NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR TO
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ('MAR). Upon the publication of this announcement via a
(“Altona” or “the Company”)
OPEN OFFER OF UP 6,153,846 NEW ORDINARY SHARES
AT
The Company announces an Open Offer to raise up to approximately £400,000 (before expenses) through the issue of up to 6,153,846 new ordinary shares of 0.01p per share ("Ordinary Shares") in the Company at an issue price of
For further information, please visit www.altonaenergy.com or contact:
Altona Energy plc Qinfu Zhang , Executive Director +44 (0) 7795 168 157Philip Sutherland , Non-Executive Director +61 (0)402 440 339Alfred Henry Corporate Finance Ltd (NEX Corporate Adviser)Jon Isaacs /Nick Michaels +44 (0) 20 3772 0021 Leander (Financial PR)Christian Taylor - Wilkinson +44 (0) 7795 168 157
Company Information
Altona is an exploration company focused on the evaluation, development and extraction of coal assets in
The Company was admitted to trading on AIM on
Introduction to the Open Offer
We are writing to you to offer you the opportunity to be part of Altona’s next phase of its operational development in
When considering the options to raise new capital, the Board unanimously agreed that its long-term, loyal shareholders should take preference over seeking funding from new sources. Therefore, the Company is making this initial, direct approach to its shareholders, preventing further dilution in an already much diluted stock.
The Company is currently short of cash and will not be able to purchase the mining licence, nor probably to continue trading on NEX Exchange Growth Market beyond
The events of 2018 saw a heavy toll on the share price, leaving the value of Altona at a fraction of its market capitalisation by the end of that year. Other poor decisions made during 2018, such as the 1000 to 1 share consolidation and the re-aligned business strategy to pursue an investment in pyrolysis has caused long-term damage to the market sentiment and reputation to the Company.
However, we now believe, as a Board, that we have a credible strategy in place, which will allow a steady recovery of the share price.
As announced on
The new tenement covered by the PELA is close to the Company’s historic Arckaringa tenements and covers 5,000 sq kms, twice the size of the existing tenements. The tenement is divided into two areas; a smaller northern area which overlaps the Company’s historic Exploration Licences at
Long-term shareholders will know that a significant amount of exploration work has been carried out over the past 15 years in the western portion of Murloocoppie and the northern portion of
The more significant and potentially more rewarding southern area of the PELA, whilst never having been tested for deep coal deposits suitable for the ISG process is, however, situated between other major coal bearing tenements, providing enough evidence for WSP to warrant further investigation. Should this exploration be successful (i.e. by finding at least two coal bearing deposits between 100m and 1,400m – the depth most suitable for ISG), the Company will look to quickly move towards obtaining the necessary permits and funding to start a test production facility, within 2-3 years.
It has been suggested by WSP that the longer term plan could be for the Company to create an “Energy Precinct”, utilising wind and solar energy to reduce costs for the extraction process, leading to the supply of power (as well as chemical by-products, such as liquid ammonia, hydrogen, ethanol and other synthetic fuels) to the South Australian and broader markets.
The Board has spent 2019 removing unnecessary costs from the Company, by streamlining the board (to three members, following the removal and resignation of four directors in
The Company is currently listed on the NEX Exchange Growth Market (“NEX”), which was the only logical choice available to Altona when the Company’s NOMAD resigned in
NEX announced on
Finally, we are aware of the criticism aimed at companies who raise capital, usually at a large discount to the price, with new investors, rather than offering loyal shareholders the opportunity to participate. We are not such a Company and, as such, welcome your further support in Altona. Your Board is fully supportive of this new project, with all three Directors participating in the Open Offer, and looks forward to delivering rewards to shareholders in the future.
Use of proceeds
Assuming full take up under the Open Offer, the proceeds received by the Company will be approximately £400,000 (gross of expenses), and which will be used as follows: The Company is required to pay AUD200,000 (approx. £105,000) for PELA 517, with an initial up-front payment of AUD100,000, followed by two further tranches to settle the balance within three months. WSP has estimated costs for the initial two phases of exploration will be in the region of AUD200,000.
The Company is currently looking for new Directors to join the Board, in the
The Board believes that a minimum capital requirement of £250,000 will allow it to acquire the tenement licence and instruct WSP to commence its exploration work. However, at this level of fund raise, the Board believes it would need to return to the market to seek further funding within the next six months.
