SOTKAMO SILVER AB ANNOUNCES RIGHTS ISSUE OF 186 MSEK.

The Extra Shareholders meeting of Sotkamo Silver AB (publ) (“Sotkamo Silver or the “Company”) decided to approve the Board’s resolution as per 4 May 2016 to carry out the rights issue of shares of approximately 186 MSEK and warrants of approximately 82 MSEK (the “Issue”)

The Company has received underwriting commitments from a group of qualified investors of 10 M€ of the Issue. The Company has received conditional pre signed subscription-commitments of 4 M€ of the Issue from the three major shareholders, whereby 14 M€ (about 70%) of the Issue is guaranteed from conditional pre-subscription and underwriting commitments.

Shares in Sotkamo Silver is traded on NGM Equity in Stockholm and on Nasdaq Helsinki.

 

Summary  

  • Shareholders in the Company have a pre-emptive right to subscribe for one (1) unit consisting of four (4) shares and one (1) warrant of series 2016/2017, for each shares held on the record-date June 9th 2016
  • The subscription price for each Unit is 9 SEK (corresponding to 2,25 SEK for each new share)
  • The Warrant gives the right so subscribe for one (1) share at 4 SEK in August 2017
  • The Company will receive about 186 MSEK, before issue costs, if the Issue is fully subscribed and, in addition, about 82 MSEK if the Warrant is fully subscribed for.
  • A Prospectus for the Issue will be published on June 14th 2016.
  • Subscription period is June 15th to June 29th 2016

 

Background and rationale

Sotkamo Silver´s business concept is to exploit mineral-deposits in the Nordic countries with regards to human society and environment. Sotkamo Silver owns, through its subsidiary mineral-deposits, which contains silver and gold in Finland and zinc in Norway. The Company’s main development-project is the Silver Mine in Sotkamo.

The Board of Directors of Sotkamo Silver has resolved on a rights issue of shares of approximately 186 MSEK (before issue costs) and warrants of approximately 82 MSEK in order to finance completion of the plant and commence production in the Companies Silver Mine in Sotkamo. Total Capital Expenditure is expected to be about 320 MSEK, of which 186 MSEK is covered by this proposed Rights Issue. The Company expects that the remaining part of financing needs will be covered by debt instruments, loan and vendor-financing. Negotiations have even been done for the sale of assets to speed up the construction process to begin. The expectation, however, requires a total financing package can be implemented before the end of the year 2016.

Issue with pre-emptive right for shareholders

The Extra Shareholders meeting decided to approve the Board’s resolution as per 4 May 2016 to increase the Company’s share capital with maximum 232 235 977,50 SEK by issuing maximum 82 572 792 new shares and maximum 20 643 198 warrants. One warrant gives the right to subscribe for one new share.

Shareholders of the Company registered in the share register kept by Euroclear Sweden on June 9th 2016 shall have pre-emptive right to subscribe for the new shares in relation to the number of shares they own. The shareholders will for every share they own in the Company receive one Unit right. One Unit right will entitle to subscribe for one Unit consisting of four (4) shares and one (1) free warrant 2016/2017. The price for each Unit is 9 SEK (corresponding to SEK 2.25 per share).

Subscription for new shares by simultaneous cash payments shall be made during the period June 15th – June 29th 2016. Subscription for Units not based on Unit Rights shall be made on a separate Subscription form.  Payment for Units without unit rights shall be made within two banking days after notification of the allocation of Units has been sent to the subscriber. The Board of Directors will have the right to prolong the Subscription period and the time for payment.

Should not all Units be subscribed for with Unit rights, the Board of Directors will resolve on allocation of Units subscribed for without Unit rights. Allocation will then be made firstly to those who have subscribed with Unit rights, regardless whether the subscriber was a shareholder on the record day or not, and, in case of over-subscription, in relation to the number of Unit rights used for subscription and, if this is not possible, by drawing of lots. Secondly, allocation will be made to others who have subscribed for Units without Unit rights and, if they cannot receive full allocation, in relation to the number of shares notified for subscription by each one of them, and, if this is not possible, by drawing of lots. Lastly, any remaining Units shall be allocated to the guarantors who have undertaken to subscribe for shares. Allocation shall in such case be made in accordance with such guarantee undertaking.

