TIDMALBA
RNS Number : 8923W
Alba Mineral Resources PLC
23 August 2022
Alba Mineral Resources plc
("Alba" or the "Company")
Alba Moves to 100% Ownership of Clogau Gold Mine
& Operational Update
Alba Mineral Resources plc (AIM: ALBA) is pleased to announce
that it has agreed to acquire the remaining 10% interest in Gold
Mines of Wales Limited ("GMOW") to take 100% ownership of the
Clogau Gold Project (the "Project"). Situated within the Dolgellau
Gold Belt in Wales, United Kingdom, the Project comprises the
Clogau Gold Mine (the "Mine"), where Alba has identified a number
of highly prospective gold targets through extensive exploratory
drilling in 2020-21, as well as a large number of gold targets and
former gold workings outside of the footprint of the Mine within a
total option area of 106.94 km (2) .
Alba is also pleased to provide an operational update which
covers the dewatering of the Llechfraith Shaft, one of the priority
targets within the Mine, as well as confirmation of the renewal of
the licence to the Limerick Base Metals Project.
Highlights
-- Alba to acquire remaining 10% of the Clogau Gold Project,
taking its total ownership of the Project to 100%.
-- Alba to buy back a 3% net smelter return royalty owned by the
vendor, reducing the royalty to 1%, as well as a residual GBP72,000
of loans held by the vendor.
-- Total consideration payable is GBP400,000
o Payable by the issue of 200 million Alba ordinary shares at a
price per share of 0.2p (the "Consideration Shares"), being a
premium of 25 per cent to the closing share price of 0.16p on 22
August 2022, plus 81,930,830 two-year share warrants with an
exercise price of 0.4p per share.
o Consideration Shares to be subject to a 12-month
lock-up/orderly marketing restriction.
-- Good progress made in further ecological surveying/data
generation in support of plan to dewater Llechfraith Shaft at
Clogau Gold Mine.
o Alba expects to submit updated ecological/technical report and
renewed permit applications in first half of September.
-- Alba's Limerick Base Metals Project licence renewed for two further years.
George Frangeskides, Alba's Executive Chairman, commented:
"It is a measure of our confidence in the long-term prospects
for the Clogau Gold Project that we have taken the opportunity to
move to 100% ownership of the Project. The 10% minority stake was
free carried to commercial production and the vendors also held a
4% net smelter return royalty over the Project, so acquiring both
the free carried interest as well as 75% of the royalty greatly
improves the economic viability of the Project for Alba. At the
same time, any concerns regarding the market impact of the issue of
Alba shares has been addressed by a lock-up of the consideration
shares for six months plus a further six-month orderly marketing
restriction. We have also negotiated to issue the consideration
shares at a significant premium to the last closing price, reducing
the dilutive effect of the transaction.
"On the matter of the dewatering of the Llechfraith Shaft, over
the past few months we have carried out supplementary ecological
surveying to generate further supporting data as well as adding to
our proposed mitigation scheme for the dewatering, all of which
elements are being incorporated within a revised ecological and
technical report for submission to NRW in the first half of
September. We remain confident that our application for dewatering
will ultimately be successful.
"Finally, we have renewed the licence to our Limerick Base
Metals Project in advance of the drilling which we intend to
undertake there this year, as soon as we have the permits in
hand."
Acquisition Terms
Alba has agreed to acquire the remaining 10% of the Clogau Gold
Project, taking its total ownership of the Project to 100%. The 10%
stake being acquired by Alba's 100%-owned subsidiary, Dragonfire
Mining Limited, was free carried to commercial production, meaning
that the owner, Victorian Gold Limited, did not have to contribute
to any of the exploration and development costs being incurred by
Alba.
At the same time, Alba has agreed to buy back a 3% net smelter
return royalty owned by the vendor, reducing its royalty to 1%, as
well as acquiring the residual GBP72,000 of loans held by the
vendor.
