TIDMCHF
RNS Number : 9589S
Chesterfield Resources PLC
28 June 2018
28 June 2018
CHESTERFIELD RESOURCES PLC
("Chesterfield" or the "Company") (TIDM: CHF)
Acquisition, Placing, Subscription and Admission
Chesterfield Resources plc is pleased to announce that, further
to the announcement of 2 November 2017, it has today entered into a
conditional share purchase agreement ("Acquisition Agreement")
pursuant to which it has agreed to acquire the entire issued share
capital of HKP Exploration Ltd ("HKP") ("Acquisition").
The Company has today also entered into a conditional placing
agreement ("Placing Agreement") in relation to a placing of
10,766,667 new ordinary shares of 0.1p each in the capital of the
Company ("Ordinary Shares") ("Placing Shares") at 7.5p per share to
raise GBP807,500 (before expenses) ("Placing") and has conditional
subscription agreements ("Subscription Agreements") in relation to
a subscription of 15,900,000 new Ordinary Shares ("Subscription
Shares") at 7.5p per share to raise GBP1,192,500 (before expenses)
("Subscription"). In addition, one Ordinary Share subscription
warrant ("Series C Warrant"), exercisable for two years at a
subscription price of 15p per Ordinary Share, will be issued to
participants in the Placing ("Placees") and the Subscription
("Subscribers") for every two Placing Shares or Subscription Shares
subscribed.
The Acquisition, the Placing and the Subscription are all
conditional upon admission of the entire issued and to be issued
Ordinary Shares to the Standard Listed segment of the Official List
of the UK Listing Authority and to trading on the Main Market of
the London Stock Exchange ("Admission"). It is expected that
Admission will become effective and dealings in the enlarged issued
ordinary share capital of the Company will commence at 8:00am on 3
July 2018.
HKP and the HKP Portfolio
HKP was incorporated in the Republic of Cyprus under the Cyprus
Companies Law Cap.113, as amended, on 1 July 2014 with company
number HE 333726. The founder of HKP is Michael Green and the
majority shareholders of HKP are Michael Green, David Hall and
Jeremy Martin ("Principal HKP Sellers"). Conditional on Admission,
David Hall ("Proposed Director") will join the Board as a
Non-Executive Director and Michael Green will be engaged as Country
Manager and Head of Exploration, Cyprus.
The principal activity of HKP is the exploration for natural
resources in Cyprus. Cyprus is a member of the European Union and
has a rich heritage in mining for copper and gold.
Between February and April 2017, HKP made applications to the
Mines Service of the Ministry of Agriculture, Rural Development and
Environment of the Republic of Cyprus ("Mines Service") for seven
prospecting permits to search for minerals over the area of land
specified in and on the terms and conditions of such prospecting
permit ("Prospecting Permit"). Those seven Prospecting Permits
("HKP's Granted Prospecting Permits") were approved by the Mines
Service between 10 January 2018 and 7 March 2018. Between January
and March 2018, HKP made applications to the Mines Service for a
further six Prospecting Permits. The applications for those six
Prospecting Permits ("HKP's Prospecting Permit Applications") had
not yet been approved by the Mines Service at the date of this
announcement.
HKP's Granted Prospecting Permits and HKP's Prospecting Permit
Applications ("HKP Portfolio") consists of three project areas as
follows:
-- HKP's Granted Prospecting Permits comprise a near contiguous
block of seven Prospecting Permits on the western side of the
Troodos Mountains forming the Troodos West Project, covering an
area of 3,211 hectares (32.11 km(2) );
-- five of HKP's Prospecting Permit Applications, covering an
area of 2,299 hectares (22.99 km(2) ), form the Troodos North
Project on the northern side of the Troodos Mountains; and
-- the remaining one of HKP's Prospecting Permit Applications,
covering an area of 480 hectares (4.8 km(2) ), forms the Troodos
East Project on the eastern side of the Troodos Mountains.
HKP has a 100 per cent. interest in each of HKP's Granted
Prospecting Permits and HKP's Prospecting Permit Applications, with
no encumbrances or dilutive interests.
