TIDMFAM
RNS Number : 3546T
FinnAust Mining PLC
05 January 2017
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FinnAust Mining plc / EPIC: FAM / Market: AIM / Sector:
Mining
5 January 2017
FinnAust Mining plc ('FinnAust' or the 'Company')
Completion of Acquisition of Avannaa Exploration and New Licence
Granted in Greenland
FinnAust Mining Plc, the AIM and FSE listed company with
projects in Greenland & Finland is pleased to announce
Greenland Government approval with respect to the acquisition of
Avannaa Exploration Limited ('Avannaa' and the 'Acquisition').
Avannaa is an exploration company with advanced projects in
southwest Greenland. The Company has also applied for and been
granted an additional 28km(2) exploration licence covering the
Illukunnguaq area adjacent to the existing Avannaa licence
areas.
Completion of the Acquisition and grant of the additional
licence significantly increases FinnAust's land position in
Greenland and its long-term project pipeline. The Company already
holds a majority interest in the Pituffik Titanium Project
('Pituffik'), which has demonstrated the potential to be a top
percentile ilmenite project in terms of heavy mineral grade with
the maiden resource expected during February. FinnAust's primary
focus remains on delivering a bulk sample during 2017 and larger
scale production in 2018.
The two newly acquired projects are: the 194sq km Disko-Nuussuaq
('Disko') Magmatic Massive Sulphide ('MMS') nickel-copper-platinum
project ('Ni-Cu-PGM') and the 107sq km Kangerluarsuk Sed-Ex
lead-zinc-silver project ('Kangerluarsuk').
Disko has been the subject of more than US$50 million of
technical work by blue chip mining houses over multiple decades
including Cominco (1980's), Falconbridge (1990's) and Vismand
(2000's). The Disko project has 7 anomalies identified for drill
testing, the larger of which are up to 5.9km long 1.1km wide and
600m thick. MMS occurrences have been identified in the Disko
licence area with the largest being a 28t boulder that assayed 6.9%
nickel ('Ni'), 3.7% copper ('Cu'), 0.6% cobalt ('Co') and 2 g/t
PGM's. The presence of massive sulphide is significant as it proves
sulphide segregation has taken place and provides a direct analogy
with Norilsk-Talnakh ('Norilsk'), the world's largest nickel/copper
sulphide mine with global resources of >2Bn tonnes containing
14.5mt of nickel, 23.8mt of copper, and 8.1kt (approximately
285moz) of PGM.
Kangerluarsuk was originally discovered and later drilled by
Cominco with further work undertaken by RTZ. Historical results
include 41% zinc, 9.3% lead and 596 g/t silver. There are currently
4 large-scale drill ready Sed-Ex targets located in favourable
topography. The Company is evaluating several low cost options that
may lead to testing of these targets during 2017.
Further information on these projects can be found in the RNS
released by the Company on 5 September 2016 or on the Company's
website.
FinnAust CEO Roderick McIllree said, "Having already proven the
success of our exploration model and regional understanding of
Greenland through the advancement of the Pituffik Titanium project,
we are delighted to have strengthened our footprint within this
extremely prospective region. Our newly acquired projects
complement our stated strategy of acquiring low cost, high quality
assets and we believe all three offer significant upside potential.
Whilst Pituffik remains our flagship project and primary
exploration/development focus, with a maiden JORC resource and bulk
sampling due next year, we look forward to further proving up the
resource potential of these new projects in order to build value
for shareholders. Disko in particular, we believe, has the
potential to become a significant nickel sulphide deposit and we
look forward to furthering our understanding of this asset."
Disko Massive Ni-Cu-PGM Project Highlights
More than three decades of exploration have defined Disko as a
potentially significant nickel sulphide deposit in one of the
world's largest nickel districts, with mineralisation believed to
be similar to Norilsk's deposit. Massive magmatic deposits are
generally contained in continental rift systems where large
magmatic events lead to significant flood basalt accumulations;
these magmas interact with crustal material during emplacement
becoming contaminated. Assimilation of organic and sulphur rich
material can lead to sulphur saturation scavenging Ni, Cu and PGM
into the melt from which ore bodies can form.
Figure 1: Massive sulphide rubble found on Disko Island, this
material provides a direct analogy with Norilsk - see PDF link
Multiple geophysical methods have identified and refined 7
poly-metallic targets at Disko, three of which are shown below.
These large scale targets occur over a strike length of >17km,
all targets identified to date are kilometres in length with the
two largest being more than 5.9km long & 1.1km wide and 4.8km
long & 800m wide and up to 600m thick in each case.
Figure 2: Targets at Disko over a strike length of 17km - see
PDF link
Further Information on the Acquisition
As previously announced, on 2 September 2016, FinnAust entered
into an agreement to acquire the entire issued and to be issued
share capital of Avannaa Exploration Limited (a company
incorporated and registered in England and Wales with company
number 06012477) from Capricorn Oil Limited ('Capricorn'), a
subsidiary of Cairn Energy PLC for a price of GBP500,000 (the
'Agreement'). Completion of the Acquisition was conditional upon,
inter alia, the relevant change of control approvals being received
from the Greenland Government. These approvals were received on 3
January 2017.
