REG - Lexington Gold Ltd - £2.5m Equity Fundraise and Conversion of Loans

Lexington GoldAnnouncement

10/07/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230710:nRSJ4202Fa&default-theme=true

RNS Number : 4202F  Lexington Gold Limited  10 July 2023

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, NEW ZEALAND, JAPAN, THE
REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION IN
WHICH IT WOULD BE UNLAWFUL TO DO SO.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN
OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR
OR OTHERWISE ACQUIRE ANY NEW COMMON SHARES OF LEXINGTON GOLD LTD IN ANY
JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE
MARKET ABUSE REGULATION NO. 596/2014 ("MAR") AS IT FORMS PART OF UK DOMESTIC
LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, as amended by
virtue of the Market Abuse (Amendment) (EU Exit) Regulations 2019. MARKET
SOUNDINGS, AS DEFINED IN MAR, WERE TAKEN IN RESPECT OF THE PLACING WITH THE
RESULT THAT CERTAIN PERSONS BECAME AWARE OF THIS INSIDE INFORMATION, AS
PERMITTED BY MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

10 July 2023

Lexington Gold Ltd

("Lexington Gold" or the "Company")

 

£2.5 million Equity Fundraise and Conversion of Loans

 

Lexington Gold (AIM: LEX), the gold exploration and development company with
projects in North and South Carolina, USA, is pleased to announce that the
Company has raised, in aggregate, gross proceeds of approximately £2.5m from
certain existing and new investors to, inter alia, unlock value from its
proposed conditional acquisition of a 76 per cent. interest in White Rivers
Exploration Proprietary Limited ("WRE"), an exploration and development
company with significant gold assets in South Africa (the "Proposed WRE
Transaction"), full details of which were announced on 15 May 2023.  In
addition, outstanding loans of US$150,000 due to the Company's Chairman,
Edward Nealon, and £300,000 due to Mark Creasy (together, in both instances,
with accrued interest thereon) have been settled in new equity on the same
terms as the fundraising (the "Loan Conversion Shares") in order to conserve
the Company's working capital.

 

Fundraising: The Company has raised, in aggregate, gross proceeds of
£2,516,300 (the "Fundraising") at a price of 6 pence (the "Fundraising
Price") per common share of US$0.003 each in the capital of the Company
("Common Shares") from the issue of, in aggregate, 41,938,334 new Common
Shares (the "Fundraising Shares") conditional upon admission of such
Fundraising Shares to trading on AIM ("Admission"). The Fundraising comprises
a placing of 17,188,334 new Common Shares (the "Placing Shares") to raise
£1,031,300 at the Fundraising Price (the "Placing"), via the Company's joint
brokers, Peterhouse Capital Limited and WH Ireland Limited, and share
subscriptions for, in aggregate, 24,750,000 new Common Shares at the
Fundraising Price to raise £1,485,000 (the "Share Subscriptions"). The Share
Subscriptions include a subscription of £100,000 by Edward Nealon, Lexington
Gold's Chairman, for 1,666,667 Fundraising Shares, representing approximately
4 per cent. of the total Fundraising amount.

 

Use of Proceeds: The Board believes that a multi-million ounce JORC
2012/SAMREC compliant Mineral Resource Estimate ("MRE") can be established in
respect of WRE's existing asset portfolio, such that the net proceeds from the
Fundraising are intended to be used primarily in relation to the following
activities, as well as providing additional general working capital for the
group:

·    Undertaking detailed analysis and modelling of the existing WRE
geological database and extensive drilling data set;

·    Establishing and implementing the requisite work required to initiate
conversion of WRE's current non-JORC/non-SAMREC compliant Mineral Resources
into a code compliant MRE including verification and duplication drilling, as
appropriate, as well as the re-sampling and assaying of historical drill core,
where possible;

·    Preparation work on comprehensive independent competent person's
reports in respect of WRE's  projects;

·    Unlocking value from the Jelani Resources JV by engaging and working
closely with Harmony Gold with the aim of progressing this project into
potential future gold production; and

·    Continuation of planned further work on the Company's projects in the
Carolinas, USA, including in particular potential drilling of the drill ready
targets identified at the Jennings-Pioneer Project.

 

 

Edward Nealon, Non-Executive Chairman of Lexington Gold, commented:

"The level of interest shown and support received during our fundraising
process has been most encouraging, particularly in light of the current
difficult market conditions, and we are delighted to have been able to raise
this additional funding at a premium to the Company's prevailing market share
price. The majority of the Fundraising has been sourced from existing
shareholders, who have continued to support the Company's growth and
development. We firmly believe that a multi-million ounce JORC 2012/SAMREC
compliant MRE can be established in respect of WRE's existing asset portfolio
and the new funds will help us progress this key objective, unlock value from
WRE's assets and also continue our work in the USA.