Each of HKP's Granted Prospecting Permits are valid for a period
of five years from grant, subject to annual renewal upon the
payment of annual fees, and may be extended for a further period of
five years. If the holder of a Prospecting Permit fails to comply
with the conditions attached to such Prospecting Permit, the
Prospecting Permit will be withdrawn.
All of the project areas within the HKP Portfolio are considered
by the directors of the Company ("Directors") and the Proposed
Director to be highly prospective for copper and/or gold.
Terms of the Acquisition
The Company and the Principal HKP Sellers have today entered
into the Acquisition Agreement, pursuant to which the Company has
agreed, subject to certain conditions, to purchase the entire
issued share capital of HKP, comprising 1,000 ordinary shares of
EUR1.00 each, for GBP500,000, to be satisfied by the issue of
6,666,667 new Ordinary Shares to the HKP sellers at a price of 7.5p
per Ordinary Share.
The Acquisition Agreement is conditional on, among other things,
the Placing Agreement and the Subscription Agreements becoming or
being declared unconditional in all respects, save for Admission,
and Admission.
Under the Acquisition Agreement, the Principal HKP Sellers have
given certain limited warranties to the Company in relation to the
business and assets of HKP.
The Opportunity and the Objectives and Strategy of the New
Group
The Directors believe that the Acquisition represents an
attractive opportunity for the Company which meets the principal
acquisition search criteria of the Company:
-- the HKP Portfolio is considered by the Directors to be highly
prospective, primarily for copper and gold, two of the most
actively traded Exchange Traded Non-Ferrous Metals;
-- HKP's Granted Prospecting Permits include previously
operating copper + pyrite mines at Limni, Kinousa, Uncle Charles,
and Evloimeni. HKP's Prospecting Permit Applications include
previously operating copper + pyrite mines at Memi and Agrokipia.
Exploitation at the mines was mainly by way of open-pit
operations;
-- the HKP Portfolio is located in the Republic of Cyprus, which
is a member of the European Union;
-- the Company will acquire the entire issued share capital of
HKP which, in turn, has a 100% interest in the HKP Portfolio;
-- the early stage of development of HKP provides the scope,
through a focussed exploration work programme, to generate value
for the Company's shareholders; and
-- the Principal HKP Sellers are highly experienced in the
mineral exploration sector and will all contribute to the
management of the Company and HKP ("New Group") following
completion of the Acquisition.
The market in which the New Group operates is global with
participants in the market ranging from multi-national giants
through to small private exploration businesses. The Directors and
the Proposed Director believe that the New Group should be well
placed to compete against other market participants on the basis of
the following competitive advantages:
-- Cyprus has a rich heritage in mining dating back to the
earliest Bronze Age, in particular of mining copper from which the
name of the island is derived, and the style of mineralisation is
relatively well understood;
-- HKP has a 100 per cent. interest in the HKP Portfolio;
-- Cyprus is an EU member with close ties to the UK and, despite
the ongoing partition of the island following the Turkish invasion
in 1974, is well-ranked both in terms of ease of doing business and
corruption perception, representing relatively low country
risk;
-- the climate in Cyprus allows for year-round exploration and mining operations;
-- Cyprus has good infrastructure, such as road networks, mobile
phone coverage, electricity and water supply, international
airports and sea ports;
-- copper and gold are both widely traded by participants in the
metals markets, with the price of copper often seen as a barometer
of global economic growth, representing relatively low commodity
risk; and
-- the Directors and the Proposed Director have wide-ranging
experience working for and/or advising businesses operating within
the natural resources sector and Michael Green provides local
knowledge and community engagement in Cyprus.
The primary objective of the Company is to generate value for
Shareholders, which the Company will seek to achieve through the
definition of a Mineral Resource estimate from multiple prospects
within the HKP Portfolio and, potentially, through further
acquisitions.
The Proposed Work Programme
The New Group proposes a phased exploration work programme for
the HKP Portfolio ("Proposed Work Programme"), the exploration
target of which is a Mineral Resource of 1,000,000 to 5,000,000
tonnes from multiple prospects, at two per cent. copper plus more
than one gram per tonne gold and silver/zinc credits. The Proposed
Work Programme comprises three phases:
Phase 1 - Data collection and analysis
The aim of Phase 1 is to identify the most prospective areas
within the HKP Portfolio and prioritise field work. This will be
achieved by acquiring and collating into digital form all relevant
available existing data from the Cyprus Geological Survey, academic
studies and historical commercial activity. Spatial data will be
captured into a GIS. All datasets will then be interrogated to
identify areas and prospects where exploration will be
prioritised.