Under the terms of the Agreement the acquisition consideration
of GBP500,000 ('Consideration') is to be satisfied by the issue of
7,584,238 new ordinary shares of 0.01 pence each ('Ordinary
Shares') in the Company ('Consideration Shares'). The Consideration
Shares have been issued at a price of 6.59262 pence per share,
which is equal to the volume weighted average price of the
Company's Ordinary Shares on AIM for the trading days for the
period from the date of the Agreement up to and including the date
on which the necessary approvals were received from the Greenland
Government, less 5 per cent.
Under the terms of the Agreement, the Company has provided
Capricorn with a consideration guarantee in respect of the
Consideration. In the event that there is a shortfall in realising
the Consideration once Capricorn sells the Consideration Shares,
FinnAust has undertaken to indemnify Capricorn by settling any
shortfall in cash to Capricorn's account as soon as reasonably
practicable following notification from Capricorn that there is a
shortfall.
If Cairn should decide to sell shares within nine months from
the date of admission of the Consideration Shares to trading on
AIM, any disposals of the Consideration Shares by Capricorn shall
be made through the Company's broker, with the aim of maintaining
an orderly market in the Company's shares.
Issue of Equity
The Consideration Shares were issued by the Company on 4 January
2017 and rank pari passu with the existing Ordinary Shares.
Application has been made for the Consideration Shares to be
admitted to trading on AIM ('Admission'). It is expected that
Admission will become effective and dealings in the new Ordinary
Shares will commence on or around 11 January 2017.
Voting Rights
Following the issue of the Consideration Shares described above,
the issued share capital of the Company consists of 614,169,499
Ordinary Shares. No shares are held in treasury at the date of this
announcement. The total current voting rights in the Company are
therefore 614,169,499.
The above total current voting rights number is the figure which
may be used by shareholders as the denominator for the calculation
by which they will determine if they are required to notify their
interest in, or a change to their interest in the Company.
**S**
For further information please visit www.finnaust.com, follow us
on Twitter @FinnaustMining or contact:
FinnAust Mining 44 (0) 20 7907
Roderick McIllree plc 9326
------------------- -------------------- ----------------
FinnAust Mining 44 (0) 20 7907
Graham Marshall plc 9326
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SP Angel Corporate 44 (0) 20 3470
Ewan Leggat Finance LLP 0470
------------------- -------------------- ----------------
SP Angel Corporate 44 (0) 20 3470
Laura Harrison Finance LLP 0470
------------------- -------------------- ----------------
St Brides Partners 44 (0) 20 7236
Elisabeth Cowell Ltd 1177
------------------- -------------------- ----------------
St Brides Partners 44 (0) 20 7236
Charlotte Page Ltd 1177
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Competent Person Statement
The information in this announcement that relates to historical
exploration results is based on information reviewed by Roderick
McIllree, who is the Chief Executive and a member of the
Australasian Institute of Mining and Metallurgy.
Roderick has sufficient experience, relevant to the style of
mineralisation and type of deposit under consideration and to the
activity, which he is undertaking, to qualify as a qualified person
as defined by the AIM Rules. Roderick has reviewed the historic
exploration results included in this announcement.
Notes
FinnAust has a number of highly prospective licences at various
stages of development in Greenland and Finland. The Company is dual
listed on the London AIM market and Frankfurt Stock Exchange.
The Company is currently focussed on advancing the Pituffik
project in Greenland, an area that has only recently revealed its
mineral potential following changes in the climate. Pituffik, which
FinnAust conditionally acquired in December 2015, has demonstrated
the potential to be in the top percentile of projects worldwide in
terms of heavy mineral grade.
Pituffik comprises three main target areas along an >80km
coastline historically proven to contain large and high-grade
accumulations of primary ilmenite occurring as placer deposits in
the following environments:
-- Raised beaches; containing ilmenite accumulations over widths
of more than 1km, of unknown depths, along more than 20km of
coastline;
-- Active beaches; which refer to the area seaward of the
frontal dunes, including the beach, tidal zones and surf zone -
historically samples from this area have achieved 70% ilmenite by
weight; and
-- Drowned beaches; refers to the areas seaward of active beaches.
The Company's strategy is focused on the production of a bulk
sample "proof of concept" from the Pituffik project in 2017 with
the aim of ultimately generating cash flow to create a company
capable of self-funding exploration on future acquisitions.
FinnAust has an interest in 60% of Bluejay Mining Limited the
holder of the Pituffik exploration licence and has an option to
acquire the remaining 40%.
Within the wider Nordic region, FinnAust also holds a 100%
interest in a portfolio of copper, zinc and nickel projects in
Finland. This multi-commodity portfolio remains a strategic asset
of importance and has been restructured to be cost-sustainable
whilst determining the best plan for future development.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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