TIDMAST
RNS Number : 7424Y
Ascent Resources PLC
18 January 2022
18 January 2022
Ascent Resources plc
("Ascent" or the "Company")
ESG Strategy Update, Operational Update and GBP0.6m Placing
Ascent Resources Plc (LON: AST), the onshore Caribbean, Hispanic
American and European focused natural resources company, is pleased
to announce an update on its ESG Metals strategy, introducing Peru
as its primary target geography alongside the signature of a Joint
Venture agreement with Peru-based Blanco Safi SAC to collaborate on
the identification and subsequent development of precious and base
metal rich tailing and processing operations. The Company also
announces it has raised gross proceeds of GBP0.6m by way of an
issue of 18,181,818 new ordinary shares ('Placing Shares') at 3.3
pence per Placing Share ("Placing Price").
Highlights:
- Peru introduced as primary target geography for new ESG Metals strategy
- Joint Venture collaboration agreement with Blanco Safi SAC,
focused on originating ESG Precious Metals processing transactions
in Peru
- Slovenia non-recourse funding for Slovenia ECT and BIT damages claim expected to close shortly
- Placing of GBP0.6m at a Placing Price of 3.3p (nil discount to closing bid price)
ESG Metals Strategy Update and new Peruvian Joint Venture
In the Company's announcement of 11 February 2021 the Company
set out its ESG Metals strategy, which focuses on secondary mining
and recovery opportunities consistent with global Environmental,
Social and Governance ('ESG') principles. The company expects that
these opportunities will typically involve the reclassification,
through highly efficient recovery techniques, of surface stockpiled
mining waste (previously viewed as a liability for mining
companies) as a valuable asset for processing/reprocessing ahead of
commercial sale to off-takers and/or other third-party buyers.
Whilst the Company continues to evaluate a number of ESG Metal
transactions across Latin and Hispanic America, it has now
identified Peru as its primary target geography. Peru is widely
recognised as one of the largest and most diversified mineral
producers with some of the most extensive reserves in the world
with mining the most important sector in the Peruvian economy (some
10% of national GDP). Peru is currently the world's second largest
Copper and Silver producer and Latin America's largest Gold, Zinc,
Tin and Lead producer.
Peru's Long-Term Credit Rating is rated as BBB by most agencies,
which is amongst the strongest in the region. The country also
benefits from a long history of mining , a robust mining legal
framework and a significant pool of local expertise. Most recently,
the Country enacted a new law that extends the process of
formalisation of artisanal miners to 31 December 2024 alongside a
law that establishes a national policy for small-scale and
artisanal mining.
The Company sees significant opportunity for attractive entry
points in mining following the global pandemic which has triggered
international capital flight and significant capital constraints
for small-scale miners. The Company therefore initially expects to
focus its attention on small-scale operations (up to 350 tpd),
which the Company considers affordable, of an efficient operational
scale and which have multiple local tax and permitting
benefits.
To accelerate its entry into Peru, the Company has today signed
a Joint Venture agreement with Blanco Safi SAC ("Blanco"), based in
Lima. Blanco was founded in 2010 and is a Peruvian registered
professional investment manager which arranges and invests
discretionary fund and third party investment monies in a variety
of Peruvian businesses, where it currently manages over $150 M in
assets, including specifically a number of direct investments in
Peru's small-scale mining sector. The Blanco team has over 30 years
experience in the banking, finance, mine and resource sectors and
is present across offices in five regions throughout Peru,
consequently Blanco have access to a number of high quality
precious metal small-scale mineral processing operations throughout
Peru.
The Joint Venture will focus its attention initially on the
identification, screening and then subsequent negotiation and
potential acquisition of small-scale yet sustainable ESG metals
processing businesses in Peru, ideally adjacent to surface
stockpiled materials for processing. Blanco and the Company already
have a number of attractive prospective leads, as well as an active
network in the small and medium scale miner sector of Peru. Further
announcements will be made as appropriate.
Slovenia Dispute and Damages Claim
The Company anticipates that the completion of the conditions to
the binding damages-based agreement appointing Enyo Law LLP to
represent it in its dispute with the Republic of Slovenia, as
announced 8 November 2021, will take place shortly. Following
completion, the Company and its legal advisor will immediately
progress to compile and execute the required materials and
officially submit the arbitration claim pursuant to the protections
afforded to the Company and its operating subsidiary under the
Energy Charter Treaty and UK-Slovenia Bilateral Investment
Treaty.
