Execution of Subscription Agreement for Convertible Loan Notes of Serabi Gold Plc

GUERNSEY, Channel Islands, Jan. 22, 2020 (GLOBE NEWSWIRE) -- Further to the press release of Serabi Gold Plc (the "Company") of January 22, 2020 Greenstone Resources II L.P. ("Greenstone") announces that it has signed a subscription deed (the "Subscription Deed"), pursuant to which it has agreed to subscribe for US$12,000,000 (equivalent to C$15,684,000, using the closing exchange rate of US$1:C$1.307 on January 21, 2020 published on the Bank of Canada website) convertible loan notes to be issued by the Company ("Convertible Loan Notes"), subject to satisfaction of the conditions set out in the Subscription Deed (including approval by the requisite majority of the Company's shareholders). 

Pursuant to the terms of the Convertible Loan Notes, Greenstone will be entitled, at any time when any of the Convertible Loan Notes are outstanding, to convert part or all of the outstanding principal amount into ordinary shares of the Company ("Ordinary Shares") at a price of £0.76 (equivalent to C$1.296, using the closing exchange rate of £1:C$1.7058 on January 21, 2020 published on the Bank of Canada website) per Ordinary Share, subject to certain limitations as set forth in the terms of the Convertible Loan Notes.  The Convertible Loan Notes will mature 16 months after their issuance and will bear an annual interest rate of LIBOR plus 13 per cent per annum, which will accrue daily and will be rolled up and compounded on a quarterly basis. Interest will be payable in cash at maturity (or earlier conversion, redemption or transfer of the Convertible Loan Notes in accordance with their terms).

Greenstone currently has ownership of and control over 14,887,971 Ordinary Shares, representing approximately 25.27% of the issued and outstanding Ordinary Shares (on an undiluted basis).  It also beneficially owns and controls 100,000 options to purchase Ordinary Shares.  Based on a current exchange rate of US$1:£1.30, conversion in full of the principal amount of the Convertible Loan Notes would result in the issuance to Greenstone of 12,145,749 Ordinary Shares, as a result of which Greenstone would hold an aggregate of 27,033,720 Ordinary Shares (excluding the exercise of any of the options held by Greenstone), representing an interest of 38.0% of the Company's issued and outstanding Ordinary Shares (on a post-issuance basis), an increase of 12.73%.

Pursuant to the terms of the Convertible Loan Notes, the exchange rate which will be used to calculate the number of Ordinary Shares issuable to Greenstone on a conversion will be the spot rate of exchange for US$ and £ on the relevant Bloomberg page as at 11 a.m. on the business day preceding the date of the notice from Greenstone indicating that it wishes to exercise its conversion option.  Pursuant to the Subscription Deed, Greenstone has agreed that the maximum number of Ordinary Shares issuable pursuant to a conversion (with any excess payable in cash only) will not exceed 28,849,072 Ordinary Shares, as a result of which Greenstone would own and control up to an aggregate of 43,737,043 Ordinary Shares, representing a maximum of 49.9% of the issued and outstanding Ordinary Shares (on a post-issuance basis), which would represent an increase in ownership of up to 24.63% (on a post-issuance basis) of the issued and outstanding Ordinary Shares. 

Greenstone entered into the Subscription Deed for investment purposes. Depending on market conditions and other factors, Greenstone may from time to time acquire and/or dispose of securities of the Company or continue to hold its current position.  A copy of the early warning report required to be filed with the applicable securities commission in connection with the transactions will be available on SEDAR at www.sedar.com and can be obtained by contacting Matt Hornton or Gordon Purvis at +44 1481 749 700. Greenstone's address is set out below.

Greenstone Resources II L.P.
PO Box 656, East Wing,
Trafalgar Court, Les Banques
St Peter Port, Guernsey

Serabi Gold Plc
66 Lincoln's Inn Fields
London, England
EC2A 3LH