BMR Group PLC Acquisition of Star Zinc (7917P)
05 September 2017 - 4:00PM
UK Regulatory
TIDMBMR
RNS Number : 7917P
BMR Group PLC
05 September 2017
BMR Group PLC
("BMR", the "Group" or the "Company")
Acquisition of Star Zinc through a Joint Venture Agreement with
Galileo Resources PLC
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
Pursuant to the previous announcement on 31 August 2017
regarding the signing of a term sheet to enter in to a joint
venture agreement with Galileo Resources PLC ("Galileo") concerning
Star Zinc, the Board is delighted to announce that on 4 September
2017, BMR, on behalf of its newly incorporated wholly owned
subsidiary ("Enviro Zambia"), entered into an agreement with
Bushbuck Resources Limited ("Bushbuck") to complete the acquisition
of Star Zinc for a cash consideration of $1,000,000, of which a
$130,000 payment has already been paid, resulting in a remaining
consideration of $870,000.
The first tranche of the remaining consideration of $400,000,
together with VAT of $160,000, was paid on 4 September 2017, with
the balance, to be satisfied in cash, as to $300,000 by no later
than 28 November 2017 and as to $170,000 by 28 February 2018. BMR
has also already paid the property transfer tax amounting to 10% of
the aggregate consideration.
As security for the payment of the whole of the remaining
consideration, Bushbuck has been granted a charge over (i) the
removable assets of BMR's wholly-owned subsidiary, Enviro
Processing Limited, which owns all of the assets at Kabwe, BMR's
principal operations, bar the property, and (ii) $570,000 of new
ordinary shares of BMR at a discount of 25% to the prevailing
market price.
On 31 August 2017 the Company also entered into a binding term
sheet concerning a joint venture, the terms of which were disclosed
in the announcement on the same date, with Galileo, a UK focused
resource company quoted on AIM, whereby Galileo advanced to the
Company $591,600 (at an interest rate of 12% per annum) primarily
to enable the Group to finance the initial consideration payable to
Bushbuck. Upon completion of the acquisition of Star Zinc, Galileo
subscribed for a 51% equity stake in Enviro Zambia which was
satisfied by the cancellation of the aforementioned loan of
$591,600.
Galileo will undertake an 18 month work programme at a cost of
$250,000 (in respect of which it has placed $100,000 in escrow),
using reasonable endeavours to complete a preliminary economic
assessment of Star Zinc ("PEA"), following which further new shares
in Enviro Zambia will be issued to Galileo to increase its
aggregate equity interest therein to 85%. BMR shall have the right
to reduce the interest of Galileo from 85% to 75% on payment of
$150,000 to Galileo, through the repayment of the $100,000 held in
escrow plus a $50,000 arrangement fee within 90 days of the date of
completion of the joint venture agreement, (failing which the
US$100,000 is released to the Company);
Other highlights of the joint venture include:
- from completion of the 18 month work programme until
completion of a feasibility study, the interest of BMR in Enviro
Zambia shall be free carried; and
- BMR and Enviro Zambia shall enter into an off take agreement
for processing of ore from Star Zinc at Kabwe, such terms to be
determined as soon as reasonably practicable following completion
of the PEA to reflect capacity production of Zinc from Star Zinc,
and relevant grade and resource life of the Star Zinc project set
out in PEA, which BMR intends to process in conjunction with its
Leach Plant Residues;
Alex Borrelli, Chairman of BMR, commented: "We are delighted to
have effected the acquisition of Star Zinc which is expected to
secure access for us to Star Zinc's high grade resources which have
the potential to enhance the grade of the Zinc products from our
Kabwe processing plant. It has taken a long time to reach this
point, and we thank Bushbuck for their patience while funding for
the project was secured. Galileo is a strong partner for mining the
resource at Star Zinc and with them we look forward to taking the
project forward and updating the Market on our work in due
course."
For further information:
BMR Group PLC 020 7734 7282
Alex Borrelli, CEO and Chairman
WH Ireland Limited 020 7220 1666
NOMAD and Joint Broker
Chris Fielding/ Alex Bond
Peterhouse Corporate Finance 020 7469 0930
Joint Broker
Lucy Williams/ Duncan Vasey/ Heena Karani
This information is provided by RNS
The company news service from the London Stock Exchange
END
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