changes to the composition of its Board. Anthony Brooke, Chief Executive Officer, and Nicholas Sibley, Non-Executive Director, are stepping down from the Board with immediate effect. Bernard Olivier and Melissa Sturgess are joining the Board as Chief Executive Officer and Non-Executive Director respectively, also with immediate effect, as further detailed below. Aligned with these changes, the Board also intends, subject to shareholder approval being obtained at the General Meeting, to change the Company’s name to Lexington Gold Ltd, undertake a share capital consolidation to reduce the total number of Common Shares in issue and effect certain other changes to its Bye-laws to bring the Company into greater alignment with more UK market standard corporate governance practices.

The Proposed Transaction represents a transformational move for the Company away from being an AIM Rule 15 cash shell to becoming an operating company with a clear focus on exploration for gold and other precious metals in North and South Carolina. The Acquisition rationale is supported by both the Board’s belief in the future potential of GAR’s existing project interests and the current strong market environment in relation to gold.

Pursuant to AIM Rule 15, the Company’s Common Shares will remain suspended from trading on AIM until Completion of the Proposed Transaction.

In the event that, for whatever reason, the Proposed Transaction is not completed, the Company’s Common Shares will remain suspended until such time as another acquisition which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission under the AIM Rules for Companies) is completed or the Company becomes an investing company pursuant to AIM Rule 8 (in either case, a “Re-admission Transaction”). There can be no guarantee that the Company will be able to complete the Proposed Transaction or any alternative Re-admission Transaction within six months of the suspension date and consequently be re-admitted to trading on AIM.

 Key Highlights:

  • Proposed acquisition of GAR, which via its wholly owned US subsidiary, holds a 51% interest in four gold exploration projects in North and South Carolina, being:
    • the Jones-Keystone Loflin Project
    • the Carolina Belle Project
    • the Jennings Pioneer Project; and
    • the Argo Project,
  • (together, the “GAR Projects”).
  • Initial Consideration: an aggregate payment on Completion to the sellers and URI of AU$60,000 (approximately US$42,500; £33,250) in cash and AU$1.04m (approximately US$737,500; £576,750) in new Common Shares to be issued at the price of the Proposed Placing (which remains to be determined). In addition, Richland is required to make two non-refundable cash payments to GAR of US$29,340 on 31 July 2020 and US$22,818 on 30 September 2020 if Completion has not occurred by such dates.
  • Deferred Consideration: potential further future payments to be made to the sellers and URI, in cash or new Common Shares at Richland’s sole discretion, of, in aggregate, AU$1.5m (the “Tranche 1 Deferred Consideration”) and AU$3m (the “Tranche 2 Deferred Consideration”), subject to the achievement of certain material, value-generative performance milestones, or the occurrence of certain vesting events within five years of Completion. Subject to an earlier occurrence of a Vesting Event, the Tranche 1 Deferred Consideration will fall due upon confirmation of a prescribed minimum estimated level of JORC 2012 Compliant Resources and the Tranche 2 Deferred Consideration will fall due on completion of a pre-feasibility study confirming a pre-tax NPV of more than US$50m in respect of any of the GAR Projects (with the Tranche 1 Deferred Consideration also falling due upon the achievement of such performance milestone if not previously triggered/paid).
  • Proposed Placing: the initial cash consideration and the enlarged group’s planned initial two year work programme and requisite working capital requirements is intended to be funded via the issue of new equity by way of the Proposed Placing to be conducted in the short term in connection with the Proposed Transaction. Peterhouse Capital Limited, the Company’s existing Broker, will act as bookrunner to the Company in connection with the Proposed Placing.
  • Board Changes and Other Proposed Corporate Changes:
    • Realignment of the Board with the appointments of Bernard Olivier and Melissa Sturgess, with immediate effect, who together have significant experience of both the natural resources sector and certain key global capital markets.
    • Proposed name change to Lexington Gold Ltd to reflect the transformational nature of the Proposed Transaction.
    • Proposed share capital consolidation to reduce the total number of Common Shares in issue on Completion and re-admission of the enlarged group to trading on AIM, and certain other changes to the Company’s Bye-laws to bring the Company into greater alignment with more UK market standard corporate governance practices. Further details of the proposed consolidation and changes to the Company’s Bye-laws will be set out in the formal Notice of General Meeting in the admission document being prepared in respect of the proposed enlarged group which is expected to be published and sent to shareholders during Q3 2020.

