TIDMWRN
RNS Number : 4668Q
Worthington Group PLC
01 September 2014
Worthington Group plc ("the Company")
1(st) September 2014
FOR IMMEDIATE RELEASE
Worthington Group plc back Rare Earth Mining exploration as
world struggles to fill supply gap in potential USD 8bn global Rare
Earth Elements' marketplace
The Company is pleased to announce that it has entered into an
agreement with Greenland Rare Earth Projects Limited ("GREP"), a
London based mineral exploration company. GREP are actively
developing a portfolio of Rare Earth Element ("REE") projects in
the Paatasuq area in Greenland.Worthington has agreed to provide
funding to explore part of the Gardar Alkaline Igneous Province
("GAIP") in Greenland. This region of Greenland represents one of
the most significant remaining exploration targets, and is
neighbored by fields with significant proven reserves of REEs.
REEs comprise a group of 17 chemical (metallic) elements, REEs
are vital to some of the world's fastest growing industries, not
surprisingly demand for REEs is surging. REE's unique chemical
properties means that they find their way into many new products,
from the consumer's high tech tablet device, to mobile phones,
solar panels, and even high performance clean burning engines.
Global market intelligence company Transparency Market Research,
in their recent June 2014 report, suggested that the REE Market
demand was worth USD 3.93 billion in 2013, and is expected to reach
USD 8.19 billion by 2019.
Industry experts, including the IPC, the global trade
association serving the printed board and electronics industries,
talk of the shortages in future supply of these vital REEs. In
their online policy briefing the IPC state that, "Demand for REEs
is expected to exceed its supply in the near future". According to
the U.S. Congressional Research Service, only a few mining
companies are developing REEs, and because of the long lead times
needed from discovery to refined elements, supply constraints are
likely in the short term.
"Business Reporter" magazine in June 2014 quoted a report by
research firm "Markets and Markets" that the demand for rare earth
metals is estimated to reach 192,000 tons by 2018. Demand is
strongest in the Asia-Pacific region, with China accounting for 60
per cent of global rare earth consumption. The Chinese government
estimates that, at the current pace of mining, China will run out
of all home sourced REEs by 2029.
The Paatasuq area in Greenland is bordered by the Motzfelt
field. EURARE, a project funded by the European Commission for the
development of a sustainable exploitation scheme for Europe's Rare
Earth ore deposits says that, "Greenland is endowed with several
large REE deposits in various geological settings. The largest
deposits by far are hosted in peralkaline intrusions related to the
Gardar Province in south Greenland, encompassing the deposits
around Kvanefjeld, Kringlerne, and Motzfeldt".
In June 2014, GREP competitor Greenland Minerals and Energy
raised USD 8.8M for a nearby Kvanefjeld mining project in southern
Greenland, part of the Motzfeldt area. The field has large
resources of REEs including 575 million pounds of U3O8, 10.33
million tonnes of total rare earth oxides and 2.25 million tonnes
of zinc with direct shipping access to markets in North America and
Europe.
Doug Ware CEO, of Worthington Group plc, commented today on
Worthington's agreement to acquire up to 41% of GREP. "Whilst this
is an investment in the exploration phase of this project, it
borders areas of proven reserves in the Motzfelt field. If the
reserves are proven, then we are looking at what could amount to
enormous potential returns given the rising demand".
Earlier this month, GREP announced that it had signed an Option
Agreement ("Agreement") with NunaMinerals A/S (COPENHAGEN: NUNA.CO
/ NUNA.DC) who are Greenland's leading company in the exploration
of precious, base and strategic metals. NunaMinerals began
operations in 1999 and is headquartered in Nuuk, Greenland. The
company is listed at NASDAQ OMX Copenhagen A/S under the symbol
"NUNA" (Copenhagen: NUNA.CO). The Agreement has the objective to
advance the development of NunaMinerals' Paatusoq Critical Metals
Project which is located within NunaMinerals' 370 km(2) Hugin
exploration licence in South East Greenland, where the company is
also actively prospecting for gold. Under the terms of the
Agreement ,"Critical Metals" are specified as the REEs, niobium,
tantalum, zirconium, uranium and thorium.
GREP is headed by mining and natural resources veteran Patrick
Newman, along with mining industry expert Steven Beharrell, partner
at Fasken Martineau DuMoulin LLP and recently named "Natural
Resources Lawyer of the Year in England" by Corporate International
Global Awards 2014. Together, the management team bring more than
fifty years of exploration expertise to the project. The London
based team are backed up by academic experts drawn from leading
geological centres, specifically St Andrew's University in the
Scotland.
