TIDMCAF
RNS Number : 6514V
China Africa Resources PLC
01 February 2017
China Africa Resources PLC
1 February 2017
China Africa Resources plc
("China Africa" or "the Company" or "CAF")
Investment Agreement Botswana
China Africa Resources plc (LON:CAF) the London Stock Exchange
AIM listed natural resource exploration and development company is
pleased to announce it has signed an Investment Agreement with
Global Exploration Technologies (Pty) Ltd ("GET"), a private
Australian company, to acquire a 48.88% shareholding in GET.
GET has five exploration licences in the Kalahari Copper Belt in
Botswana held through three Botswanan subsidiary companies. Further
details in respect of GET and specifically its Botswanan interests
are provided below.
Shareholders should note that this transaction does not
constitute a reverse takeover under the AIM Rules and consequently
China Africa must continue to seek to complete a reverse takeover
or face suspension from trading on AIM.
In addition to this investment, the Board of CAF is actively
advancing discussions in respect of various other investment and
acquisition opportunities. This includes both project and corporate
transactions and is principally although not entirely focused on
Uranium, Lithium, Cobalt, Copper and Niobium commodities.
Shareholders should note that there is no certainty that any of
these discussions will lead to a successful conclusion however the
Board of CAF hopes to be able to provide further updates to market
in the near-term subject to the successful finalisation of
commercial negotiations.
Paul Johnson, Chief Executive Officer of China Africa Resources
plc commented "I am pleased to confirm to the market this
investment in GET, a Company with interests in the Kalahari Copper
Belt in Botswana.
The China Africa team have been highly proactive in the search
for new potentially high value opportunities across the energy
metals and minerals sector.
This acquisition represents a first step forward for the
Company. Investors may be aware of the significant copper discovery
recently made in the Kalahari Copper Belt by MOD Resources and we
are delighted to be investing in the same region in Botswana
through GET.
Clearly exploration projects of this nature carry material
exploration risk, but this is countered by the exceptional
operating environment that Botswana provides for diligent and
professional operating companies.
GET has developed and is implementing a planned exploration
programme and through our investment we are supporting that work.
The principle objective for GET is to identify further economically
viable copper deposits in the region."
Investment Agreement - Key Financial Terms
CAF to is to acquire a 48.88% holding in GET with consideration
to comprise cash and CAF equity as follows:
A$75,000 payable in cash (GBP44,910) to GET to be applied to
clear outstanding shareholder loans to GET;
A$150,000 payable in ordinary shares of 1p each in the Company
("Ordinary Shares") at 3p per share being the mid-market price of
CAF stock on the date that the investment agreement was prepared.
The sterling equivalent at the date of agreement is GBP89,888
equating to 2,996,266 CAF shares or 3.8% of CAF issued share
capital post transaction.
The investment agreement provides for certain amendments to the
Articles of Association of GET to ensure CAF's proportionate
holding in GET is protected, notably the application of 75%
shareholder approval for any issue of new equity or alteration to
the capital structure of GET.
In addition, as part of the investment agreement CAF has
committed to solely fund licencing and exploration costs in respect
of the five licences for the first 12 months following signature of
the investment agreement, including a guarantee to fund at least
the minimum expenditure commitments on the licences during this 12
month period (the latter amounting to approximately GBP100,000 in
total for the 12 month period in question). Expenditure budgets
must be agreed by CAF prior to incurrence.
Further Summary Information
Global Exploration Technologies Pty Limited ("GET")
GET is an Australian private limited company which holds 100% of
three Botswanan subsidiaries which in turn hold 100% of five
exploration licences in good standing in the Kalahari Copper Belt,
Botswana.
Botswanan Interests of GET
The GET Copper Project (the "Project") consists a portfolio of
five exploration licences totalling 3,554.7 sq. km of prospective
ground on the Kalahari Copper Belt ("KCB") in north-west Botswana.
The KCB is a relatively underexplored emerging, sediment hosted
stratiform, copper province with total reported Mineral Resources
of over 5.5Mt contained copper metal and 170Moz silver within a
140km radius of the GET Project.
