TIDMJAN
RNS Number : 2226A
Jangada Mines PLC
28 May 2019
Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector:
Mining
28 May 2019
Jangada Mines plc ('Jangada' or the 'Company')
Proposed Disposal of the Pedra Branca Project
Jangada Mines plc, a natural resources company developing the
Pedra Branca project, South America's largest and most advanced
platinum group metals ('PGM') and nickel project ("Pedra Branca"),
and the Ptombeiras West vanadium project ("Ptombeiras"), in north
eastern Brazil, is pleased to announce that it has entered into a
binding letter agreement (the "Agreement") with a TSX-V listed
entity, ValOre Metals Corp. ("ValOre"), for the sale, subject to
satisfaction of a number of conditions (set out further below), of
100% of Pedra Branca do Brasil Mineracao Ltda., the entity that
holds Pedra Branca, to ValOre (the "Proposed Transaction").
As part of the Proposed Transaction, the Ptombeiras project
remains 100% owned by Jangada.
The Proposed Transaction
The Agreement sets out that the following consideration is
payable to Jangada pursuant to the Proposed Transaction:
a) issuance and allotment of 25,000,000 ValOre common shares
("Consideration Shares") on the date of closing of the Proposed
Transaction; and
b) cash payments to Jangada in the aggregate of C$3,000,000, as follows:
(i) an exclusivity payment of C$250,000, which has been received
by the Company. C$200,000 of this amount is refundable only in the
event that Jangada breaches the exclusivity covenant set out in the
Agreement, which runs for the next 100 days;
(ii) C$750,000 payable on closing of the Proposed Transaction;
(iii) C$1,000,000 on, or before, 3 months after the closing of
the Proposed Transaction; and
(iv) C$1,000,000 on, or before, 6 months after the closing of the Proposed Transaction.
As such, the total consideration payable to Jangada, based on
the closing price of a ValOre common share on 23 May 2019, is
approximately GBP4.1 million.
The issue of the Consideration Shares would give Jangada an
interest of approximately 33 per cent. in the current share capital
of ValOre as enlarged by the issue of the Consideration Shares, but
prior to the issue of the new common shares in ValOre pursuant to
the VO Equity Raise (as defined below). Assuming completion of the
Proposed Transaction, Jangada would also have the right to nominate
one individual to the Board of Directors of ValOre and one observer
to the Board, with the intention that such observer shall be
appointed to the Board of Directors of ValOre at the next annual
general meeting of ValOre following the closing of the Proposed
Transaction. Jangada's right to nominate up to 2 directors may be
extended if mutually agreed in writing by ValOre, Jangada and each
of the nominee board members.
Conditions precedent
The Proposed Transaction is subject to normal commercial
conditions of a transaction of this nature including, inter alia,
completion of due diligence by both parties (a process which is
currently ongoing) and definitive and binding documentation being
negotiated and agreed within the next 100 days. The Proposed
Transaction constitutes a fundamental change of business of the
Company pursuant to Rule 15 of the AIM Rules for Companies.
Accordingly, completion of the Proposed Transaction is also
conditional on the approval of the Company's shareholders at a
general meeting that is to be convened once the above conditions on
due diligence and documentation, and the below condition on
funding, have been satisfied.
As part of the Proposed Transaction, ValOre is required to
undertake an equity raise of at least C$3 million (the "VO Equity
Raise") and seek shareholder approval to issue, inter alia, the
Consideration Shares.
The Proposed Transaction provides for an exclusivity period of
100 days for completion of the various conditions precedent set out
above and therefore, until these conditions precedent have been
satisfied in full, Shareholders should be aware there is no
guarantee the Proposed Transaction will proceed.
Rationale for the Proposed Transaction and Future Focus on
Ptombeiras
The Board of Directors of Jangada are aware that this
announcement may come as a surprise to some shareholders and seem
to be conflicting with the Company's promoted views of the
technical and economic prospects of Pedra Branca. This is not the
case. The Board continues to believe very strongly in Pedra Branca
and its prospects, which is evidenced by Jangada remaining a
substantial shareholder of ValOre going forward, and the
appointment of two Jangada nominees to ValOre's board.
