Paternoster enters agreement with RiverFort Global Capital

The AIM-traded firm described RiverFort as a “highly-respected” provider of specialist financing to the natural resources sector, providing equity, convertible debt and senior project finance solutions.

As a participating co-investor with Cuart Investments PCC - a Gibraltar Experienced Investor Fund to which RiverFort is the investment director - Paternoster would gain access to a pipeline of investment opportunities.

Furthermore, investors wishing to obtain exposure to RiverFort's investment opportunities would have the opportunity to do so through a listed vehicle by investing in Paternoster.

The board said the initiative was both in line with its existing investing policy, and would enable it to significantly increase its level of activity.

“Since its formation, RiverFort has been able to generate very attractive returns for its investors,” the Paternoster board noted.

“In 2016, its first year of operation, Cuart Investments PCC Ltd - Cuart Growth Capital Fund I achieved an increase in its audited NAV of over 15% between July and December 2016 with a similar level of performance expected for 2017.

“Over this period, RiverFort, in conjunction with its co-investors, have arranged investments of over $74m.”

Paternoster said the RiverFort team had an international footprint and a range of financial, entrepreneurial and industrial expertise.

It also announced that, as part of the strategy, the company has - through Shard Capital Partners - placed 772,727,270 new ordinary shares at a price of 0.11p per share with institutional and private investors to raise gross proceeds of £0.85m.

The funds raised would be used to pursue opportunities in line with its existing investing policy that it expected to arise as a result of the agreement with RiverFort.

Furthermore, to strengthen the board with additional relevant expertise, it said it intended for Andrew Nesbitt - a member of the RiverFort team - to join the board as a non-executive director subject to compliance with the AIM rules.

It said Nesbitt is a mining specialist and a qualified mining engineer.

He would bring more than 20 years of experience in the natural resources sector and was an experienced investor as a result of working as a partner and portfolio manager for Craton Capital, a global precious metals fund with more than $400m of assets under management.

Further to the issue of placing shares, Paternoster said Shard Capital Partners had been appointed as joint broker to the company.

“I am delighted that we have agreed to work closely with RiverFort,” said chairman Nicholas Lee.

“This will significantly assist the company in pursuing its investment strategy and enable it to increase further the return on its investment portfolio.”

Lee said it was a “very significant” development for Paternoster, providing a clear strategy for the company going forward, building on what had already been established as well as taking it to “the next level”.

“This initiative is also expected to provide the company with access to additional capital in the future which will allow the company to grow and develop further.

“I am also very pleased with the quality of the new investors that have now come on board and who are very supportive of this approach,” Lee added.

“Furthermore, the coard will clearly be strengthened by the addition of Andrew to the team.”