TIDMCRTM
RNS Number : 9439F
Critical Metals PLC
24 March 2022
Critical Metals plc / EPIC: CRTM / Market: Main Market / Sector:
Closed End Investments
24 March 2022
Critical Metals plc
("Critical Metals" or the "Company")
Update re Proposed Acquisition of DRC Copper/Cobalt Project
Critical Metals plc, a mining investment company established to
acquire mining opportunities in the critical and strategic metals
sector , is pleased to provide an update on its proposed
acquisition of a majority interest in the copper/cobalt project
located within Small Scale Mining License PEPM 14784 (the "Mining
Licence") in the Democratic Republic of Congo (the "Molulu
Project") announced on 20 May 2021 (the "Proposed
Acquisition").
Further to the Company's announcements of 23 December 2021 and 9
March 2022, in which it was noted that the original transaction
structure was under renegotiation in relation to the temporary ban
on the issuance and transfer of mining licence permits in the
Democratic Republic of Congo. The structure for the Proposed
Acquisition has now been agreed so as to avoid the need for a
transfer of the underlying Mining Licence.
The structure for the Proposed Acquisition, as summarised below,
has been agreed with the existing owners of Amani Mining Katanga SA
("AMK"), Madini Occidental Ltd Mauritius ("Madini Occidental"), and
the Company, and the relevant parties have updated the existing
transaction documents (the "Updated Terms") to reflect this new
structure.
Pursuant to the Updated Terms, Critical Metals will acquire a
majority controlling 57 per cent equity interest in Madini
Occidental by way of a subscription for new ordinary shares in
Madini Occidental, contemporaneously with Madini Occidental, via
its DRC subsidiary Madini Occidental RDC SA, subscribing for a 70
per cent interest in Amani Minerals Katanga SA, the sole current
holder of the Mining Licence.
As a result, on completion of the Proposed Acquisition
("Completion"), Critical Metals will hold a controlling interest in
the Mining Licence via its majority interest in Madini Occidental,
which in turn, will hold a controlling interest in the Mining
Licence, equating to a look-through economic interest of
approximately 40 per cent in the Molulu Project.
The consideration for the Proposed Acquisition will be as
follows:
-- Cash consideration of USD300,000 will be paid, via Madini
Occidental, to AMK on Completion for the transfer by the existing
holders of AMK (the "AMK Original Partners") of a 70 per cent
equity interest in AMK to Madini Occidental's wholly owned
subsidiary Madini Occidental RDC SA, with the AMK Original Partners
retaining a 30 per cent interest in AMK.
-- Cash consideration of USD750,000 will be paid to Madini
Occidental on Completion, in exchange for the issue of such number
of new ordinary shares in Madini Occidental, as provides Critical
Metals with a 57 per cent interest in Madini Occidental.
o Pursuant to the terms of the investment agreement to be
entered into between Critical Metals and Madini Occidental (the
"Investment Agreement"), such consideration will be loaned, in
full, to AMK, to be utilised as working capital applied to the
development of the Molulu Project (the "AMK Loan").
o The AMK Loan is to be repaid to Madini Occidental from future
income from the Molulu Project, such that Critical Metals will
benefit from the repayment of the AMK Loan, to the extent of its 57
per cent equity interest in Madini Occidental.
-- In the event that a carried interest of 10 per cent in the
Mining Licence is required to be transferred to the State of the
Democratic Republic of Congo (or affiliated entity) pursuant to DRC
Mining Law, it has been agreed that such interest will be
transferred by way of a transfer of equity in AMK by both AMK
Original Partners and Madini Occidental RDC SA pro rata to their
interest in AMK post Completion, being 7 per cent and 3 per cent
for Madini Occidental RDC SA and the AMK Original Partners,
respectively.
-- In conjunction with the Investment Agreement governing
Critical Metals' subscription for a 57 percent equity interest in
Madini Occidental, various shareholder and operational agreements
will be entered into to ensure that Critical Metals has operational
control of the Molulu Project and also conducts the sales and
marketing of the minerals produced from the Molulu mine.
-- Critical Metals will provide a loan of USD200,000 after
readmission for the drilling and further delineation of the copper
and cobalt ore bodies. This loan is to be made on commercial terms
and will be repaid in monthly instalments after the mine reaches
steady state production.
-- A final cash consideration payment of USD250,000 will be made
to the AMK Original Partners twelve months after the closing of the
transaction.
It is noted that there can be no certainty that the Proposed
Acquisition will complete and it remains subject, inter alia, to
final binding documentation and satisfaction of the Condition
Precedents being completed. However, the AMK and Madini Occidential
due diligence has been completed and submitted to the relevant
parties.
The Company wishes to highlight that, due to the previous work
completed and the imminent ending of the rainy season, the Company
will create a mining plan to access not only the oxide copper
zones, but also the higher-value sulphide copper zones, whilst
progressing towards FCA readmission approval.
Furthermore, a series of consultations have already begun with
the Competent Person in South Africa, to identify known copper and
cobalt areas for a near-term drill programme, in order to assemble
a JORC compliance resource.
The Board continues to believe the Proposed Acquisition
represents an excellent opportunity to acquire a controlling
interest in a highly prospective copper/cobalt project, which has
previously been in production and can be quickly brought back into
operation to generate near-term free cashflow.
Whilst the undertaking of the transaction structure changes
outlined above were extremely time consuming due to the complexity
of the negotiations, however, thanks to the elevated copper price,
the Board believes the economics of this transaction in the current
commodity environment have greatly improved.
Finally, the Board of Critical Metals sincerely thanks our
shareholders, prospective shareholders, and DRC partners for their
patience, whilst the Company look to conclude the Proposed
Acquisition.
The Board looks forward to providing further updates 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
Oonagh Reidy/Catherine St Brides Partners Ltd, Tel: +44 (0)20
Leftley/Isabelle Financial PR 7236 1177
Morris
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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