Arc Minerals Limited Sale of Casa Mining (6307G)
March 18 2020 - 7:17AM
UK Regulatory
TIDMARCM
RNS Number : 6307G
Arc Minerals Limited
18 March 2020
18 March 2020
Arc Minerals Ltd
('Arc' or 'Arc Minerals' or the 'Company')
Sale of Casa Mining
Arc Minerals is pleased to announce that it has today entered
into a binding Sale and Purchase Agreement to sell Arc's entire
99.43% interest in Casa Mining Limited ("Casa") to Golden Square
Equity Partners Limited ("Golden Square" or the "Purchaser") for a
consideration payable of up to $US50m. The transaction will close
on 19 March 2020 (the "Completion Date"). An amount of US$5m of
consideration will be paid to Arc on the Completion Date in the
form of a loan note which will mature on 19 March 2021 (the
"Maturity Date"). In the event that the share capital of Casa is
acquired by a publicly traded company, the Purchaser may, at its
option, discharge the US$5m liability by delivering shares of the
public company with a market value of US$5m to Arc.
In addition, the Purchaser has a binding obligation to enter
into a royalty payment agreement with Arc Minerals of up to US$45m
within 20 Business Days of the transaction closing on 19 March
2020, based on potential gold production of the projects and
interests that are held by Casa as at the Completion Date
("Royalty").
The Purchaser also assumes all existing liabilities pertaining
to Casa (GBP1.95m as at 30 September 2019), capped at US$3m.
Arc has ensured that it has security over 100% of the Casa
shares being sold in the event of non-payment of the loan note.
While the Purchaser has provided certain documentation to Arc in
respect of underlying investments there can be no guarantee that
the loan note will be repaid.
The payment of any Royalty will depend upon Casa becoming a gold
producer and this in turn will depend upon Casa raising significant
amounts of additional funding, the successful completion of studies
and the granting of the required permits. There can be no guarantee
that any Royalty payments will flow to Arc or the timing of such
payments.
Substantial Transaction
Casa is a private company which owns a 73.84% interest in the
3-million-ounce inferred Resource Akyanga gold deposit in the
DRC.
The sale of Casa constitutes a substantial transaction under AIM
Rule 12. As at 30 September 2019, the reported net book value of
Arc's interest in Casa Mining Ltd and its subsidiary, which own the
Misisi gold assets was GBP 4.7m. The cost to Arc of the shares
being sold is GBP5.7 ($6.9m) against the gross consideration of up
to $50m. Valuation of future consideration which directly impacts
the profit on disposal of Casa is under consideration. As at 30
September 2019, the loss attributable to Casa was GBP6,250. The net
proceeds of the disposal will be applied to exploration and
development activities in Zambia and for general working capital
purposes.
Nick von Schirnding, chairman of Arc commented: "This
transaction is a major step forward for Arc. Following the disposal
of our interests in Slovakia and Eritrea, the sale of Casa turns
Arc into a pure play copper company with our exciting Zambian
copper development where we intend to recommence our drilling
programme in Q2 of this year. Given the extremely challenging
market conditions we are experiencing with Covid-19 this
transaction is attractive to Arc with a potential $5m cash payment
upon the maturity of the loan note in March 2021 and a potential
royalty of up to $45m going forward, allowing us to share some of
the future upside at Casa.
Jonathan de Thierry, an Arc non-executive director and one of
the founders of Casa, has informed the board that he intends to
resign from the Arc board on March 31 2020, following the disposal
of Casa. Jonathan has been a valued member of our board and I thank
him for his contributions to the company and in particular his
insights into Casa and wish him well going forward."
**ENDS**
Contacts
Arc Minerals Ltd
Nick von Schirnding (Chairman) +44 (0) 20 7917 2942
SP Angel (Nominated Adviser
& Broker)
Ewan Leggat / Soltan Tagiev +44 (0) 20 3470 0470
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 until the release of this
announcement.
Notes to the Editors
Arc Minerals is an AIM listed exploration company focused on its
exciting Zambian copper exploration projects.
Arc Minerals current holdings in Zambia include:
-- A 66% equity interest in Zamsort Limited ("Zamsort"), a
private company focused on a prospective copper licence in the
Zambia Copperbelt, together with a convertible loan to Zamsort
which converts into approximately a five percent additional equity
interest in Zamsort.
-- A 52.5% equity interest in Zaco Limited ("Zaco"), a private
company focussed on a prospective copper and cobalt license
adjacent to Zamsort.
For more information visit www. arcminerals.com
Forward-looking Statements
This news release contains forward-looking statements that are
based on the Company's current expectations and estimates.
Forward-looking statements are frequently characterised by words
such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate", "suggest", "indicate" and other similar
words or statements that certain events or conditions "may" or
"will" occur. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that could cause
actual events or results to differ materially from estimated or
anticipated events or results implied or expressed in such
forward-looking statements. Such factors include, among others: the
actual results of current exploration activities; conclusions of
economic evaluations; changes in project parameters as plans
continue to be refined; possible variations in ore grade or
recovery rates; accidents, labour disputes and other risks of the
mining industry; delays in obtaining governmental approvals or
financing; and fluctuations in metal prices. There may be other
factors that cause actions, events or results not to be as
anticipated, estimated or intended. Any forward-looking statement
speaks only as of the date on which it is made and, except as may
be required by applicable securities laws, the Company disclaims
any intent or obligation to update any forward-looking statement,
whether as a result of new information, future events or results or
otherwise. Forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on
such statements due to the inherent uncertainty therein.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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