Release: Herald?s Meluak gold project update
Wednesday, June 18 2003 - 05:28 AM WIB
Perth, 18 Jun 2003 -- As previously announced, Herald has obtained some highly encouraging initial gold sampling results from this project, located in the Gayo Lues regency in Sumatra. In addition, recent assay results obtained from the latest soil geochemistry survey are now to hand, and significantly increase the area of anomalism from that reported in the March quarterly report.
In order to provide funding for further exploration on Meluak, Herald proposes the following:
1) Unlisted subsidiary Corona Gold Limited, ("Corona") will acquire a 100 percent interest in the Meluak Gold Project from Herald for $0.5m on a deferred settlement basis. Herald presently owns 100 percent of the issued capital of Corona, which comprises 10m shares.
2) Corona will undertake an issue of shares at $0.01 each on a non-renounceable priority 1 for 2 entitlement basis to Herald shareholders who are registered on a record date to be advised. This issue will raise approximately $260,000 before costs, and will increase Corona's total issued capital to approximately 36m shares.
3) Leading investment bank Macquarie Bank Ltd ("MBL"), has agreed to enter a subscription agreement with Corona whereby for $300,000 MBL will subscribe for 2,000,000 shares in Corona, equal to approximately 5 percent of Corona at that time. Under the subscription agreement MBL will also have the right to participate in future fundraisings of Corona as follows:
- MBL to have the first right of refusal to receive a placement of up to 7,150,000 shares in Corona at $0.20 each, raising approximately $1,400,000 and taking MBL to 19.9 percent of Corona; and
- MBL to have the first right of refusal to underwrite an aggregate amount of $10,000,000 of future capital raisings by Corona.
The entry of MBL in (3) above is subject to normal due diligence matters. Additionally Herald has warranted to MBL that the funds in (2) above will be raised. To ensure that this occurs, a company associated with a Herald director has agreed to underwrite the issue in (2) above for no fee.
A full prospectus for the issue of shares in (2) above will be issued in due course and applications or shares can only be made using the entitlement form which accompanies the prospectus. The prospectus will also detail the risks associated with investment, such as the project's location in Southern Aceh in Indonesia.
Shareholders should also note that, notwithstanding the transaction referred to in this announcement, neither Herald nor Corona have any current intention to apply for the listing of Corona on the Australian Stock Exchange Limited at this time.
The Directors are very pleased to attract on favourable terms an equity partner of the calibre of Macquarie Bank to facilitate the further advancement of the promising Meluak Gold Project. (end of release)