TIDMAXM
RNS Number : 5401F
Alexander Mining PLC
23 February 2015
23 February 2015
Alexander Mining plc
("Alexander" or the "Company")
Agreement signed for an AmmLeach(R) Licence for Browns Project,
Northern Territory, Australia
-- Heads of Agreement signed with Compass Resources Limited
("Compass") for an AmmLeach(R) licence and certain technical and
management services.
-- Feasibility study planned for use of AmmLeach(R) at Compass'
treatment plant in Australia for copper, cobalt and nickel
production.
-- Alexander expects to form a strategic alliance in Australia
with Compass to investigate further outstanding copper
opportunities.
The Company is delighted to announce that it has signed a
non-binding Heads of Agreement ("HoA") with Compass, a listed
Australian public company (ASX:CMR), for executing a definitive
agreement ("Agreement") covering an AmmLeach(R) licence and certain
technical management services for Compass in the Northern
Territory, Australia. These arrangements should significantly
accelerate the first commercial adoption of Alexander's proprietary
AmmLeach(R) technology.
Background on Compass
(website: www.compass-resources-limited.com )
Compass currently is a party to three commercial joint ventures
in the area north of Batchelor, approximately 100km from Darwin,
the capital of the Northern Territory, Australia. The joint
ventures are all with HNC (Australia) Resources Pty Limited
("HAR"). HNC (Australia) Exploration and Mining Pty Limited (wholly
owned by HAR) is the Joint Venture Operator for all three joint
ventures ("JVs"). The JVs are the Oxide JV, the Sulphide JV and the
Regional Exploration JV.
The Browns project includes a fully constructed 1.3 million
tonnes per annum design capacity oxide ore treatment plant
("Plant") and associated infrastructure. The Plant was originally
designed to produce 10,000t copper, 1,000t of contained cobalt and
700t contained nickel per annum.
The Plant operated for four months, starting in September 2008,
before shutting down due to mineral processing problems. Since then
the mine site and Plant have been subject to a care and maintenance
regime.
Martin Rosser, Chief Executive Officer, said:
"We greatly look forward to working closely together with
Compass under this transformative agreement. Based on the
completion of a positive AmmLeach(R) feasibility study and
production go-ahead, the Project would complement our AmmLeach(R)
technology with existing high quality mining assets.
The plan is to generate significant economic value from the
Project area. Australia is one of the world's leading mining
countries and together with Alexander's metallurgical team based in
Perth, Western Australia, it provides an exemplary project to work
on together with Compass Resources.
In addition, Compass and Alexander believe that market
conditions are the most favourable for several years for growth by
attractively priced corporate acquisitions. Accordingly, both
companies expect to form a strategic alliance in Australia to
investigate the acquisition by Compass of copper resources which
can be exploited using the Leaching Technologies. This will be on
terms to be agreed in respect of each such project."
The first step is the completion of an AmmLeach(R) feasibility
study, with a pilot plant programme, funded by Compass. This pilot
plant programme would be carried out at the independent commercial
facilities of Simulus Engineers, Perth, Western Australia, under
the supervision of Alexander's technical personnel. This would lead
to the completion of a feasibility study into commercial production
and is dependent upon statutory approval and obtaining all
necessary permits required to recommence production.
Compass is currently working to complete a financing facility
with sophisticated institutional investors as a first step in a
proposed major refinancing and relisting of the company. The
proceeds of the financing will be used for various purposes,
including payments due under the Agreement to Alexander and for the
third party AmmLeach(R) pilot plant and feasibility study
costs.
Compass and Alexander are currently working to finalise the
definitive Agreement, which will be conditional on completion of
Compass' proposed financing ("Condition"). The key commercial terms
agreed in the HoA are summarised below.
AmmLeach(R) Licence
On satisfaction of the Condition, the Company will grant to
Compass a non-transferable licence to use Alexander's leaching
technologies (AmmLeach(R)) for the sole purpose of extracting base
metals or value added metal containing products from ore mined at
or sourced from Compass properties. The licence will be granted on
the following terms:
I. Cash payment by Compass of A$825,000 to Alexander on commencement of the Agreement; and
II. A royalty of 2.6077% on saleable metal production after capped third party royalties.
Consultancy Services
Alexander will provide technical project management services
('Consultancy Services') to Compass as follows.
I. During the AmmLeach(R) pilot plant and feasibility study period
Alexander will provide Consultancy Services to Compass during
the period through to completion of the feasibility study and a
construction go-ahead decision point, whereby;
Compass will pay to Alexander:
-- an initial fee of A$275,000 on commencement of the Agreement;
-- A$400,000 three months after the initial fee payment; and
-- A$425,000 upon delivery of the feasibility study.
II. During construction and commissioning stage
There will be two A$275,000 payments made to Alexander, as
follows:
-- A$275,000 three months after delivery of the feasibility study; and
-- A$275,000 on plant commissioning in accordance with the
technical specifications set out in the Feasibility Study.
Granting of Alexander Share Options
Conditional upon the Agreement being executed, satisfaction of
the Condition and subject to Alexander shareholders' approval at
the 2015 AGM, the Company will grant to Compass the following share
options:
I. options over 5 million ordinary shares of 0.1p each at an
exercise price of 7.5p per share for 18 months from issue; and
II. options over 5 million ordinary shares of 0.1p each at an
exercise price of 10.0p per share for 24 months from issue.
Enquiries:
Martin Rosser Matt Sutcliffe
Chief Executive Officer Executive Chairman
Mobile: +44 (0) 7770 865 Mobile: +44 (0) 7887 930
341 758
Alexander Mining plc
1(st) Floor
35 Piccadilly
London
W1J 0DW
Tel: +44 (0) 20 7292 1300
Fax: +44 (0) 20 7292 1313
Email: mail@alexandermining.com
Website: www.alexandermining.com
Northland Capital Partners
Limited
Nominated Adviser and
Joint Broker
Matthew Johnson / Gerry
Beaney
+44 (0) 20 7382 1100
Hume Capital Securities
plc
Joint Broker
Guy Peters / Abigail Wayne
+44 (0) 20 3693 1470
This information is provided by RNS
The company news service from the London Stock Exchange
END
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