TIDMURU
RNS Number : 9390Q
URU Metals Limited
03 March 2021
3 March 2021
URU Metals Limited
("URU" or "the Company")
Proposed Disposal of the Company's Zebediela Nickel Project
& Notice of Annual General Meeting
URU Metals Limited (AIM: URU), announces that its Annual General
Meeting ("AGM") will be held at 10.00 a.m. EST/ 3.00pm GMT at the
offices of URU Metals Limited at 4 King Street, West Suite 401 M5H
1B6 Toronto, ON, Canada on 1 April 2021. The Notice of AGM is being
published today on the Company's website at
www.urumetals.com/investor-relations/circulars-and-publications and
will be posted to shareholders on 5 March 2021.
The Company announced on 13 January 2021 that it has entered
into a letter of intent, dated 7 January 2021 ("LOI"), with Blue
Rhino Capital Corp ("BRC"), a company listed on the TSX Venture
Exchange ("TSXV") whereby BRC proposed to acquire all of the issued
and outstanding share capital of Zebediela Nickel Company (Pty)
Ltd. ("ZEB"), which controls the Company's Zebediela Nickel Project
in South Africa (the "Zebediela Project" or the "Project").
Following a period of due diligence the Company and BRC entered a
Sale Agreement on 2 March 2021 pursuant to which the Company agreed
to sell its holding in ZEB to BRC in exchange for the Consideration
Shares ("Disposal") which at completion of the Disposal
("Completion") represent approximately 79.85% of the issued share
capital BRC. As part of the transaction BRC will carry out a 2.3-1
stock Consolidation ("Consolidation"), and will also carry out a
non-brokered private placement to raise CND $2,300,000
("Fundraise"). At the anticipated issue price of the Consideration
Shares this values ZEB at CND $ 10M prior to completion of the
Fundraise.
ZEB's local partner in the Project is entitled to a gross 1.5%
royalty on all revenue generated from the Project (the "Royalty").
URU currently has a right to acquire 1% of this Royalty for 2
Million USD within 24 months of a mining right being granted in
respect of the Project. URU has agreed to cede, assign, transfer
and make over to BRC at Completion this right. URU will retain its
1.0 % royalty in respect of the Project.
The Disposal constitutes a fundamental change of business of the
Company under Rule 15 of the AIM Rules for Companies. Accordingly,
completion of the Disposal is conditional, inter alia, on the
approval of Shareholders at a general meeting of the Company,
notice of which is set out on page 13 of the Circular to be sent to
shareholders on 5 March 2021 and also available on the Company's
website.
Following the Disposal the Company will not be regarded as an
investing company (as defined in the AIM Rules) as the Company will
retain majority ownership of BRC and will be the technical operator
of the Project. In addition the Company is actively pursuing other
exploration projects and its subsidiary has recently made an
application to the Department of Mineral Resources of South Africa
for mining prospecting rights on 247.28 hectares of various
portions of land neighbouring the Zebediela Project.
Information relating to the Buyer
BRC is a capital pool company within the meaning of the policies
of the TSXV that has not commenced commercial operations and has no
assets other than cash. The current directors and officers of BRC
consists of Anton Drescher (Director, President, Chief Executive
Officer and Corporate Secretary), Raphael Danon (Director), David
Cross (Chief Financial Officer) and David Brett (Director). Under
the Sale Agreement at Completion BRC has agreed to procure that
BRC's directors and officers (other than Anton Drescher) will
resign and be replaced by nominees of the Company. These nominees
will include Jay Vieira who is a director of the Company. The names
and backgrounds of all persons who are expected to be appointed as
officers and directors of BRC are detailed below.
BRC currently has 5,400,000 common shares issued and
outstanding, as well as 200,000 incentive stock options and 200,000
broker warrants to acquire common shares, each exercisable at CND
0.10 per share.
Following the Consolidation, BRC will have approximately
2,347,826 shares outstanding, and 86,957 incentive stock options
and 86,957 broker warrants, each exercisable at CND 0.23 per
share.
