REG - Andrada Mining Ltd - Orion US$25 Million Funding Package Update

Andrada MiningAnnouncement

15/08/2023 07:00

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RNS Number : 3523J  Andrada Mining Limited  15 August 2023

 

 

15 August 2023

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")

Orion US$25 Million Funding Package Update

Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the African technology metals
mining company with a portfolio of mining and exploration assets in Namibia,
is pleased to provide an update on the previously proposed Funding Package
with funds managed by Orion Resource Partners ("Orion") announced on 15
September 2022. On 11 August 2023, Andrada signed binding documentation for an
updated, conditional US$25 million funding package with Orion.

HIGHLIGHTS

·   US$25 million financing agreements signed ("Orion Financing") detailed
below:

o US$2.5 million (c£2.0 million) equity at 6.39p and US$10 million (c£7.9
million) Convertible Loan Note ("the Note") being for the general purposes of
accelerating Andrada's overall strategy of achieving commercial production of
its lithium, tin, and tantalum revenue streams.

o US$12.5 million unsecured tin royalty for the sole purpose of increasing
Andrada's tin production as it ramps up its capital programmes over the next 2
years.

·    The Company will issue Orion with warrants equivalent to double the
GBP value of the US$10 million Convertible Loan Note based on the USD/GBP
closing rate at market close on the Orion Issuance Date. Each warrant will
enable Orion to subscribe for one ordinary share in the Company (the
"Warrants").

·    Financing conditional on satisfaction of requirements customary with
transactions of this nature and shareholder approval of certain resolutions at
the Company's Annual General Meeting (before 29 September 2023).

·    Funding expected to be completed around the end of September 2023.

·    The financing facility from the Development Bank of Namibia also
remains on track with drawdown of funds expected in due course pending
satisfaction of final conditions.

 

Anthony Viljoen, Chief Executive Officer, commented:

"The signing of the Orion financing agreement will provide sufficient capital
to complete our expansion programmes at our flagship Uis operation.
 Finalising this funding will expedite our lithium implementation programme,
expand our tin production, and concurrently bring a highly respected new
investor onto our register. This will be another major step towards our goal
of becoming a multi-technology metals producer. Additionally, the conclusion
of the Development Bank of Namibia c.US$5.8 million debt facility will further
provide considerable strength to the Company's balance sheet.

"Orion is a renowned mining investment fund with a long track record of
enhancing shareholder value, and we believe the proposed investment terms
strongly endorse Andrada's corporate and broader multi-commodity development
strategy. Orion also has the depth to provide debt financing for Phase 2 of
the business growth. We look forward to building a successful partnership with
Orion in conjunction with all our funding partners going forward."

Philip Clegg, Managing Partner of Orion, commented:

"We are very pleased to have executed definitive documents with Andrada. We
regard Andrada as a high-quality investment opportunity presenting extensive
optionality, with a series of value-creative projects across multiple
future-facing commodities. We are excited to begin our partnership with
Anthony and his team."

DETAILS OF THE ORION FINANCING

The financing is subject to the fulfilment of the following outstanding
conditions precedent:

·    shareholder approval at the upcoming Annual General Meeting;

·    the Company's lender banks' consent;

·    exchange control approval to remit funds into Namibia; and

·    Admission of the Subscription Shares (as defined below) to trading on
AIM.

The final agreed deal terms of the US$25 million funding package are as
follows;

Equity Subscription

·    Andrada, Orion Mine Finance Fund III LP ("Orion LP") and OMF Fund III
(F) Limited ("OMF Limited") have today entered into a subscription agreement
(the "Subscription Agreement"), pursuant to which Orion LP has agreed, subject
to the conditions set out above, to subscribe for 30,821,596 ordinary shares
in the Company, at a price of 6.39p (the "Subscription Shares") (the
"Subscription Price"), being a total investment of c£2.0 million (US$2.5
million ). The price is 90% of the Company's 10 - day Volume Weighted Average
Price ("VWAP") of 7.1p, calculated as at 11 August 2023, being the last
practicable date prior to the date of this announcement.

·    Application for Admission of the Subscription Shares will be made
and, subject to the satisfaction of the conditions above, trading in the
Subscription Shares is anticipated to occur shortly after the Company's Annual
General Meeting. A further update will be provided at that time.

·    Following the issue of the Subscription Shares, Orion LP's interest
in the Company will be 30,821,596 Ordinary Shares representing 1.96% of the
then enlarged share capital of the Company.

Convertible Loan Note

·    As also set out in the Subscription Agreement, OMF Limited has
conditionally agreed to make available to Andrada up to US$10 million (c£7.9
million) by way of an unsecured Loan Note (the "Note"). The Loan can only be
drawn down in full, and not in part. Interest accrues on the Note at a rate of
12% per annum.

·    The Note has a four-year term from the date that the Subscription
Shares commence trading on AIM, anticipated to be end of September 2023 (the
"Redemption Date").