END OF EXTRACT FROM 27 July 2020 ANNOUNCEMENT

On 1 July 2020 the Company announced:

Richland (AIM: RLD), as announced previously, became an AIM Rule 15 Cash Shell on 31 December 2019 pursuant to the successful completion of the disposal of its former wholly owned subsidiary, Richland Corporate Ltd, the holder of the Capricorn Sapphire Project (and the Company’s loans to Richland Corporate Ltd), to Fura Gems Inc.

As such, the Company was required to either make an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission under the AIM Rules for Companies) or become an investing company pursuant to AIM Rule 8 (either being, a “Re-admission Transaction”), within six months from 31 December 2019, failing which, the Company’s common shares would be required to be suspended from trading pursuant to AIM Rule 40.

To date, Richland has not consummated such a Re-admission Transaction and accordingly trading in the Company’s common shares has been suspended with effect from 7.30 a.m. on 1 July 2020.

Admission to trading on AIM of the Company’s common shares will be cancelled pursuant to AIM Rule 41 if a Re-admission Transaction is not completed within a further six month period from today, being the suspension date, to rectify the reason for the suspension.

The Board has now identified a suitable opportunity and is currently in late-stage discussions with respect to a potential reverse takeover transaction in the mining sector, in line with its stated strategy, and anticipates being able to enter into such a transaction in the short term (the “Potential RTO Transaction”). The Potential RTO Transaction involves the acquisition of majority interests in, and operatorship of, four gold exploration projects in North and South Carolina in the United States located within the wider Carolina Super Terrane (formerly the ‘Carolina Slate Belt’), which i) also hosts the producing Haile Gold Mine owned by OceanaGold Corporation (TSX/ASX: OGC) who acquired the Haile Gold Mine be acquiring Romarco Minerals Inc. in 2015 for C$856M; and ii) was the site of the first documented gold discovery in the USA in 1799, with North Carolina being the biggest gold producing state until discovery of the Californian gold deposits.

Whilst negotiations in respect of the Potential RTO Transaction are at an late-stage, there can be no guarantee that the Company will be able to secure and subsequently complete the Potential RTO Transaction or any alternative Re-admission Transaction and consequently be re-admitted to trading on AIM.

A further update(s) will be made in due course as appropriate.

Richland Resources Ltd Completed the Disposal of its Capricorn Sapphire Project on 31 December 2019 and is now an AIM Rule 15 Cash Shell

Richland (AIM: RLD) announced on 2 January 2020 that, further to its announcements of 18 July, 22 July, 19 August, 31 October, 18 November, 2 December, 9 December, 16 December and 23 December 2019 in relation to the proposed disposal to Fura Gems Inc. (“Fura”) of its wholly owned subsidiary Richland Corporate Ltd, the holder of the Capricorn Sapphire Project (and the Company’s loans to Richland Corporate Ltd) (the “Disposal”), the Disposal completed on 31 December 2019 (the “Completion Date”).

Fura paid the total cash consideration of US$1,250,000 (approximately £952,125) due under the Disposal (the “Consideration”), of which US$880,000  (approximately £670,296), was  paid directly to the Lender in order to settle the total amount outstanding under the Company’s pre-existing Secured Convertible Loan Facility (including all accrued interest). The balance of the Consideration will be utilised by the Company to pay transaction costs and certain other outstanding creditors and to provide additional working capital as the Company seeks to identify a suitable reverse takeover transaction in the mining sector.

AIM Rule 15 Cash Shell Status Pursuant to the successful completion of the Disposal, the Company has become an AIM Rule 15 cash shell and, as such, is required to make an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission under the AIM Rules for Companies) within six months from the Completion Date.  Alternatively, within such time period, the Company can seek to become an investing company pursuant to AIM Rule 8, which requires, inter alia, the raising of at least £6 million and publication of an admission document.  In the event that the Company does not complete a reverse takeover under AIM Rule 14 within such six month period or seek re-admission to trading on AIM as an investing company pursuant to AIM Rule 8 (either being, a “Re-admission Transaction”), the Company’s common shares would be suspended from trading pursuant to AIM Rule 40. Thereafter, if a Re-admission Transaction has not been completed within a further six month period, admission to trading on AIM of the Company’s common shares would be cancelled.

Capitalised terms, unless otherwise defined herein, have the same meanings as set out in the Company’s announcement of 27 June 2019.