Phase 2 - Confirmatory field studies
The aim of Phase 2 is to rank prospects and to define drill
targets. Field studies will include geological and structural
mapping, rock chip and trench sampling and ground geophysics and
will start at areas and prospects prioritised during Phase 1. All
new data will be integrated into an evolving exploration model.
Phase 3 - Drilling
The aim of Phase 3 is to drill targets defined in Phase 2 and
define Mineral Resources. The style and quantum of drilling will be
constrained by local conditions.
Each project area and each prospect within each project area,
will move through the proposed exploration phases at different
rates. For example, data collection and analysis are already quite
advanced for the Troodos West Project and a number of prospects
within it, whereas data are still being gathered for the Troodos
North and Troodos East Projects. The primary focus of the Proposed
Work Programme is the Troodos West Project, comprising HKP's
Granted Prospecting Permits. Less than 10 per cent. of the budget
of the Proposed Work Programme is projected to be spent on the
Troodos North and Troodos East Projects, comprising HKP's
Prospecting Permit Applications. The Troodos North and Troodos East
Projects are expected to provide a pipeline of further exploration
prospects for the New Group beyond the Proposed Work Programme,
subject to the approval of HKP's Prospecting Permit
Applications.
The Directors and the Proposed Director expect the Proposed Work
Programme to be completed within 12 months at a cost of
approximately GBP1,100,000.
In addition to pursuing the exploration of the HKP Portfolio,
the Company will continue to seek acquisition opportunities in the
sector. Particularly attractive acquisition opportunities will
continue to include companies, businesses or assets where an
identified mineral resource can be optimised or increased or where
value can be unlocked.
The Placing and the Subscription and Use of Proceeds
The Company has raised gross proceeds of GBP2,000,000 through
the Placing and the Subscription, conditional on Admission.
Under the Placing and the Subscription, the 10,766,667 Placing
Shares and the 15,900,000 Subscription Shares have been
conditionally subscribed for by the Placees and the Subscribers,
respectively, at 7.5p per Ordinary Share. A total of 13,333,322
Series C Warrants will be issued to the Placees and the
Subscribers.
In accordance with Listing Rule 14.3, on Admission at least 25
per cent. of the Ordinary Shares will be in public hands (as
defined in the Listing Rules).
The Placing and the Subscription are conditional on, inter alia,
Admission. If Admission does not occur, neither the Placing nor the
Subscription will proceed and all monies paid will be refunded to
the applicants.
Completion of the Placing and the Subscription will be announced
via a regulatory news service on Admission, which is expected to
take place at 8.00 a.m. on 3 July 2018.
At the issue price of 7.5p per Ordinary Share, the enlarged
issued ordinary share capital of the Company will have a market
capitalisation of GBP4,645,000 on Admission.
The Placing is subject to the satisfaction of conditions
contained in the Placing Agreement, including Admission occurring
on or before 3 July 2018 or such later date as may be agreed by the
Company and Shard Capital Partners LLP (being not later than 15
July 2018).
The Subscription is subject to the satisfaction of conditions
contained in the Subscription Agreements, including Admission
occurring on or before 3 July 2018 or such later date as may be
determined by the Company (being not later than 15 July 2018).
Admission is expected to take place and dealings in the enlarged
issued ordinary share capital of the Company are expected to
commence on the London Stock Exchange at 8.00 a.m. on 3 July
2018.
After deduction of the estimated expenses of the Acquisition,
the Placing, the Subscription and Admission, amounting to
approximately GBP500,000, the net proceeds of the Placing and the
Subscription ("Net Proceeds") are estimated to be approximately
GBP1,500,000.