Following Completion BRC is expected to have 51,347,826 common
shares in issue and that BRC will be listed as a Tier 2 Mining
issuer on the TSXV and will be involved in the exploration and
development of the Project. The Transaction is intended to
constitute BRC's "qualifying transaction" pursuant to Policy 2.4 -
Capital Pool Companies of the TSXV.
CV of Directors' of BRC at Completion
Anton Drescher (Director)
Mr. Drescher is an existing director of BRC and has been a
Certified Public Accountant, Certified Management Accountant since
1981. Mr. Drescher is currently involved with several public
companies including as: a director (since 1991) of International
Tower Hill Mines Ltd., a public mining company listed on the TSX
and the NYSE-MRT; a director (since 1996) and Chief Financial
Officer (since 2012) of Xiana Mining Inc., a public mineral
exploration company listed on the TSXV; a director (since 2007) and
the Chief Financial Officer of Oculus VisionTech Inc., a public
company involved in watermarking of film and data listed on the
TSXV and the OTC Bulletin Board; a director (since 2014) of CENTR
Brands Corp., a public company listed on the CSE. Mr. Drescher is
also the President (since 1979) of Westpoint Management Consultants
Limited, a private company engaged in tax and accounting consulting
for business reorganizations, and the President (since 1998) of
Harbour Pacific Capital Corp., a private company involved in
regulatory filings for businesses in Canada.
Wayne Isaacs (CEO and Director)
Mr. Isaacs has a thirty-year career on Bay Street specializing
in the resource sector both as a corporate executive of resource
companies and as an investment banker. This extensive experience
has allowed him to successfully seek out and engage and acquire
significant resource assets and financing to support exploration,
development and mining activities for his operating and investee
companies. Mr. Isaacs has been involved as principal in 30 listed
companies and has served as a director and / or senior officer of
over 35 listed companies. He was the President and Director of
Forsys Metals Corp. from 2003 to 2007, a TSX listed company with
uranium properties in Namibia, Africa which he managed from start
up to in excess of $750 million in market capitalization raising
over $70 million to advance its uranium property from the
exploration stage to the production decision stage. Mr. Isaacs is
currently a Director of AM Resources Corp. (TSX.V: AMR), a mining
company engaged in the exploration of coal, hydrocarbons and gold
mining sites located in Colombia. He is a graduate of the
University of Western Ontario and has held numerous securities
certifications and licenses.
Tom Panoulias (Director)
Mr. Panoulias is a capital markets professional with over
fifteen years of experience. He has previously worked at Echelon
Wealth Partners, Fraser Mackenzie, and Dundee Capital Markets,
raising over one billion dollars for issuers in the mining sector
and advising senior management teams on numerous merger and
acquisition transactions. Prior to entering capital markets, Mr.
Panoulias held senior roles at Kinross Gold Corporation and TVX
Gold Inc. in corporate development, responsible for managing
various acquisition and divestiture activities. He currently is the
Vice President of Corporate Development for Freeman Gold Corp. and
a director of Bonavista Resources Corp. Mr. Panoulias holds an
Honours Bachelor of Commerce degree from the University of Toronto
and is a member of the Canadian Institution of Mining and
Metallurgy and the Toronto Society of Financial Analysts.
Greg McKenzie (Director)
Mr. McKenzie (JD, MBA) is a former senior investment banker with
more than twenty years of experience in financing, M&A,
financial advisory, valuation, and strategic advice to mid-cap
companies. Mr. McKenzie has held positions with Morgan Stanley,
CIBC World Markets and Haywood Securities, and has been involved in
transactions valued in excess of $18 billion. In addition to his
capital market experience Mr. McKenzie previously practiced
corporate law with a leading Canadian securities and M&A law
firm. He is currently the President & CEO of Golden Tag
Resources, a Mexican Silver Exploration and Development
Company.
Jay Vieira (Director)
Mr Vieira is the Non-executive Chairman of URU and former Vice
President, Corporate and Legal Affairs at Distinct Infrastructure
Group Inc. Previously, from 2006 to 2016, he was a partner with the
law firm of Fogler, Rubinoff LLP, Toronto, Ontario, where he
focussed on securities and corporate finance. Mr. Vieira is a
member of the Canadian and Ontario bar associations and the Law
Society of Upper Canada. He was admitted to the Ontario bar in 1999
after obtaining his LL.B. from the University of Windsor Law
School. Mr. Vieira also holds a B.A. (Hons.) in Humanities from
McMaster University.
