REG - Alba Mineral Resrcs. - 100% Ownership of Clogau Gold & Operations Update

Alba Mineral ResourcesAnnouncement

23/08/2022 07:30

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220823:nRSW8923Wa&default-theme=true

RNS Number : 8923W  Alba Mineral Resources PLC  23 August 2022

Alba Mineral Resources plc

("Alba" or the "Company")

Alba Moves to 100% Ownership of Clogau Gold Mine

& Operational Update

 

Alba Mineral Resources plc (AIM: ALBA) is pleased to announce that it has
agreed to acquire the remaining 10% interest in Gold Mines of Wales Limited
("GMOW") to take 100% ownership of the Clogau Gold Project (the "Project").
Situated within the Dolgellau Gold Belt in Wales, United Kingdom, the Project
comprises the Clogau Gold Mine (the "Mine"), where Alba has identified a
number of highly prospective gold targets through extensive exploratory
drilling in 2020-21, as well as a large number of gold targets and former gold
workings outside of the footprint of the Mine within a total option area of
106.94 km².

Alba is also pleased to provide an operational update which covers the
dewatering of the Llechfraith Shaft, one of the priority targets within the
Mine, as well as confirmation of the renewal of the licence to the Limerick
Base Metals Project.

Highlights

·      Alba to acquire remaining 10% of the Clogau Gold Project, taking
its total ownership of the Project to 100%.

·      Alba to buy back a 3% net smelter return royalty owned by the
vendor, reducing the royalty to 1%, as well as a residual ~£72,000 of loans
held by the vendor.

·      Total consideration payable is £400,000

o  Payable by the issue of 200 million Alba ordinary shares at a price per
share of 0.2p (the "Consideration Shares"), being a premium of 25 per cent to
the closing share price of 0.16p on 22 August 2022, plus 81,930,830 two-year
share warrants with an exercise price of 0.4p per share.

o  Consideration Shares to be subject to a 12-month lock-up/orderly marketing
restriction.

·      Good progress made in further ecological surveying/data
generation in support of plan to dewater Llechfraith Shaft at Clogau Gold
Mine.

o  Alba expects to submit updated ecological/technical report and renewed
permit applications in first half of September.

·    Alba's Limerick Base Metals Project licence renewed for two further
years.

 

George Frangeskides, Alba's Executive Chairman, commented:

"It is a measure of our confidence in the long-term prospects for the Clogau
Gold Project that we have taken the opportunity to move to 100% ownership of
the Project.  The 10% minority stake was free carried to commercial
production and the vendors also held a 4% net smelter return royalty over the
Project, so acquiring both the free carried interest as well as 75% of the
royalty greatly improves the economic viability of the Project for Alba.  At
the same time, any concerns regarding the market impact of the issue of Alba
shares has been addressed by a lock-up of the consideration shares for six
months plus a further six-month orderly marketing restriction.  We have also
negotiated to issue the consideration shares at a significant premium to the
last closing price, reducing the dilutive effect of the transaction.

"On the matter of the dewatering of the Llechfraith Shaft, over the past few
months we have carried out supplementary ecological surveying to generate
further supporting data as well as adding to our proposed mitigation scheme
for the dewatering, all of which elements are being incorporated within a
revised ecological and technical report for submission to NRW in the first
half of September. We remain confident that our application for dewatering
will ultimately be successful.

"Finally, we have renewed the licence to our Limerick Base Metals Project in
advance of the drilling which we intend to undertake there this year, as soon
as we have the permits in hand."

Acquisition Terms

Alba has agreed to acquire the remaining 10% of the Clogau Gold Project,
taking its total ownership of the Project to 100%.  The 10% stake being
acquired by Alba's 100%-owned subsidiary, Dragonfire Mining Limited, was free
carried to commercial production, meaning that the owner, Victorian Gold
Limited, did not have to contribute to any of the exploration and development
costs being incurred by Alba.

At the same time, Alba has agreed to buy back a 3% net smelter return royalty
owned by the vendor, reducing its royalty to 1%, as well as acquiring the
residual ~£72,000 of loans held by the vendor.

An estimated value of £214,000 was attributed to the 10% interest in the
Group accounts for the year ended 30 November 2021, however this did not
include any value for the future free carry benefit, which the Directors
consider to be material. The Group had not attributed a value to the royalty
in the Group accounts as at 30 November 2021.

