TIDMLEX
RNS Number : 7219L
Lexington Gold Limited
07 September 2023
7 September 2023
Lexington Gold Ltd
("Lexington Gold" or the "Company")
Completion of Acquisition of White Rivers Exploration (Pty)
Ltd,
Issue of Equity, Additional Subscription
and Total Voting Rights
Lexington Gold (AIM: LEX), the gold exploration and development
company, further to its announcement of 15 May 2023 and associated
circular to shareholders published on 2 June 2023, is pleased to
announce, inter alia, the completion of its acquisition of White
Rivers Exploration Proprietary Limited ("WRE"), an exploration and
development company with significant gold assets in South
Africa.
Accordingly, WRE has now exited its business rescue process with
no creditors other than the Lexington Gold group, and the Company,
through its wholly owned subsidiary Lexington Gold South Africa
Proprietary Limited, is now the sole shareholder of WRE, with a 26
per cent. interest in WRE to be issued to Lexington Gold's
Broad-Based Black Economic Empowerment ("BBBEE") partners in due
course which will reduce Lexington Gold's remaining interest in WRE
to 76 per cent. Capitalised terms in this announcement have the
same meanings as ascribed to them in the Company's announcement of
15 May 2023 unless indicated otherwise.
Highlights :
-- Lexington Gold is now the sole ultimate beneficial owner of
WRE with a 26 per cent. interest to be issued to Lexington Gold's
BBBEE partners in due course which will serve to reduce Lexington
Gold's resultant interest in WRE to 76 per cent. Lexington Gold is
currently finalising arrangements with a well-known BBBEE group in
South Africa and will announce further details when this transfer
of a 26 per cent. ownership interest has been completed.
-- In accordance with the terms of the acquisition, Lexington
Gold is issuing 36,129,032 new common shares (the "Initial
Consideration Shares") to settle GBP2.24 million, representing 35
per cent. of the maximum Lexington Gold Equity of up to GBP6.4
million to be paid as consideration under the WRE Acquisition and
Loan Agreements.
-- The Initial Consideration Shares are being issued at a price
of 6.20 pence per new common share (the "Issue Price") based on the
30-day VWAP to Tuesday, 5 September 2023 being 2 business days
prior to this announcement.
-- The balance of the consideration due under the WRE
Acquisition and Loan Agreements is to be settled by way of the
issue of new common shares in Lexington Gold at the Issue Price
based on certain milestones being achieved.
-- The Initial Consideration Shares are being issued as follows:
o 27,142,784 shares to Mark Creasy or his nominee; and
o 8,986,248 shares to Sunswell Holdings Pty Limited or its
nominees.
-- In addition, Mark Creasy has invested an amount of GBP100,000
by way of a subscription for 1,666,666 new common shares (the
"Creasy Subscription Shares") and 1,666,666 associated Fundraising
Warrants on the same commercial terms as the Company's approximate
GBP2.5 million equity fundraising announced on 10 July 2023.
-- Following the issue of the Initial Consideration Shares and
the Creasy Subscription Shares, Mr Creasy will own 33,867,065
common shares representing approximately 9.16 per cent. of the
Company's enlarged issued share capital.
Edward Nealon, Lexington Gold's Non-Executive Chairman,
commented :
" The Company is delighted to have completed this potentially
game changing acquisition, which received the overwhelming support
of our shareholders. We are also excited to be working with Mark
Creasy as we commence our initial work programmes seeking to
convert the internally estimated 37 million ounces of non-compliant
gold resource to an independent JORC code compliant estimate and
unlocking long term shareholder value from these promising
assets."
Deferred consideration milestones, extension of consent deadline
and WRE's licence interests
The balance of the Lexington Gold Equity payable, being up to
GBP4.16m, will fall due to be issued at the Issue Price upon the
achievement of the following milestones:
Lexington Gold Equity
-------------------------------
% No. of common Amount Milestone event
shares
-------------- ------------------------------------------------
45% 46,451,613 GBP2.88m Later of 30 November 2023 and the date
of renewal of four of the Prospecting
Rights split, 25%, 10%, 8% and 2% respectively
between the four Prospecting Rights concerned.
20% 20,645,161 GBP1.28m Receipt of Ministerial Consent.
Table 1 below shows the current status of WRE's Prospecting
licences and Prospecting Right applications.
