TIDMALBA
RNS Number : 6994U
Alba Mineral Resources PLC
16 July 2018
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Alba Mineral Resources plc
("Alba" or the "Company")
Alba Signs Conditional Agreement to Increase Stake
in Clogau Gold Project to 90%
Alba Mineral Resources plc (AIM: ALBA), the diversified mineral
exploration and development company, is pleased to announce that it
has conditionally agreed to acquire a further 41 per cent interest
in Gold Mines of Wales Limited ("GMOW"). Subject to Completion,
Alba will thereby move to 90 per cent ownership of the Clogau Gold
Project situated within the Dolgellau Gold Belt in Wales, United
Kingdom (the "Project"). As previously announced, the Project
comprises the Clogau Gold Mine and includes a large number of
highly prospective gold targets and former gold workings within a
total option area of 106.94 km(2).
HIGHLIGHTS
-- Alba to acquire 41% of the Clogau Gold Project, taking its
total ownership of the Project to 90%.
-- The remaining 10% of the Project will be free carried to
commercial production, but will be subject to a put and call option
effective from the grant of planning permission enabling Alba to
move to 100% ownership in the future if so desired.
-- As part of the transaction, the vendor has agreed to assign
to Alba in full the approximately GBP1 million in loans owed to it
by GMOW.
-- The consideration payable for the acquisition is 185,714,285
Alba consideration shares (valuing the total consideration at
approximately GBP650,000 based on a 30 trading day VWAP of Alba
shares of GBP0.0035 up to and including 12 July 2018), plus a one
for three Alba share warrant (ie 61,904,761 share warrants at an
exercise price of GBP0.0042 and an expiry date of 27 March 2021).
The Alba consideration shares will be subject to a seven month lock
up/orderly marketing agreement.
-- Alba has agreed to grant a 4 per cent net smelter return
royalty to the vendor, subject to a buy-back right in respect of
any proposed future sale of the royalty.
-- Alba's objective remains to bring the Clogau Gold Mine back
into production and also to make a push into the regional
exploration of the wider Project area.
George Frangeskides, Alba's Executive Chairman, commented:
"For the first time in many years, the Clogau Gold Project is
moving to the majority ownership of one company. This will allow us
more readily to progress the plan for re-opening the Clogau Mine,
as well as making a push into regional exploration of the extensive
and under-explored Dolgellau Gold Belt."
"We will not be depleting the Company's cash reserves with this
proposed acquisition, and the shares that will be issued on
Completion will be subject to lock up and orderly marketing
restrictions for a seven-month period."
Acquisition Terms
Alba has conditionally agreed to issue 185,714,285 Alba fully
paid ordinary shares ("Consideration Shares") to Victorian Gold
Limited ("VGL") for a 41 per cent shareholding in Gold Mines of
Wales Limited, which is the ultimate parent company of GMOW
(Operations) Limited, the owner of the Project. The consideration
is valued at GBP650,000 (based on a 30 trading day VWAP of Alba
shares of GBP0.0035 up to and including 12 July 2018). All
Consideration Shares issued to the vendor shall be subject to
lock-up and/or orderly marketing restrictions for a period of seven
months, as follows:
- For a 30 day period following Completion, no Consideration
Shares may be sold or transferred without the prior written
approval of Alba.
- For a further 6 month period thereafter:
o 50% of the Consideration Shares shall remain under a formal
lock up agreement, such that they may not be disposed of without
the prior written approval of Alba; and
o 50% of the Consideration Shares shall be subject to orderly
marketing restrictions, such that they may not be sold without
first seeking the prior written approval of Alba (or Alba's broker
acting as Alba's agent) and complying with such requirements as
Alba or Alba's broker shall reasonably require in order to ensure
the maintenance of an orderly market in Alba's shares.
The consideration shall include a one for three Alba share
warrant, that is 61,904,761 share warrants at an exercise price of
GBP0.0042 and an expiry date of 27 March 2021.
