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WFW advises North River Resources on US$5.6m investment by Greenstone Resources

11 July 2016

International law firm Watson Farley & Williams (“WFW”) has advised North River Resources plc (“North River”) on a US$5.6m conditional investment by its majority shareholder Greenstone Resources LP (“Greenstone”).

North River is a mineral exploration and development company operating in Namibia and Mozambique and currently focused on re-opening its flagship asset, the Namib Lead Zinc Project, on which it is targeting commencement of production in the near term.

London-based Greenstone Resources is a private equity fund and long term investor in the mining and metals sector. Greenstone has conditionally agreed to subscribe for US$5.6million secured, conditionally convertible loan notes to be used by North River (together with its existing cash resources) to repay outstanding convertible loan notes already in issue and repayable to Greenstone, as well providing working capital for certain pre-construction work-streams relating to The Namib Lead Zinc Project.

As Greenstone already holds approximately 29.99% of the shares in North River following investments in 2014 and 2015 (on which WFW also advised North River), conversion of the loan notes is conditional (inter alia) on North River Shareholders (excluding Greenstone) approving a resolution to waive the requirement for Greenstone to make a general offer for the company pursuant to Rule 9 of the City Code on Takeovers and Mergers (and the Takeover Panel has agreed to grant the waiver subject to such shareholder approval being obtained).

In conjunction with the Greenstone placing and whitewash, North River is also launching an open offer to certain eligible shareholders and intends to carry out a placing to certain investors with the objective of raising a sufficient amount pursuant to the open offer and placing to repay up to 70% of the loan notes. If the whitewash is approved and the amount raised pursuant to the open offer and placing is sufficient to repay 70% of the loan notes, the remaining 30% of the loan notes will automatically be converted into shares and the security granted in respect of the loan notes will be released.

The WFW Corporate team advising North River was led by partner and Head of the London Corporate and Natural Resources Groups Jan Mellmann, assisted by associates Jenny Hodges and Danny Perera and trainee Laura Gerrard.

WFW London partner Jan Mellmann commented: “Having advised North River since its original admission to trading on the AIM market of the London Stock Exchange, and all previous Greenstone investments in the Company, we are delighted to have been able to assist North River once again. Conditions remain difficult for junior mining companies, and so it is testament to North River’s Namib project and management that Greenstone have committed further funding. WFW’s expertise in the natural resources sector and on AIM transactions enabled this transaction to be completed very smoothly within a short timetable”.