East Star Resources PLC Update on Proposed RTO (3288Q)
October 26 2021 - 09:30AM
UK Regulatory
TIDMEST
RNS Number : 3288Q
East Star Resources PLC
26 October 2021
26 October 2021
East Star Resources Plc
("East Star" or the "Company")
Update on Proposed RTO
East Star, a shell company formed for the purpose of undertaking
an acquisition in the natural resources sector, is delighted to
announce that it has entered into a share purchase agreement with
the vendors of Discovery Ventures Kazakhstan Limited ("DVK") to
conditionally acquire the entire issued share capital of DVK (the
"Proposed Acquisition").
DVK is 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"). 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 located in Kazakhstan 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.
Share Purchase Agreement
The terms of the Proposed Acquisition have been agreed, but the
transaction remains subject to and conditional upon the
satisfaction of certain conditions, including, inter alia:
1. the acquisition being approved by shareholders of the Company at a general meeting;
2. the Company having obtained a waiver from the Takeover Panel
under Rule 9 of the Takeover Code, if required;
3. the placing being undertaken by the brokers of the Company in
connection with the transaction being unconditional in all
respects; and
4. the Company's shares being re-admitted to trading following the completion of the transaction.
Subject to the acquisition being declared unconditional, the
acquisition will be satisfied by the issue and allotment of
45,000,000 ordinary shares in the capital of the Company
("Consideration Shares") to the shareholders of DVK. The DVK
Sellers shall have right to deferred consideration of 75,000,000
new Ordinary Shares, subject to the satisfaction of a performance
condition (the "Deferred Consideration Shares").
DVK issued a convertible loan note to existing shareholder
Ilwella Pty Ltd ("Notes"). It has been agreed between the parties
that the convertible loan will be redeemed by the Company by
issuing and allotting to Ilwella Pty Ltd a number of Ordinary
Shares as is equal to the full redemption value of the Notes, being
US$361,100. The number of Ordinary Shares used to satisfy the
redemption cannot be ascertained as at the date of this
announcement.
The full terms of the Proposed Acquisition will be set out in a
prospectus expected to be published in due course.
Convertible Loan Note Arrangements
Under a term sheet, East Star subscribed for up to four 12-month
convertible loan notes of $175,000 each ("CLN") issued by DVK.
These CLN proceeds drawn by DVK over the past four months have
enabled continued work on DVK's projects and preparation for an
accelerated exploration programme upon completion of the
transaction during Q4 2021.
As at today's date DVK has drawn down $US700,000 of convertible
loan notes under the term sheet.
Sandy Barblett, Director of East Star Resources Plc, said:
" We are very excited to have completed the conditional
acquisition of DVK. At a time of higher prices across the base
metals complex and increasing resource scarcity we see enormous
opportunity in Kazakhstan. Historically Kazakhstan has been a
significant producer of precious and base metals but has remained
largely underexplored by modern exploration techniques. Alex and
his experienced team at DVK have first mover advantage under the
new Kazakh mineral legislation (introduced in 2018) and have
secured significant acreage positions in highly prospective mineral
belts. Some of the world's largest resource companies including
Glencore, Rio Tinto and Fortescue Metals Group continue to grow
their footprint in Kazakhstan which gives us further confidence in
this jurisdiction."
Alex Walker, CEO of DVK, said:
"We are pleased to join forces with East Star Resources, a
combination which will drive an accelerated work programme on our
projects. 2022 will be a landmark year for our merged group as we
continue drilling areas with demonstrated high grades of gold and
copper and apply modern exploration techniques to our underexplored
assets. Our joint venture agreement with Kazakhstan National Mining
Company, Tau-Ken Samruk (TKS), provides us with a stable and
supportive framework to grow our footprint in country and increase
our exposure to exploration in world class precious and base metal
mineral belts."
Enquiries:
East Star Resources Plc
Sandy Barblett/Charlie Wood
Tel. +44 (0)20 3918 8792
Peterhouse Capital Limited (Broker)
Lucy Williams/Duncan Vasey
Tel. +44 (0)20 7469 0936
Vigo Consulting (Investor Relations)
Ben Simons/Oliver Clark
Tel. +44 (0)20 7390 0234
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