Under the terms of the agreement with GREP, Worthington have
agreed to provide GREP with immediate funding of USD 550,000 by way
of a loan convertible into 20% of GREP's ordinary share capital. In
addition, Worthington has acquired the right, but not the
obligation, to acquire a further 10% of GREP for a further
investment of USD 1,150,000 payable within one year, subject to WRN
being satisfied with the performance of GREP and satisfactory
exploration results. An option to acquire an additional 11% for USD
1,150,000 within two years, has also been agreed so that, if
Worthington is satisfied with exploration results, it has the right
to increase its holding to 41%.
Patrick Newman CEO of GREP said, "The agreement reached with
Worthington Group plc provides us with access to capital markets
vital to the funding of our exploration work. The Paatusoq project
lying in the Gardar Province of South West Greenland is known to
contain some of the earth's largest deposits of critical metals,
such as the rare earths, yet its continuation on the South East
coast of Greenland has remained unexplored so far. GREP, in
partnership with NunaMinerals and backed by Worthington, now have a
unique opportunity to unlock the mineral potential of the last
remaining virgin exploration target in this world class province.
The agreement provides an ideal synergy between NunaMinerals
in-depth knowledge and expertise in critical metal exploration in
Greenland, and GREP's financial capabilities backed by Worthington
Group within the global financial centre of London. We now look
forward to working alongside Worthington and our partners in
NunaMinerals to develop this recent addition to our exploration
portfolio, starting with a helicopter-borne geophysical survey over
the complex during September 2014 to delineate targets for a
multi-phase, aggressive field program in 2015."
Doug Ware, CEO of Worthington Group plc said, "This investment
is a good example of our strategy defined as 'The Worthington
difference' going forward. We're looking for a diversified
portfolio of investments across the world in fast growing market
places. We are looking to support experienced management teams with
strong potential. Our backing of Patrick and his team at GREP is an
example of this: a great team in a vital industry with enormous
growth potential which needed capital investment to grow. This
investment fits in exactly with Worthington's current mission
statement."
Worthington are placing up to GBP450,000 of unsecured
convertible loan notes ("UCLN") with specialist investors in order
to finance the first phase of the GREP investment. The UCLNs will
pay an interest coupon of 4.5% per annum and are convertible at any
time after three months from the date of issue, at the option of
the loan note holders, into Worthington ordinary shares at a price
per Worthington ordinary share of 50p. To the extent that the loan
notes have not been converted within three years thereof,
Worthington may elect to either redeem the loan notes for cash, or
issue to the Loan Note holders new Worthington ordinary shares at a
price per Worthington ordinary share of 40p.
Commenting on the placing Doug Ware stated "We believe that it
is important that the Company raises money in the most efficient
way possible in order to maximise returns for our shareholders. We
are particularly keen to avoid deeply discounted placings which
often tend to prefer new investors over existing ones".
About Worthington Group Plc ("Worthington")
Worthington (Stock Exchange LSE: WRN) is a British investment
company that this year celebrates its 60th anniversary as a London
Stock Exchange main market listed company. The company has five
areas of investment focus: traditional manufacturing, property,
litigation claims, new economy and emerging markets. The Company
believes that exceptional shareholder returns can be achieved by
utilising its main market Sterling paper to acquire investments in
these sectors worldwide.
Note:
Forward-looking statements contained in this announcement,
including descriptions of GREP/WorthingtonGroupplc/NunaMinerals'
exploration and development projects, strategy and plans, as well
as expectations for future revenue and earnings, reflect
GREP/WorthingtonGroupplc/NunaMinerals' current views and
assumptions with respect to future events and are subject to
certain risks, uncertainties and assumptions. There are many
factors that may cause actual results achieved by
GREP/WorthingtonGroupplc/NunaMinerals to differ materially from
expectations for future results and expectations that may be
expressed in or form an assumption of such forward-looking
statements. Such factors include risks related to exploration,
development and mining activities, uncertainties related to the
results of GREP/WorthingtonGroupplc/NunaMinerals' exploration and
development projects, including risks of delays or closure of
projects, price falls, currency fluctuations and changes in
concession terms, legislation and administrative practices, as well
as competition risk and
other unforeseen factors. If one or more of such risks or
factors of uncertainty were to materialise, or should one or more
of the statements provided prove to be incorrect, actual
developments may differ materially from the forward-looking
statements contained in this announcement.
GREP/WorthingtonGroupplc/NunaMinerals are not under any duty to
update the forward-looking statements contained in this
announcement or to adjust such statements to actual results, except
as may be required by law.
Enquiries:
Charlotte Parham, Media information Tel: +44 203 291 1872
or email: media@worthingtongroupplc.com
PD Cosec - Company Secretary Tel: +44 208 940 0963
Website: www.worthingtongroupplc.com
Statement ends.
This information is provided by RNS
The company news service from the London Stock Exchange
END
AGREAXNFEEALEEF
Worthington (LSE:WRN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Worthington (LSE:WRN)
Historical Stock Chart
From Apr 2023 to Apr 2024