Guarantee commitments

The Company has received underwriting commitments from a group of qualified investors of 10 M€ of the Issue. The Company has received pre signed subscription-commitments of 4 M€ of the Issue from the three major shareholders, whereby 14 M€, which is about 70%, of the Issue is guaranteed from pre-subscription and underwriting commitments.

 

Preliminary time table for the Righs issue (all dates 2016)

7 June –            Extra shareholders meeting to approve the Boards resolution for the Issue

7 June –            Last day of trading in the shares including Unit rights

8 June –            Trading in the Company’s shares without Unit Rights

9 June –            Record date for allocation of Unit Rights

14 June –          Prospectus is published

15 - 27 June      Trading in Unit rights on NGM Equity

15- 22 June       Trading in Unit rights on Nasdaq Helsinki

15- 29 June       Subscription period (subscription in cash payment based on Unit rights)

15 June –          Trading in Units starts on NGM Equity and Nasdaq Helsinki. Trading will continue until registration of the Issue at the Swedish Companies Registration Office is completed.

1 July –             Preliminary outcome of the Issue

 

Avisors

Stockholm Corporate Finance is acting as finacial advisor, A1 Advokater and DLA Piper legal advisors to Sotkamo Silver. Aqurat Fondkommission och S-Bank Ltd are acting as Issuing agents in this Issue.

 

Sotkamo Silver AB (publ) discloses the information provided herein pursuant to the Swedish Securities Markets Act and/or the Financial Instruments Trading Act.

The official Stock Exchange Releases are given in Swedish and there may be slight differences in the translated version.

 

Stockholm May 7 th 2016

Sotkamo Silver AB (publ)

Timo Lindborg, CEO

 

Important information

Information in this press release is not an offer to acquire, subscribe for or otherwise trade in shares or other securities in Sotkamo Silver. Invitation to interested persons to subscribe for shares in Sotkamo Silver will only be made through the prospectus that Sotkamo Silver expects to publish around June 14th 2016.

This press release may not, directly or indirectly, be released or published or distributed in or into the United States, Canada, Japan, Australia or any other jurisdiction where participation would require further prospectus, registration or other measures than those required by Swedish law. The Offer is not being made to, and acceptance forms will not be accepted from, subscriber (including shareholders), or persons on behalf of the subscriber, in these countries or persons in any other country where the application for subscription of preference shares would contravene applicable laws or regulations or require that additional prospectuses, or registration or other measures in addition to those required by Swedish law. The information in this press release may not be forwarded or reproduced in ways that conflict with such restrictions or would such claims. Actions contravene the restrictions may constitute a violation of applicable securities laws.

No interim shares or shares issued by Sotkamo Silver ("Securities") have been or will be registered under the United States Securities Act of 1933 (the "Securities Act") or the securities laws of any state or other jurisdiction of the United States and may not be offered, pledged, sold, resold, delivered or otherwise transferred, directly or indirectly, in the United States or to US persons as defined in Regulation S under the Securities Act ("Regulation S"). Securities are being offered outside the United States pursuant to Regulation S. There will be no any offer of Securities in the United States or to United States persons.

 

About Sotkamo Silver AB:

Sotkamo Silver AB´s business concept is to exploit mineral deposits in the Nordic countries with regards to human society and environment. Sotkamo Silver owns, through its subsidiary mineral deposits, which contains silver and gold in Finland and exploration-potential targets of zinc, lead, copper and gold in Norway. The Company’s main development project is the Silver Mine project in the municipality of Sotkamo.

Sotkamo Silver applies SveMin’s & FinnMin’s respective rules of reporting for public mining & exploration companies. Sotkamo Silver has chosen to report mineral resources and mineral reserves according to the internationally accepted JORC or NI 43-101-code. The company applies International Financial Reporting Standards (IFRS) as approved by the European Union.

The ticker symbol is SOSI at NGM and SOSI1 in NASDAQ OMX Helsinki.

ISIN-code for Sotkamo Silver shares are SE0001057910.

Read more about Sotkamo Silver on www.sotkamosilver.com or www.silver.fi