TIDMORM
RNS Number : 6171L
Ormonde Mining PLC
14 January 2021
This announcement contains inside information
14 January 2021
Ormonde Mining plc
("Ormonde" or "the Company")
Ormonde looks to acquire African high grade copper projects
Ormonde notes recent increased trading and volume in the
Company's shares together with volatility in the Company's share
price and is pleased to provide an update and further information
on its previously announced potential acquisition.
On 16 September 2020, the Company announced that it had entered
into an exclusivity agreement in relation to this potential
acquisition, and since that time the Company has been advancing
negotiations, diligence and legal structuring of the transaction.
Very significant progress has been made in these areas. However,
progress to completion has been slowed somewhat resulting from the
impact of the pandemic and ongoing discussions with the Company's
largest shareholder.
On completion of this transaction, which remains subject to the
finalisation of certain terms, conditions and legal agreements,
Ormonde will acquire, or have the rights to acquire up to an 80%
interest in two exploitation licenses ("Licenses") covering
multiple high grade copper and polymetallic development and
exploration projects in a highly prospective and underexplored
district in the Republic of the Congo ("ROC", also known as
Congo-Brazzaville).
The Licenses include:
-- a copper-lead-zinc deposit that has been, until recently,
subject to small-scale underground mining:
o recovering direct shipping ore ("DSO") grade material
(previous operator DSO grades of 6% copper, 23% lead and 25% zinc
reported - see Note 1);
o public domain drilling results including 11.9% copper, 29.6%
lead, 19.4% zinc and 159.2 g/t silver from 8.55 metres downhole
depth (see Note 2);
-- a copper-silver deposit with mineralisation over a 1.2
kilometre strike length with significant high grade resource
potential indicated by previous operator work including a public
domain JORC (Note 4) Exploration Target of 15 to 20 million tonnes
grading 3% to 5% copper (see Note 1); and
-- several other recognised historical mine sites or exploration
prospect areas providing an exciting project pipeline across this
underexplored land package, which has to date seen very limited
effective modern-day exploration (see Note 3).
On completion of the acquisition, Ormonde has negotiated to
bring in project partners that provide in-country operating
capability based on previous experience managing mineral
exploration and development operations in the ROC. Ormonde also
intends to expedite a comprehensive program of confirmatory
drilling, metallurgical testwork and other technical programs.
Consideration, as set out below, will be based upon project
milestones including (but not limited to) delivery of a JORC
resource and confirmation of the applicable mining convention.
The ROC has a well established Mining Code regime and a
government strongly supportive of exploitation of natural resources
in the country. Ormonde's participation has been welcomed by the
ROC government as the country tries to expand its existing mining
industry and diversify its current GDP for which the oil industry
accounts for a very material component. The transaction would
likely see equity ownership shared with project partners including
the existing License holders who have been unable to provide
meaningful investment in the Licences in recent times.
The Board of the Company believes that this is a cornerstone
transaction for Ormonde which has extremely high potential to be a
significant long-term value enhancing opportunity for all
stakeholders, including all the Company's existing
shareholders.
The terms of the transaction are at a late stage of negotiation
and remain subject to change, however the Company has focused on
minimising share dilution and execution risk for Ormonde.
While the transaction could be completed as an all-cash
transaction without any shareholder approvals, the Company believes
that a milestone based mix of cash and shares as consideration for
the acquisition to be the optimal formula, as do the
counterparties, demonstrating their confidence in the prospects for
the Licences and their desire to participate in the value accretion
potential for the Company. In addition, the Board would prefer to
retain as much cash in treasury as possible to be put into value
enhancing, on the ground activities in the ROC.
It is proposed that Ormonde would pay a consideration of up to
US$800,000 in Ormonde shares and/or cash on closing of the
transaction. Further cash and Ormonde shares will be payable
conditional on the achievement of key technical and administrative
project milestones. The final of these milestones would be payable
on one of the several projects achieving a year of profitable
production. Further details of the terms of the transaction will be
announced by the Company once they have been finalised in a binding
acquisition agreement.