·    The Note is convertible at any time prior to the Redemption Date in
tranches of US$100k. The conversion price for the Note at the election of the
holder is fixed at 9.45p, being the conversion price of the Loan Notes issued
by the Company on 18 July 2023 (see announcement of the same date)
("Conversion Price").

·    If, after 12 months from the date of drawdown, the 20-day VWAP of the
Company's shares is trading at 200% or more of the Conversion Price the
Company may request the immediate conversion of the outstanding Note.

Warrants

·    On drawdown of the Note, the Company will issue OMF Limited with
warrants to subscribe for up to US$20m of ordinary shares in Andrada at a
price of 9.45p ("Orion Warrants"). The exact GBP (sterling) value of the
warrant package will be determined by reference to the USD/GBP closing
exchange rate at market close on the date that the Subscription Shares
commence trading on AIM.

·    Each warrant will enable OMF Limited to subscribe for one Ordinary Share at a subscription price of 9.45p.
·    The Orion Warrants are exercisable at any time from the date of issue for a period of two years.

Assuming full conversion of the Note at 9.45p, the issue of the Subscription
Shares at 6.39p, and exercise of all the Orion Warrants (using estimated
warrant numbers, based on the prevailing exchange rate) Orion's interest in
Andrada would be c.7.8% of the then enlarged issued share capital.

Royalty

·    The Company has today entered into a Royalty Agreement with Uis Tin
Mining Proprietary Limited ("Uis"); OMF Limited; Greenhills Resources Limited
and Andrada Mining (Namibia) (Proprietary) Limited pursuant to which Uis, the
subsidiary of the Company, grants to OMF Limited up to US$12.5 million
unsecured gross royalty over tin production, which is drawn down at staggered
rates based on increasing contained tin gross revenue produced at the Uis
Mine.

·    A base rate of 5.13% at the current production run rate with a
15-month fixed commitment from drawdown to allow the proceeds to be converted
into additional production. If the increased production has not been achieved
within 15 months, then the rate temporarily increases to 9.63% until the
increased production is achieved, with a linear decrease from this rate to
5.13% from 1000 tpa to 1599 tpa.

·    At an annualised contained tin production between 1,600 tpa to 2,000
tpa the rate will further reduce from 4.50% to 3.61%, ultimately reducing to
0.86% with the Phase 2 expansion.

·    Once the royalty has been paid against 95,500 tonnes, the rate then
further reduces by 75% in respect of the first 9,800 tonnes, or 87.5% in
respect of the production in excess of 9,800 tonnes for the remainder of that
year. The 75% rate reduction for the first 9,800 tonnes in a year and by 87.5%
for amounts in excess of 9.800 tonnes in that year then applies separately for
each subsequent year.

Update of Financing with Development Bank of Namibia ("DBN")
Further to the announcement on 26 June 2023, the inter-creditor agreements between DBN and Standard Bank have been concluded and the completion of the DBN financing is now only subject to the finalisation of the associated security package. The Directors currently expect the completion and associated drawdown to occur during August 2023. Further updates will be provided in due course.
General Meeting

As set out above, the key outstanding condition is the approval by Andrada's
shareholders at the upcoming Annual General Meeting of the Company. A further
announcement will be made when the circular convening that meeting is
dispatched.

 Andrada Mining Limited                   +27 (11) 268 6555

 Anthony Viljoen, CEO                     investorrelations@andradamining.com

 Sakhile Ndlovu, Investor Relations

 Nominated Adviser
 WH Ireland Limited                       +44 (0) 207 220 1666

 Katy Mitchell

 Corporate Adviser and Joint Broker
 H&P Advisory Limited                     +44 (0) 20 7907 8500

 Andrew Chubb

 Jay Ashfield

 Matt Hasson

 Stifel Nicolaus Europe Limited           +44 (0) 20 7710 7600

 Ashton Clanfield

 Calum Stewart

 Varun Talwar

 Tavistock Financial PR (United Kingdom)  +44 (0) 207 920 3150

 Catherine Drummond                       andrada@tavistock.co.uk

 Adam Baynes

 

About Andrada Mining Limited

Andrada Mining Limited has 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.

Andrada has three mining licences namely:

ML 134 on which Uis Mine is located.

ML133 (Lithium Ridge)

ML129 (Spodumene Hill)

The main minerals in these mining licences are tin, lithium and tantalum.
Additionally, the Company has an exploration licence EL5445 (Brandberg West)
on which the main minerals are tin, copper and tungsten. The Company has set a
mineral resource target of 200 Mt to be delineated within the next 5 years.
The substantial mineral resource potential allows the Company to consider
economies of scale.

Andrada is managed by a board of directors with extensive industry knowledge
and a management team with deep 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 how 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 which has been implemented at all
levels of the Company and aligns with international standards.

 

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