 

"We again thank our existing shareholders for their continued support and
welcome our new investors to the register. We look forward to providing
further updates on the proposed acquisition and our operational progress in
due course."

 

Further Details of the Fundraising: Pursuant to the Fundraising, in aggregate,
41,938,334 Fundraising Shares will be issued at the Fundraising Price to a
director of the Company, certain existing shareholders and certain new
investors conditional upon Admission. The Fundraising Price represents a
premium of approximately 2.0 per cent. to the closing middle market price of a
Common Share of 5.9 pence on 7 July 2023, being the latest practicable
business day prior to this announcement.  The Company is also issuing
warrants to the Fundraising participants to subscribe for up to a further
41,938,334 new Common Shares which are exercisable at 10 pence per share
(representing an approximate 67% premium to the Fundraising Price) for an
exercise period of three years from Admission (the "Fundraising Warrants").
The Company is currently assessing whether such warrants can be held in CREST.
It is the Company's current intention that the warrants to be issued, could be
held in either certificated form or within CREST and the Company will update
investors in the Fundraising accordingly in due course.

 

The Fundraising Shares represent, in aggregate, approximately 12.6 per cent.
of the Company's enlarged issued share capital (as enlarged by the issue of
the Fundraising Shares and the Loan  Conversion Shares). The Fundraising
Shares and Loan Conversion Shares will be fully paid and rank pari passu in
all respects with the Company's existing Common Shares.

 

Loan Conversion Shares: The Company has agreed to settle, in aggregate,
£423,518 of outstanding Loans including accrued interest on the same terms as
the Fundraising by way of the issue of 7,058,639 new Common Shares and
7,058,639 warrants with the same terms as the Fundraising Warrants.
£120,061 of this amount was due to Edward Nealon, the Company's Chairman, in
relation to his US$150,000 loan to the Company announced on 14 March 2023
which will be settled by the issue of 2,001,024 new Common Shares and
2,001,024 warrants with the same terms as the Fundraising Warrants.  The
remaining £303,457 was due to Mark Creasy in relation to his £300,000 loan
to the Company which was announced on 15 May 2023 which will be settled by the
issue of 5,057,615 new Common Shares and 5,057,615 warrants with the same
terms as the Fundraising Warrants.

 

The table below shows Mr Nealon's resultant shareholding in the Company and
his percentage holding of the Company's total voting rights (TVR) at
Admission:

 

                                         Common Shares
 Director                                Current holding  Fundraising Shares  Loan Conversion Shares  Resultant holding  % of TVR at Admission
 Edward Nealon (Non-Executive Chairman)  7,916,145        1,666,667           2,001,024               11,583,836         3.49%

 

Related Party Transaction - Director Participation: As Edward Nealon is a
director of the Company, his participation in the Fundraising and the issue of
the Loan Conversion Shares and associated warrants to him constitute related
party transactions pursuant to Rule 13 of the AIM Rules for Companies.
Accordingly, the independent directors, being Bernard Olivier, Melissa
Sturgess and Rhod Grivas, having consulted with the Company's Nominated
Adviser, Strand Hanson Limited, consider Mr Nealon's participation in the
Fundraising and issue to him of the Loan Conversion Shares and associated
warrants to be fair and reasonable insofar as the Company's shareholders are
concerned.

 

Related Party Transactions - Substantial Shareholder Participations: The
participation in the Share Subscriptions by certain of the Company's existing
substantial shareholders, namely Pure Ice Ltd, Orasa Chiaratanasen and Mark
Mitchel Greenwood, also constitute related party transactions pursuant to Rule
13 of the AIM Rules for Companies. Accordingly, the Board, having consulted
with the Company's Nominated Adviser, Strand Hanson Limited, consider such
participations to be fair and reasonable insofar as the Company's shareholders
are concerned.

 

Application to trading on AIM: The Fundraising is conditional on Admission.
Application will be made to the London Stock Exchange for the 41,938,334
Fundraising Shares and 7,058,639 Loan Conversion Shares (together, the "New
Common Shares") to be admitted to trading on AIM. It is expected that
Admission will become effective and that dealings in the New Common Shares
will commence at 8.00 a.m. on or around 20 July 2023.

 

Total Voting Rights: On Admission, the number of Common Shares in issue
outside treasury and the total voting rights in the Company will be
332,098,975. This figure may be used by shareholders in the Company as the
denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest in,
Lexington Gold under the notification provisions incorporated in the Company's
Bye-laws.

