TIDMATM
RNS Number : 3523J
Andrada Mining Limited
15 August 2023
15 August 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in
the United Kingdom pursuant to the European Union (Withdrawal) Act
2018. Upon the publication of this announcement via Regulatory
Information Service (RIS), this inside information will be in the
public domain.
Andrada Mining Limited
("Andrada" or "the Company")
Orion US$25 Million Funding Package Update
Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the African
technology metals mining company with a portfolio of mining and
exploration assets in Namibia, is pleased to provide an update on
the previously proposed Funding Package with funds managed by Orion
Resource Partners ("Orion") announced on 15 September 2022. On 11
August 2023, Andrada signed binding documentation for an updated,
conditional US$25 million funding package with Orion.
HIGHLIGHTS
-- US$25 million financing agreements signed ("Orion Financing") detailed below:
o US$2.5 million (cGBP2.0 million) equity at 6.39p and US$10
million (cGBP7.9 million) Convertible Loan Note ("the Note") being
for the general purposes of accelerating Andrada's overall strategy
of achieving commercial production of its lithium, tin, and
tantalum revenue streams.
o US$12.5 million unsecured tin royalty for the sole purpose of
increasing Andrada's tin production as it ramps up its capital
programmes over the next 2 years.
-- The Company will issue Orion with warrants equivalent to
double the GBP value of the US$10 million Convertible Loan Note
based on the USD/GBP closing rate at market close on the Orion
Issuance Date. Each warrant will enable Orion to subscribe for one
ordinary share in the Company (the "Warrants").
-- Financing conditional on satisfaction of requirements
customary with transactions of this nature and shareholder approval
of certain resolutions at the Company's Annual General Meeting
(before 29 September 2023).
-- Funding expected to be completed around the end of September 2023.
-- The financing facility from the Development Bank of Namibia
also remains on track with drawdown of funds expected in due course
pending satisfaction of final conditions.
Anthony Viljoen, Chief Executive Officer, commented:
"The signing of the Orion financing agreement will provide
sufficient capital to complete our expansion programmes at our
flagship Uis operation. Finalising this funding will expedite our
lithium implementation programme, expand our tin production, and
concurrently bring a highly respected new investor onto our
register. This will be another major step towards our goal of
becoming a multi-technology metals producer. Additionally, the
conclusion of the Development Bank of Namibia c.US$5.8 million debt
facility will further provide considerable strength to the
Company's balance sheet.
"Orion is a renowned mining investment fund with a long track
record of enhancing shareholder value, and we believe the proposed
investment terms strongly endorse Andrada's corporate and broader
multi-commodity development strategy. Orion also has the depth to
provide debt financing for Phase 2 of the business growth. We look
forward to building a successful partnership with Orion in
conjunction with all our funding partners going forward."
Philip Clegg, Managing Partner of Orion, commented:
"We are very pleased to have executed definitive documents with
Andrada. We regard Andrada as a high-quality investment opportunity
presenting extensive optionality, with a series of value-creative
projects across multiple future-facing commodities. We are excited
to begin our partnership with Anthony and his team."
DETAILS OF THE ORION FINANCING
The financing is subject to the fulfilment of the following
outstanding conditions precedent:
-- shareholder approval at the upcoming Annual General Meeting;
-- the Company's lender banks' consent;
-- exchange control approval to remit funds into Namibia; and
-- Admission of the Subscription Shares (as defined below) to trading on AIM.
The final agreed deal terms of the US$25 million funding package
are as follows;
Equity Subscription
-- Andrada, Orion Mine Finance Fund III LP ("Orion LP") and OMF
Fund III (F) Limited ("OMF Limited") have today entered into a
subscription agreement (the "Subscription Agreement"), pursuant to
which Orion LP has agreed, subject to the conditions set out above,
to subscribe for 30,821,596 ordinary shares in the Company, at a
price of 6.39p (the "Subscription Shares") (the "Subscription
Price"), being a total investment of cGBP2.0 million (US$2.5
million ). The price is 90% of the Company's 10 - day Volume
Weighted Average Price ("VWAP") of 7.1p, calculated as at 11 August
2023, being the last practicable date prior to the date of this
announcement.
-- Application for Admission of the Subscription Shares will be
made and, subject to the satisfaction of the conditions above,
trading in the Subscription Shares is anticipated to occur shortly
after the Company's Annual General Meeting. A further update will
be provided at that time.
-- Following the issue of the Subscription Shares, Orion LP's
interest in the Company will be 30,821,596 Ordinary Shares
representing 1.96% of the then enlarged share capital of the
Company.
Convertible Loan Note
-- As also set out in the Subscription Agreement, OMF Limited
has conditionally agreed to make available to Andrada up to US$10
million (cGBP7.9 million) by way of an unsecured Loan Note (the
"Note"). The Loan can only be drawn down in full, and not in part.
Interest accrues on the Note at a rate of 12% per annum.
-- The Note has a four-year term from the date that the
Subscription Shares commence trading on AIM, anticipated to be end
of September 2023 (the "Redemption Date").
