TIDMALBA
RNS Number : 3066B
Alba Mineral Resources PLC
06 October 2015
6 October 2015
Alba Mineral Resources plc
("Alba" or the "Company")
Alba secures option to earn into graphite project in southern
Greenland
Alba Mineral Resources plc (AIM:ALBA) announces that it has
today signed an agreement with Artemis Resources Ltd ("Artemis"),
an Australian Securities Exchange quoted company (ASX:ARV), which
grants to Alba an option to earn up to 70 per cent. of a graphite
project (the "Project") near Nanortalik in southern Greenland
("Agreement"). The licence area comprises the historic Amitsoq
graphite mine and is prospective not only for graphite but also for
gold, copper, nickel and platinum group elements (PGEs).
HIGHLIGHTS
-- Option to earn up to a 70 per cent. interest in a graphite
project in southern Greenland which is also prospective for gold,
nickel, copper and platinum group metals (PGEs)
-- Graphite was previously mined at Amitsoq at high grades at an average 20 per cent graphite
-- The Project has had no modern exploration for graphite and
the directors of Alba believe that there are good prospects for
significant exploration upside
Earn-in Terms
The principal earn-in terms with Artemis pursuant to the
Agreement are as follows:
(a) In consideration for securing an option to earn into the
Project, Alba has agreed to pay Artemis GBP50,000 in cash
consideration and to fund a minimum of DKK 529,954 (approximately
GBP52,000) of exploration costs on the Project by 31 December 2015.
Alba intends to conduct a remote sensing study as part of this
work.
(b) The Company may elect to earn a 25 per cent. interest in the
Project by 31 March 2016 through the issue of GBP50,000 of Alba
shares to Artemis (calculated at a 20 trading day volume-weighted
average price ("VWAP")) and by funding a minimum of a further DKK
1,476,740 (approximately GBP146,000) of exploration costs on the
Project by 31 December 2016.
(c) The Company may elect to earn an additional 24 per cent
interest in the Project by 31 March 2017 through the issue of a
further GBP50,000 of Alba shares to Artemis (calculated at a 20
trading day VWAP) and by funding a minimum of a further DKK
1,476,740 (approximately GBP146,000) of exploration costs on the
Project by 31 December 2016., which would increase Alba's interest
in the Project to 49 per cent.
(d) Thereafter, Alba shall have the right to increase its
interest in the Project to 70 per cent by meeting the 2017/2018
commitment of DKK 4,430,320 (approximately GBP438,000). This shall
be subject to Greenlandic Governmental approvals being obtained for
Alba to acquire a majority interest in the Project, and the renewal
of the existing licence (which expires on 31 December 2017) for a
further five year period commencing 1 January 2018. The parties
shall co-operate to ensure the satisfaction of these
conditions.
(e) During the earn in period, Alba shall propose programmes and
budgets to a joint venture board ("JV Board"), which will comprise
representatives from both Artemis and Alba). Approval of these
programmes and budgets by the JV Board shall not be unreasonably
withheld or delayed. Whil Artemis retains a majority interest in
the Project, it shall be entitled to appoint a majority of the JV
Board. Thereafter, Alba shall retain a majority of the JV
Board.
(f) Once Alba's holding reaches 70 per cent, Artemis shall have
the right to joint fund further expenditure pro rata to maintain
its residual 20 per cent. interest in the Project.
(g) Once Alba's holding reaches 70 per cent, Alba will take over
Artemis's rights and obligations under a put and call option in
respect of the partially free carried 10 per cent. interest
currently held by a minority shareholder in the Project ("minority
interest") (save that if Artemis elects to fund its residual 20 per
cent interest, it shall fund its pro rata proportion of the
minority interest). The put and call option over the minority
interest may be exercised by either party following completion of a
bankable feasibility study for an agreed price or, failing
agreement, a price determined by independent valuation.
(h) Following Alba acquiring a majority interest in the Project,
and upon either a bankable feasibility study being completed which
confirms the economic viability of the Project or upon the
commencement of commercial production, Alba shall issue a further
GBP150,000 of Alba shares to Artemis (calculated at a 20 trading
day VWAP).
(i) While Alba is earning into the Project, it will be the manager of the Project.
