Placing of up to 120 million New Ordinary Shares

Mercator Gold plc, the diversified mineral development company, is pleased to announce a placing (“the Placing") of up to 120 million new ordinary shares of 0.1p each ("the Placing Shares") at a price of 1p per share to raise up to £1.2 million before costs.

 

Daniel Stewart & Company plc, nominated adviser and co-broker to Mercator, acted with Old Park Lane Capital plc, co-broker to the Company, in the Placing, which is conditional upon, inter alia, admission of the Placing Shares to trading on AIM.

 

 

Application has been made for the admission of the Placing Shares to AIM effective 18 May 2010, following which the Company will have 289,250,562 ordinary shares in issue. The Placing Shares will rank pari passu in all respects with the ordinary shares of the Company currently traded on AIM.

 

Issue of Warrants

In addition, the Company will grant up to 22 million warrants to placees in the placing announced on 15 March 2010. Each warrant shall be exercisable to acquire one new ordinary share of the Company at a price of 1p per share for up to 12 months.

 

Use of Proceeds

The net proceeds of the Placing will enable the Company to continue implementing its stated strategy of adding, and where appropriate, realising value from its existing portfolio of assets whilst taking advantage of new opportunities as they arise.

The directors caution that in view of the convertible loan notes redeemable in October 2010, the proceeds of the Placing may not be sufficient to provide the Company with working capital for the next 12 months. It may be necessary for further capital to be raised during 2010, and there can be no certainty as to whether such capital will be available or as to the price at which it may be available.

 

However, the working capital position of the Company may be strengthened by the sale of assets, and potential means by which the convertible loan notes may be refinanced are being investigated.

 

The Company has also entered into a Standby Equity Distribution Agreement with YA Global Master SPV, Ltd. (as announced on 19 April, 2010), under which YA Global has agreed to purchase up to a maximum of £4 million worth of new ordinary shares of the Company over a period of up to 30 months, subject to certain conditions and limitations.

 

For further information please contact:

Mercator Gold plc
Michael Silver, Chairman Tel: +44 (0) 20 7929 1010
Patrick Harford, Managing Director +1 646 239 9087
Email:This email address is being protected from spambots. You need JavaScript enabled to view it.
Bankside Consultants Ltd Tel: +44 (0) 20 7367 8888
Simon Rothschild
Oliver Winters
Daniel Stewart & Company plc
Oliver Rigby Tel: +44 (0) 20 7776 6550
Old Park Lane Capital plc
Forbes Cutler Tel: +44 (0) 20 7518 2603
Director of Corporate Broking
Barry Kaplan Associates
Larry Kaplan Tel: +1 732 747 0702

 

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