East Star Resources PLC Proposed Acquisition of Gold Projects & Suspension (6452F)
July 19 2021 - 2:19AM
UK Regulatory
TIDMEST
RNS Number : 6452F
East Star Resources PLC
19 July 2021
19 July 2021
East Star Resources Plc
("East Star" or the "Company")
Proposed Acquisition of High Impact Gold Exploration Projects
and Suspension of Trading
East Star Resources, a London Stock Exchange traded natural
resource focused company, is pleased to announce that it has
entered into binding Heads of Terms ("Term Sheet") to acquire 100%
of the share capital by way of a reverse takeover ("the
Transaction") of Discovery Ventures Kazakhstan Limited ("DVK"), a
private Kazakhstan registered company. DVK has negotiated the
rights to certain prospective gold and base metals exploration
licences in the Chu-ili and Rudny Altai mineral belts (the
"Projects") through a joint venture agreement with Kazakhstan
National Mining Company, Tau-Ken Samruk JSC ("TKS").
Kazakhstan is a significant producer of precious and base
metals, but has remained largely underexplored by modern
exploration techniques. The country introduced a new mineral code
effective since June 2018 which, based on Western Australia's
mineral law, has opened significant portions of world class mineral
belts. The partnership with TKS gives DVK a vital pillar of support
as it seeks to expand in country.
The Projects are located in highly prospective areas where
historical exploration and old mining operations demonstrate highly
mineralised systems. DVK has a world-class management team of
natural resources project developers and financiers, led by Alex
Walker, a mineral resources executive with more than 15 years'
experience in financing and project management. The team also
includes ex-senior management for Kazakhstan and the Eurasian
Region from Freeport-McMoRan, BHP and Kazakhmys.
Exploration activity on priority targets has already commenced
with field sampling and magnetic surveying and drilling is expected
to commence in the coming months. Under the Term Sheet, East Star
has also subscribed for four, 12-month convertible loan notes of
US$175,000 each ("Convertible Notes") issued by DVK, the proceeds
of which will be used to continue exploration at the Projects.
The Transaction remains subject to full due diligence to the
Company's satisfaction, completion of the acquisition and
re-listing of the enlarged group. If the Transaction is completed,
it will constitute a reverse takeover under the Listing Rules and
will be subject to approval by shareholders of the Company at a
general meeting.
As the Transaction will constitute a Reverse Takeover, the
Company has requested that the listing of its Ordinary Shares be
temporarily suspended with effect from 7.30 a.m. today. Pending the
publication of a prospectus, EST intends to make an application for
the enlarged Company to have its Ordinary Shares admitted to the
Official List and to trading on the Main Market for listed
securities of the London Stock Exchange ("Relisting"). However, the
Board has noted of the ongoing market effectiveness review by the
FCA, which may lead to certain changes in the Listing Rules for new
issuers, and so will keep shareholders updated with any changes to
the proposed Relisting.
Charlie Wood, director of East Star said "We are very excited to
have agreed initial terms with Alex and his team on an acquisition
of DVK. Kazakhstan has been overlooked as a mining destination for
many years, but has a well-established history of gold and base
metals success. Our combined vision is to build on this initial
Transaction and grow a portfolio of near-term production and
high-impact exploration assets in a significant, but
underdeveloped, mining-friendly jurisdiction. We are now conducting
due diligence and hope to conclude the transaction as soon as
possible."
**ENDS**
Enquiries
Charles Wood
East Star Resources Plc Non-executive Director +44 (0)20 3918 8792
Peterhouse Capital Limited
(as brokers to the Company) Lucy Williams/Duncan Vasey +44 (0)207 469 0936
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