The remaining 10% of the Project will be free carried to
commercial production, but will be subject to a put and call option
agreement effective from the grant of planning permission ("Put and
Call Option") enabling Alba to move to 100% ownership in the future
if so desired. The option may be exercised by either party
following the grant of planning permission to recommence mining
operations at the Project, or earlier if so agreed by the parties,
for an agreed price or, failing agreement, a price determined by
independent valuation.
As part of the consideration for the acquisition, the existing
loans of approximately GBP1 million made by VGL to GMOW will be
assigned to Alba or its wholly-owned subsidiary on Completion,
thereby effectively extinguishing those loans in full. Alba has
agreed to grant to VGL a 4 per cent net smelter return ("NSR")
royalty over the Project ("Royalty"), subject to a pre-emptive
right for Alba to acquire the Royalty on the same or equivalent
terms as may be offered to the royalty holder by a bona fide arm's
length third party.
Completion of the acquisition is subject to certain conditions
precedent, notably the execution by the parties thereto of
definitive agreements in respect of the Royalty and Put and Call
Option described above.
Exploration Update
As announced in our mining update (see RNS on 2 May 2018), Alba
has been collating all historical data for the project and has
compiled a regional geological model that has been used to generate
regional exploration targets from across the licence. The regional
targets have been identified through a comparison of the known
geological framework of the existing Clogau-St David's Gold Mine.
Numerous targets have been identified with Alba initially planning
to focus efforts on the two targets in closest proximity to the
existing mine.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information please contact:
Alba Mineral Resources plc
George Frangeskides, Executive Chairman +44 20 7264 4366
Cairn Financial Advisers LLP (Nomad)
James Caithie / Liam Murray +44 20 7213 0880
First Equity Limited (Broker)
Jason Robertson +44 20 7374 2212
Yellow Jersey (PR/IR)
Tim Thompson/Harriet Jackson +44 7710 718649
Qualified Person's Statement:
Michael Nott, a Director of Alba, has over 45 years relevant
experience in the geological, mining, minerals, waste disposal,
industrial minerals, oil , drilling, mineral planning and quarrying
industries has approved the information in this announcement.
He holds a BSc. degree in Geology from Queen Mary, University of
London, a MSc. Degree in Mineral Production Management from the
Royal School of Mines, Imperial College, University of London, The
Diploma of Imperial College in Mineral Production Management and is
a Chartered Engineer.
He is a Fellow of the Institute of Materials, Minerals and
Mining, a Fellow of the Minerals Engineering Society, a Fellow of
the Institute of Quarrying and an Associate of the Royal School of
Mines Association.
Alba's Project Portfolio
Oil & Gas
Horse Hill (Oil & Gas, UK): Alba holds a 18.1 per cent
interest in Horse Hill Developments Limited, the company which has
a 65 per cent participating interest and operatorship of the Horse
Hill oil and gas project (licences PEDL 137 and PEDL 246) in the UK
Weald Basin.
Brockham (Oil & Gas, UK): Alba has a direct 5 per cent
interest in Production Licence 235, which comprises the previously
producing onshore Brockham Oil Field.
Mining
Amitsoq (Graphite, Greenland): Alba owns a 90 per cent interest
in the Amitsoq Graphite Project in Southern Greenland and has an
option over the remaining 10 per cent.
Black Sands (Ilmenite, Greenland): Alba owns 100 per cent of
mineral exploration licences 2017/29 and 2017/39 in the Thule
region, north-west Greenland.
Melville Bay (Iron Ore, Greenland): Alba is entitled to a 51 per
cent interest in mineral exploration licence 2017/41 in Melville
Bay, north-west Greenland. The licence area benefits from an
existing inferred JORC resource of 67 Mt @ 31.4% Fe.
Inglefield Land (Copper, Cobalt, Gold): Alba owns 100 per cent
of mineral exploration licence 2017/40 in north-west Greenland.
Limerick (Base Metals, Ireland): Alba has 100 per cent of the
Limerick base metal project in the Republic of Ireland.
El Mreiti (Uranium, Mauritania): Alba has applied for the
reissue of a uranium permit in northern Mauritania, centred on
known uranium-bearing showings.
Web: www.albamineralresources.com
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
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