Trans-Siberian Gold plc (TSG.LN) (“TSG”, or “the Company”), a low cost, high grade gold producer in Russia, is pleased to announce that, on 28 November 2019, a Relationship Agreement (“the Agreement”) was signed between the Company and certain entities of UFG Asset Management (“UFG”).
In accordance with the Company’s adoption of the QCA Corporate Governance Code, it has considered and adopted the recommendation to put in place a relationship agreement with its major shareholders. The total shareholding of UFG, its connected entities and individuals in the Company’s issued share capital is approximately 75%. UFG is one of the leading Russia-dedicated Western multi asset investment managers, established in 1996 and is a long-term supportive majority shareholder of TSG.
A summary of the key terms of the Agreement is as follows:
1. UFG has agreed, amongst other things, that: UFG shall (and shall procure that each of their Associates shall) at all times exercise their Voting Rights so as to procure, insofar as it is able to do so by the exercise of those rights that: (i) all transactions, agreements or arrangements entered into between a member of TSG and a member and/or Associate of UFG will be conducted at arm’s length and on normal commercial terms; (ii) at all times the Independent Directors constitute a majority of the board of directors of TSG so as to enable decisions as to the implementation and enforcement of this Agreement to be taken independently of UFG and/or their Associates; (iii) where an Independent Director ceases to be either an Independent Director or a director of the Company, one or more new Independent Directors may be appointed to the Board; and (iv) any dealings or disputes (including any conflicts of interest) between any member and/or Associate of UFG and any member of the Company shall be passed to and dealt with on behalf of the Group by a committee comprising only the Independent Directors.
2. UFG will (i) not undertake any activity in conflict with those of TSG which may render the Company incapable of carrying on its business independently or lead to transactions and relationships between the Company and any member and/or Associate of UFG which are not at arm’s length or on normal commercial terms or which would constitute a Related Party Transaction (as defined under the AIM Rules for Companies); or (ii) not propose or vote in favour of any resolution which has the effect of waiving the pre-emption rights in respect of issues of shares to the Controlling Shareholders unless such resolution is supported by a majority of the Independent Directors.
3. TSG has granted UFG the right to nominate Directors to the Board (“Shareholder Directors”), commensurate with the aggregate holdings of UFG as follows: (i) appoint up to a maximum of three Directors if and for so long as UFG holds more than 50 per cent of the total number of Ordinary Shares in issue; (ii) appoint up to a maximum of two Directors if and for so long as UFG holds more than 40 per cent of the total number of Ordinary Shares in issue; or (iii) appoint up to a maximum of one Director if and for so long as UFG holds more than 20 per cent of the
total number of Ordinary Shares in issue. Currently, Alexander Dorogov, Chief Executive Officer, Eugene Antonov, Chief Operating Officer and Stewart Dickson and Lou Naumovski, Non-Executive Directors, are independent of UFG. Charles Ryan, Non-Executive Chairman, and Robert Sasson and Florian Fenner, Non-Executive Directors, are not independent of UFG.
4. In addition, the parties acknowledge and agree that UFG (or one or more of their Associated Bodies Corporate) shall be retained to provide certain advisory and support services to the Company on a non-exclusive basis, which shall include, but not be limited to (i) financing support; (ii) developing M&A strategy; (iii) operational support; (iv) strategy development; and (v) deal origination. In consideration for the provision of such services, the Company shall pay UFG a fixed fee of US$150,000 per annum (inclusive of any VAT or equivalent).
A full copy of the Agreement can be found on the Company’s website at www.trans-siberiangold.com
Stewart Dickson +44 (0) 7799 694195
Arden Partners plc
Paul Shackleton (Corporate Finance)
Tim Dainton / Fraser Marshall (Equity Sales)
+44 (0) 207 614 5900
Hudson Sandler (Financial PR) +44 (0) 207 796 4133
Charlie Jack / Katerina Parker / Elfreda Kent
TSG is focused on low cost, high grade mining operations and stable gold production from its 100% owned Asacha Gold Mine in Far East Russia. The Group also holds the licence for the development and exploration of the Rodnikova deposit, one of the largest gold fields in South Kamchatka. Additional information is available from the Company’s website: www.trans-siberiangold.com