(j) Alba shall be entitled to accelerate any of the earn-in stages, should it wish to do so.
Aside from the known graphite deposit, there is also the
possibility of additional resource credits being added to the
Project, including gold, platinum group elements (PGEs) and nickel.
As Alba will earn an interest in the Project vehicle, it will
thereby earn an interest in all commodities not just in the
graphite.
George Frangeskides, who is Executive Chairman of Alba, is also
non-executive Chairman of Artemis.
Historic Exploration and Production
Greenland has a long history of graphite mining. The Amitsoq
graphite mine was an open-cut operation between 1914 and 1924 and
produced circa 5,500 tonnes at an average grade of 20 per cent
graphite. The graphite was sent to Copenhagen for processing. Other
than a local government funded mineral inventory and potential
study in 1986, conducted by Danish company A/S Nielson, no other
graphite exploration or development has taken place in the licence
area since production ceased. Metallurgical testwork on behalf of
A/S Nielson reported some flakes reaching a maximum of 15 mm
("super jumbo" flake size), with the average flake size being
0.2-0.3 mm (+60 mesh, or "jumbo" flake size).
Proposed Future Work
During the option period, Alba intends to undertake further
historical data acquisition and to carry out field work (ground
truthing, mapping and sampling), weather permitting. A remote
sensing study is expected to be commissioned to complete this first
phase of work. Should the Company then decide to exercise the
option to earn into the Project, Alba intends to bring modern
exploration concepts and an updated geological model to the Project
in an effort to fast track towards the initiation of a bankable
feasibility study. This would be achieved by employing
high-resolution modern airborne electromagnetic (EM) and magnetic
surveys to identify graphitic horizons. Follow-up work would
consist of diamond drilling to provide a resource estimation.
Maps and photographs of the Project area will be available
shortly on the Alba website at www.albamineralresources.com.
Location
The mine is located on the coast of an island located 15 km
north of Nanortalik town and heliport. Access is by helicopter or
boat. The Nalunaq gold mine, operated until recently by Angel
Mining PLC, is located 18 km to the north-east of the former mine.
Licence 2013/06, which encompasses the former Amitsoq graphite
mine, covers a land area of 146 km(2) and encompasses the whole of
Amitsoq island and the mainland to the east of Nanortalik.
About Graphite
The current industrial uses of graphite include steel,
refractories, brake lining and other automotive products. The
expected largest growth area is associated with lithium ion
batteries, currently the preferred battery source for electric
vehicles. According to Industrial Minerals, graphite is the
second-largest input material required in lithium ion batteries by
volume. Other growth areas for graphite include fuel cells,
aluminium anodes, pebble-bed nuclear reactors, and graphene.
The European Union and the USA have named graphite a mineral in
critical supply.
Mike Nott, Alba's CEO, commented:
"The option that Alba has secured to earn into the Project gives
the Company the opportunity to explore in the very southern part of
Greenland and on a similar latitude to the Shetland Islands, in a
previously mined area where there is significant historic
geological information.
"Alba is excited to enter into this sector and to offer AIM
shareholders and investors access to a graphite project. Future
demand for graphite looks firm due to its long-standing industrial
uses, including its role as a key component in lithium-ion
batteries."
For further information please contact:
Alba Mineral Resources
plc
Michael Nott, CEO +44 20 3696 4616
Cairn Financial Advisers
LLP
Avi Robinson / James Caithie +44 20 7148 7900
Dowgate Capital Stockbrokers
Limited
Jason Robertson / Neil
Badger +44 1293 517744
Additional Information
Alba holds interests in Mauritania (uranium: JV with FOSSE
Investments Limited) and Ireland (base metals) and a 10 per cent
interest (which may increase to a 15-20 per cent interest - see our
announcement dated 24 September 2015) in Horse Hill Developments
Limited, the company which has a 65 per cent participating interest
and operatorship of the Horse Hill oil and gas project (Licences
PEDL 137 and PEDL 246) ("Horse Hill").
The projects are at different stages of development. The
Mauritania uranium project comprises early phase exploration
targets, whereas drilling has been undertaken on the Irish base
metals project.
Alba continues actively to review and discuss other project
opportunities which have value-enhancing potential for the Company
whether by acquisition, farm in or joint venture in a range of
jurisdictions around the world.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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