Since the Company's IPO in June 2017, the Jangada Board has
found there to be limited support in the UK financial markets for
financing a PGM project. The support that Jangada has experienced
is diametrically opposite to both the independent experts' value of
the underlying assets and the level of support given to projects
with similar asset suites on other bourses. Notwithstanding
Jangada's success at developing its two projects, the UK financial
markets have not responded as expected. The Jangada Board believes
that Pedra Branca will continue to develop strongly as a project,
but, in order to continue that development, the project requires
stronger financial market support, which the Jangada Board believes
ValOre will experience in Canada. It is for this reason that
Jangada has made the decision to proceed with the Proposed
Transaction which will see ValOre raising finance to continue the
development of Pedra Branca and allow the Company to maintain an
interest in a project that will be funded through to its next stage
of development.
Recognising the difficulties of financing PGM projects in the UK
markets, since October 2017, the Board has increasingly focused its
efforts on proving up the vanadium potential of Ptombeiras, and on
5 February 2019, reported the results of its vanadium drilling
campaign, which confirmed the presence of a high-grade deposit with
the potential for significant resource delineation.
The Board believes there is a strong appetite amongst UK and
international investors for vanadium as an asset class, primarily
driven by its importance as an input to battery metals, and
assuming completion of the Proposed Transaction, the Board
considers that it's in the best interests of shareholders to focus
the Company's resources on pursuing the development of Ptombeiras.
In the near term, this would involve further drilling and
metallurgical work, the results of which would then dictate the
path forward for development. A NI 43-101 compliant CPR is already
underway, which is expected to be completed by the Company during
Q3 2019. The Proposed Transaction includes a cash consideration
component allowing Jangada to substantially progress the
development of Ptombeiras.
Information on ValOre
ValOre Metals Corp. (TSX--V: VO) is a Vancouver based company
with a portfolio of high--quality uranium and precious metal
exploration projects in Canada. In addition to the Baffin Gold
Property, ValOre holds Canada's highest--grade uranium resource
outside of Saskatchewan. ValOre's 89,852 hectare Angilak Property
in Nunavut Territory, hosts the Lac 50 Trend with a NI 43--101
Inferred Resource of 2,831,000 tonnes grading 0.69% U3O8, totalling
43.3 million pounds U3O8. ValOre's comprehensive exploration
programs have demonstrated the "District Scale" potential of the
Angilak Property. For disclosure related to the inferred resource
for the Lac 50 Trend uranium deposits, please refer to ValOre's
news release of 1 March 2013.
In Saskatchewan, ValOre holds a 100% interest in the 13,711
hectare Hatchet Lake Property and a 50% interest in the 131,412
hectare Genesis Property, both located northeast of the
north--eastern margin of the uranium--producing Athabasca
Basin.
ValOre's team has forged strong relationships with sophisticated
resource sector investors and partner Nunavut Tunngavik Inc. (NTI)
on both the Angilak and Baffin Gold Properties. ValOre was the
first company to sign a comprehensive agreement to explore for
uranium on Inuit Owned Lands in Nunavut Territory, Canada and is
committed to building shareholder value while adhering to high
levels of environmental and safety standards and proactive local
community engagement.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
* ENDS *
For further information, please visit www.jangadamines.com or
contact:
Jangada Mines plc Brian McMaster (Chairman) Tel: +44 (0) 20 7317
6629
Strand Hanson Limited James Spinney Tel: +44 (0)20 7409
(Nominated & Financial Ritchie Balmer 3494
Adviser) Jack Botros
Brandon Hill Capital Jonathan Evans Tel: +44 (0)20 3463
(Broker) Oliver Stansfield 5000
St Brides Partners Isabel de Salis Tel: +44 (0)20 7236
Ltd Gaby Jenner 1177
(Financial PR)
This information is provided by RNS, the news service of the
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Authority to act as a Primary Information Provider in the United
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contact rns@lseg.com or visit www.rns.com.
END
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