TIDMMAFL
RNS Number : 6231R
Mineral & Financial Invest. Limited
01 July 2020
MINERAL AND FINANCIAL INVESTMENTS LIMITED
Amended terms to Redcorp Earn-In Agreement with Ascendant
Resources
HIGHLIGHTS:
-- Amendment to one payment of Redcorp Earn-In Option Agreement with Ascendant
-- M&FI received US$100,000 on June 22, 2020 and
additionally costs of US$62,000 have been reimbursed
-- M&FI has received the equivalent of 32.4% of the expected payment in June 2020
-- Amendments result in US$600,000 of monthly cash payments in
lieu of a US$500,000 single payment scheduled for June 22, 2020
-- In the event of a financing, or change of control, the amount owed will be paid on closing
George Town, Cayman Islands - 1 July 2020 - Mineral and
Financial Investments Limited (LSE-AIM: MAFL) ("M&FI" "MAFL" or
the "Company") is pleased to provide an update on the Earn-In
Option Agreement with Ascendant Resources Inc. The Directors of
M&FI are pleased to announce what it believes is a mutually
satisfactory resolution to the financial issues which its partner
have encountered in 2020. This an example as to how M&FI can
work constructively with its investee companies while securing
improved returns for MAFL shareholders. M&FI, through its
wholly owned Swiss subsidiary TH Crestgate GmbH, currently owns 75%
of Redcorp Empreedimentos Mineiros Lda, whose main asset is the
23Mt Lagoa Salgada Polymetallic project in Portugal. Ascendant must
fulfil its work obligations, totalling US$9.0m and pay M&FI
US$2.5M over the next 2 years to reach 50% ownership. To reach 80%
ownership of Redcorp, Ascendant must complete a Feasibility and pay
M&FI an additional US$2.5m.
Amendment
M&FI has agreed with Ascendant Resources Inc, in the face of
the extraordinary circumstances in part created by the global
shut-down caused by the Coronavirus pandemic, an amendment to the
payment schedule set out in the Earn-In Option Agreement, ("Option
Agreement").
In accordance with the terms of the Amendment to the Option
Agreement, the US$500,000 payment due to be paid by Ascendant on
June 22, 2020 will instead be satisfied by the six monthly payments
of US$100,000 (a total of US$600,000), and an additional security
pledge, in accordance with the following schedule:
June 22, 2020 US$100,000
July 22, 2020 US$100,000
-----------
August 22, 2020 US$100,000
-----------
September 22, US$100,000
2020
-----------
October 22, 2020 US$100,000
-----------
November 22, 2020 US$100,000
-----------
The final payments due to MAFL under the Option Agreement at
intervals of 36 months and 48 months after completion, remain
unchanged. In the event of a default the option would lapse, and
ownership would be frozen at the then level of ownership,
operatorship would remain at the Redcorp level and Ascendant would
be subject to dilution by further investment into Redcorp.
Additionally, in the event that Ascendant succeeds in raising
third party financing in excess of US$1.0 million during the six
month period beginning June 22, 2020, or if there is a change of
control of Ascendant, they will have to pre-pay the remaining
amount to be paid of the amended Option payment.
Original Agreement
On 2 August 2018, the Company announced the details of an Option
Earn-in agreement, the details are as follows:
1) In the first part of the transaction Ascendant acquired an
initial effective 25% interest for an upfront payment of US$2.45
million composed of US$800,000 in cash (US$400,000 on closing of
the transaction and US$400,000 on July 15, 2018) and US$1.65
million in Ascendant shares.
2) The second part of the Agreement is an Earn-in Option which
has a minimum total value, if fully exercised, of US$15.0 million.
Earn-in transaction terms are as follows:
a) Ascendant has the right to earn a further effective 25%
interest via staged payments and funding obligations as outlined
below:
(1) Investing a minimum of US$9.0 million directly in the
operating company, Redcorp within 48 months of the closing date, to
fund exploration drilling, metallurgical test work, economic
studies and other customary activities for exploration and
development, and
(2) Making payments totaling US$3.5 million to TH Crestgate
(M&FI) according to the following schedule or earlier:
I. 6 months after the closing date: US$0.25 million
II. 12 months after the closing date: US$0.25 million
III. 18 months after the closing date: US$0.5 million
IV. 24 months after the closing date: US$0.5 million (this payment has been amended)
V. 36 months after the closing date: US$1.0 million
VI. 48 months after the closing date: US$1.0 million
b) Ascendant then has the option to earn an additional 30%,
totaling an 80% interest in Redcorp, the operating subsidiary, by
completing a Feasibility study within 54 months (i.e. 30 months
from June 22, 2020) and making a further payment of US$2.5 million
to TH Crestgate (M&FI).
FOR MORE INFORMATION:
Jacques Vaillancourt, Mineral & Financial Investments Ltd. +44 780 226 8247
Katy Mitchell and Matt Chan, WH Ireland Limited +44 207 220 1666
Jon Belliss, Beaufort Securities Limited +44 207 382 8300
ABOUT MINERAL AND FINANCIAL INVESTMENTS LIMITED:
Mineral and Financial Investments Limited is a Cayman Island
based investment company quoted on AIM, a market of the London
Stock Exchange. M&FI has 20 investments in the natural resource
sector with the majority in the metals and minerals sector and has
about 38% of its investment portfolio in precious metal
investments. M&FI's Net Asset Value per share (NAVPS)is 15.11p,
as of March 31, 2020 M&FI's NAVPS has risen at a Compound
Annual Growth Rate (CAGR) of 31.2% since December 31, 2016.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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