Martin Vydra (Strategic Advisor to the Board)
Mr. Vydra President of Giga Metals joined following a thirty-one
year career with Sherritt International Corporation, a leader in
the mining, processing and refining of lateritic nickel and cobalt
with operations in Canada, Cuba and Madagascar. Martin is widely
recognized as an expert in nickel and cobalt extraction, processing
and refining including the development and application of advanced
technologies to maximize the recovery of valuable metals such as
nickel and cobalt from a variety of feeds. While at Sherritt,
Martin's technical accomplishments spanned four continents and over
20 operations including postings in Australia where he was
integrated in Murrin Murrin's refinery start up; Finland for the
design of Harjavalta's nickel reduction circuit; and, in Chile
where he oversaw the design, construction and commissioning of a
major pressure oxidation operation. Most recently, Martin served as
Sherritt's Senior Vice President, Commercial and Technologies,
where he had oversight for the sales and marketing of nickel and
cobalt, and marketing and commercialization of Sherritt's
proprietary technologies. Mr. Vydra also currently works for Conic
Metals Corp in a strategic capacity.
Justin Cochrane (Advisor to the Board)
Mr. Cochrane, President and CEO of Conic Metals Corp., has 20
years of royalty and stream financing, M&A and corporate
finance experience. Prior to Conic Metals, he served as President
& COO of Cobalt 27 Capital Corp. and before that as Executive
Vice President and Head of Corporate Development for Sandstorm Gold
Ltd. Mr. Cochrane's expertise is in the structuring, negotiation,
execution and funding of royalty and stream financing contracts
around the world, across dozens of projects, totalling over $2
billion. Prior to Sandstorm, he spent nine years in investment
banking and equity capital markets with National Bank Financial
where he covered the resource, clean-tech and energy technology
sectors. In addition, Mr. Cochrane is currently a board member of
Nevada Copper Corp.
David Cross (Chief Financial Officer and Corporate
Secretary)
Mr. Cross, a Certified Public Accountant, Certified Management
Accountant, started his accounting career at a Chartered Accountant
firm in 1997. Currently he is a partner of Cross Davis &
Company LLP, an accounting firm founded in 2010, which is focused
on providing accounting and management services for publicly traded
companies. Mr. Cross also serves as the Chief Financial Officer and
director of several publicly listed companies. Mr Cross will not be
a director of BRC.
The Zebediela Project
The Zebediela Nickel Project extends over three separate
adjacent prospecting rights in the Limpopo Province of South
Africa. All three rights are held by LPU, which in turn is 100%
owned by UML. ZEB owns 74% of the issued share capital of UML. The
Zebediela Nickel Project is located on the Northern Limb of the
Bushveld Complex. The Bushveld Complex is thought to be the world's
largest repository of PGEs, chrome, and vanadium. The project is
immediately adjacent to, and up-dip from, Ivanhoe Mines Platreef
Project, and about 15 km along strike from Anglo American
Platinum's flagship Mogalakwena Mining Complex, which Anglo
American Platinum claim is the highest margin PGM producer in the
industry. A November 2020 feasibility study on Ivanhoe Mines'
Platreef Project concluded it could have production of 4.4 Mtpa of
PGM with previous studies for the same project indicating 0.34%
nickel, 0.17% copper and 4.40 g/t 3PGE+Au (platinum + palladium +
rhodium + gold) at the project (Ivanhoe Mines Updated DFS, 2020).
In its annual results to December 2019 Anglo American Platinum
reported that Mogalakwena had ore reserves of 1195.3 Mt, plus an
additional 60.8 Mt on the primary stockpiles (Ore Reserves and
mineral Resources Report, 2019).
