Great Southern Copper secures £1 million funding for further Cu-Au exploration in Chile

Proceeds from this capital raising mean the Company is well funded for its ongoing exploration programme in Chile. At Especularita, successful sampling work at the Teresita and Victoria prospects highlights the prospectivity of the area with high-grade copper identified in outcrops and artisanal mine dumps and the Company is looking forward to drill testing a number of high-grade Cu-Au prospects. The Company continues to advance its project-scale exploration for large-scale Cu-Au deposits at both Especularita and San Lorenzo.

Sam Garrett, Chief Executive Officer of Great Southern Copper, said: “We are very pleased with the strong support shown for this fundraising from new and existing shareholders, which reflects the confidence in our copper-gold exploration projects in Chile. At Especularita, we are in the process of preparing multiple high-grade Cu-Au prospects for drill testing. This is very exciting because none of these prospects have been drilled before despite strong evidence of high-grade Cu and Au at surface. In addition, regional exploration efforts are continuing at both the Especularita and San Lorenzo projects to identify potential for large-scale low to medium grade Cu-Au deposits. We look forward to advancing the exploration campaigns on our Cu-Au projects in Chile and to updating the market on our progress.”

The funding comprises:

I. £501,000 raised through a conditional placing and subscription with existing and new investors (Placing and Subscription), resulting in the issue of 41 749 998 new ordinary shares of 1p each (New Shares) at a subscription price of 1.2p, being a 17% premium to the volume weighted average share price over the previous 20 trading days. The New Shares represent approximately 19.5% of the Company's current issued share capital. Although the Placing and Subscription were oversubscribed, this is the maximum amount that the Company can currently raise, taking into account new ordinary shares already issued over the last 12 months, pursuant to its shareholder authorities and without having to publish a prospectus. Each New Share will have one attached warrant exercisable at 2.4p for the period of 36 months from the date of admission to listing of the New Shares on the Official List (Standard Segment) of the Financial Conduct Authority and to trading on the Main Market of London Stock Exchange plc (Admission). The warrants however will only be granted once the Company has the relevant shareholder authorities in place and a prospectus has been published. The Placing and Subscription are conditional on Admission becoming effective. As part of the 41 749 998 New Shares, each of the Company's directors will subscribe for 833 333 New Shares.

II. £501 000 raised through a convertible loan facility dated 15 May 2023 (Convertible Loan) with Foreign Dimensions Pty Ltd (FDPL), the Company’s main shareholder and the trustee of the Colin and Imelda Bourke Family Trust, the beneficiaries of which are members of the Bourke family. The Company will be able to draw down half of the facility on 31 August 2023 and the balance on 11 September 2023. The loan is unsecured, will not accrue interest and will automatically convert into a maximum of 41 749 995 ordinary shares at 1.2p each (together with an equivalent number of 2.4p warrants) once the Company has the relevant shareholder authorities in place and a prospectus has been published. Any new ordinary shares arising on conversion will be locked in, subject to customary exemptions, for a period of 12 months from conversion.

The Convertible Loan evidences the ongoing commitment to the Company by FDPL, which, together with other members of the Bourke family who are deemed to be acting in concert with it (the Concert Party) currently holds approximately 54.4% of the Company's voting rights. Following Admission this percentage interest will reduce to approximately 45.5% until the automatic and mandatory conversion of the Convertible Loan, at which point the combined interest of the Concert Party will increase to 53.1% of the Company's voting rights.

The Takeover Code (the Code) applies to the Company. Under Rule 9 of the Code, any person who acquires an interest in shares which, taken together with shares in which that person or any person acting in concert with that person is interested, carry 30% or more of the voting rights of a company which is subject to the Code is normally required to make an offer to all the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with that person, is interested in shares which in the aggregate carry not less than 30% of the voting rights of such a company but does not hold shares carrying more than 50% of the voting rights of the company, an offer will normally be required if such person or any person acting in concert with that person acquires a further interest in shares which increases the percentage of shares carrying voting rights in which that person is interested. An offer under Rule 9 must be made in cash at the highest price paid by the person required to make the offer, or any person acting in concert with such person, for any interest in shares of the company during the 12 months prior to the announcement of the offer.

The automatic and mandatory conversion of the Convertible Loan described above would normally trigger an obligation for an offer to be made under Rule 9. However, the Panel has agreed to waive this obligation such that there will be no requirement for an offer to be made in respect of the conversion of the Convertible Loan.

Following the conversion, the members of the Concert Party will hold shares carrying more than 50% of the voting rights of the Company and (for so long as they continue to be acting in concert) may accordingly increase their aggregate interests in shares without incurring any obligation to make an offer under Rule 9, although individual members of the concert party will not be able to increase their percentage interests in shares through or between a Rule 9 threshold without Panel consent.

As the Convertible Loan is with a related party which has control of the Company, the Board have determined that the Convertible Loan is fair and reasonable from the perspective of both the Company and its other shareholders, including minority shareholders.

Admission and total voting rights

Application will be made for the 41 749 998 New Shares, which will rank pari passu in all respects with the existing ordinary shares in the Company, to be admitted to the Standard Segment of Official List and to trading on the Main Market of the London Stock Exchange plc, which is expected to occur at 8.00 am on or around 19 May 2023. Following Admission of the New Shares, the total number of ordinary shares and voting rights in the Company will be 255 086 409. The above 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, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Read the article online at: https://www.globalminingreview.com/exploration-development/15052023/great-southern-copper-secures-1-million-funding-for-further-cu-au-exploration-in-chile/