TIDMSAV
RNS Number : 8218C
Savannah Resources PLC
20 June 2019
20 June 2019
Savannah Resources Plc
Agreement to Acquire the 25% Minority Interest in Mina do
Barroso Project, and Agreement to Settle Deferred Consideration of
Block 5 Licence in Oman
HIGHLIGHTS:
Acquisition of the 25% Minority Interest in Mina do Barroso
Project
-- 100% control of its flagship asset, the Mina do Barroso
Lithium Project in Portugal ('Mina do Barroso' or the 'Project'),
secured following approval at its AGM via an all-share
transaction
-- Remaining 25% interest acquired from minority shareholders
(the 'Vendors') including resource investment specialist Slipstream
Resources Investments Pty Ltd ('Slipstream'), an existing
shareholder in Savannah, which will increase its interest to 16.0%
from 5.1%
-- 100% ownership provides greater exposure to this significant
lithium project and valuable optionality as the development and
commercialisation of the Project progresses
-- Consideration has been satisfied through the issue of 163
million new ordinary shares of 1p each in Savannah ('Ordinary
Shares') at USD 0.073 (circa. 5.63p) per share, 13% premium to the
last closing share price, valuing the Transaction at circa
US$11.9m
-- Vendors have agreed to a 12-month lock-in arrangement on the
Consideration Shares and a further 9-month orderly market
restriction, following completion of the Transaction
-- The Acquisition demonstrates Slipstream's confidence in the
potential of the Project and Savannah's overall asset portfolio
In connection with the Transaction, Savannah has retained Hannam
& Partners (H&P Advisory Limited) as financial
advisors.
Settlement of the Deferred Consideration in Respect of the Block
5 Licence in Oman
-- Agreement signed with Gentor Resources Inc ('Gentor') to
settle the deferred consideration that is related to the original
acquisition of the Block 5 licence on 10 April 2014 as part of the
strategic review of the Oman portfolio
-- The deferred consideration of US$3,000,000 (payable 50% in
cash) relating to the share purchase agreement between the parties
shall be cancelled in full return for the issue of US$200,000 worth
of Ordinary Shares which are subject to a six month orderly market
agreement; and a cash payment of US$100,000. The number of Ordinary
Shares to be issued in consideration shall be determined by
reference to the volume weighted average price as traded on the AIM
market of the London Stock Exchange PLC 30 dealing days prior to
the execution of this Settlement Agreement which equates to a share
price of 5.22p.
Savannah Resources plc (AIM: SAV, FWB: SAV and SWB: SAV)
('Savannah' or the 'Company'), the resource development company
with a portfolio of diversified assets, is pleased to announce that
it has entered into an Share Purchase Agreement ('SPA'), to acquire
the minority 25% shareholding in Savannah Lithium Lda, which owns
the Mina do Barroso Lithium Project in Portugal. The Transaction
takes Savannah's ownership of the Project to 100% ahead of the
completion of the Feasibility Study and a decision to mine. It also
has also reached a settlement to cancel the deferred contingent
liability of US$3,000,000 in respect of the Block 5 licence in the
Sultanate of Oman.
Commenting on the Transaction, Savannah's CEO David Archer,
said: "We are delighted to have completed this Acquisition which
increases Savannah's stake in the Mina do Barroso Project to 100%.
We believe the Project will play a crucial role in securing
Europe's new lithium battery supply chain by providing a long-term
and reliable source of battery grade spodumene lithium concentrate.
As we move into a critical phase in the Project's definition,
permitting and financing, we believe the simplified ownership
structure has significant benefits, and provides our shareholders
with greater exposure to the Project's long-term value.
"The European lithium sector is developing at a very rapid rate.
For example, in the short period since we announced our intention
to secure the outstanding 25% stake in the Project, the market has
witnessed Northvolt AB's successful financing of 'Europe's first
homegrown (16GWh) gigafactory' in Sweden and its 50/50 joint
venture with Volkswagen to establish a second, 16GWh battery plant
in Germany. At the same time, the European Commission has also
reaffirmed its commitment to "completing the value chain" with
greater financing to be made available for battery metal mining and
refining from the EU via the EIB and the EBRD.
"As sole owner of Western Europe's most significant spodumene
lithium project, Savannah is ideally placed to become a key player
in Europe's new battery market."
Commenting on the Transaction, Geoffrey Stewart, CEO of
Slipstream, said: "Following completion of the Transaction, we will
be fully aligned with Savannah's other shareholders. We strongly
support and endorse the Board's strategy and the management team's
sustained efforts to rapidly advance the development of the Mina do
Barroso Project. It has been a truly remarkable achievement that,
in under two years, Savannah has developed what was a promising
exploration project into what is likely to be Europe's first
significant producer of high-grade, low impurity spodumene
concentrate. We are excited and confident that the Project will
become both economically and strategically important in Europe's
rapidly developing electric vehicle industry."
