Empire Metals Limited Finalised Sale of 50% Interest in Georgian Assets (0582B)
07 June 2021 - 9:49PM
UK Regulatory
TIDMEEE
RNS Number : 0582B
Empire Metals Limited
07 June 2021
Empire Metals Limited / AIM: EEE / Sector: Natural Resources
7 June 2021
Empire Metals Limited ('Empire' or the 'Company')
Conclusion of Sale of 50% Interest in Georgian Copper &
Gold
Empire Metals Limited, the AIM-quoted resource exploration and
development company, is pleased to announce that it has concluded
an agreement to sell its 50% holding in Georgian Copper & Gold
JSC for an all-cash consideration of US$3.3 million. The proceeds
will put Empire in a strong financial position to continue to
create shareholder value principally from its Eclipse and Central
Menzies Gold Projects in Western Australia.
Sale Agreement
On 26 October 2020, the Company announced that it had entered
into a sale and purchase agreement with Candelaria Mining
Corporation ('CAND') for the sale of the Company's wholly owned
subsidiary GMC Investments Limited ('GMCIL') (the 'CAND
Transaction'), for an all-shares consideration. GMCIL is the owner
of a 50% interest in JSC Georgian Copper and Gold ('GCG'), which in
turn holds the rights to copper-gold projects under a 30-year
mining concession in Georgia. This transaction was subject to a
number of conditions including a Right of First Refusal ('ROFR')
held by Caucasian Mining Group ('CMG'), the Company's partners in
Georgia and the owners of the other 50% of GCG.
CMG advised the Company that it intended to exercise its ROFR
but due to certain aspects of the CAND Transaction being directly
related to CAND being a listed company, it was not possible to
directly match the CAND offer and to provide the Company with
confidence that the Company would receive the full consideration
included in that offer. However, this also prevented the Company
from proceeding with the CAND Transaction.
As a result, the parties commenced negotiations and have now
entered into a Sale and Purchase Agreement for the sale of the
Company's 50% interest in GCG to CMG for a single cash payment of
US$3.3 million.
The Company and CAND have agreed to mutually terminate the
agreement announced on 26 October 2020.
The Board has concluded that the CMG offer is the best option
available to the Company and one that will allow Empire to move
forwards from the untenable situation in Georgia and focus its
resources and efforts on the Company's new strategy of exploration
and development principally within the Western Australian gold
sector.
Mike Struthers, Director of Empire Metals, said: "After our
entry into Georgia in 2015 and two years of successful exploration
we had created a good foundation for growth in the country, but
since early to mid-2018 external factors started to turn against
us. Despite sustained and determined efforts by the Company on many
different fronts for nearly three years to unlock the challenges
being faced, it is evident that the joint venture in Georgia is no
longer sustainable. Furthermore, although the Company has appealed
the decision by the Mining Agency to withdraw the majority of the
original licence area there is little confidence in a successful
outcome; and the sale and purchase agreement with Candelaria Mining
cannot be executed because although CMG indicated their desire to
exercise their ROFR, the Company had no confidence in receiving the
full consideration offered by Candelaria and this dispute can only
be settled through lengthy and expensive arbitration.
"The Board has therefore concluded the best outcome for
shareholders is to bring this chapter in the Company's history to a
close and to focus our resources and efforts elsewhere. Our efforts
in Australia are already bearing fruit, and the recent addition of
the very prospective Central Menzies Project has further
strengthened our presence in the gold sector in WA and provided a
real platform for growth. This injection of capital will ensure we
are well funded for further exploration and project development
works at our Eclipse Gold Project; for the initial work programme
at our Central Menzies Gold Project; and, if justified, also funded
to exercise the option at Central Menzies. I and the rest of the
Board look forward to supporting our new MD Shaun Bunn as we
develop real value through our assets in Australia."
Transaction Details
CMG will pay US$3.3 million cash to the Company for its 50%
interest in GCG with completion expected on or around 14 June
2021.
The Company will also pay a fee of US$250,000 to an unrelated
third party in Georgia who has acted as an adviser and assisted in
bringing the CMG negotiations to fruition. This fee is payable on
completion and consists of US$100,000 in cash and US$150,000 to be
satisfied by the issue of 3,995,238 new ordinary shares in the
Company at a price of 2.65p, (the 30-day VWAP as at the date of
signing the Sale and Purchase Agreement between GMCIL and CMG).
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014, as incorporated into UK law by the
European Union (Withdrawal) Act 2018, until the release of this
announcement.
**ENDS**
For further information please visit www.empiremetals.co.uk or
contact:
Shaun Bunn Empire Metals Ltd Company Tel: 020 7907
9327
Mike Struthers Empire Metals Ltd Company Tel: 020 7907
9327
Ewan Leggat S. P. Angel Corporate Nomad & Broker Tel: 020 3470
Finance LLP 0470
Adam Cowl S. P. Angel Corporate Nomad & Broker Tel: 020 3470
Finance LLP 0470
Damon Heath Shard Capital Partners Joint Broker Tel: 020 7186
LLP 9950
Susie Geliher StBridesPartners Ltd PR Tel: 020 7236
1177
Cosima Akerman St Brides Partners Ltd PR Tel: 020 7236
1177
About Empire Metals Limited
Empire Metals' primary focus is on the Eclipse and Central
Menzies gold projects in Western Australia. Empire owns 75% of
Eclipse and has the option to acquire 75% of Central Menzies, with
a right to acquire a further 25%. Both projects have historical
workings within the licences and are highly prospective.
Empire also holds a portfolio of three precious metals projects
located an historically high-grade gold production region
comprising the Rotgulden, Schonberg and Walchen prospects in
central-southern Austria.
The Board continues to evaluate opportunities through which to
realise the value of its wider portfolio and reviews further assets
which meet the Company's investment criteria.
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END
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