Uranium Update - £1 Million Raised by way of a Convertible Loan Note
VANE Minerals Plc ("VANE" or "the Company") announces that, further to the progress recently announced with the expansion of its US based portfolio of uranium assets and the commencement of drilling at certain projects, the Board is undertaking a strategic review of its options in order to maximise shareholder benefit from its uranium portfolio. The Board recognises the rising interest, particularly in the US and Canada, of institutions and other parties in companies operating in the uranium sector. This has led to substantial valuations and major fundraising opportunities for some asset-rich uranium companies in those markets.
There is no certainty as to the outcome of any such review but in the current environment the Board considers that it has a duty in the best interests of shareholders to explore what options may be available to extract optimum value from its now sizeable uranium portfolio. An update on any progress will be announced in due course.
To facilitate the fast track exploration and drilling at the Company's various North American uranium projects, the Company has conditionally agreed to raise £1,000,000 through the issue of a fixed-rate unsecured convertible loan note (the "Loan Note") to Geiger Counter Limited.
The issue of the Loan Note is conditional upon shareholder approval which will be sought at an Extraordinary General Meeting (the "EGM"), to be held on the 8th May, 2007. A circular describing the proposed issue of the Loan Note and convening the EGM will be sent to shareholders this week.
Principal Terms of the Loan Note
The Loan Note attracts interest at 8% per annum, paid half-yearly.
The Loan Note is convertible at the option of the holder at any time prior to the redemption date (being the date five years from the date of issue of the Loan Note) at a price of £0.29 per share, a premium of 28.9% to the closing price at the 10th April. (£0.225 per share).
The number of ordinary shares of 10 pence each to be issued upon conversion of the Loan Note are subject to proportional adjustments to reflect stock dividends, share splits, reverse share splits and other anti-dilutive events.
Should the Company elect to divest any or all of the uranium assets into a new company, the Loan Note shall be convertible at the option of the holder into shares in such company at a price not greater than the price per share of the shares in such company issued to new investors in the first round of a fundraising.
Upon a change of control involving the acquisition of voting control or direction of over 50% or more of the ordinary shares of the Company, the holder has the right to require the Company to redeem the Loan Note, in whole or in part, at a price equal to 101% of the principal amount, plus accrued and unpaid interest thereon.
Additionally, shareholders will be aware that the Company raised £750,000 in September 2006 through a convertible loan note agreement with City Natural Resources High Yield Trust Plc and Geiger Counter Limited, who loaned £450,000 and £300,000 respectively. Should shareholder approval be obtained in respect of the Loan Note, Geiger Counter and City Natural Resources have irrevocably undertaken to exercise their conversion rights on the existing loan note into ordinary shares of the Company at the agreed price of 12p, this will happen on the issue of the new loan note and no further interest will be payable from that point on the £750,000.
Matthew Idiens, Director of Corporate Development, commented, "We are very pleased to announce this funding which will allow us to continue to accelerate the development of our uranium portfolio in the US. The uranium market is here to stay and we believe that the time is now right to explore ways in which we can extract the maximum value from our uranium assets. We are also delighted that Geiger Counter, the specialist uranium fund, has likewise recognised the potential uplift and further cemented their support for VANE."