In March 2012 an assessment of the nickel mineralization in the
Lower Zone Uitloop II body was completed by MSA Geoservices
(Proprietary) Limited as part of a Preliminary Economic Assessment
of the Project. This NI 43-101 compliant report concluded that the
Project contained an Indicated Resource of 485.4 million tonnes
averaging 0.245% nickel to be stated, with an additional Inferred
Resources of 1,115.1 million tonnes at 0.248% nickel. The directors
believe this level of resource would rank the Project amongst the
top ten largest nickel sulphide resources globally.
BRC has recently concluded a NI43-101 compliant report on the
Zebediela Project which is available on the Company's website or
via the following link
http://www.rns-pdf.londonstockexchange.com/rns/9390Q_1-2021-3-2.pdf
This report identifies the prospective targets (including a new
target) and makes recommendations for the development of the
Project. The report identifies three targets which are as
follows:
-- Target Type 1 (Lower Zone): A low-grade, disseminated nickel
sulphides mineralization within the Lower Zone Uitloop I body,
which also contains significant iron minerals in the form of
magnetite which is also a potential by-product and further
low-grade, disseminated nickel sulphides associated with the Lower
Zone Uitloop II hosted mostly in a thick package of alternating
dunite, serpentinized dunite, serpentinite, pyroxenite and
harzburgite.
-- Target Type 2: referred to as Platreef/Critical Zone
mineralization, this type is characterized by two styles, Platreef
stratabound and contact-style. Platreef stratabound mineralized
zones contain Ni-Cu-PGE mineralization hosted by disseminated
and/or bleb sulphides in a stratigraphic unit up to 150 m thick.
Contact-style Ni-Cu-PGE mineralization is intimately associated
with the footwall contact of the intrusion. Both styles of
mineralization have been intercepted in historical and current
boreholes on the Zebediela Project.
-- Target Type 3: comprises nickel-rich massive-sulphide bodies
which may be located within the ultramafic lithologies close to, or
on the footwall contact, or injected up to several hundred metres
into the granitic rocks of the footwall.
The New NI 43-101 recommends a two phase program, totalling
US$950,000 (C$1.2M) as follows:
-- Phase 1 - obtain Mining Right and complete associated
environmental authorisation process in order to secure long term
title across the three prospecting rights that make up the Project;
and
-- Phase 2 - a six hole diamond drilling program totalling
approximately 3,600 m targeting the newly discovered Platreef style
mineralization (Target 2 above) with the aim of proving the strike
and dip extent of the mineralization, and for resource definition
drilling and producing an outline maiden PGE resources.
Following Completion, BRC will retain ownership of the Project
and become with URU continuing as operator of the Zebediela Project
and therefore will conduct the work programme set out above.
There are no profits or losses attributable to ZEB, as it is a
holding company for the Project.
Background to and Reasons for the directors recommending the
Disposal
The Company's current market capitalisation is just over
GBP4.4m. Over the 12 months the Company has been valued as high as
approximately GBP5 million GBP and as low as GBP700,000. The Board
believes that this valuation does not reflect the current value of
the Project or the potential exploration upside. This is partly due
to the lower trading volumes in the Company's shares, which
prevents shareholders from trading in meaningful volumes or with
any frequency. The Company has seen projects it believes to be
similar achieve much higher valuations when owned by TSXV listed
entities. The Board believe by selling the Project to a TSXV
company it will be able to obtain a higher valuation of the shares
it holds in that vehicle than the current value placed on the
Company on the AIM Market.
Furthermore there are large number of Africa focused mining and
exploration companies that are listed on the TSX or the TSXV and,
therefore there is a listed peer group to provide comparators to
BRC.
Summary of the Sale Agreement
Under the Sale Agreement the Company has agreed to sale and BRC
have agreed to buy the entire issued and outstanding share capital
of Zebediela Nickel Company (Pty) Ltd. ("ZEB") in consideration for
which BRC will issue to the Company the Consideration Shares.
Completion of the Disposal is subject to a number of conditions
inter alia:
-- the completion of the Concurrent Financing of CND $2,000,000 by BRC;
-- the completion of the Consolidation;
-- receipt of all required shareholder, regulatory and
third-party consents, including approval of the TSXV and the
shareholders of the Company; and
-- satisfaction of other customary closing conditions.
