CITATION RESOURCES LTD ABN 90 118 710 508
Ground Floor, 1 Havelock St West Perth WA 6005 t: +61 8 9488 5220 f: +61 8 9324 2400
www.citation.net.au info@citation.net.au
23 October 2015 ASX Announcement
Company Announcements Office Australian Securities Exchange Level 6, 20 Bridge Street SYDNEY NSW 2000
Via E Lodgement
Company Update ‐ Restructure of Guatemalan Oil Project's Equity Interest Citation Agrees Project Restructuring To Retain 10% Interest in Latin American Resources (LAR)Citation Resources Limited (ASX:CTR) ('CTR' or the 'Company') is pleased to announce that it has reached an in principle agreement with Latin American Resources Limited ('LAR') whereby the Company will reduce to a 10% finance carried equity interest in LAR. This agreement is in line with previous announcements by the Company during 2015 whereby the Company disclosed that it was seeking to retain an equity interest in LAR and its Atzam and Tortugas Oil Projects in Guatemala through the introduction of a new farm in partner to finance LAR.
In addition to the 10% interest, the Company will also have an option to acquire an additional 5% interest by paying US$1m to LAR (or its nominee) within 12 months from completion of the agreement.
If the Company does not choose to exercise its option within the 12 month period, Citation will forfeit its 10% interest in LAR. This will allow the Company time to assess the progress of the Guatemalan projects before committing to any future expenditure on the project.
The deal is subject to final documentation and the Company will provide updates upon further progress.
The Company also would like to confirm that it will be shortly lodging a Priority and Top Up Offer Prospectus to existing Citation shareholders as approved at the General Meeting on 24 September 2015 as part of the transaction to acquire 40% of Pearl Global Pty Ltd, for the offer of up to 123,360,894 shares at 5 cents per ordinary share to raise up to $6,168,045.
There will be three parts to this Priority and Top Up Offer whereby all shareholders, including those holding unmarketable parcels, will be entitled to participate in the raising. The offers to Shareholders comprise the following:
a Priority Offer to Shareholders who hold a Marketable Parcel of shares as at the Record Date;
a Top Up Offer to Shareholders who hold less than a Marketable Parcel of shares as at the Record Date; and
a Public Offer which is open to all investors.
Under the Priority Offer existing shareholders who hold 10,000 or more shares will be entitled to apply for shares on the basis of two (2) shares for every one (1) share held. The Top Up Offer will allow existing Shareholders who hold less than 10,000 Shares to top up their holding to 10,000 shares. To the extent that less than 123,360,894 shares are applied for under the Priority Offer and Top Up Offer, those shares will be made available for subscription under the Public Offer.
All shares applied for under each of the Offers as set out above will be at the same price of $0.05 per ordinary share.
The Company is also pleased to announce that it has executed formal agreements with the Company's Convertible Note lenders and Short‐term finance providers whereby it will settle combined debt of circa
$1.8m, with the Convertible Note lenders and Short‐term financiers agreeing a reduced settlement of
$1.5m for their outstanding combined loan of $1.8m. Settlement of the $1.5m will be split with $750k being settled in cash and the balance of $750k being settled through the issue of shares at $0.05, pursuant to the Company's Priority and Top Up Offer Prospectus. The debt settlement is conditional upon completion of the Company's acquisition of a 40% shareholding interest in Pearl Global Pty Ltd and associated capital raising as approved by shareholders on 25 September 2015.
For and on behalf of the Board
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