Slovenia Operations
Whilst production from PG-10 and PG-11A continues to decline as
expected, the production is sold to local industrial buyers at
Central European Gas Hub daily spot prices. The Company and its JV
partners continue to discuss historic disputes, as previously
announced on 10 March and 11 October 2021, as well as the Company
challenging to renegotiate the monthly fixed cost fee requested by
a service provider (a related party to the Company's JV partner)
which were agreed in 2013 when the project contemplated initial
production levels which were significantly higher than the current
production levels (which have been stifled due to the inability to
mechanically re-stimulate the wells, and which forms a part of the
Company's dispute with the Republic of Slovenia).
The JV partner, who is the Concession License holder for the
Petisovci field, has filed the required materials, ahead of the
required deadline, to be granted an automatic 18-month concession
extension pursuant to Article 11 of the Act on Intervention
Measures implemented in Slovenia to assist the economy in
mitigating the consequences of the COVID-19 pandemic. Accordingly,
the concession expiry date will now be 28 November 2023. The
Company and its JV partner are continuing their workstreams to
progress the formal long-term extension of the concession which is
now expected to be finalised early next year.
New Funding & Issue of Equity
The Company is pleased to announce that it has raised gross
proceeds of GBP0.6m to fund its continued working capital
requirements and wider business development activities as it
continues to execute on its ESG Metals growth strategy.
The Company has today raised total gross new equity proceeds of
GBP0.6m by way of issue of 18,181,818 Placing Shares each with a
nominal value of 0.5 pence per share, to new and existing
shareholders, at a Placing Price of 3.3 pence, representing a nil
discount to the closing bid price. The subscribers for the new
equity shall each receive one new equity warrant for each Placing
Shares subscribed for, with each warrant being exercisable into one
new ordinary share at any time over the next two years by paying a
warrant exercise price of 5 pence per new warrant share. The
Company is also issuing 818,182 Fee Warrants in connection with
costs of the fund raising. The Company has also agreed to satisfy a
GBP10,000 Consultant Invoice with the issue of GBP10,000 worth of
new equity on the same terms as the Placing. The Company has
therefore agreed to issue a further 303,030 Consultancy Shares.
Align Research Limited, who are a substantial shareholder of
Ascent, have subscribed for GBP50,000 of the new equity issue and
this transaction constitutes a related party transaction pursuant
to the AIM Rules for Companies. The independent directors (being
all of the directors), having consulted with WH Ireland Limited,
consider the transaction to be fair and reasonable insofar as the
Company's shareholders are concerned.
Following the placing and pursuant to the terms of the 3,600,000
Warrants issued to RiverFort in December 2021, RiverFort have
agreed to waive the right to have the exercise price reset to the
Placing Price and the Company has instead agreed with RiverFort for
their December 2021 Warrants to be reset to the placing warrant
price of 5 pence per warrant share and in compensation for this
agreement the Company has agreed to issue RiverFort with 1,000,000
Warrants on the same term as the placing warrants.
Admission and Total Voting Rights
Application has been made to the London Stock Exchange for the
Placing Shares and Consultancy Shares to be admitted to trading on
AIM ("Admission") and it is expected that such Admission will occur
at 8.00 a.m. on 27 January 2022 . The Placing and Consultancy
Shares will be issued credited as fully paid and will rank in full
for all dividends and other distributions declared, made or paid
after the admission of the Placing and Consultancy Shares,
respectively and will otherwise be identical to and rank on
Admission pari passu in all respects with the existing Ordinary
Shares. The Placing and Consultancy Shares are not being made
available to the public and are not being offered or sold into any
jurisdiction where it would be unlawful to do so.
Following Admission of the Placing Shares and Consultancy
Shares, the Company will have 127,861,652 Ordinary Shares in issue,
none of which will be held in treasury. Accordingly, the total
number of voting rights in the Company will be 127,861,652 and
shareholders may use this figure 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 Guidance and Transparency
Rules.
Andrew Dennan, CEO, comments; "I am delighted to announce our
joint venture with Blanco Safi. Peru offers huge potential for our
ESG metals strategy and our relationship with our partner will
provide us with both market insight and local access to
transformative precious metals processing opportunities. In
addition, today's fundraising reinforces our financial platform as
we look to build the business materially this year."
Enquiries:
Ascent Resources plc Via Vigo Communications
Andrew Dennan
WH Ireland, Nominated Adviser & Broker
James Joyce / Sarah Mather 0207 220 1666
Novum Securities, Joint Broker
John Belliss 0207 399 9400
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END
UPDBRMBTMTIBTJT
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