Table 1 : WRE's Prospecting Licences and Prospecting Right
Applications
Project Tenement Area (hectares) Status Expiry date
----------------- -------------------- --------------- -------------------- -----------
FS 30/5/1/1/2/10350
Jelani Resources PR 956.76 Renewal Awarded (1)
FS 30/5/1/1/2/889
Kroonstad PR 13,845.77 Renewal under appeal (2)
FS 30/5/1/1/2/10520
Kroonstad PR 12,429.45 Renewal under appeal (2)
Kroonstad FS 30/5/1/1/2/10519 22,193.1 Executed 28-May-24
PR
Bothaville FS 30/5/1/1/2/10578 9,510 Executed 03-Mar-24
PR
Bothaville FS 30/5/1/1/2/10579 9,119.58 Executed 17-Mar-24
PR
Ventersburg FS 30/5/1/1/2/888 8,418.7 Executed 09-Dec-23
PR
Ventersburg FS 30/5/1/1/2/10489 8,965.9 Executed 09-Dec-23
PR
Ventersburg FS 30/5/1/1/2/10528 2,248.6 Executed 21-Aug-24
PR
NW 30/5/1/1/2/11335
Klerksdorp PR 1,816.9 Renewal under appeal (2)
----------------- -------------------- --------------- -------------------- -----------
Total 89,504.79
--------------------------------------- --------------- -------------------- -----------
(1) In South Africa renewals are for 3 years from the grant date of
the renewal.
(2) Renewals under appeal by WRE following an initial rejection due
to technical non-compliance of original renewals previously submitted
by WRE. New applications by Lexington Gold SA have also been submitted
over the same areas.
Further to Lexington Gold South Africa Proprietary Limited's
receipt of its interest in WRE, the procedural application for
Ministerial Consent in respect of the transaction will be made
shortly and the parties to the WRE Acquisition and Loan Agreements
have agreed that the deadline for obtaining such consent will be
extended to 31 August 2024 or such later date as may be further
agreed between the parties.
Lock-up and Orderly Market Arrangements
The Initial Consideration Shares and future issues of Lexington
Gold Equity are subject to a 12-month lock-up from the date of
issue and thereafter to a further 12-month orderly market
arrangement via Lexington Gold's broker.
Application to trading on AIM and Total Voting Rights
Application will be made to the London Stock Exchange for the
36,129,032 Initial Consideration Shares and the 1,666,666 Creasy
Subscription Shares (together, the " New Common Shares " ) to be
admitted to trading on AIM ("Admission"). It is expected that
Admission will become effective and that dealings in the New Common
Shares will commence at 8.00 a.m. on or around 14 September
2023.
On Admission, the number of common shares in issue outside
treasury and the total voting rights in the Company will be
369,894,673. This figure may be used by shareholders in the Company
as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a
change to their interest in, Lexington Gold under the notification
provisions incorporated in the Company's Bye-laws.
Full details on WRE and its asset portfolio are set out in the
Company's announcement of 15 May 2023 and associated circular of 2
June 2023.
Planned Work Programme
The Company's Directors believe that a multi-million ounce JORC
2012/SAMREC compliant Mineral Resource Estimate (" MRE ") can be
established in respect of WRE's asset portfolio and intends,
subject to additional funding as necessary, for the Company to:
-- Undertake detailed analysis and modelling of the existing
geological database and extensive drilling data set; and
-- Establish and implement the requisite work required to
convert the current non-JORC/non-SAMREC complaint Mineral Resources
into a code compliant MRE including verification and duplication
drilling, as appropriate, as well as the re-sampling and assaying
of historical drill core, where possible.
Furthermore, the Directors plan to unlock value from the Jelani
Resources JV by engaging and working closely with Harmony Gold with
the aim of progressing the project into future gold production.
Whilst WRE has internally estimated that it potentially has over
37 million ounces of non-code compliant gold resources across over
its projects, there can be no guarantee that the planned
exploration and technical work by the Company will be sufficient to
establish JORC (2012) compliant Mineral Resources.
For further information, please contact :
Lexington Gold Ltd www.lexingtongold.co.uk
Bernard Olivier (Chief Executive Officer) via Yellow Jersey
Edward Nealon (Chairman)
Mike Allardice (Group Company Secretary)
Strand Hanson Limited (Nominated Adviser) www.strandhanson.co.uk
Matthew Chandler / James Bellman / Abigail T: +44 207 409 3494
Wennington
WH Ireland Limited (Joint Broker) www.whirelandplc.com
Katy Mitchell T: +44 207 220 1666
Peterhouse Capital Limited (Joint Broker) www.peterhousecap.com
Duncan Vasey / Lucy Williams (Broking) T: +44 207 469 0930
Eran Zucker (Corporate Finance)
Yellow Jersey PR Limited (Financial Public www.yellowjerseypr.com
Relations) T: +44 7747 788 221
Charles Goodwin / Annabelle Wills / Soraya
Jackson
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended by virtue of the Market Abuse
(Amendment) (EU Exit) Regulations 2019.
Note to Editors :
Lexington Gold (AIM: LEX) is a gold exploration and development
company currently holding interests in four diverse gold projects,
covering a combined area of approximately 1,675 acres in North and
South Carolina, USA and in five gold projects covering
approximately 89,505 hectares in South Africa.
Further information is available on the Company's website:
www.lexingtongold.co.uk . Neither the contents of the Company's
website nor the contents of any website accessible from hyperlinks
on the Company's website (or any other website) is incorporated
into, or forms part of, this announcement.
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END
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