Should the Open Offer deliver a higher level of interest from shareholders, resulting in a larger commitment of capital than the £400,000 full take-up, the Board will then decide whether to issue more shares and take a higher amount in order to fulfil shareholder demand.
Further information on PELA 517 and In-Situ Gasification
The Altona Energy (the Company) Board of Directors (BOD) has been researching suitable resource development opportunities in
The BOD’s research has included the reconsideration of an
The predominant product gases from ISG are methane, hydrogen, carbon monoxide and carbon dioxide. Alternatively, the gas output can be used to produce synthetic natural gas, or hydrogen and carbon monoxide can be used as a chemical feedstock for the production of fuels (e.g. diesel), fertilizer, explosives and other products. The gas can be used for electricity generation which will be discussed later in this statement. The process of ISG enables the development of deep coal resources where open-cut or underground mining are identified as not feasible or uneconomic. This could include coal seams that are too deep, low grade, or have a thin stratum profile. The important criteria for a viable ISG mine is the scale of the coal deposit; coal must be at a depth of greater than 100 metres (up to 1400 metres); a coal seam with a thickness of more than 3 metres; Ash content of less than 60%; minimal discontinuities; coal seam isolated from valued water aquifers; and overburden that has suitable properties.
ISG is an industrial process considered to require less capital and lower operating costs than traditional mining and is a term applied to a number of different techniques that can produce a fuel or synthesis gas mixture from coal seams. Since the experimental research on ISG started in the 1930s there has been a progressive change in the technologies and improvement in operating methods to increase efficiency of operations and reduce environmental impact.
ISG converts coal into product gas while still in the coal seam (in-situ). While there are a variety of designs for ISG, essentially gas is produced and extracted through wells drilled into the unmined coal seam. Injection wells are used to supply the oxidants (air, oxygen) and steam to ignite the underground combustion process. The product gas is brought to the surface in a controlled manner through separate production wells drilled from the surface. As the coal face burns (underground) and the immediate area is depleted, volumes of oxidants injected are controlled by the operator.
The subject tenement to be acquired is covered by Petroleum Exploration Licence Application (PELA) 517 which is a very large area comprising approximately 5,000 square kilometres and extending across two blocks of land, the Main Block (the larger of the two) and a North Eastern Block. As with our MELs, PELA 517 sits within the
WSP reported that earlier exploration drilling by others had shown that PELA 517 had potential for large coal deposits close to the surface. Coal at depth however is a requirement for ISG. While some of the available seismic analysis available to WSP indicted the possibility of coal at depth in the North-Eastern Block, this Block has been discounted as an area of interest as the area falls within the environmentally sensitive GAB. The southern half of the Main Block is outside of the GAB and located on the eastern extremity of the
The immediate primary area of interest for the Company is therefore the northern part of the Main Block. This area is still within the GAB but outside of the primary sensitive zone. Drilling reports show evidence of coal in several sections. Encouragingly, there is seismic data that may be interpreted as identifying coal seams at depths from 100 to 1300 metres. WSP have recommended the progression of an early Stage 1 desktop review of all of the available data in the PELA 517 with the objective of preparing a staged programme for a more detailed geological and hydrological investigation should sufficient coal at depth be identified in locations where there is potential for an ISG project.
Subject to funding, the BOD is desirous of commissioning this early Stage 1 review, and then to escalate the exploration effort subject to additional favourable information becoming available. Should a suitable ISG project target area be defined, a mine plan will be developed together with the identification of the appropriate ISG mining technology. A wide variety of coals are amenable to the ISG process and coal grades from lignite through to bituminous may be successfully gasified. A great many factors are taken into account in selecting appropriate locations for ISG, including surface conditions, hydrogeology, lithology, coal quantity, coal depth and quality. The project economics including the investment required and return on this investment will be progressively established. One body of work will inform the next.
ISG is currently a proven technology with companies developing projects in
Our ISG project economics will benefit by the relatively close proximity of PELA 517 to the main
The BOD believes the Company now has a project, subject to completing the acquisition of the PELA, and further geological and hydrological investigation, with very significant potential and financial upside.
