TIDMKAT TIDMABM
RNS Number : 0190T
Katoro Gold PLC
15 March 2019
Katoro Gold plc (Incorporated in England and Wales)
(Registration Number: 9306219)
Share code on AIM: KAT
ISIN: GB00BSNBL022
("Katoro" or "the Company")
Dated: 15 March 2019
Katoro Gold PLC ('Katoro' or the 'Company')
Investment and Option Agreement with African Battery Metals
Katoro Gold PLC (AIM: KAT), the Tanzanian focused exploration
and development company, is pleased to announce that it has entered
into an investment and option agreement (the "Agreement") with AIM
quoted African Battery Minerals Plc ("ABM") (LON:ABM).
Under the Agreement ABM will be able to acquire up to 10 million
new ordinary shares of 1.0 pence each in the capital of the Company
("Ordinary Shares"), together with up to 10 million warrants over
Ordinary Shares, and an option to acquire, subject to the
completion of due diligence by ABM, up to a 35% interest in
Company's 100% owned Haneti Nickel Project ("Haneti") in Tanzania
(the "Option") for a total consideration of up to GBP125,000.
Highlights:
-- For a consideration of GBP25,000, ABM will acquire 2,500,000
new Ordinary Shares (the "Tranche 1 Shares"), equating to an issue
price of 1.0 pence per share. On admission of such shares, ABM will
be interested in 1.56% of Katoro's then enlarged issued share
capital;
- ABM will also be granted 2,500,000 warrants to subscribe for
2,500,000 new Ordinary Shares at a price of 1.25 pence per share
with a three year expiry term from today's date;
-- Under the Agreement, ABM has been granted the Option, a
period of 60 days in which to undertake due diligence on Katoro and
its projects, in particular Haneti. If ABM exercises the Option,
ABM will invest a further GBP75,000 to acquire an additional
7,500,000 new Ordinary Shares at a price of 1.0 pence per share
(the "Tranche 2 Shares") and
- Together with the Tranche 1 Share, on admission of the Tranche
2 Shares, ABM will then be interested in 5.95% of Katoro's then
enlarged share capital;
- ABM will also be granted a further 7,500,000 warrants to
subscribe for 7,500,000 new Ordinary Shares at a price of 1.25
pence per share with a three year expiry term from the date of the
exercise of the Option;
-- On exercise of the Option, ABM will also acquire a 25%
interest in the Company's wholly owned subsidiary, Kibo Nickel
Limited ("Kibo Nickel"), which, through its wholly owned
subsidiary, Eagle Exploration Limited ("Eagle"), holds a 100%
interest in Haneti. Following the Option exercise, Katoro will
retain a 75% interest in Kibo Nickel;
- Following the Option exercise, ABM will be required to fund
its 25% share of Haneti costs, or will dilute in accordance with
standard industry fund or dilute provisions;
-- In the event the Option is exercised, ABM will have the
right, for 12 months after the Option exercise date, to acquire a
further 10% interest in Kibo Nickel for a further payment to Katoro
of GBP25,000 in cash.
Louis Coetzee, Executive Chairman of Katoro, commented: "We are
very pleased with the interest ABM has acquired in Katoro and the
Agreement holds the promise of establishing a strategic partnership
with ABM, with whom we can explore and ultimately hopefully develop
the full potential of Haneti.
The investment by ABM announced today, fits perfectly with
Katoro's development strategy for Haneti and will enable the
Company to execute its exploration program for Haneti quicker and
with significant more effectiveness and efficiency.
We are looking forward to working with ABM on an accelerated
exploration programme at Haneti, that builds on the extensive
existing knowledge that Katoro, and Kibo Energy plc, its prior
owner and majority shareholder of Katoro, have gathered. This
includes data demonstrating 13.59% nickel in sampling of
outcrops."
Further information on the Agreement
Katoro is required to allocate the monies received pursuant to
the issue of the Tranche 1 Shares, the potential issue of the
Tranche 2 Shares and the potential receipt of a further GBP25,000
from ABM to the maintenance, exploration and development of
Haneti.
In the event the Option is exercised, Katoro and ABM will
establish within one month a written Joint Venture Agreement and
associated Shareholder Agreement in respect of Kibo Nickel, Eagle
and Haneti.
Save for certain circumstances, the warrants issued pursuant to
the Agreement may, until 1 July 2019, only be exercised by ABM if
such exercise does not dilute Kibo Energy plc ("Kibo"), the
Company's major shareholder, to less than 50.5% of the issued share
capital of the Company at that time.
Further information on the Haneti Nickel Project
The 5,000 sq. km polymetallic Haneti Nickel Project in Tanzania
is a highly prospective, high-grade nickel sulphide asset. Previous
work, totalling approximately US$1.5 million, has identified grades
of up to 13.59% nickel with additional gold, cobalt, platinum
credits and some significant lithium anomalies. Additionally,
independent work, undertaken by Western Geophysics Pty, underlines
the potential of Haneti to host a substantial nickel sulphide
deposit.
The Company acquired Haneti in November 2018 and immediately
commenced a review and analysis of all historic work completed on
the project. Based on the review of historic exploration work on
the project, the Company believes that it could host a chonolith
type nickel sulphide deposit and that Mihanza Hill, one of several
high priority exploration targets within Haneti, is the most
prospective target identified to date and this will be the initial
focus for the Company.
The main objective of the 2019 exploration work programme will
be to ascertain the existence of disseminated (or massive) sulphide
mineralisation at the identified high priority exploration targets,
including Mihanza Hill. Using a variety of exploration techniques,
the programme will seek to define a future drilling programme. Work
has already commenced in this regard, with the Company having
completed a soil sampling programme of 1,300 samples which have now
been submitted for laboratory analysis.
For the year ended 31 December 2017, Kibo Nickel reported net
liabilities of EUR11,620, nil revenue and a loss for the year of
EUR3,300. For the year ended 31 December 2017, Eagle reported net
liabilities of US$891,968, nil revenue and a loss for the year of
US$33,989. Kibo Nickel does not consolidate the results of Eagle
and Eagle's only liability, is an inter-company loan of US$957,621
was transferred to Katoro on completion of the acquisition in
November 2018.
Admission to Trading and Total Voting Rights
Application will be made for the admission to trading on AIM of
the Tranche 1 Shares ("Admission"), with such Admission expected to
become effective on or around 22 March 2019. Following Admission,
the share capital of the Company will comprise 160,462,477 Ordinary
Shares.
Each Ordinary Share has one voting right. No Ordinary Shares are
held in treasury. Accordingly, the total number of voting rights
will be 160,462,477 and this figure may be used by Shareholders as
the denominator for the calculation by which they will determine if
they are required to notify their interest in, or a change to their
interest in, Katoro Gold PLC under the FCA's Disclosure Guidance
and Transparency Rules.
Following the Admission of the Tranche 1 Shares, Kibo will be
interested, in aggregate, in 90,945,754 Ordinary Shares
representing approximately 56.7% of the Company's then issued share
capital.
**ENDS**
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014.
For further information please visit www.katorogold.com or
contact:
Louis Coetzee louisc@katorogold.com Katoro Gold plc Executive Chairman
Richard Tulloch +44 (0) 20 7409 Strand Hanson Limited Nominated Adviser
Ritchie Balmer 3494
Georgia Langoulant
Ben Tadd +44 (0) 203 7000 SVS Securities Broker
Tom Curran 093
Isabel de Salis +44 (0) 207 236 St Brides Partners Investor and Media
1177 Ltd Relations Adviser
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END
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