Benefits of the Transaction for Savannah and its shareholders
include:
-- Providing Savannah with 100% control over Mina do Barroso,
Savannah's flagship asset and Europe's most significant spodumene
lithium deposit, with a JORC Compliant Mineral Resource Estimate
currently standing at 27Mt
-- Significant simplification of Savannah's group structure and Project decision making process
-- Reduction in Project funding uncertainty related to Project level minority shareholders
-- Expected cost savings and efficiency gains from the reduced
complexity related to joint venture management and reporting
-- The lock-in and orderly market arrangements provide
protection for the Company's existing shareholders during the
funding phase of the Project
Terms of the Transaction
Pursuant to the term sheet ('Term Sheet', announced on 15 April
2019), the SPA has been entered into and the total consideration
remains at US$11.9m for the Vendors combined 25% shareholding in
the Project. This has been settled by the issue of 163 million
Consideration Shares at 0.073 USD (circa. 5.63p at the time of
entering into the Term Sheet) per share, equating to 15.6% in the
enlarged issued share capital of the Company. The Consideration
Shares will rank pari passu with the Company's existing Ordinary
Shares.
Slipstream, an existing 5.1% shareholder in Savannah, and the
largest of the Vendors, has seen its holding in the Company
increase to 16.0%, making it Savannah's second largest shareholder.
The Vendors have agreed to a 12-month lock-in arrangement on their
Consideration Shares and a further 9-month orderly market
restriction, whereby any sale of the Consideration Shares by a
vendor would be through a Savannah nominated broker.
Savannah and the Vendors have entered into a legally binding
SPA. The Company's shareholders have approved the resolutions
related to the approval of the Transaction at the Company's AGM on
18 June 2019.
Acquisition of 25% of the Issued Share Capital of Savannah
Lithium LDA
In connection with the Transaction, Savannah has retained Hannam
& Partners (H&P Advisory Limited) as financial
advisors.
Settlement of the Deferred Consideration in Respect of the Block
5 Licence in the Sultanate of Oman
As part of the work being undertaken in relation to the
strategic review of Savannah's Oman portfolio, the Company has come
to an agreement to settle the deferred consideration that is
related to the Block 5 licence. Specifically, the Company has
agreed with Gentor that the deferred consideration of US$3,000,000
relating to the Share Purchase Agreement between the parties dated
10 April 2014 shall be cancelled in full return for the issue of
US$200,000 worth of Ordinary Shares, being 3,008,025 shares which
are subject to a six month orderly market agreement ('Settlement
Shares'); and the cash payment of US$100,000.
Regulatory Information
Application has been made for 163,000,000 Consideration Shares
and 3,008,025 Settlement Shares (together the 'New Ordinary
Shares'), which rank pari passu with the existing Ordinary Shares,
to be admitted to trading on AIM ('Admission'). It is expected that
Admission will become effective and dealings will commence at 8:00
a.m. on or around 26 June 2019.
Following Admission, the total issued share capital of the
Company will consist of 1,047,459,820 Ordinary Shares. This number
may be used by shareholders as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change to their interest in, the Company under
the FCA's Disclosure and Transparency Rules. Following the
Transaction, the percentage holdings of certain significant
shareholders will increase as per the table below:
Shareholder Holding Percentage Number Holding Percentage
Prior to of Ordinary of New Following of Ordinary
the Transaction Shares Ordinary Transaction Shares
Prior to Shares Following
the Transaction issued Transaction
Slipstream Resources
Investments Pty Ltd 45,000,000 5.11% 122,250,000 167,250,000 15.97%
----------------- ----------------- ------------ ------------- -------------
Effective Investments
Pty Ltd 6,500,000 0.74% 32,600,000 39,100,000 3.73%
----------------- ----------------- ------------ ------------- -------------
Mineralia - Minas,
Geotecnia E Contrucoes
Lda 3,000,000 0.34% 8,150,000 11,150,000 1.06%
----------------- ----------------- ------------ ------------- -------------
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
Mr Dale Ferguson
Mr Dale Ferguson, the Company's Technical Director, is also a
Director of and minority shareholder in Slipstream Resources
Investments Pty Ltd (one of the Vendors). As such, Dale Ferguson
has been excluded from any of Savannah's commercial negotiations
with the Vendors and was precluded from voting on any Board matters
relating to the Term Sheet and the SPA between Savannah and the
Vendors.
**ENDS**
For further information please visit www.savannahresources.com
or contact:
David Archer Savannah Resources Tel: +44 20 7117 2489
plc
David Hignell / Charlie SP Angel Corporate Tel: +44 20 3470 0470
Bouverat (Nominated Adviser) Finance LLP Partners
Ltd
Christopher Raggett (Joint finnCap Ltd Tel: +44 20 7220 0500
Broker)
Grant Barker (Joint Broker) Whitman Howard Tel: +44 020 7659
1225
Melissa Hancock / Cosima St Brides Partners Tel: +44 20 7236 1177
Akerman (Financial PR) Ltd
About Savannah
Savannah is a diversified resources group (AIM: SAV) with a
portfolio of energy metals projects - lithium in Portugal and
copper in Oman - together with the world-class Mutamba Heavy
Mineral Sands Project in Mozambique, which is being developed in a
consortium with the global major Rio Tinto. The Board is committed
to serving the interests of its shareholders and to delivering
outcomes that will improve the lives of the communities we work
with and our staff.
The Company is listed and regulated on AIM and the Company's
ordinary shares are also available on the Quotation Board of the
Frankfurt Stock Exchange (FWB) under the symbol FWB: SAV, and the
Börse Stuttgart (SWB) under the ticker "SAV".
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACQGGUBPQUPBGMB
(END) Dow Jones Newswires
June 20, 2019 02:01 ET (06:01 GMT)
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