WSP - Proposed Initial Working Programme
Stage 1: up to 3 months from commencement. Cost approx AUD30,000
Desktop review of information available – confirm preliminary assessment
-- Undertake review by senior coal geologist on likelihood of coal presence
in the area/s identified
-- Review the potential for extensive coal in the two areas identified in
the main block using available data
-- Review seismic information available – identify any correlation with any
hole data in both areas
-- Identify possible extent of coal field(s), if any
-- Prepare very preliminary report on potential cost and benefit of a
geological investigation
-- Undertake all relevant hydrogeological studies to determine water risks
and opportunities
Stage 2: up to 6 months from end of Stage 1. Cost up to AUD150,000 (dependent on initial findings)
-- Small seismic programme in the east of the Main Block, with extension
running approx 5 km on orthogonal lines – total 40km line seismic
-- Use seismic results to plan to drill 2-4 holes, coring at least 2 holes
-- Correlate seismic results to prepare a coal resource potential report
-- Prepare a report on the potential to develop the resource, including a
forward drilling and testing work programme and budget
Stage 3: up to 1 year from end of Stage 2: Cost between AUD500,000 to AUD2 million
-- Bring together an integrated project roadmap for the development of an
ISG / mining / energy precinct for PELA517
-- Exploration drilling programme, to define the target area for the ISG
project
-- Pre-feasibility Study
Shareholder Conference Call –
The Directors of Altona, along with a representative from WSP will host a Shareholder Conference Call on 18 March at
The meeting will be in the form of a Q&A and it is suggested that participants keep their phones on mute, whilst listening and only turn this off, if they have a question to ask.
Conference Call PIN: 70891913
Telephone Numbers:
Australia: 02-8999 0964
China: 010-5387 6269
France: 0821-618272
Germany: 01803-127 127
Worldwide Mobile: +44 843 373 0999
If you would like to attend the conference call, but live in a country not listed above, please contact
Details of the Open Offer
The Company is proposing to raise up to £400,000 (before expenses) pursuant to the Open Offer.
The Directors recognise the importance of pre-emption rights to Shareholders and consequently up to 6,153,846 Open
Qualifying Shareholders may subscribe for Open
The Open Offer is conditional on the following:
Admission of the Open
In the event that the Open Offer does not become unconditional by
The Open
Basic Entitlement
Subject to the fulfilment of the conditions set out below and in Part IV of this document, Qualifying Shareholders are being given the opportunity to subscribe for Open
1 Open Offer Share for every 1 Existing Ordinary Share
held by Qualifying Shareholders and registered in their name at the Record Date.
Open Offer Entitlements under the Open Offer will be rounded down to the nearest whole number and
any fractional entitlements to Open
Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlement in full, to apply for Excess Shares through the Excess Application Facility.
Shareholders who are not Qualifying Shareholders may not participate in the Open Offer, unless the minimum requirement is not met and the Offer is opened up to the general market.
All Qualifying Shareholders who hold Existing Ordinary Shares on the Record Date will receive an Open Offer Entitlement and may also apply for Excess Shares pursuant to the Excess Application Facility.
If you have sold or otherwise transferred all of your Ordinary Shares after the ex-entitlement Date, you are not entitled to participate in the Open Offer.
The Open Offer is not a rights issue. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear’s Claims Processing Unit. Qualifying Non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should be aware that under the Open Offer, unlike in a rights issue, any Open
Application has been made for the Open Offer Entitlements of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements will be admitted to CREST on
Further details of the Open Offer and the terms and conditions on which it is being made, including the procedure for application and payment, are contained in Part IV of this document and for Qualifying Non-CREST Shareholders on the Application Form.