-- The Note is convertible at any time prior to the Redemption
Date in tranches of US$100k. The conversion price for the Note at
the election of the holder is fixed at 9.45p, being the conversion
price of the Loan Notes issued by the Company on 18 July 2023 (see
announcement of the same date) ("Conversion Price").
-- If, after 12 months from the date of drawdown, the 20-day
VWAP of the Company's shares is trading at 200% or more of the
Conversion Price the Company may request the immediate conversion
of the outstanding Note.
Warrants
-- On drawdown of the Note, the Company will issue OMF Limited
with warrants to subscribe for up to US$20m of ordinary shares in
Andrada at a price of 9.45p ("Orion Warrants"). The exact GBP
(sterling) value of the warrant package will be determined by
reference to the USD/GBP closing exchange rate at market close on
the date that the Subscription Shares commence trading on AIM.
-- Each warrant will enable OMF Limited to subscribe for one
Ordinary Share at a subscription price of 9.45p.
-- The Orion Warrants are exercisable at any time from the date
of issue for a period of two years.
Assuming full conversion of the Note at 9.45p, the issue of the
Subscription Shares at 6.39p, and exercise of all the Orion
Warrants (using estimated warrant numbers, based on the prevailing
exchange rate) Orion's interest in Andrada would be c.7.8% of the
then enlarged issued share capital.
Royalty
-- The Company has today entered into a Royalty Agreement with
Uis Tin Mining Proprietary Limited ("Uis"); OMF Limited; Greenhills
Resources Limited and Andrada Mining (Namibia) (Proprietary)
Limited pursuant to which Uis, the subsidiary of the Company,
grants to OMF Limited up to US$12.5 million unsecured gross royalty
over tin production, which is drawn down at staggered rates based
on increasing contained tin gross revenue produced at the Uis
Mine.
-- A base rate of 5.13% at the current production run rate with
a 15-month fixed commitment from drawdown to allow the proceeds to
be converted into additional production. If the increased
production has not been achieved within 15 months, then the rate
temporarily increases to 9.63% until the increased production is
achieved, with a linear decrease from this rate to 5.13% from 1000
tpa to 1599 tpa.
-- At an annualised contained tin production between 1,600 tpa
to 2,000 tpa the rate will further reduce from 4.50% to 3.61%,
ultimately reducing to 0.86% with the Phase 2 expansion.
-- Once the royalty has been paid against 95,500 tonnes, the
rate then further reduces by 75% in respect of the first 9,800
tonnes, or 87.5% in respect of the production in excess of 9,800
tonnes for the remainder of that year. The 75% rate reduction for
the first 9,800 tonnes in a year and by 87.5% for amounts in excess
of 9.800 tonnes in that year then applies separately for each
subsequent year.
Update of Financing with Development Bank of Namibia ("DBN")
Further to the announcement on 26 June 2023, the inter-creditor
agreements between DBN and Standard Bank have been concluded and
the completion of the DBN financing is now only subject to the
finalisation of the associated security package. The Directors
currently expect the completion and associated drawdown to occur
during August 2023. Further updates will be provided in due
course.
General Meeting
As set out above, the key outstanding condition is the approval
by Andrada's shareholders at the upcoming Annual General Meeting of
the Company. A further announcement will be made when the circular
convening that meeting is dispatched.
Andrada Mining Limited +27 (11) 268 6555
Anthony Viljoen, CEO investorrelations@andradamining.com
Sakhile Ndlovu, Investor Relations
Nominated Adviser
WH Ireland Limited
Katy Mitchell +44 (0) 207 220 1666
Corporate Adviser and Joint
Broker
H&P Advisory Limited
Andrew Chubb
Jay Ashfield
Matt Hasson +44 (0) 20 7907 8500
Stifel Nicolaus Europe Limited
Ashton Clanfield
Calum Stewart
Varun Talwar +44 (0) 20 7710 7600
Tavistock Financial PR (United +44 (0) 207 920 3150
Kingdom) andrada@tavistock.co.uk
Catherine Drummond
Adam Baynes
About Andrada Mining Limited
Andrada Mining Limited has a vision to create a portfolio of
globally significant, conflict-free, production and exploration
assets. The Company's flagship asset is the Uis Mine in Namibia,
formerly the world's largest hard-rock open cast tin mine.
Andrada has three mining licences namely:
ML 134 on which Uis Mine is located.
ML133 (Lithium Ridge)
ML129 (Spodumene Hill)
The main minerals in these mining licences are tin, lithium and
tantalum. Additionally, the Company has an exploration licence
EL5445 (Brandberg West) on which the main minerals are tin, copper
and tungsten. The Company has set a mineral resource target of 200
Mt to be delineated within the next 5 years. The substantial
mineral resource potential allows the Company to consider economies
of scale.
Andrada is managed by a board of directors with extensive
industry knowledge and a management team with deep commercial and
technical skills. Furthermore, the Company is committed to the
sustainable development of its operations and the growth of its
business. This is demonstrated by how the leadership team places
significant emphasis on creating value for the wider community,
investors, and other key stakeholders. Andrada has established an
environmental, social and governance system which has been
implemented at all levels of the Company and aligns with
international standards.
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END
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