Ann: Update to Bass's Investment in Graphmada, page-16

Stratmin Global Resources PLC Posting of Circular
Source: UK Regulatory (RNS & others)


Stratmin Global Resources PLC

18 December 2015

Posting of Circular

StratMin Global Resources Plc (AIM: STGR), London's only listed graphite production and exploration company, announces that it has today posted a circular to shareholders in relation to a proposed capital reorganisation of the Company and increase in the Directors' authority to allot shares and disapply pre-emption rights (the "Circular"). The Circular contains a notice convening a general meeting of the Company to approve the matters relating to the proposed capital organisation as noted above. The general meeting will be held at the offices of Strand Hanson Limited, 26 Mount Row, London W1K 3SQ on 6 January 2016 at 10 a.m. (the "General Meeting"). The Circular will also be made available on the Company's website.

Capitalised terms are appended to this announcement and have the same meaning as provided in the Circular, unless the context requires otherwise.

For further information please visit www.stratminglobal.com

Background to the Resolutions

The Existing Ordinary Shares have in recent months frequently been trading on AIM at a price below their nominal value of 4 pence per share. The issue of new shares by an English company at a price below their nominal value is prohibited by English company law and accordingly the ability of the Company to raise funds by way of the issue of further equity has been inhibited. Accordingly the Directors are seeking Shareholders' authority to implement the Capital Reorganisation to create a differential between the nominal value of the ordinary shares in the capital of the Company and their market price to facilitate future share issues.

To give effect to the Capital Reorganisation the Articles will need to be amended to make changes to allow the creation of the Deferred Shares. These amendments will also require Shareholders' approval at the General Meeting.

Capital Reorganisation

As at 17 December 2015, being the latest practicable date prior to the publication of this announcement, the total issued share capital of the Company was GBP6,045,975.64 divided into 151,149,391 Existing Ordinary Shares.

It is proposed that in relation to the Company's share capital to effect the Capital Reorganisation, that each of the 151,149,391 Existing Ordinary Shares will be subdivided and reclassified into one New Ordinary Share of 0.01 pence and one Deferred Share of 3.99 pence each.

As a consequence of, and immediately following, the Capital Reorganisation becoming effective each Shareholder's holding of New Ordinary Shares will be the same as the number of Existing Ordinary Shares held by them on the Record Date. Therefore, each Shareholder's proportionate interest in the Company's issued ordinary share capital will, and thus the aggregate value of their holding should, remain unchanged as a result of the Capital Reorganisation.

The New Ordinary Shares will continue to carry the same rights as attached to the Existing Ordinary Shares. The Deferred Shares will carry the rights as set out in the Articles and as summarised below.

The last day of trading on AIM in the Existing Ordinary Shares is expected to be 6 January 2016. If approved, following the Capital Reorganisation becoming effective, and assuming no shares are issued between 17 December 2015 (being the latest practicable date prior to the printing of the Circular) and the date the Capital Reorganisation becomes effective (expected to be 10 a.m. on 6 January 2016), the Company's issued ordinary share capital will still comprise 151,149,391 New Ordinary Shares.

If the Capital Reorganisation is approved, the New Ordinary Shares will be admitted to trading on

AIM.

No new share certificates representing the New Ordinary Shares will be sent to Shareholders who hold Existing Ordinary Shares in certificated form. Accordingly, share certificates for the Existing Ordinary Shares will remain valid, and will only be replaced by share certificates for New Ordinary Shares when the old share certificates are surrendered for cancellation following the transfer, transmission or other disposal of New Ordinary Shares.

Shareholders who hold their Existing Ordinary Shares in uncertificated form through CREST should expect to see the security description updated for the existing ISIN number (GB00B9276C59), in order to reflect their holding in New Ordinary Shares.

The Deferred Shares created will be effectively valueless as they will not carry any rights to vote or dividend rights. 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 holder of a New Ordinary Share has received a payment of an amount equal to the amount paid up on that share after repayment in respect of each New Ordinary Share of the capital paid up on it and the further payment to holders of New Ordinary Shares of GBP1,000,000 on each New Ordinary Share. The Deferred Shares will not be traded on AIM or listed and will not be transferable other than as specified in the proposed Article 3.3.3.2. No share certificates will be issued in respect of the Deferred Shares, nor will CREST accounts of Shareholders be credited in respect of any entitlement to Deferred Shares.

In connection with the Capital Reorganisation, the Company also proposes to amend the Articles to include the rights and restrictions attaching to the Deferred Shares, as set out above. The Resolution pertaining to the Capital Reorganisation and associated amendment of the Articles will be proposed as a special resolution, numbered Resolution 2.

Share Authority Increase

The proposed authority to issue New Ordinary Shares for cash on a non-pre-emptive basis is to give the Board flexibility to undertake a future fundraising, when market conditions are appropriate, during the course of 2016 without the financial and time expense of having to convene a further general meeting. The Board is proposing to increase the authority to allot shares and disapply pre-emption rights over a total of 48,000,000 New Ordinary Shares, representing approximately 32 per cent. of the Company's currently issued share capital. When combined with existing unused authorities, and assuming the Resolution is approved, the Board will have authority to allot shares and disapply pre-emption rights over, in aggregate, 42 per cent. of the Company's currently issued share capital. At this point in time, the Board envisions that the net proceeds from any fundraising undertaken pursuant to this authority will be used, in conjunction with part of the cash received and to be received pursuant to the investment agreement with Bass Metals Ltd., to fund immediate capital expenditures and provide for expanded working capital.

In order to conserve cash resources, part of this proposed authority will also be used to settle unpaid cash salaries for certain of the Board and senior management. The price that these New Ordinary Shares will be issued at will be set according to the price that the fundraising referred to above takes place at.

In order to further conserve cash resources, part of this proposed authority will also be used to settle monthly cash salaries coming due in early 2016 for certain of the Board and senior management until the earlier of the exercise of the incentive option granted to Bass Metals Ltd. and 30 April 2016. Please see the Company's announcement dated 4 December 2015 for further information on the transaction with Bass Metals Ltd. including details on the incentive option.

These New Ordinary Shares will be issued monthly in arrears and a price determined by the 5-day volume weighted average price (VWAP) prior to the end of each respective month. Part of the proposed authority will also be used to issue shares due to the Company's Chief Executive Officer, Brett Boynton, pursuant to his employment contract with the Company. Mr. Boynton is due a total of GBP200,000 in shares, over a two year period, payable in arrears in four six-monthly tranches of GBP50,000 each at a price of 6 pence per New Ordinary Share. The total number of shares to be issued to Mr Boynton under this arrangement is expected to be 3,333,333.

Finally, the Board also intends to use part of this authority to allot and issue the corresponding number of New Ordinary Shares to certain of the holders of existing Options and Warrants in the event of the exercise of such Warrants and Options, totaling 11,356,250.

The Board is seeking an extension to their authority to issue shares as set out in Resolutions 1 and 3 of the Notice of General Meeting.

Related Party Transaction

The issue of New Ordinary Shares to certain of the Board and senior management to settle monthly cash salaries coming due in early 2016 is considered a related party transaction under the AIM Rules. The independent directors (being the Board, save for those receiving New Ordinary Shares in lieu of cash salary) consider, having consulted with Strand Hanson Limited, the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as Shareholders are concerned.

Irrevocable Undertaking

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