The Company's intention is to use the Net Proceeds as
follows:
-- the Proposed Work Programme for the HKP Portfolio -
approximately GBP1,100,000, which is expected to be broken down as
follows:
o Phase 1 - data collection and analysis - approximately GBP90,000;
o Phase 2 - confirmatory field studies - approximately GBP130,000; and
o Phase 3 - drilling - approximately GBP880,000; and
-- additional general working capital to be applied towards
ongoing corporate costs and expenses (including directors' and key
personnel's remuneration and consultancy fees and other internal
costs of sourcing, reviewing and pursuing any further acquisitions)
- approximately GBP400,000.
The Board and key personnel
The Directors and the Proposed Director
The Directors have been the only directors of the Company since
its incorporation and have led the Company through its development
to date. The Directors are:
Christopher Hall, Non-Executive Chairman, aged 68
Christopher is an experienced mining finance and investment
specialist and corporate manager with a career spanning more than
40 years and encompassing exploration and mine geology, mining
share analysis, specialist fund management, M&A, general
management and wide-ranging consultancy. Between 1998 and 2003,
Christopher was with international mining consultants, Behre
Dolbear International Limited, initially as a consultant and then
from 2000 as President, managing the UK office covering Europe, the
Middle East, Russia, the Former Soviet Union, India and parts of
Asia. He acted as an in-house mining adviser/resources specialist
for international accountant and AIM Nominated Adviser Grant
Thornton LLP, UK from 2005 until 2015, advising capital markets and
audit functions. Christopher is a Director of Rift Resources
Limited, a private exploration company operating in East Africa and
the Middle East, and, until 2016, was Non-Executive Chairman of
AIM-traded companies Stratex International plc, a gold producer and
explorer active in Turkey and Senegal with strategic interests in
East Africa and Ghana, and Goldstone Resources plc, an exploration
company operating principally in Ghana. Christopher holds a BSc
degree in Geology from the University of Reading, an MSc degree in
Exploration and Mining Geology from the University of Leicester and
is a Chartered Engineer, Member of the Institute of Materials,
Minerals and Mining.
David Cliff, Non-Executive Director, aged 72
David is an experienced geologist who spent 26 years working in
a management capacity for the Rio Tinto Exploration group until
2006, including the last five years as Exploration Manager Europe.
During his time with Rio Tinto Exploration, he headed exploration
teams in the wider European area, including the discovery and
evaluation of the Çöpler gold mine in Turkey, now owned and
operated by Alacer Gold Corporation. David commenced his career in
1968 with the Union Corporation group, spending seven years in
South Africa (including work on the discovery and evaluation of the
Beatrix Gold Mine complex, as well as the development of the Unisel
mine and production-related geology at St Helena Gold Mine). Prior
to that he spent four years in the United Kingdom, mainly involved
in development and production at two Cornish tin mines. More
recently, he was a Director and Chief Executive Officer of Columbus
Copper Corporation (formerly Empire Mining Corp.), a Toronto
Venture Exchange listed exploration company exploring copper and
gold assets in western Turkey and chromite in Albania, until its
merger with Energulf Resources Inc. in 2015. David holds a BSc
honours degree in Geology from University College London and is a
Chartered Engineer, Member of the Institute of Materials, Minerals
and Mining.
Derek Crowhurst, Non-Executive Director, aged 56
Derek has spent more than 30 years working in the City of
London, having commenced his career with R. Nivison & Co.
(ultimately absorbed into Smith & Williamson Investments) as a
fixed-interest analyst before progressing to the eurobond
sales/trading desk, where he became involved in the issuance of
eurodollar convertible bonds. He became increasingly focused on
providing corporate financial advice, culminating in him joining
Keith, Bayley Rogers & Co. in 1993, where he worked on numerous
IPOs (on both the Official List and AIM), secondary fund raisings
and M&A transactions. After spending more than 15 years with
Keith, Bayley, Rogers & Co., the last two years of which as
Managing Director of the business, Derek left to join Religare
Capital Markets Limited in 2009 and moved to natural resources
specialists VSA Capital Limited in 2012. Since January 2014, he has
been a Director - Corporate Finance with corporate financial
advisory boutique, Argento Capital Markets Limited. Derek holds a
BSocSc honours degree in Mathematics, Economics and Statistics from
the University of Birmingham and is a Fellow of the Chartered
Institute for Securities and Investment and an FCA Approved
Person.