The total consideration for these acquisitions is £400,000, payable by the
issue of 200 million Alba ordinary shares at a price per share of 0.2p, being
a premium of 25 per cent to the closing share price of 0.16p on 22 August
2022, plus 81,930,830 share warrants with an exercise price of 0.4p per share
and an expiration date of two years from the date of issue.

The Consideration Shares will be subject to restrictions on disposals
comprising a six-month lock-up (no disposals to be undertaken without Alba's
prior consent) and a further six-month orderly marketing restriction
(disposals only to be permitted in consultation with Alba so as to maintain an
orderly market in Alba shares).

Alba has also agreed that if at any time in the five years following
Completion it should acquire the exclusive right to explore for and/or exploit
the Clogau Project licence area or any part of it for copper, the vendor shall
have the right to a 10% working interest in those copper rights, to be
enshrined in a formal joint venture agreement.  The prospectivity of the
Dolgellau Gold Belt for copper has been long known.  In the first half of the
nineteenth century, the most important mines in the Mawddach Valley included
the Vigra and Old Clogau copper mines, both of which are situated within the
area covered by Alba's Clogau exploration licence (which only covers gold and
silver). It is believed that the two decades from 1825 to 1845 covered the
principal era of copper working.

Completion of the acquisition is scheduled to occur in the next few days and a
further announcement will be made in due course.

Clogau Operational Update

In November 2021, the regulator, Natural Resources Wales ("NRW"), refused the
Company's permit application to dewater the Llechfraith Shaft, situated below
the Llechfraith Adit level.  The dewatering exercise is a necessary first
step in gaining access to the Llechfraith Payshoot, one of Alba's primary
in-mine targets.  In March 2022, Alba submitted additional data and analysis
to the regulator.  Following the receipt of its feedback in respect of those
submissions, the Company and its professional consultants have in the past few
months implemented an extension to the programme of ecological and species
surveys in order to expand the ecological dataset generated by the Company
during the past 3-4 years.

The Company's ecological consultants are in the process of updating the
previously submitted ecological and technical report.  Once the survey data
for August is incorporated, the Company intends to submit the revised report
and renewed dewatering applications in the first half of September.  The
Company remains confident that it will ultimately be successful in its bid to
dewater the shaft.

Limerick Update

The mineral exploration licence for the Company's 100% owned Limerick Base
Metals Project, PL 3824, has been renewed until 26 May 2024.  The Project is
situated in the world-class Irish Zinc Ore Field, the location of a number of
high-grade zinc-lead deposits.

The expenditure conditions attaching to the renewal of PL 3824 require the
Company to incur expenditure of €38,087 by 31 December 2022 with a further
€62,500 to be spent by 26 May 2024.

As previously announced, the Company has identified three principal
exploration target areas for follow-up drilling at Limerick.  Accordingly,
applications for the necessary drill permits have been submitted with the aim
of commencing drilling before the end of 2022.

 

This announcement contains inside information for the purposes of
the UK Market Abuse Regulation and the Directors of the Company are
responsible for the release of this announcement.

**ENDS**

 

For further information, please visit www.albamineralresources.com
(http://www.albamineralresources.com) or contact:

 

Alba Mineral Resources plc

George Frangeskides, Executive Chairman                  +44 20 3950
0725

 

SPARK Advisory Partners Limited (Nomad)

Andrew
Emmott                                                        +44
20 3368 3555

 

OvalX (Broker)

Thomas Smith
               +44 20 7392 1494

 

St Brides Partners (Financial PR)

Isabel de Salis / Catherine Leftley
          alba@stbridespartners.co.uk

 

 

Alba's Projects and Investments

 Mining Projects Operated by Alba   Location   Ownership
 Clogau (gold)                      Wales      100%
 Dolgellau Gold Exploration (gold)  Wales      100%
 Gwynfynydd (gold)                  Wales      100%
 Limerick (zinc-lead)               Ireland    100%
 Investments Held by Alba           Location   Ownership
 GreenRoc Mining Plc (mining)       Greenland  54%
 Horse Hill (oil)                   England    11.765%

 

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 (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDPJMFTMTMTMRT