REG - Ascent Resources PLC Amur Minerals Corp - Intention to bid for Amur Minerals Corporation

Amur MineralsAnnouncement

01/06/2023 13:15

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RNS Number : 3758B  Ascent Resources PLC  01 June 2023

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

1 June 2023

                Ascent Resources plc

Intention to bid for Amur Minerals Corporation

 

The board of directors of Ascent Resources Plc ("Ascent" or, the "Company"),
the European and Latin American focused natural resources company, is pleased
to announce their intention to bid for the entire issued and to be issued
share capital of Amur Minerals Corporation ("Amur" or, the "Target Company")
following a period of protracted discussions with the Board of Amur.

 

Ascent's vision is that Ascent and Amur would combine to form a larger, well
funded and more liquid, entity combining Amur's cash (post the recently
announced asset sale and subsequent dividend) with Ascent's ESG Metals project
pipeline in LATAM, which typically have low geological risk and near term and
sustainable cashflows, in addition to the significant upside exposure of
Ascent's funded EURO 500+ million Energy Charter Treaty damages claim (the
"Potential Combination").

 

Ascent submitted a non-binding indicative proposal to the Board of Amur in
November 2022 to acquire 100% of the issued and to be issued share capital of
Amur (post payment of its dividend as subsequently announced 24 May 2023) in a
share-for-share exchange on a ratio of approximately 1 new Ascent share for
every 21 Amur shares in issue (the "Exchange Ratio") (subject to the
reservations set out below) (the "Indicative Proposal").  On the assumption
that Amur only has assets of $5,000,000 in cash (post payment of dividend) and
no further material liabilities, the indicative proposal is equivalent to a
gross equity valuation of 6.1 pence per new Ascent share (based on an exchange
rate of $1 = £0.8051).   Despite multiple conversations with the Board of
Amur and multiple follow up correspondence, the Company has as yet been unable
to elicit a written response to their offer.

 

The Indicative Proposal also included the intention to combine the skills of
both executive teams, as well as other potential changes to the enlarged
groups non-executive directors. It is intended that the enlarged group would
have a majority of board directors from Ascent.

 

The Exchange Ratio, based on Ascents volume weighted average share price of
3.6716 pence yesterday, being the last business day immediately prior to the
date of this announcement, currently represents a value of approximately 0.175
pence per Amur share.

 

At the current value of approximately 0.175 pence per Amur share implied by
the Exchange Ratio, a potential offer, if made, when added to the 1.8 pence
dividend to be paid by Amur would represent a premium of approximately:

·     7.3 per cent. to the Amur closing price of 1.840 pence per
share on 31 May 2023, being the last business day immediately prior to this
announcement;

·    15.3 per cent. to the monthly average volume weighted average price
calculations for Amur shares over the three-month period starting on and
including 1 March 2023, being 1.713 pence per share; and

·    47.5 per cent. to the monthly average volume weighted average price
for Amur shares over the six-month period starting on and including 1
December 2022, being 1.339 pence per share

 

Under the terms of the Indicative Proposal, it is expected
that Amur shareholders would own approximately 28.6 per cent. of the
enlarged group, and Ascent shareholders would own approximately 71.4 per cent.
of the enlarged group.

 

Given the Indicative Proposal is currently proposed to be structured as an
share-for-share exchange effected by either scheme of arrangement or plan of
arrangement, Ascent is currently only minded to proceed with the Indicative
Proposal on the pre-condition that a recommendation from the Amur Board is
ultimately forthcoming.

 

The Company believes that the combination would be a strategically compelling
proposition for both sets of shareholders at this moment in time, resulting in
the combination of two complementary businesses, with a new well funded LATAM
focused metals processing businesses emerging from the combination supported
by Amur's remaining cash balance (post dividend) as well as Ascents funded
€500+ million monetary damages claim. The Company believes that the combined
shareholder group would benefit from dovetailing industrial capital with
metals processing business development inventory, in a scaled and well funded
enlarged entity with greater breadth of shareholders and positioned to be
exposed to multiple near and long term business catalysts in play and to be
achieved.

 

Amur is a British Virgin Islands incorporated corporation and is not subject
to the UK City Code on Takeovers and Mergers, nor is it subject to any similar
legislation or code in its country of incorporation. Amur has voluntarily
adopted similar provisions to the UL City Code on Takeovers and Mergers in
Clauses 143 to 149 (inclusive) of the Articles of Association. At this stage,
there can be no certainty that a binding offer will be made.

 

Further announcements will be made as appropriate.

 

Enquiries:

 Ascent Resources plc                            Via Vigo Communications

 Andrew Dennan
 WH Ireland, Nominated Adviser & Broker          0207 220 1666

 James Joyce / Sarah Mather
 Novum Securities, Joint Broker                  0207 399 9400

 Jon Belliss

 

Important notices

 

WH Ireland Limited, which is regulated by the Financial Conduct Authority in
the United Kingdom, is acting exclusively for Ascent Resources Plc and no one
else in connection with the matters referred to in this announcement and will
not be responsible to anyone other than Ascent Resources Plc for providing the
protections afforded to clients of WH Ireland, or for providing advice in
relation to the matters referred to in this announcement.

 

 

 

 

 

 

 

 

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