To be valid, Application Forms (duly completed) and payment in full for the Open
Qualifying Non-CREST Shareholders will receive an Application Form which sets out their maximum entitlement to Open
All Qualifying Shareholders who hold Ordinary Shares on the Record Date will receive an Open Offer Entitlement and may apply for additional Open
The Open Offer is restricted to Qualifying Shareholders in order to enable the Company to benefit from exemptions from securities law requirements in certain jurisdictions outside the
Excess Application Facility
The Excess Application Facility will enable Qualifying Shareholders, provided that they take up their Basic Entitlements in full, to apply for Excess Entitlements to the extent that if a Qualifying Shareholder has taken up its Basic Entitlements in full and applies for and is allocated the maximum Excess Entitlements it will suffer no dilution as a result of the Open Offer. Qualifying Non-CREST Shareholders who wish to apply to acquire more than their Basic Entitlements should complete the relevant sections on the Application Form. Qualifying CREST Shareholders will have Excess Entitlements credited to their stock account in CREST and should refer to paragraph 3(ii) of Part IV of this document for information on how to apply for Excess Entitlements pursuant to the Excess Application Facility. Applications for additional Open
Once subscriptions by Qualifying Shareholders under their Basic Entitlements have been satisfied, the Company shall, in its absolute discretion, determine whether or not to meet any applications for Excess Entitlements in full or in part and no assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full, in part or at all. Applications will be made for the Basic Entitlements and Excess Entitlements in respect of Qualifying CREST Shareholders to be admitted to CREST. It is expected that Open
Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Basic Entitlements and Excess Entitlements on
Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part IV of this document. For Qualifying Non-CREST Shareholders, completed Application Forms, accompanied by full payment, should be returned by post, or by hand (during normal business hours only) to,
Action to be taken in respect of the Open Offer
If you are a Qualifying Non-CREST Shareholder you will be sent an Application Form which gives details of your Basic Entitlement (i.e. the number of Open
If you are a Qualifying CREST Shareholder, no Application Form will be sent to you. As a Qualifying CREST Shareholder you will receive a credit to your appropriate stock account in CREST in respect of your Basic Entitlement. You should refer to the procedure set out at paragraph 2 and paragraph 3 (ii) of Part IV of this document.
The latest time for applications to be received under the Open Offer is
If you are in any doubt as to the procedure for acceptance, please contact
If you are in any doubt as to the contents of this document and/or the action you should take, you are recommended to seek your own personal financial advice from an independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) if you are in the
The Company already has the authority to issue 6,153,846 Ordinary Shares as part of the Open Offer and will not require any further approvals from Shareholders in order to complete the Open Offer.
Recommendation
The Directors consider that the Proposals are in the best interests of the Company and its Shareholders as a whole and encourage shareholders to take up their Excess Entitlement. The Directors have confirmed their participation in this Open Offer.
OPEN OFFER STATISTICS
Issue Price per New Ordinary Share
Open Offer Basic Entitlement 1 Open
1 Ordinary Shares on the
Record Date
Number of Ordinary Shares in issue as at the date of this Document 1,602,434
Number of Ordinary Shares in issue as at the Record Date 1,602,434
Number of Open
Offer to raise £400,000
Maximum Enlarged Ordinary Share Capital on Admission 7,756,280
Gross proceeds of the Open Offer up to £400,000
Estimated cash proceeds of the Open Offer receivable by the Company (net up to £380,000
of expenses and assuming full allocation)
Percentage of the Enlarged Ordinary Share Capital of the Company that the 384 per cent.
Open
ISIN – Open Offer Basic Entitlements GB00BKV4RQ57
ISIN – Open Offer Excess Entitlements GB00BKV4RR64
Notes
-- *Share Price on 10 March is 9.5 pence , representing a discount of 32%
-- Statistics are prepared on the basis that no Ordinary Shares will be
issued following the date of this document and before the completion of
the Open Offer
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2020
Record Date and time for entitlements under the Open Offer
Announcement of the Open Offer
Publication of this document and Application Forms to Qualifying 12 March
Shareholders
Ordinary Shares marked ‘ex’ entitlement by the NEX Exchange
Basic Entitlements and Excess Entitlements credited to CREST accounts of 13 March
Qualifying CREST Shareholders
Shareholder Meeting and Q&A, via conference call to speak with Directors
Recommended latest time and date for requesting withdrawal4.30pm on 23 March of Basic Entitlements and Excess Entitlements from CREST3.00pm on 24 March Latest time and date for depositing Basic Entitlements and Excess Entitlements into CREST3.00pm on 25 March Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)11.00am on 31 March Latest time and date for receipt of completed Application Forms from Qualifying Shareholders and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)