Geologically, the KCB is a constituent of a northeast-trending,
tectonically inverted Mesoproterozoic and Neoproterozoic rift
basin, which extends from central Namibia to northern Botswana. The
KCB rock units extend over 1,000km in strike and are known to host
at least 19 copper deposits across Namibia and Botswana. An
extensive covering of Kalahari sands over much of the KCB has meant
that there has been limited historical exploration over the belt.
Airborne geophysical surveys combined with soil geochemical
surveying, ground based geophysics and drilling are typically
required to investigate the copper potential below the sand
cover.
Through this investment the GET Project will become the third
active player on the Botswanan KCM. Cupric Canyon Capital have
completed a Feasibility Study and are currently looking to develop
their Zone 5 Deposit (100.3Mt@1.95%Cu & 20g/t Ag). Whilst, in
December 2016, MOD Resources Limited announced the results of a
Scoping Study on their T3 Deposit for which a maiden Mineral
Resource Estimate (28.36Mt @ 1.24%Cu and 15.7g/t Ag) was released
in September 2016. The T3 Deposit was only discovered in March
2016.
The GET Project is made up of two groups of licences; Ghanzi
West Group consisting three contiguous licences covering 2,724.2
sq. km at the western end of the KCB; and the Senyetse Group
consisting two adjacent licences totalling 830.5 sq. km, located on
the central KCB, 28km south of the MOD Resources T3 Deposit.
The Ghanzi West Group currently contains two soil anomalies,
identified by soil geochemical sampling, each approximately 10km in
strike length. Interpretation of geophysics data indicates over
200km of favourable geological contact within these licences. The
previous licence holders drilled four shallow reverse circulation
("RC") drill holes on a small section of Soil Anomaly 1. Two of the
four holes intersected zones of pyrite (<150m) but no further
work was undertaken at the time and most of the soil anomalies
remain untested. Elsewhere on the KBC pyrite occurrences have been
shown to be associated with lateral and vertical copper mineral
zonation.
The Senyetse Group licences also contain surface copper
anomalies identified by previous soil sampling work. Independent
structural analysis of geophysics data has shown that the copper
anomalies are coincident with an interpreted fold axis and a cross
cutting structure. As at Ghanzi West these licences also contain
many tens of kilometres of favourable geological contact.
GET's initial Project work programme will consist historical
exploration data gathering and analysis followed by geological
mapping and confirmatory and infill soil sampling programmes over
the historically explored ground in both project areas. GET will
also conduct a detailed review of geophysical data, including
Induced Polarisation (IP) survey and geomagnetic data, to refine
exploration targets and identify hitherto untested targets across
the licences. Follow-up drilling will seek to test for copper
zonation at Anomaly 1, whilst shallow drilling programmes will be
planned for the other copper soil anomalies and promising
structural targets.
Investors wishing to see a graphic detailing the physical
location of the licences and the proximity to other projects and
landholdings should follow the link below:
http://www.rns-pdf.londonstockexchange.com/rns/6514V_-2017-1-31.pdf
Investors wishing to see the location of the exploration region
within Botswana and Africa should click the following link:
http://www.rns-pdf.londonstockexchange.com/rns/6514V_1-2017-1-31.pdf
Total Voting Rights
As a result of this investment, 2,996,266 new Ordinary Shares
are expected to be admitted to trading on or around 10 February
2017 ("Admission"). Following Admission the total issued share
capital of the Company will consist of 78,835,862 Ordinary Shares.
As such the total number of voting rights in the Company will be
78,835,862 Ordinary Shares. This number may be used by shareholders
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, the Company under the FCA's Disclosure
and Transparency Rules.
AIM Rule 15 Cash Shell Status
On 14(th) December shareholders in CAF approved at General
Meeting the distribution of shares in the Company's 100% owned
China Africa Namibia Pty Limited to then shareholders. This
distribution was completed as announced to market on 11 January
2017. As a result of the distribution China Africa Resources became
a Rule 15 Cash Shell with six months to complete a reverse takeover
or face suspension from trading on AIM.