On 3 December 2020, 17 December 2020 and 7 January 2021, the
Company announced that it had adjourned its AGM ahead of
considering Resolutions 6 to 8. Should a mix of cash and shares be
used as proposed consideration for the transaction, the Company
would require resolution 6 to be approved at the adjourned AGM, to
be reconvened on the 18 February 2021, or alternatively a similar
resolution may be put to shareholders for approval at a separate
EGM.
Ormonde will continue to keep the market appraised over the
coming weeks as work continues towards concluding this transaction,
as expeditiously and efficiently as possible, as well as completing
ongoing discussions with the Company's largest shareholder. While
the transaction is well advanced, there still can be no certainty
that a deal will be concluded.
Commenting on the potential acquisition, Jonathan Henry,
Executive Chairman, stated:
"The deal we are working to conclude is on a group of
principally copper assets, with exceptional potential. Completion
of this deal will deliver on the Company's stated strategy of
generating immediate value accretion for shareholders. We look
forward to finalising and completing the transaction and fast
tracking the assets towards development, positive cashflow and
earnings with our new partners, including the supportive government
of the Republic of the Congo, and look forward to updating
shareholders as soon as possible."
Note 1
DSO grades and JORC Exploration Target (and associated JORC
Table 1 disclosures) were reported by Aus American Mining to the
ASX on 5 September 2014 ( https://bit.ly/2FImsN7 ). The results and
Exploration Target have not been verified by Ormonde and are
provided for background information purposes only.
Note 2
The following drilling results and associated JORC Table 1
disclosures were released by Aus American Mining to the ASX on 26
November 2014 ( https://bit.ly/2HdII1H ). Drilling results have not
been verified by Ormonde and are provided for background
information purposes only.
Hole From To Interval True Cu % Pb % Zn % Ag g/t
ID (m) Width
(m)
ZK130401 38.4 55.1 16.7 7.3 11.0 0.6 2.1 33.5
----- ------ --------- ------- ----- ----- ----- -------
ZK130401 85.1 93.65 8.55 3.8 11.9 29.6 19.4 159.2
----- ------ --------- ------- ----- ----- ----- -------
MZK004 88.0 97.5 9.5 4.2 6.2 - - 10.2
----- ------ --------- ------- ----- ----- ----- -------
MZK007 7.0 11.0 4 1.8 13.2 - - 20.5
----- ------ --------- ------- ----- ----- ----- -------
MZK007 25.9 41.6 15.7 6.9 9.0 - - 116.4
----- ------ --------- ------- ----- ----- ----- -------
MZK011 27.0 59.0 32 14.1 2.0 - - -
----- ------ --------- ------- ----- ----- ----- -------
Note 3
The Licenses cover a district of structurally controlled base
metal deposits hosted by Neoproterozoic carbonate rocks and contain
multiple recognised historical mine sites or exploration prospect
areas assessed to various levels by geological, geochemical,
geophysical and / or drilling works. The style of deposits found in
the district has been compared to high grade deposit analogues
including Kennecott (Alaska), Tsumeb (Namibia) and Kipushi
(DRC).
Note 4
"JORC Exploration Target" or "JORC resource" = An Exploration
Target or Mineral Resource estimate reported in accordance with the
Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (The JORC Code).
Review by qualified person
Fraser Gardiner, MAIG, Chief Operating Officer of Ormonde Mining
plc, and a qualified person as defined in the Note for Mining, Oil
and Gas Companies, June 2009, of the London Stock Exchange, has
reviewed and approved the technical information contained in this
announcement, which is based on a review of public domain
information which has not been verified by the qualified
person.
Enquiries to:
Ormonde Mining plc
Jonathan Henry, Executive Chairman
Paul Carroll, Chief Financial Officer
Fraser Gardiner, Chief Operating Officer
Tel: +353 (0)1 8014184
Davy (Nomad, Euronext Growth Advisor and Joint Broker)
John Frain / Barry Murphy
Tel: +353 (0)1 679 6363
SP Angel Corporate Finance LLP (Joint Broker)
Ewan Leggat
Tel: +44 (0)20 3 470 0470
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