Conico Ltd (Conico or the Company) is pleased to confirm a resolution of its legal dispute with drilling contractor, Cartwright Drilling Inc ('Cartwright') and the settlement of its liability related to oustanding drilling invoices for the 2022 field season in Greenland as detailed in the previous ASX announcement dated 19 December 2024.
Conico is also pleased to advise that it has placed a total of $900,000 in converting loans that will convert to ordinary fully paid shares in the capital of the Company following shareholder approval at a general meeting of the Company to be held in July 2025 ('Meeting') ('Converting Loans'). Funds raised will be used to pay the settlement fee with Cartwright and for working capital.
Further, the Company plans to recapitalise by undertaking a fully underwritten nonrenounceable entitlement offer, on a 4 for 5 basis, to eligible shareholders to raise approximately $1.19 million (before expenses) at an offer price of $0.001 per share ($0.008 per share post-Consolidation), to be undertaken following the Meeting in July. Further Conico plans to convert related party debts, broker fees and advisory fees to shares in order to conserve avaialble cash, subject to shareholder approval at the Meeting. Further details are provided following.
Legal Dispute Settlement
As previously announced to the ASX, the Company was disputiing unpaid invoices with drilling contractor Cartwright. The arbitrator in Newfoundland handed down findings that Longland and Conico were joint and severally liable to Cartwright in the amount of CAD$951,420.87 related to drilling at Ryberg plus additional contractual interest to the date of payment. Additionally, that Longland is liable to Cartwright in the amount of CAD$391,247.41 in relation to invoices for drilling and related activities at Mestersvig and a further CAD$45,865.40 related to Cartwright's costs of the arbitrator ('Cartwright Liability').
Entitlement Offer to Shareholders
The Company intends to undertake a fully underwritten non-renounceable pro-rata rights offer to all eligible Conico share-holders of four (4) fully paid ordinary Conico shares for every five (5) shares held, at a price of $0.001 per share ($0.008 per share postConsolidation) to raise approximately $1.19 million ('the Rights Offer'). RM Corporate Finance Pty Ltd ('RM Corporate') will act as Lead Manager and underwriter to the Rights Offer, with a 6% fee payable on the amount raised under the Rights Offer amount (to be converted to Shares at the Rights Offer price subject to shareholder approval at the Meeting) and the issue of 30,000,000 lead manager fee shares (3,750,000 post-Consolidation) and the issue of 400,000,000 unlisted lead manager fee options (50,000,000 post-Consolidation), exercisable at $0.002 each ($0.016 post-Consolidation) and expiring 30 November 2029, subject to obtaining shareholder approval. Refer to Annexure B for a summary of the material terms of the underwriting agreement with RM Corporate.
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