Shareholders should note that this transaction, being an
investment to secure a 49% holding in GET, does not represent a
reverse takeover under the AIM rules. Consequently, China Africa
continues to be required to complete a reverse takeover within six
month of 11 January 2017 or face suspension from trading on
AIM.
Competent Person
The technical information contained in this disclosure has been
read and approved by Mr Nick O'Reilly (MSc, DIC, MAusIMM, FGS), a
Director of China Africa, who is a qualified geologist who meets
the criteria of a qualified person under the AIM Rules - Note for
Mining and Oil & Gas Companies.
For further information on the Company, visit:
http://www.chinaafricares.com/.
China Africa Resources PLC T: +44 (0) 7766 465617
Paul Johnson, Chief Executive
Officer
SPARK Advisory Partners - T: +44 (0) 2033 683
Nominated Adviser 555
Sean Wyndham-Quin
Neil Baldwin www.sparkadvisorypartners.com
SI Capital Limited - Joint T: +44 (0) 1483 413
Broker 500
Nick Emerson
Andy Thacker
Beaufort Securities Limited T: +44 (0) 207 382
- Joint Broker 8300
Elliot Hance
China Africa Resources Investing Policy:
Under the AIM Rules for Companies, CAF is required to complete
an acquisition or acquisitions that constitutes a reverse takeover
within six months of becoming an AIM Rule 15 Cash Shell or it will
face suspension from trading on AIM. The Directors intend to apply
the investing policy set out below in seeking an acquisition or
acquisitions that will constitute a reverse takeover but there can
be no certainty that they will be able to do this in the specified
time frame.
The Board proposes to invest in and/or acquire companies and/or
projects within the natural resource sector but with a particular
interest in opportunities in the energy metal and minerals sector
and with a key focus on opportunities in respect of uranium,
lithium, cobalt, copper and coal. Each commodity has a specific
relevance to the Energy space in terms of power generation, storage
and distribution.
The Board considers that, as evidenced by the financial support
provided by the new investors for the proposals outlined, there is
a strong demand for energy metal and mineral opportunities on
London's AIM.
The Board will not be limited to a specific geographic focus. In
selecting investment opportunities, the Board will focus on
businesses, assets and/or projects that are available at attractive
valuations and hold opportunities to unlock embedded value or
where, through efficient and focused work, there is the prospect of
adding considerable value to each project, for the benefit of
shareholders.
Where appropriate, the Board may seek to invest in businesses
where it may influence the business at a board level, add their
expertise to the management of the business, and utilise their
industry relationships and access to finance.
The Company's interests in a proposed investment and/or
acquisition may range from a minority position to full ownership
and may comprise one investment or multiple investments. The
proposed investments may be in quoted or unquoted companies; be
made by direct acquisitions or farm-ins; and may be in companies,
partnerships, earn-in joint ventures, debt or other loan
structures, joint ventures or direct or indirect interests in
assets or projects. The new Board may focus on investments where
intrinsic value can be achieved from the restructuring of
investments or merger of complementary businesses.
The Board expects that investments will typically be held for
the medium to long term, although short term disposal of assets
cannot be ruled out if there is an opportunity to generate an
attractive return for Shareholders. The Board will place no minimum
or maximum limit on the length of time that any investment may be
held.
The Board will conduct initial due diligence appraisals of
potential businesses or projects and, where they believe further
investigation is warranted, intend to appoint appropriately
qualified persons to assist.
The Board believes it has a broad range of contacts through
which it is likely to identify various opportunities which may
prove suitable. The Board believes its expertise will enable it to
determine quickly which opportunities could be viable and so
progress quickly to formal due diligence.
The Company will not have a separate investment manager. The
Board proposes to carry out a comprehensive and thorough project
review process in which all material aspects of a potential project
or business will be subject to rigorous due diligence, as
appropriate. Due to the nature of the sector in which the Company
is focused the Company expects a focus on capital returns over the
medium to long term. Should opportunities arise for an early cash
return to investors, this will be considered by the Board.
It is emphasised that there is no certainty that the Company
will be able to secure an acquisition or Reverse Takeover as set
out above.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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