Pursuant to the terms of the Sale Agreement URU has agreed to
transfer its rights to buy out the Royalty to BRC. The Company has
also provided certain warranties to BRC in respect of ZEB and the
Project.
Interests of the Directors in BRC
It is the expectation of BRC that Mr John Zorbas will invest CAD
75,000 in the proposed Concurrent Financing by BRC to show his
support for the continued development of the Project, and the
valuation of the transaction agreed between the Company and BRC.
Details regarding the participation of Mr Zorbas, and other
directors, remain to be confirmed and will be notified to
Shareholders.
The Company's operations following the Disposal
On completion of the Disposal, the Board anticipates that the
Company will have a cash balance of approximately CAD $60,000. The
Company intends to use the funds available to it following the
Disposal to provide working capital for the day-to-day business of
the Company and to develop its other projects, which include the
application for mining prospecting rights in land neighbouring the
Zebediela Project.
Assuming that the Transaction is completed, URU will have an
interest in 41,000,000 common shares of BRC, representing
approximately 79.85% of the issued common share capital of BRC.
Shareholders should note that, should the Transaction proceed,
the disposal of ZEB is deemed to be a fundamental change of change
of business pursuant to Rule 15 of the AIM Rules for Companies.
Accordingly, at the AGM shareholders of URU will be asked to
consent to the disposal of ZEB. For the avoidance of doubt, URU
will not become an AIM Rule 15 company as a consequence of the
Transaction.
URU intends to retain ownership of the common shares of BRC for
the foreseeable future and these shares will be subject to an
escrow period under the rules of the TSXV. The Company will review
strategic options for the block of shares held by the Company as
the Project develops. This may include a sale of some or all of the
shares by the Company, or a distribution of shares to Shareholders
of the Company by dividend in specie or demerger.
Board Recommendation
The Board considers the proposed Disposal of the Zebediela
Project to be in the best interests of the Shareholders and
recommends Shareholders vote to approve the proposed Disposal at
the AGM. For the reasons set out in the Circular being sent to
shareholders (and available via the Company's website)and following
the process undertaken by the Board, the Board is of the view that
the Disposal is in the best interests of Shareholders.
Accordingly, the Board unanimously considers each of the
Resolutions to be in the best interests of the Company and its
Shareholders as a whole. Accordingly, the Board and its management
recommends that Shareholders vote in favour of the Resolutions to
be proposed at the Meeting of Shareholders as they intend to do in
respect of their own holdings.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS (1)
Event Expected Timetable
Latest time and date for receipt of Forms 10.00 a.m. EST/ 3.00
of Instruction p.m. GMT on 29 March
2021
-----------------------
Latest transmission time for CREST Voting 10.00 a.m. / 3.00 p.m.
Instructions GMT on 30 March 2021
-----------------------
Latest time and date for receipt of Forms 10.00 a.m. / 3.00 p.m.
of Proxy GMT on 30 March 2021
-----------------------
Annual General Meeting 10.00 a.m. / 3.00 p.m.
GMT on 1 April 2021
-----------------------
Expected completion of the Disposal Not later than 30 June
2021
-----------------------
(1) All times shown in this document are Toronto Eastern
Standard Time / London GMT times unless otherwise stated. The dates
and times given are indicative only and are based the Company's
current expectations and may be subject to change. If any of the
times and/or dates above change, the revised times and/or dates
will be notified to Shareholders by announcement through the
Regulatory News Service of the London Stock Exchange.
This announcement should be read in conjunction with the full
text of the Circular to be posted to Shareholders on 05 March 2021,
copies of which are available on the Company's website
www.urumetals.com/investor-relations/circulars-and-publications .
The same definitions apply throughout this announcement as are
applied in the Circular
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.
For further information, please contact:
URU Metals Limited
John Zorbas
(Chief Executive Officer)
+1 416 504 3978
SP Angel Corporate Finance LLP
(Nominated Adviser and Broker)
Ewan Leggat / Charlie Bouverat
+ 44 (0) 203 470 0470
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END
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