Peter Damouni, Non-Executive Director, aged 40
Peter has over 17 years of experience in investment banking and
capital markets, with expertise in mining and oil and gas. During
his career, Peter has worked on and led equity and debt financings
valued at more than $5 billion. He has comprehensive experience in
equity financing, restructuring, corporate valuations and advisory
assignments. Peter is a Non-Executive Director of Georgian Mining
Corporation, an AIM traded copper and gold development and
exploration company and of Kerr Mines, Inc., a Toronto Stock
Exchange listed North American gold development and exploration
company based in Toronto, Canada. He holds a double major BA
honours degree in Economics, Finance and Political Science from
McGill University, Montreal, Canada.
With effect from Admission, the Proposed Director will join the
Company as a Non-Executive Director. The Proposed Director is:
David Hall, Proposed Non-Executive Director, aged 59
David has nearly 30 years of experience in the exploration
sector and has worked on and assessed exploration projects and
mines in more than 50 countries and is one of the Principal HKP
Sellers. From 1992, he was Chief Geologist for Minorco SA,
responsible for Central and Eastern Europe, Central Asia and the
Middle East. He moved to South America in 1997 as a consultant
geologist for Minorco South America and subsequently became
exploration manager for AngloGold South America in 1999, where he
was responsible for exploration around the Cerro Vanguardia gold
mine in Argentina, around the Morro Velho and Crixas mines in
Brazil and establishing the exploration programme that resulted in
the discovery of the La Rescantada gold deposit in Peru as well as
certain joint ventures in Ecuador and Colombia. David was a founder
and executive director of Stratex International Plc, an AIM traded
company with exploration assets in Turkey, and was also a founder
of Erris Resources plc, an AIM traded company with exploration
assets in Ireland and Sweden, where he remains a technical adviser.
He is also currently CEO of Thani-Stratex Resources Ltd, a private
gold exploration and development company focused on North and East
Africa and the Middle East, and Non-Executive Chairman of Horizonte
Minerals Plc, an AIM traded and Toronto Stock Exchange listed
company with development stage nickel assets in Brazil. David holds
a BA honours degree in geology from Trinity College Dublin and an
MSc in Mineral Exploration from Queens University, Kingston,
Ontario and is a Fellow of the Society of Economic Geologists, a
Member of the Institute of Geologists of Ireland, a EuroGeol and P.
Geo.
Key personnel
The management team of the New Group will comprise the Directors
and the Proposed Director and the following key personnel.
Dr Michael Green, Proposed Country Manager and Head of
Exploration, Cyprus, aged 48
Michael is a geologist with more than 20 years of mineral
exploration experience, including managing all aspects of
exploration programmes targeting a broad range of commodities but
particularly gold, copper and nickel. He is the founder, a director
and company secretary of HKP and one of the Principal HKP Sellers
and has built the HKP Portfolio. Michael has operated as an
independent geological consultant and has worked with numerous
publicly traded and private companies. He was Chief Operating
Officer of BMG Resources Limited, an Australian Stock Exchange
listed company, where he managed its exploration portfolio in
Cyprus. Michael holds a BSc honours degree in geology from the
University of Western Australia and gained his PhD in geology from
the University of Sydney, Australia. He is a Member of the
Australian Institute of Geoscientists.
Christopher Hall, Non-Executive Chairman, said "I am delighted
we are able to announce today the acquisition of HKP, which holds
an exciting package of exploration licences and applications in
Cyprus. Your board believes they are highly prospective for the
discovery and development of copper-gold resources. The fund
raising, together with our existing cash balances, provides the
funding for our highly focussed programme of evaluation and
exploration.
This transaction has achieved the initial objective of the
company when it was listed in August last year. We look forward to
working with David Hall, who will be joining the board, and Michael
Green, who will be our country manager in Cyprus, and to updating
shareholders on the progress of our exploration programme in the
coming months."
- ENDS -
For further information please visit
http://www.chesterfieldresourcesplc.com or contact:
Chesterfield Resources plc:
Christopher Hall, Non-Executive Tel: +44(0)7773 427726
Chairman
Peter Damouni, Non-Executive Tel: +44(0)7771 787788
Director
Shard Capital (Broker):
Damon Heath Tel: +44(0)20 7186 9952
Erik Woolgar Tel: +44(0)20 7186 9964
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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