TIDMBZT
RNS Number : 6146G
Bezant Resources PLC
31 May 2017
31 May 2017
Bezant Resources Plc
("Bezant" or the "Company")
Agreement for Acquisition, Commissioning & Operation of
Initial Gold-Platinum Production Plant in Choco, Colombia
Bezant (AIM: BZT), the AIM quoted mineral exploration and
development company, announces that yesterday, 30 May 2017 it
signed an agreement with Exumax S.A.S. ("Exumax") (the "Mining
Services Agreement"),encompassing the acquisition, commissioning
and operation of the Company's first gold-platinum production plant
with commissioning targeted to occur during Q2/Q3 2017. In
connection with the Mining Services Agreement, the Company has also
signed an agreement to acquire a Panamanian special purpose
vehicle, Kellstown Investments Corp ("Kellstown") (the "Acquisition
Agreement"). Kellstown via its wholly owned subsidiary owns both a
processing plant and mobile test plant (the "Mining and Exploration
Equipment") and certain other mining equipment (the "Equipment")
which will be utilised in mining operations on the Company's
FKJ-083 mining licence in Colombia. Kellstown also holds, inter
alia, intellectual property rights in relation to the Mining and
Exploration Equipment, and certain proprietary geological
information and other data and intellectual property rights for use
by Exumax in performing its services under the Mining Services
Agreement.
Exumax is a private Colombian based alluvial mining company
which, since September 2016, has been progressing the Company's
exploration and development programme on its near surface platinum
and gold assets located in the Choco Region of Colombia (the "Choco
Alluvial Gold-Platinum Project").
Highlights:
-- Under the terms of the agreements signed, Bezant has acquired
a fully-equipped, purpose built modern alluvial processing plant
currently situated in Colombia and ready for mobilisation to
site:
o Mercury-free alluvial processing plant capable of processing
up to 100m(3) of material per hour (approximately 150 tonnes per
hour)
o First modern plant of its kind to be utilised on the
deposit
-- In addition, engineering blue prints and all technical plans,
schematics and data acquired, to enable Bezant to replicate and
manufacture similar processing plants in Colombia
-- Experienced Colombian mining contractors, Exumax, will
shortly commence mining operations on the Company's FKJ-083 licence
area
Key objectives include:
- Commencement of earthworks to allow mining to commence
- Plant commissioning targeted for Q2/Q3 2017
- Recovery of first platinum and gold within two months of commencement of mining operations
-- Exumax, established in 2010, is focused on the alluvial mining industry:
o Senior management comprises both Australian and Colombian
mining professionals
o Over six years' experience of operating alluvial mining
projects in Colombia
o Emphasis on community relations and best practice
environmental management
-- Operations will be based at the mining camp used for
exploration, which includes a platinum and gold storage room and is
located close to the town of Condoto and its nearby airport
Bernard Olivier, CEO of Bezant, today commented:
"Our focus on achieving initial gold-platinum production in the
short-term is progressing well and this new agreement evolves our
existing relationship with Exumax from being exploration partners
to mining partners with their equipment, experience and personnel
secured for use by Bezant. We shall now progress our first recovery
plant into production over the coming months with the intention of
realising a low-cost gold-platinum model that can be replicated
quickly and cheaply across the Choco region. Our intention remains
to generate shareholder value from a revenue producing precious
metals portfolio with highly robust margins."
Pedro Martins da Costa, CEO of Exumax, today commented:
"We are delighted to be initiating the mining phase and believe
this agreement reinforces the alignment between our respective
companies. We look forward to achieving the first pour in the
coming months and appreciate the Company's trust being placed n
Exumax towards meeting a common objective."
Further Information
Mining Programme
The initial focus of Bezant's planned mining programme with
Exumax (the "Mining Programme") will comprise the FKJ-083 licence
area, which was historically mined between 2007 and 2012. To date,
the Company has focused its exploration programme on this historic
production area and the information obtained was used by
independent consultants in the preparation of an independent
scoping study, the results of which were announced on 8 March 2017,
which projected, inter alia, a total cost of production of US$768
per ounce for platinum and gold recoveries over a 12-month
operational period.
Current Operations
As announced previously, the historical mining camp office,
laboratory facilities and storage area have already been renovated
as part of the Company's exploration programme. Exumax will now
proceed to mobilise the Mining and Exploration Equipment and its
personnel to site, with earthworks targeted to commence within the
next four weeks. The key objectives include the recovery of initial
platinum and gold within two months of commencement of mining
operations.
Summary of the Mining Services and Acquisition Agreements
As noted above, in connection with the Mining Services
Agreement, Bezant has also agreed to acquire a special purpose
vehicle, Kellstown, which via its wholly owned subsidiary owns the
Mining and Exploration Equipment and certain associated Equipment.
