REG - Andrada Mining Ltd - Conditional Asset Portfolio Restructuring

Andrada MiningAnnouncement

27/06/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240627:nRSa0615Ua&default-theme=true

RNS Number : 0615U  Andrada Mining Limited  27 June 2024

27 June 2024

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in the United Kingdom pursuant to the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information will be in the public domain.
 
Andrada Mining LimiteD

("Andrada" or the "Company")

Proposed Restructuring of Andrada's Main Operating Company

Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the technology-metals
producer with mining and exploration assets in Namibia, is pleased to announce
it has, on 26 June 2024, executed a legally binding agreement to restructure
Uis Tin Mining Company ("UTMC"), the operational Namibian entity that holds
the Company's licences (ML133, ML134 and ML129) (the "Licences"), to ensure a
more efficient corporate structure going forward, subject to certain
conditions.

Background to the Transaction

The Company is seeking to increase its ownership interest in UTMC, from 85% to
100% through the acquisition of the 15% interest currently held by the Small
Miners of Uis ("SMU").

The SMU is a not-for-gain (Section 21 of the Namibian Companies Act 2004)
organisation established by the Minister of Mines and Energy of Namibia to
support the economic development of Namibians in historical mining areas. UTMC
was a joint venture between SMU and Andrada's wholly owned subsidiary Andrada
Mining (Namibia) (Pty) Ltd ("Andrada Namibia") to ensure the economic
development of the Licences. To date, the collaboration has been considered
very successful in implementing its mandated responsibility to operate Uis
Mine and to develop all the licences. SMU has a 15% interest in UTMC and under
the proposed transaction this interest is being ultimately sold to Andrada
Namibia.

The SMU has approved as part of the transaction, the transfer of a 5%
ownership interest in UTMC, from its original 15% ownership interest in UTMC,
to Sinco Investments Five (Pty) Limited ("Sinco"), to fulfil its mandate to
further empower Namibians and enable access to the mining industry. Subject to
satisfaction of the completion conditions set out below, Andrada Namibia will
then acquire this 5% interest in UTMC from Sinco, as Sinco has expressed a
preference to hold Andrada listed shares. Sinco is a locally owned and managed
investment company focussed on developing mining and construction projects
within Namibia. It works with partners across the mining value chain to
advance Namibian interests. This transaction is a continuation of Andrada's
strategic positioning to benefit Namibia through collaboration with SMU to
unlock multiple critical minerals while empowering local Namibians.

The Directors believe that this transaction will simplify Andrada's ownership
structure in the Uis and Lithium Ridge licences, whilst still giving the SMU
and Sinco economic exposure to the development of the Company's assets through
a shareholding in Andrada itself. The Directors also believe the new structure
will allow streamlining of operations for value creation and will create the
opportunity for more rapid development of the assets through the introduction
of project specific financing partner solutions.

 

Anthony Viljoen, Chief Executive Officer, commented:

"We believe that this transaction reflects the strong and collaborative
relationship Andrada has built with the SMU over the years. It signifies our
mutual growth and development as partners, and the progression of SMU as an
organisation. Furthermore, it marks a significant step forward, with the aim
to leverage our combined strengths to advance the economic revival of
historical mining areas and upliftment of local communities.

Building on this momentum, we have reached a mutually beneficial share swap
agreement that upholds our commitment to empower local Namibians. The net
effect of this restructure should be value-accretive for all Andrada
shareholders and facilitates Andrada's long-term strategy. Andrada's full
ownership of the Uis and Lithium Ridge licences will provide strategic
optionality to enhance the value proposition of our portfolio, and on
completion we will be well-positioned to unlock the full potential of both
assets through the various ongoing strategic discussions that the Company is
currently undertaking. I look forward to providing updates as the transactions
progress."

