Rose Petroleum plc

Issue of equity to raise £1m


Rose is pleased to announce that the Company has raised £1m through the issue of new ordinary shares

Rose Petroleum plc, the AIM quoted (AIM: ROSE) natural resources company, is pleased to announce that following the acceptance of an offer of funding, the Company has raised £1m through the issue of new ordinary shares of 0.1p each ("Ordinary Shares") with warrants attached (the "Offer").

As announced in its recent interim results, it is the Company's intention to increase cash flow from its Mexico mining and milling operations by restarting joint venture operations with certain mine owners in the area of the SDA Mill (100% owned by Rose). The funds from the Offer will be used to advance these projects to seek to increase cash flow in the short term, as well as for additional general working capital. Certain projects have been identified and negotiations and due diligence have already commenced. The outcome of these negotiations may or may not be successful.

As previously announced, we are continuing negotiations in respect to the Cuban gypsum project and given the extensive time spent in country, we have been able to identify further potential opportunities which we are currently reviewing. Our activities within Cuba are, at present, fully funded following the investment in to Rose by Earth Source Investment Inc. in May 2016.

In respect of our US oil and gas project, the ongoing permitting programme for the 3D seismic shoot in the Paradox basin is also fully funded up to grant of permits. The physical shoot is currently planned for H2 2017.

As per the Offer, the Company will issue 714,285,714 Ordinary Shares ("Placing Shares") at a price of 0.14 pence per share, which represents a discount of 12.5 per cent. on the closing mid-price of 0.16 pence of an Ordinary Share on 18 October 2016. For every two Placing Shares issued, the subscriber will receive one warrant to subscribe for a new Ordinary Share at a price of 0.25 pence per share ("Warrant") and will therefore result in the issue of 357,142,857 Warrants. The Warrants are exercisable for three years at any time from the date of admission of the Placing Shares to trading on AIM ("Admission"). An additional 42,857,142 Warrants with the same terms will be issued on Admission to Turner Pope Investments (TPI) Limited, the broker of the Offer that will place the Placing Shares and Warrants with its clients.

The number of Placing Shares to be issued under the Offer is limited to the existing authority to issue new Ordinary Shares that was granted to the directors at the Company's Annual General Meeting in June 2016. However, the Company does not currently have sufficient authority pursuant to the Companies Act 2006 to issue sufficient new Ordinary Shares should the Warrants be exercised and therefore the terms of the Offer require the Company to convene a general meeting of shareholders within two months in order to obtain such additional authority. Further announcements in this regard will be made in due course.

Application will be made for the Placing Shares to be admitted to trading on AIM and Admission is expected to occur on or around 26 October 2016.

The Placing Shares will represent approximately 19 per cent. of the issued share capital of the Company as at Admission.

As a result of the Fundraising, Turner Pope Investments (TPI) Limited ("TPI") has been appointed to act as the Company's Joint Broker with effect from Admission.

Total voting rights

Following the issue of the Placing Shares and with effect from Admission, the Company's issued share capital will consist of 3,764,470,841 Ordinary Shares, with one voting right per share. The Company does not hold any ordinary shares in treasury. Therefore, the total number of Ordinary Shares and voting rights in the Company will be 3,764,470,841. 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, the share capital of the Company.

Matthew Idiens, CEO of Rose Petroleum, commented: "We are pleased to have been able to accept the favourable terms on which the funding has been offered and look forward to working with TPI in the future. We are confident of a positive outcome on the negotiations in Mexico and will keep the market informed of our progress."