The modern, New Zealand style, alluvial processing plant is capable
of processing up to 100 m(3) of material per hour (approximately
150 tonnes per hour). The processing plant is fully equipped and
currently situated in Medellin, Colombia and ready for mobilisation
to site. This zero mercury, modern processing plant will be the
first of its type to be utilised on the deposit. In addition,
Bezant has acquired the engineering blue prints and all technical
plans, schematics and data pertaining to the processing plant which
going forwards will enable it to engage Colombian engineering firms
to replicate and manufacture similar processing plants locally for
use on its Colombian licence portfolio.
Acquisition Agreement
A share purchase agreement (the "SPA") has been entered into
between the Company and Exumax's parent company, Verona Investment
Group Inc. ("Verona"). Pursuant to the terms of the SPA, the
Company is acquiring the entire issued share capital of Kellstown,
whose 100% owned subsidiary, Andean Mining S.A.S. ("Andean
Mining"), owns the Equipment, from Verona for an upfront cash
payment of US$200,000 and initial equity consideration comprising
the issue of 25 million new ordinary shares of 0.2 pence each in
the capital of the Company ("Ordinary Shares") (the "Tranche One
Consideration Shares") to Verona on Completion. Deferred
consideration comprising of a further 15 million Ordinary Shares
will be payable when the plant being acquired has for 10
consecutive scheduled work days processed 900m(3) of material per
day (the "Tranche Two Consideration Shares"). The Tranche One
Consideration Shares and Tranche Two Consideration Shares represent
approximately 11.6 per cent. of the Company's issued share capital
as enlarged by the issue of such consideration shares. Post
Completion, Andean Mining will owe an amount of approximately
US$162,000 to Exumax being the balance due in relation to the
Equipment and which is payable by 31 July 2017. Accordingly, Bezant
will be assuming this agreed liability.
The acquisition of Kellstown, as well as the Equipment, provides
Bezant with ownership of certain valuable proprietary data and
related intellectual property rights developed by Verona, including
geological information, geographic mapping information, information
in relation to environmental regulations and requirements, and CAD
designs in respect of the Mining and Exploration Equipment, for use
by both Bezant and Exumax in conducting the planned Mining
Programme.
Pursuant to the SPA, the existing guarantee fee will continue to
be payable to Verona at a rate of US$5,000 per month, for the
duration of the Mining Services Agreement, in order to guarantee
the performance of Exumax's basic obligations under such Mining
Services Agreement, including the use of its in house team and its
expertise in operating and building the Mining and Exploration
Equipment.
The SPA contains various warranties, including in relation to
title and capacity, of the type customarily found in agreements of
this nature.
The SPA is legally binding and mobilisation of the Mining and
Exploration Equipment will now commence. Completion of the
acquisition of Kellstown remains subject, inter alia, to the
delivery of certain ancillary legal documentation and the issue of
the Tranche One Consideration Shares. The issue of the Tranche One
Consideration Shares and completion of the acquisition is currently
expected to occur by 7 June 2017 ("Completion") and a further
announcement will be made in due course in this regard.
Mining Services Agreement
The Mining Services Agreement has been entered into between
Exumax and Bezant's wholly owned Colombian subsidiary, Ulloa
Recursos Naturales S.A.S. for a period lasting until 31 December
2019, to secure Exumax's management services and expertise for
mining and exploration work, in respect of the Company's Choco
Gold-Platinum Project. Pursuant to the terms of the Mining Services
Agreement, Bezant has agreed to reimburse Exumax its monthly
budgeted costs plus a 10 per cent. management fee incurred in
conducting the mandated Mining Programme and the provision of
certain related accounting and administrative services.
For further information, please contact:
Bezant Resources Plc
Bernard Olivier Tel: +61 40 894
Chief Executive Officer 8182
Laurence Read
Executive Director / Communications Tel: +44 (0)20
Officer 3289 9923
Strand Hanson Limited (Nomad)
James Harris / Matthew Chandler / Tel: +44 (0)20
James Dance 7409 3494
Beaufort Securities Limited (Broker)
Elliot Hance Tel: +44 (0)20
7382 8300
or visit http://www.bezantresources.com
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR").
Notes to Editors:
Exumax (www.exumax.co) is a private Colombian based alluvial
mining company, with over 6 years' experience of operating mines in
Colombia. It has a well-established and knowledgeable local team
that, inter alia, provide and manage a turnkey mining exploration
and development solution for Bezant's wholly owned Colombian
subsidiary, Ulloa Recursos Naturales S.A.S. The principals of
Exumax have over 50 years' of combined operating experience in the
mining and construction industry in South America and have
developed extensive proprietary mining expertise over this period.
The special purpose alluvial mining equipment acquired by the
Company from Exumax was developed in, and imported by Exumax from,
New Zealand, for use in low-cost alluvial extraction projects
focused on precious metals, such as the Company's Choco Alluvial
Gold-Platinum Project and the operating capacities of the Mining
and Exploration Equipment were applied in developing the models
used in the independent scoping study, the results of which were
announced by Bezant on 8 March 2017. Exumax prioritises community
relations and best practice environmental management as key
components to building successful mining operations in-country.
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
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