Rationale for the Restructuring

The restructuring is intended to consolidate the ownership of Uis and Lithium
Ridge licences, in order to provide Andrada with the ability to target and
expedite the development of these individual mining licences through full
operational and strategic control. As part of the transaction, Andrada Namibia
will also dispose of its 85% interest in Licence ML129 to SMU. Whilst Licence
ML129 (known as Spodumene Hill) no longer aligns with Andrada's current plans,
it presents a valuable opportunity for the SMU to drive immediate development
and economic growth in the Erongo region.

The restructure of ML134 (Uis) and ML133 (Lithium Ridge) should augment
Andrada's strategic dialogue with potential funding partners and culminate in
a series of value-accretive transactions aimed at realising the full potential
of the Company's lithium resource and asset portfolio. At the same time, this
transaction will allow Andrada to retain its empowerment credentials in line
with its commitment to uplifting economic empowerment in Namibia, while the
SMU will realise near-term value and remain well-positioned to continue to
benefit from Andrada's future growth.

The two remaining licences will strategically position the Company to develop
its lithium strategy and to attract partners with expertise in processing
lithium for both the technical (glass - ceramics) and chemical (battery)
industries through the production of petalite and spodumene concentrates
respectively. Whilst the transaction is subject to certain consents and
approvals the Directors are confident that these will be obtained and look
forward to providing updates as this process progresses.

 

Details of the Transaction

As set out above, the Company has today executed a conditional Share Purchase
Agreement ("SPA"), pursuant to which following satisfaction of the outstanding
conditions Andrada Namibia will acquire 15 ordinary shares of NAD1.00 each in
the capital of UTMC currently held by the Small Miners of Uis ("SMU") and will
(as one of the requirements of the SPA) immediately transfer 5 of those shares
to Sinco. This would result in Andrada Namibia holding, in aggregate, 95
ordinary shares of NAD1.00 each in UTCM, representing a 95% interest in UTMC,
and therefore in the Licences held by UTMC (other than ML129, which is to be
transferred to SMU as part of the consideration under the SPA) (the
Acquisition"). In addition, as part of the Acquisition arrangements, Andrada
Namibia would be granted an option to acquire the remaining 5% of UTMC
transferred to Sinco, as set out above (the "Option").

Once exercised, Andrada Namibia (and accordingly Andrada) will then hold a
100% interest in UTMC and a 100% interest in all of its Licences (with the
exception of ML129 which will be disposed of as part of the Acquisition). As
part of the consideration for the conditional Acquisition the SMU will be
issued with ordinary shares in Andrada, calculated as set out below (the
"Consideration Shares"). As also set out below, SMU will be paid a cash
payment and will take control of Licence ML129, currently held by UTMC. In
addition, once the Acquisition has completed, the Option can be exercised and
Sinco will be issued with ordinary shares in Andrada calculated as set out
below (the "Option Shares").

Conditions

The Acquisition (including the transfer of ML129) and the Option are
conditional upon, amongst other items, Ministerial Consent and consents from
Orion, Standard Bank and the Development Bank of Namibia. Accordingly, whilst
there can be no guarantee that the Acquisition or the Option will complete the
Directors have every expectation that they will. Further updates will be
provided in due course.

Consideration

The consideration for the Acquisition is as follows:

§ The issue by Andrada of Ordinary Shares to the SMU (for a total value of
NAD12 million (approx. £520 000) using a 30-day VWAP on the date prior to
the completion of the Acquisition).

§ NAD18 million (approx. £781 000) total cash payment to be paid by Andrada
Namibia to SMU by way of 240 monthly payments of NAD75 000.

§ Transfer of Andrada Namibia's 85% interest in ML 129 to the SMU.

§ The transfer of 5% of the shares in UTMC to Sinco.

Exercise of Sinco Option

Following completion of the Acquisition documentation, the intention is that
Andrada will exercise its option to acquire the remaining 5% of UTMC held by
Sinco. The consideration for which is the issue by Andrada of Ordinary Shares
in the Company at a total value of NAD24 million (approx. £ 1 million) using
a 10-day VWAP on the date prior to the completion of the Acquisition.

