TIDMCRTM
RNS Number : 2104Z
Critical Metals PLC
20 May 2021
Critical Metals plc / EPIC: CRTM / Market: Main Market / Sector:
Closed End Investments
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
20 May 2021
Critical Metals plc ("Critical Metals" or the "Company")
Heads of Terms Signed
Proposed Acquisition of DRC Copper/Cobalt Project
Suspension of Listing
Critical Metals plc, a mining investment company established to
acquire mining opportunities in the critical and strategic metals
sector , is pleased to announce that it has signed a non-binding
Heads of Terms with Madini Minerals, a Johannesburg based
enterprise focussed on investment in advanced exploration or near
term production assets in Africa ("Term Sheet") for the possible
acquisition of a majority stake (57 %) in Madini Occidental Limited
("MO"), which will hold a 70% beneficial interest in a 'Small Scale
Mining License' ("Permis d'Exploitation de Petit Mine") PEPM 14784,
in the Democratic Republic of Congo ("Molulu" or the "Project')
(the "Proposed Acquisition"). Molulu is a copper/cobalt project
located on the Katangan Copperbelt, adjacent to a number of
existing medium and large scale mining operations that are in
production.
The Proposed Acquisition is to be made via an acquisition of
shares in MO, a company incorporated in Mauritius, to the value of
US$850,000, of which US$100,000 will be paid to the current owners
of PEPM 14784 and the remaining US$750,000 to be spent on the
development of the Project. In addition, 2 loans of US$150,000 and
US$200,000 will be made available to MO on terms to be agreed, with
the former to be advanced to the current owner of the Project on
terms to be agreed. The latter is to be used to fund an exploration
drilling program to enable a JORC compliant resource to be
created.
Under the Term Sheet, the current owners will retain the other
30% interest in the Project. The remaining 43% interest in MO will
be held (in equal amounts) by Madini Minerals and Mr Russell Fryer,
the CEO of Critical Metals. In 2018, Mr Fryer had invested
US$200,000 in MO and has an outstanding interest bearing loan to MO
of US$800,000. As such, the directors of Critical Metals other than
Mr Fryer have approved the Term Sheet.
The Proposed Acquisition is in line with the Company's
investment strategy to make equity investments into operators or
near-term production operators within the critical and strategic
metals sector in the continent of Africa and would represent the
first acquisition since listing on the Standard List of the London
Stock Exchange in September 2020. Molulu has previously been mined
by artisanal miners from 4 pits and Critical Metals believes that
the Project has the potential to be developed to become a new
long-term, large copper-cobalt producer. Madini Minerals has
conducted e xtensive geophysics, geotechnical analysis, and
historical drilling at site shows copper grades ranging between 15%
and 40% for sulphides and copper oxide grades of between 2% and 15%
based on metallurgical samples undertaken by a copper smelter in
Lubumbashi and made available to Madini. As part of the due
diligence process to be undertaken by the Company, a competent
person's report will be prepared on the Project. Critical Metals
believes that the historical mining on site will enable a low cost
restarting of production within approximately 6 to 9 months.
Furthermore, the proximity of the Project to certain smelters
should provide a selling channel for any copper production, leading
to near term cash flow. The Company has agreed an exclusivity
period of two months with the option to extend for a further month
and will now undertake extensive due diligence to enable the
Proposed Transaction to be completed.
Suspension of Listing
The Proposed Acquisition, if completed, would constitute a
reverse takeover under the Listing Rules. As the Company is
currently unable to provide full disclosure under Listing Rule
5.6.15, it has requested, and been granted, a suspension of listing
in its shares with immediate effect pending either the issue of an
announcement providing further details on the Proposed Acquisition,
the publication of a prospectus, or an announcement that the
Proposed Acquisition is not proceeding . Any restoration of the
listing is subject to the approval of the Financial Conduct
Authority.
The Company has engaged certain advisers and will engage others
to rapidly progress the requisite due diligence, which, if
satisfactory, is expected to lead to a reverse takeover
transaction, which will be subject to the approval of the Financial
Conduct Authority .
On completion of the Proposed Acquisition, the Company's listing
would be cancelled and, subject to approval by the Financial
Conduct Authority, the enlarged Company's ordinary shares would
then be admitted to the Standard List and to trading on the Main
Market for listed securities of the London Stock Exchange.
There can be no certainty that the Proposed Acquisition will
take place and it remains subject, inter alia, to final terms being
agreed.
Further announcements and updates will be made in due
course.
Russell Fryer, CEO of Critical Metals, commented:
"We are delighted to have agreed a term sheet on our first
potential acquisition, the first of what we expect will be a series
of transactions. In that time, we have reviewed numerous projects
and believe the Proposed Acquisition meets our stated objective of
identifying a low CAPEX and OPEX project with near term
production.
"The Democratic Republic of Congo is an area which the Board is
familiar with and believe successful completion of the targeted
transaction should position Critical Metals well for subsequent
transactions.
"The demands for copper, as a 'critical mineral', are ever
increasing as is seen in the buoyant copper price of late.
Predicted to continue, an increased environmental agenda globally
and electrification are at the centre of this with the
proliferation of electric vehicles, the increased use of renewable
energy sources, energy efficiency and increased consumption of
electronics. In addition, cobalt is highly sought-after by both the
aerospace industry and the rechargeable power unit sector.
"I believe this is an opportune time to gain exposure to
copper/cobalt and I look forward to updating shareholders in due
course."
**ENDS**
For further information on the Company please visit
www.criticalmetals.co.uk or contact:
Russell Fryer Critical Metals plc Tel: +44 (0)20
7236 1177
Rory Murphy / Strand Hanson Limited Tel: +44 (0)20
James Bellman Financial Adviser 7409 3494
Lucy Williams Peterhouse Capital Limited, Tel: +44 (0)20
/ Corporate Broker 7469 0936
Heena Karani Tel: +44 (0)20
7469 0933
Catherine Leftley St Brides Partners Ltd, Tel: +44 (0)20
/ Charlotte Hollinshead Financial PR 7236 1177
About Critical Metals
Critical Metals was formed as an investment company and intends
to make equity investments into operators or near-term production
operators within the natural resources development and production
sector in the continent of Africa. It is envisaged that such
acquisition or acquisitions will trigger a reverse takeover in
accordance with the listing rules. The Company intends to search
initially for acquisition opportunities in the natural resources
sector on known deposits and more specifically minerals that are
perceived to have strategic importance to future economic growth.
Commodities such as antimony, beryllium, cobalt, copper, fluorspar,
gold, rare earth elements, tin, tungsten, titanium, and vanadium
have been identified by several governments as "critical minerals"
and so guaranteeing supplies is seen as a strategic necessity. The
Company therefore believes that the market conditions for these
minerals will remain strong in the short-to-long term.
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END
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