Expected date of Admission and commencement of dealings of Open
Expected date for CREST accounts to be credited with Open
Share certificates in relation to Open
dispatched by
Save for the date of publication of this document, each of the times and dates above are subject to change. Any such change, including any consequential change in the Open Offer Statistics above, will be notified to Shareholders by an announcement on a
DEFINITIONS
The following words and expressions shall have the following meanings in the document, unless the context otherwise requires:
“Act” the
“Admission” admission of the Open
“Applicant” a Qualifying Shareholder or a person entitled by virtue of a bona fide market claim who lodges an Application Form under the Open Offer;
“Application Form” the application form to be used by Qualifying Non-CREST Shareholders in connection with the Open Offer;
“Articles” the articles of association of the Company for the time being;
“Basic Entitlement(s)” the entitlement to subscribe for Open
“Board” or “Directors” the current directors of the Company, whose names are set out on page 7 of this document;
“Business Day” any day which is not a Saturday, Sunday or a public holiday in the
“certificated” or “in certificated
Form” not in uncertificated form (that is, not in CREST);
“Company” or “Altona” Altona Energy Plc, a company registered in
“CREST” the computerised settlement system to facilitate the transfer of title of shares in uncertificated form operated by
“CREST Manual” the compendium of documents entitled CREST Manual issued by Euroclear from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, CREST Rules, CCSS Operations Manual and the CREST Glossary of Terms;
“CREST Member” a person who has been admitted to Euroclear as a member (as defined in the CREST Order);
“CREST Participant” a person who is, in relation to CREST, a participant (as defined in the CREST Order);
“CREST Payment” shall have the meaning given in the CREST Manual issued by Euroclear;
“CREST Sponsor(s)” a CREST Participant admitted to CREST as a CREST sponsor;
“CREST Sponsored member(s)” a CREST Member admitted to CREST as a sponsored member (which includes all CREST Personal Members);
“CREST Regulations” the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended;
“Enlarged Ordinary Share Capital” the Ordinary Shares of the Company in issue upon Admission following completion of Open Offer (assuming full take-up of the Open Offer);
“EU” the
“Excess Application Facility” the arrangement pursuant to which Qualifying Shareholders may apply for any number of Open
“Existing Ordinary Shares” The existing Ordinary Shares of the Company as at close of business on the Record Date;
“Financial Conduct Authority” or the
“FSMA” the Financial Services and Markets Act 2000, as amended;
“HMRC” Her Majesty’s Revenue & Customs;
“IFRS” International Financial Reporting Standards as adopted by the
“ISIN” international security identification number;
“Issue Price”
“NEX Rules” the NEX Rules for Companies and the NEX Rules for NEX Corporate Advisers;
“NEX Rules for Companies” the rules which set out the obligations and responsibilities in relation to companies whose shares are admitted to trading on NEX as published by the NEX Exchange from time to time;
“Official List” the list maintained by the UKLA in accordance with section 74(1) of FSMA for the purposes of Part VI of FSMA;
“Open Offer” the offer to Qualifying Shareholders to subscribe for Open
“Open Offer Entitlements” the entitlement of Qualifying Shareholders to subscribe for the Open
“Open Offer Shares” up to 6,153,846 new Ordinary Shares which are being offered to Qualifying Shareholders pursuant to the Open Offer;
“Ordinary Shares” ordinary shares of 0.01p each in the issued share capital of the Company from time to time;
“Overseas Shareholders” Shareholders resident in, or citizens of, jurisdictions outside the
“Qualifying CREST Shareholders” Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are held in uncertificated form;
“Qualifying Non-CREST Qualifying Shareholders whose Existing Ordinary Shares on the register
Shareholders” of members of the Company on the Record Date are held in certificated form;
“Qualifying Shareholders” holders of Existing Ordinary Shares on the Record Date (other than Shareholders resident in or citizens of any Restricted Jurisdiction);
“Receiving Agent”
“Record Date” close of business on
“Regulation S” Regulation S of the Securities Act;
“Restricted Jurisdiction” any
“Securities Act” the
“Shareholders” the persons who are registered as holders of Ordinary Shares;
“Sterling” or “£” the legal currency of the
“TIDM” tradable instrument display mnemonic;
“UK” or “United Kingdom” the
“UKLA” the
“Uncertificated” or “in Uncertificated Form”
“U.S.” or “US”
“USE”
a share or other security recorded on the relevant register of the relevant company concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;
“VAT” Value Added Tax;
All references in this Document to “£” or “pence” are to the lawful currency of the
All references in this Document to “$” or “cents” are to the lawful currency of
All references to legislation in this Document are to English legislation unless the contrary is indicated.
-Ends-
