REG - Andrada Mining Ltd - USD 25 million received from OMF

Andrada MiningAnnouncement

16/11/2023 07:00

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RNS Number : 6783T  Andrada Mining Limited  16 November 2023

16 November 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")

USD 25 million proceeds received from Orion Mine Finance (OMF)

Issue of Equity

Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the metals and mining company
with a portfolio of technology metals mining and exploration assets in
Namibia, announces the receipt of USD 25 million and associated issue of
shares, convertible loan notes and warrants as part of the Funding Package
announced on 15 August 2023, with funds advised by Orion Resource Partners
("Orion").

HIGHLIGHTS

·   The combined USD 25 million Funding Package comprises a USD12.5 million
(c. GBP 10.2 million) unsecured tin royalty, a  USD 2.5 million (c. GBP
1.95million) equity subscription for 30 505 755 ordinary shares, and a USD
10 million (c. GBP 8.2 million) unsecured convertible loan note (the "Note").

-     In addition, Andrada will issue to OMF III (Mauritius) LTD ("OMF
LTD") warrants (the "Warrants") to acquire ordinary shares in Andrada at an
exercise price of 9.45p.

·   USD 12.5 million (from the royalty) is allocated to increasing tin
production at the Company's flagship Uis Mine in Namibia ("Uis Mine").

-     The royalty funding, coupled with the ongoing continuous improvement
programme ("CI2"), is targeted to achieve production rates up to 2 000 tonnes
of tin metal per annum ("tpa").

·   The balance of USD 12.5 million net of costs is expected to accelerate
the lithium and tantalum revenue streams following the drilling results and
milestones achieved in the current calendar year from January 2023, including:

-     Expansion of the resource at Uis and exploration drilling across all
licences.

-     Metallurgical testing campaigns at the recently-commissioned pilot
facility and laboratory on-site.

-     Various studies to expedite the feasibility of additional revenue
streams across the Company's entire geological footprint.

Anthony Viljoen, Chief Executive Officer, commented:

"We are pleased to announce drawdown of the Orion funding, following the
fulfilment of all conditions. This partnership with Orion will not only enable
the expansion of tin production up to 2 000 tpa, but will also allow us to
accelerate  our wider lithium and tin development surrounding our Uis mine .
The exceptional results achieved across all exploration drilling campaigns
this year indicate that Andrada has the potential to generate additional
revenue streams from multiple sites. We are pleased to have Orion, a globally
respected resource funding partner, onboard to support our planned growth
period."

UPDATE ON THE ORION FUNDING package
Royalty

The Company's subsidiary, Uis Tin Mining Company (Properitary) Limited  has
now received a USD12.5 million payment from OMF Fund III (F) Ltd in exchange
for a royalty over tin production at the Company's Uis Mine, for staggered
rates starting at 5.13%. An annualised contained tin production between 1 600
tpa to 2 000 tpa will decrease the rate to between 4.50% and 3.61% as
determined by interpolating on a linear basis. Ultimately the rate will reduce
to 0.86% with the achievement of certain milestones based on tonnage. Further
details of the royalty terms are set out in the announcement dated 15 August
2023.

The CI2 at the Uis Mine financed through the Development Bank of Namibia
commenced in September 2023 to enhance the plant's productivity and output.
The targeted increase in the tin recovery rate to 69% through the CI2 will
contribute to Andrada achieving the requisite thresholds of concentrate
tonnages (see announcement dated 5 September 2023).

Equity Subscription

The Company has today issued OMF Ltd with 30 505 755 ordinary shares in the
Company (the "Subscription Shares") , at a price of 6.39p (the "Subscription
Price"), for a total investment of USD 2.5 million (c. GBP 1.95 million). The
number of shares issued is slightly lower than previously announced due to
exchange rate fluctuations. Following the issuance of the Subscription Shares,
OMF LTD's equity interest in the Company will be 30 505 755 Ordinary Shares
representing 1.96% of the  issued share capital of the Company. Application
has been made for the admission of the Subscription Shares to trading  on
AIM, and it is anticipated that admission will occur and trading will
commence  on or around 22 November 2023 ("Admission").

Convertible Loan Note

Andrada has drawn down USD 10 million (c. GBP 8.2 million) from OMF Limited,
which was provided to Andrada by way of an unsecured Note which accrues
interest at 12% per annum. The Note has a four-year term from the date the
Subscription Shares commence trading on AIM (anticipated to be 22 November
2023). Full details of the Convertible Loan Notes are set out in the
announcement of 15 August 2023.

Warrants

On or around 22 November 2023, Andrada will issue a number of warrants to OMF
Ltd, pursuant to the terms of the Funding Package. The number of warrants to
be issued is based on two warrants for every equivalent pound sterling in
relation to the USD 10 million Convertible Loan Note instrument. The exact
sterling value of the warrant package will be determined by reference to the
USD/GBP exchange rate at market close on the date that the Subscription Shares
commence trading on AIM. The Company will issue warrants to ordinary shares at
an exercise price of 9.45p. The Warrants are exercisable at any time from the
date of issue for a period of two years.

USE OF PROCEEDS
As set out above, the funding from the royalty will be used to increase tin production at the Company's Uis Tin Mine.
The funding from the Subscription Shares and Convertible Loan Notes will be utilised for further exploration drilling programmes which are important in determining the extent of the lithium mineralisation within the Uis, Lithium Ridge and Spodumene Hill mining licence areas. It will also be utilised for metallurgical testwork to gain an understanding of the elemental configuration of the large number of pegmatites across the region (see announcements dated: 6 July, 29 August, 6 September, and 18 September all in 2023). The tantalum production circuit optimisation is on-going to achieve the specifications required by AfriMet as stipulated in the off-take agreement (see announcement dated 15 November 2023). Nominal funding is required to complete the optimisation.

Disclosure, Guidance and Transparency Rules

In accordance with the provisions of the Disclosure Guidance and Transparency
Rules (DTR) of the Financial Conduct Authority, the Company confirms that upon
Admission its issued share capital will comprise 1 580 250 758 Ordinary
Shares of no-par value. All of the Company's Ordinary Shares have equal voting
rights and none of the Ordinary Shares are held in treasury. The total number
of voting rights in the Company will therefore be 1 580 250 758 following
Admission. This total voting rights figure may be used by shareholders as the
denominator for calculations to determine whether they are required to notify
their interests in, or a change to their interest in Andrada under the DTRs.

 CONTACT

 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

 Jos Simson                               andrada@tavistock.co.uk

 Catherine Drummond

 Adam Baynes

 

About Andrada Mining Limited

Andrada 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. An
exploration drilling programme is currently underway at Uis with the aim of
expanding the tin resource over the fourteen additional, historically mined
pegmatites, all of which 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 considerable industry
knowledge and a management team with extensive commercial and technical
skills. Furthermore, the Company is committed to the sustainable development
of its operations as demonstrated by the way the leadership team places
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.  END 

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