 

Additional Information: The table below shows the resultant shareholdings of
the substantial shareholders who participated in the Fundraising and their
percentage holdings of total voting rights (TVR) in the Company at Admission.
 

 

                                    Common Shares
 Shareholder                        Current holding           Fundraising Shares  Resultant holding  % of TVR at Admission
 Pure Ice Ltd                       65,810,946                 13,333,333           79,144,279       23.83%
 Orasa (a.k.a Doris) Chiaratanasen         42,349,200            7,500,000           49,849,200      15.01%
 Mark Greenwood                         33,794,999                  916,667           34,711,666     10.45%

 

 

Unless otherwise defined herein, all capitalised terms in this announcement
shall have the meanings ascribed to them in the Company's announcement of 15
May 2023.

 

 

For further information, please contact:

 

 Lexington Gold Ltd                                      www.lexingtongold.co.uk (http://www.lexingtongold.co.uk)

 Bernard Olivier (Chief Executive Officer)               via Yellow Jersey

 Edward Nealon (Chairman)

 Mike Allardice (Group Company Secretary)

 Strand Hanson Limited (Nominated Adviser)               www.strandhanson.co.uk (http://www.strandhanson.co.uk)

 Matthew Chandler / James Bellman / Abigail Wennington   T: +44 207 409 3494

 WH Ireland Limited (Joint Broker)                       www.whirelandplc.com (http://www.whirelandplc.com)
 Katy Mitchell / Enzo Aliaj                              T: +44 207 220 1666

 Peterhouse Capital Limited (Joint Broker)               www.peterhousecap.com (https://peterhousecap.com/)

 Duncan Vasey / Lucy Williams (Broking)                  T: +44 207 469 0930

 Eran Zucker (Corporate Finance)

 Yellow Jersey PR Limited (Financial Public Relations)   www.yellowjerseypr.com (http://www.yellowjerseypr.com)

 Charles Goodwin / Annabelle Wills / Soraya Jackson      T: +44 7948 758 681

 

 

Note to Editors:

 

Lexington Gold (AIM: LEX) is a gold exploration and development company
currently holding interests in four diverse gold projects, covering a combined
area of approximately 1,675 acres in North and South Carolina, USA. The
projects are situated in the highly prospective Carolina Super Terrane
("CST"), which has seen significant historic gold production and is host to
several multi-million-ounce mines operated by majors. It was also the site of
the first US gold rush in the early 1800s, before gold was discovered in
California.

 

Further information is available on the Company's website:
www.lexingtongold.co.uk (http://www.lexingtongold.co.uk) . Neither the
contents of the Company's website nor the contents of any website accessible
from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.

 PDMR Notification Form:

 The notification below is being made in accordance with the requirements of
 MAR.

1.  Details of the person discharging managerial responsibilities / person closely
   associated
 a)  Name                                                         Edward Nealon
 2.  Reason for the Notification
 a)  Position/status                                              Non-Executive Chairman
 b)  Initial notification/amendment                               Initial notification
 3.  Details of the issuer, emission allowance market participant, auction
   platform, auctioneer or auction monitor
 a)  Name                                                         Lexington Gold Ltd
 b)  LEI                                                          213800ZBDLZC9TO5W864
 4.  Details of the transaction(s):section to be repeated for (i) each type of
   instrument; (ii) each type of transaction; (iii) each date; and (iv) each
   place where transactions have been conducted
 a)  Description of the Financial instrument, type of instrument  Common shares of US$0.003 each ("Common Shares")
   Identification code                                          BMG5479L1072
 b)  Nature of the Transaction                                    Subscription for Common Shares in a fundraising

                                  Settlement of a loan in Common Shares

 c)  Price(s) and volume(s)                                       Price(s)  Volume(s)
                                  Fundraising  shares       6 pence   1,666,667
                                  Loan  Settlement Shares   6 pence   2,001,024

 d)  Aggregated information

   Aggregated volume Price                                      3,667,691 Common Shares at 6 pence
 e)  Date of the transaction                                      7 July 2023
 f)  Place of the transaction                                     Outside of an exchange

 d)

 Aggregated information

 Aggregated volume Price

 3,667,691 Common Shares at 6 pence

 e)

 Date of the transaction

 7 July 2023

 f)

 Place of the transaction

 Outside of an exchange

d)

Aggregated information

Aggregated volume Price

 

3,667,691 Common Shares at 6 pence

e)

Date of the transaction

7 July 2023

f)

Place of the transaction

Outside of an exchange

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  IOEFFFFIDRIAIIV