10/02/10 Lotus Resources Plc ('Lotus' or 'the Company') Fundraising: Update Lotus Resources Plc ('Lotus' or 'the Company') (PLUS Markets: LOTP), a company engaged in the development of mining and exploration projects in Mongolia, is pleased to announce that it has completed a £600,000 fundraising by way of a placing. £100,000 has been raised through the issue of 4,694,835 shares ordinary shares at 2.13p per share with a further £500,000 raised via a convertible secured loan note based on asset acquisition. The shares have been issued pursuant to the current dis-application of pre-emption rights as approved by the shareholders at the Company's AGM in 2009, whilst the issue of the loan notes and warrants are subject to shareholder approval. These funds have been raised for working capital and to develop the mining opportunities in Mongolia already announced with the funding from the convertible loan note being allocated for the purchase of production assets. Brief summaries of these projects are given below. Lotus Resources' Fluorspar Projects Lotus Resources Plc operates in Mongolia through its wholly owned subsidiary Lotus Minerals Mongolia LLC ("LMML") which holds the Group's investments in its mining and exploration companies. Lotus Amgalan LLC ('Chuluut Project') Lotus Amgalan LLC is owned 51% by LMML and 49% by Amguulan LLC, a Mongolian company. The Company holds a mining licence covering 35 hectares which is located approximately 410km southeast of Ulaanbaatar. It is anticipated that mine development work will be able to commence shortly subject to the necessary consents being obtained. Lotus Dai Uul LLC ('Dai Uul Project') Lotus Dai Uul LLC was originally owned 51% by LMML but in January 2010 LMML acquired the 49 per cent of the JV owned by GXT LLC, a local Mongolian company and now owns 100 per cent of this project. Lotus Dai Uul LLC holds an exploration licence ('Dai Uul') covering 83 hectares approximately 300km southeast of Ulaanbaatar. It is located near the Bor-Ondor Mine (the biggest fluorspar mine in Mongolia) in the Bor-Ondor fluorspar district. An application for the grant of a mining licence is being prepared. It is anticipated that mine development work will be able to commence in mid 2010 subject to the necessary consents being obtained. Lotus Bayalag Fluorspar LLC ('GAT Project') Lotus Bayalag Fluorspar LLC is now owned 80% by LMML with the balance owned by Mr Orgil Enkh-Onon, a local Mongolian businessman. The exploration licence held by Lotus Bayalag Fluorspar LLC covers 1,066.7 hectares and is located approximately 225km east of Ulaanbaatar. Limited exploration work, which involved trenching and test pitting on three outcropping fluorite veins, has been carried out on this licence so far. An exploration programme has been prepared to cover mapping and trenching which it is intended to commence during 2010. Tsagaan Chuluut ('Tsagaan Chuluut Project') The Tsagaan Chuluut project, which is wholly owned by LMML, is a recent addition to the Company's portfolio of fluorspar projects. The property comprises a mining licence covering an area of 33 hectares. It is located approximately 400km south east of Ulaanbaatar and 70km north east of the town and fluorspar mining centre of Bor-Ondor. Details of the Share and Convertible Loan Note Placements The Company has issued for cash, 4,694,835 shares at 2.13p pence per share raising £100,000 together with the issue of warrants over 14,084,505 ordinary shares of 1p exerciseable as follows: · 4,694,835 warrants @2.13p for up to one year from issue · 4,694,835 warrants @3.2p for up to two years from issue · 4,694,835 warrants @4.26p for up to three years from issue City of London Group and John Greenhalgh subscribed for 2,347,418 shares each at 2.13p per share representing 3.38% of the enlarged share capital with the warrants being issued on a pro rata basis. The company also issued Cumulative Convertible Redeemable secured Loan Notes. City of London Group and John Greenhalgh subscribed for £50,000 worth of Loan Notes each and private clients of UBS AG subscribed for £400,000 worth of Loan Notes. The principal terms of the Cumulative Convertible Redeemable secured Loan Notes are: · Conversion of all of the loan notes into ordinary shares of 1p at the Holders option until 31 December 2013 at an exercise price of 2.5p per share; · The Company may (subject to approval of the holders) repay the first £200,000 of the £500,000 loan note plus any accrued interest, in part or in full, for cash, up to the date of repayment, at any time after the second anniversary of issue; · The issue, on 31 December 2013, of up to 20,000,000 warrants over Ordinary shares @4.26p exercisable for up to two years from issue. The warrants will be issued pro rata to the holding of the loan note; · 10% interest per annum payable quarterly in arrears in cash or rolled up at the discretion of the holder; · Secured on plant and machinery of Lotus Minerals Mongolia LLC and its subsidiaries as assets are acquired. In addition to the above, the Company has placed 456,385 new ordinary shares at 2.13p per share. These shares have been issued to a consultant to, the Company, as settlement of outstanding contractual obligations. Following this issue of shares, the Directors continue to hold 6,928,268 shares now representing 10%of the issued share capital. Simon Longworth, the Chief Executive Officer continues to hold 4,221,347 shares, now representing 6.1% of the issued share capital. Luka Lu continues to hold 1,973,587 shares now representing 2.8% of the issued share capital. Following this issue there will be 69,396,275 ordinary shares in issue. The new shares will rank pari passu with existing ordinary shares. The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or change to their interest in, Lotus Resources Plc under the FSA's Disclosure and Transparency Rules. Further to the announcement made on 9 December 2009, the Company announces that, owing to a technical delay in the transfer of shares into the Euroclear account of Habsburg & Partner Advisory AG ("Habsburg") settlement of the consideration for the shares is now expected to be received on or before the 15th February 2010. As a result of the delay the options granted to Habsburg over new ordinary shares have lapsed. Simon Longworth, Chief Executive, Lotus Resources commented: "These additional funds will allow us to continue the expansion of the Company. We now have in place a resource base that will generate cashflow this year. "We are actively looking to add further licences and to acquire producing assets. We remain on track to meet our aim of building a medium sized mining and exploration company." The Directors of the Issuer accept responsibility for this announcement Enquiries: Lotus Resources Plc Simon Longworth, Chief Executive Tel: +976 8800 8983 and +86 (0) 1350 107 0840 James Benson, Finance Director Tel: +44 (0) 7768 242 660 Rivington Street Corporate Finance Tel: +44 (0) 20 7562 3373 Eran Zucker Lothbury Financial Michael Padley / Ron Marshman Tel: +44 (0) 20 7011 9411 END
LOTUS RESOURCES PLC
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