Subscription Financing Raises £6.2 million (US$9.4 million)

TORONTO, Feb. 27, 2013 /CNW/ - Patagonia Gold Plc (TSX: PAT), (AIM: PGD) today announced it has raised gross proceeds of approximately £6.2 million (approximately US$9.4 million) through a subscription (the "Subscription") of 41,196,687 new ordinary shares of one pence each in the Company (the "Subscription Shares") each at a price of 15 pence per Subscription Share (the "Issue Price").

The Issue Price represents a discount of approximately 3.23 per cent to the closing middle market price of 15.5 pence per ordinary share on February 26, 2013, being the last trading day prior to this announcement.

The net proceeds of the Subscription will be used to fund exploration and drilling expenditure on the Cap-Oeste and COSE projects in Argentina and to provide general working capital for the Company.

Subscription Shares were subscribed for by Carlos Miguens and William Humphries, each a Director of the Company, and their disclosable interests are as set out below.

Director     Subscription
Shares
subscribed
      Shareholding
immediately
following
Admission
      Percentage of
enlarged issued
share capital
Carlos Miguens     13,117,333       118,072,109       13.83
William Humphries     1,500,000       27,550,541       3.23

The participation of Carlos Miguens and William Humphries in the Subscription is deemed to be a related party transaction under the AIM Rules. The Company's independent Directors consider, having consulted with Strand Hanson Limited, the Company's nominated adviser, that the terms of their participation in the Subscription are fair and reasonable insofar as the Company's shareholders are concerned. The Subscription Shares will represent 4.82 per cent of the enlarged issued share capital of the Company and the Subscription is conditional on admission of the Subscription Shares to trading on AIM ("Admission").

The Subscription Shares will rank pari passu in all respects with the existing ordinary shares of the Company.  Application has been made to the London Stock Exchange for Admission of the Subscription Shares and application has been made to list the Subscription Shares on the Toronto Stock Exchange.  It is expected that Admission will become effective and dealings in the Subscription Shares to trading on AIM will commence at 8:00 a.m. on March 5, 2013. Following the Subscription, the Company will have 853,827,565 ordinary shares in issue. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company, under the Disclosure and Transparency Rules.

About Patagonia Gold

Patagonia Gold Plc is a mining company that seeks to grow shareholder value through exploration, development and production of gold and silver projects in the southern Patagonia region of Argentina. The Company is primarily focused on three projects: the flagship Cap-Oeste project, the nearby COSE project and the Lomada heap leach project, which is generating free cash flow. Patagonia Gold, indirectly through its subsidiaries or under option agreements, has mineral rights to over 220 properties in several provinces of Argentina and Chile, and is one of the largest landholders in the province of Santa Cruz.

Patagonia Gold is listed on the Toronto Stock Exchange (TSX) under the symbol PAT and has been listed on the AIM market of the London Stock Exchange under the symbol PGD since 2003.

Cautionary Statement Regarding Forward-Looking Information

This news release includes certain information that may constitute "forward-looking information" under applicable securities legislation. Forward looking information includes, but is not limited to, statements about the expected closing of the Subscription, the admission of the Subscription Shares to trading and the use of proceeds from the Subscription. Forward-looking information is necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the risks identified in the Company's public disclosure, the risk that regulatory approvals required in connection with the Subscription may not be received and the risk that other conditions of the Subscription may not be met. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management at the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

NEITHER THIS ANNOUNCEMENT NOR ANY PART OF IT CONSTITUTES AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE OR ACQUIRE ANY NEW ORDINARY SHARES IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (SAVE IN CERTAIN LIMITED CIRCUMSTANCES FURTHER DETAILS OF WHICH ARE SET OUT IN THE TERMS AND CONDITIONS ATTACHED TO THIS ANNOUNCEMENT), AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. 

www.patagoniagold.com

 

SOURCE: Patagonia Gold plc

For further information:

Bill Humphries / Nigel Everest
Patagonia Gold Plc
Tel: +44 (0)20 7409 7444

Philip Yee, CFO
Patagonia Gold Plc
Tel: +1 (416) 572 2007

Colin Languedoc
Barnes Communications Inc.
Tel: +1 (416) 367-5000

Angela Hallett / James Dance
Strand Hanson Ltd
Tel: +44 (0)20 7409 3494

Rory Scott
Mirabaud Securities LLP
Tel: +44 (0)20 7878 3360

David Bick / Mark Longson
Square 1 Consulting
Tel: +44 (0)20 7929 5599