About: ML129 (Spodumene Hill)

The Company's Uis Tin Project is comprised of three separate mining licences
(ML129, ML133 and ML134) each of which has been historically exploited for tin
on varying scales. ML134 is the main licence of the Company and incorporates
the former Uis tin mine. ML129 is the least advanced of the Company's three
licences and a key portion of the historic exploration details for ML129 (from
before Andrada acquired the licence) no longer exist. The Andrada directors do
not consider ML129 to be a material licence in the Company's portfolio and do
not consider it aligns to the Company's current objectives.

Additional Information in respect of the 15% interest in UTMC

The losses attaching to the 15% interest in UTMC for the year ended 28
February 2023 are NAD9 720 115.20 (approx. £423 000) (by reference to the
annual audited accounts for the year ended 28 February 2023 of UTMC) and the
turnover attaching to the 15% interest in UTMC for the year ended 28 February
2023 is NAD29 612 777.40 (approx. £1 289 000) (by reference to the annual
audited accounts for the year ended 28 February 2023 of UTMC).

A 15% interest in the gross asset value of UTMC is NAD90 420 734.70 (approx.
£3 935 000) (by reference to the annual audited accounts for the year ended
28 February 2023 of UTMC).

Additional Information in respect of licence ML129

There is no turnover and no profits attaching to licence ML129 (by reference
to the annual audited accounts for the year ended 28 February 2023 of UTMC)
and the book value for ML129 as set out in the annual audited accounts for the
year ended 28 February 2023 of UTMC is NAD24 257 435 (approx. £1 056 000)
(which, as it is only an exploration licence, reflects costs incurred to
date).

 

CONTACT

 Andrada Mining                       +27 (11) 268 6555

Anthony Viljoen, CEO

 Sakhile Ndlovu, Investor Relations

 NOMINATED ADVISOR & BROKER
 WH Ireland Limited                   +44 (0) 207 220 1666

Katy Mitchell

 Harry Ansell

 Andrew de Andrade

 CORPORATE BROKER & ADVISOR
 H&P Advisory Limited                 +44 (0) 20 7907 8500

Andrew Chubb

 Jay Ashfield

 Matt Hasson

 Berenberg                            +44 (0) 20 3753 3040

Jennifer Lee

 Natasha Ninkov

 WHI Capital Markets                  +44 (0) 20 7220 1670

Harry Ansell

 FINANCIAL PUBLIC RELATIONS
 Tavistock (United Kingdom)           +44 (0) 207 920 3150

Jos Simson

                                    andrada@tavistock.co.uk
 Charles Vivian

 Josephine Clerkin

 
About Andrada Mining Limited

Andrada Mining Limited, formerly Afritin Mining Limited, is a London-listed
technology metals mining company with a vision to create a portfolio of
globally significant, conflict-free, production and exploration assets. The
Company's flagship asset is the Uis Mine in Namibia, formerly the world's
largest hard-rock open cast tin mine and currently being re-developed as a
major tin-tantalum-lithium producer.

 

An exploration drilling programme is currently underway with the aim of
expanding the tin resource over the fourteen additional, historically mined
pegmatites that occur within a 5 km radius of the current processing plant.
The Company has set a mineral resource target of 200 Mt to be delineated
within the next 5 years. The existing mine, together with its substantial
mineral resource potential, allows the Company to consider economies of scale.

 

Andrada is managed by a board of directors with broad industry knowledge and a
management team with extensive commercial and technical skills. Furthermore,
the Company is committed to the sustainable development of its operations and
the growth of its business. This is demonstrated by the way the leadership
team places significant emphasis on creating value for the wider community,
investors, and other key stakeholders. Andrada has established an
environmental, social and governance system that has been implemented at all
levels of the Company and aligns with international standards.

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  MSCEAAKKAASLEAA