An estimated value of GBP214,000 was attributed to the 10%
interest in the Group accounts for the year ended 30 November 2021,
however this did not include any value for the future free carry
benefit, which the Directors consider to be material. The Group had
not attributed a value to the royalty in the Group accounts as at
30 November 2021.
The total consideration for these acquisitions is GBP400,000,
payable by the issue of 200 million Alba ordinary shares at a price
per share of 0.2p, being a premium of 25 per cent to the closing
share price of 0.16p on 22 August 2022, plus 81,930,830 share
warrants with an exercise price of 0.4p per share and an expiration
date of two years from the date of issue.
The Consideration Shares will be subject to restrictions on
disposals comprising a six-month lock-up (no disposals to be
undertaken without Alba's prior consent) and a further six-month
orderly marketing restriction (disposals only to be permitted in
consultation with Alba so as to maintain an orderly market in Alba
shares).
Alba has also agreed that if at any time in the five years
following Completion it should acquire the exclusive right to
explore for and/or exploit the Clogau Project licence area or any
part of it for copper, the vendor shall have the right to a 10%
working interest in those copper rights, to be enshrined in a
formal joint venture agreement. The prospectivity of the Dolgellau
Gold Belt for copper has been long known. In the first half of the
nineteenth century, the most important mines in the Mawddach Valley
included the Vigra and Old Clogau copper mines, both of which are
situated within the area covered by Alba's Clogau exploration
licence (which only covers gold and silver). It is believed that
the two decades from 1825 to 1845 covered the principal era of
copper working.
Completion of the acquisition is scheduled to occur in the next
few days and a further announcement will be made in due course.
Clogau Operational Update
In November 2021, the regulator, Natural Resources Wales
("NRW"), refused the Company's permit application to dewater the
Llechfraith Shaft, situated below the Llechfraith Adit level. The
dewatering exercise is a necessary first step in gaining access to
the Llechfraith Payshoot, one of Alba's primary in-mine targets. In
March 2022, Alba submitted additional data and analysis to the
regulator. Following the receipt of its feedback in respect of
those submissions, the Company and its professional consultants
have in the past few months implemented an extension to the
programme of ecological and species surveys in order to expand the
ecological dataset generated by the Company during the past 3-4
years.
The Company's ecological consultants are in the process of
updating the previously submitted ecological and technical report.
Once the survey data for August is incorporated, the Company
intends to submit the revised report and renewed dewatering
applications in the first half of September. The Company remains
confident that it will ultimately be successful in its bid to
dewater the shaft.
Limerick Update
The mineral exploration licence for the Company's 100% owned
Limerick Base Metals Project, PL 3824, has been renewed until 26
May 2024. The Project is situated in the world-class Irish Zinc Ore
Field, the location of a number of high-grade zinc-lead
deposits.
The expenditure conditions attaching to the renewal of PL 3824
require the Company to incur expenditure of EUR38,087 by 31
December 2022 with a further EUR62,500 to be spent by 26 May
2024.
As previously announced, the Company has identified three
principal exploration target areas for follow-up drilling at
Limerick. Accordingly, applications for the necessary drill permits
have been submitted with the aim of commencing drilling before the
end of 2022.
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
are responsible for the release of this announcement.
**S**
For further information, please visit
www.albamineralresources.com or contact:
Alba Mineral Resources plc
George Frangeskides, Executive Chairman +44 20 3950 0725
SPARK Advisory Partners Limited (Nomad)
Andrew Emmott +44 20 3368 3555
OvalX (Broker)
Thomas Smith +44 20 7392 1494
St Brides Partners (Financial PR)
Isabel de Salis / Catherine Leftley alba@stbridespartners.co.uk
Alba's Projects and Investments
Mining Projects Operated Location Ownership
by Alba
Clogau (gold) Wales 100%
----------- ----------
Dolgellau Gold Exploration
(gold) Wales 100%
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Gwynfynydd (gold) Wales 100%
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Limerick (zinc-lead) Ireland 100%
----------- ----------
Investments Held by Alba Location Ownership
----------- ----------
GreenRoc Mining Plc (mining) Greenland 54%
----------- ----------
Horse Hill (oil) England 11.765%
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END
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