REG - Amala Foods PLC - Rare Earth Elements Potential Transaction Update

Amala FoodsAnnouncement

16/03/2022 07:45

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RNS Number : 9495E  Amala Foods PLC  16 March 2022

 

Amala Foods Plc

("Amala" or the "Company")

 

Rare Earth Elements Potential Transaction Update

 

Amala Foods Plc (LON: DISH) is pleased to update the market as progress is
made towards the execution of a Sale and Purchase Agreement (SPA), a
transaction with Terra Rara UK Ltd that was first announced on 17 February
2022.  The Company expects to execute the SPA in the near term.

Highlights:

·   Terra Rara Uganda Limited increases footprint in Uganda with the
granting of three additional exploration licenses in areas with Rare Earth
Mineralisation (REE).

·    Work underway with a view to define a drill program.

The Company announced on 17 February that Terra Rara UK Ltd had two
subsidiaries, Terras Raras De Angola Limitada ("TRAL") and Terra Rara Uganda
Limited ("TRUL").

TRAL owns a 51% project interest in the Mungo Rare Earth Elements Project.
Further detail was previously announced on 10 March 2022.  TRAL has the
option to increase its project interest to 70%.

TRUK owns an 80% interest in TRUL which has increased its footprint in Uganda
with the granting of three additional exploration licenses.  The company now
holds four exploration licenses covering over 330 square kilometres. The two
licenses in the Nankoma area are contiguous to the ground owned by Ionic Rare
Earths Limited (IXR), the Australian Stock Exchange listed explorer and
developer which is developing the Makuutu Project. This is one of the largest
Ionic rare earth projects outside of China with a globally significant JORC
resource estimate of 315mt @ 650ppm Total Rare Earth Oxides (TREO). IXR are
currently completing a Bankable Feasibility Study on Makuutu which is expected
to confirm that it will be a low-cost producer with a long life of mine.

TRUL have already completed an aeromagnetic interpretation and a sampling
campaign over its first license in the Nankoma area with the results
confirming REE mineralization. The company will now acquire the aeromagnetic
data for the recently acquired second license in the area and carry out
interpretation of this data. At the same time the company will begin
mobilization to carry out a detailed geophysical program over the two license
areas with the goal of having the defined areas ready to be drilled within six
months.  TRUL intends to increase its tenement holding in the highly
prospective region.

 

In the Gulu Road region of Uganda the company have been granted two
exploration licenses covering an area of over 230 square kilometres.  Based
upon historical exploration data TRUL believe that the area has potential to
host large scale REE mineralisation similar to that which IXR have proved in
the Iganga region and the company plans to take advantage on being a first
mover in this prospective area.

 

The current geopolitical turmoil and rising energy prices are likely to result
in western economies accelerating the shift towards the "green economy" as
they continue to seek to reduce their reliance on fossil fuels.  The
electrification of the energy used to drive machinery is a key part of the
energy transition and one of the most significant energy shifts in history.
Magnet metals are central to this transition and critical to manufacturing
applications such as electric vehicles and wind turbines.  Provenance of
critical rare earth materials will become significant factors in supply
chains.  Prices of Praseodymium-Neodymium Oxide (NdPr) continue to rise
driven by burgeoning demand and growing shortage of supply in China.

 

 

Gerard Kisbey Green, Executive Director of Tera Rara UK, commented:

 

"We are very pleased to have been granted over 330 square kilometres of
exploration licenses in areas that are highly prospective for Ionic clay REE
mineralization in Uganda. In less than 3 years IXR has grown to a market
capitalization in excess of £100 million and we hope to mirror this success."

 

"Initial results from the licenses that lie contiguous to IXR confirm REE
mineralization and being the first mover into the Gulu Road area should prove
to be of significant advantage."

 

 

Aidan Bishop, Director, Amala Foods Plc, commented:

 

"As we close out the due diligence period, Amala Foods anticipates being in a
position within the very near future of signing the SPA to acquire the entire
issued share capital of Terra Rara UK Ltd and a complete rebirth of the listed
vehicle. I am confident that following solid expressions of interest of
finance provision in bringing this opportunity to fruition that shareholders
in the company stand on the cusp of a new and exciting beginning".

 

 

Enquiries:

 

Jonathan Morley-Kirk, Non-Executive Chairman

jmk@bigdish.com (mailto:jmk@bigdish.com)

 

 

 

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