REG - Armadale Capital PLC - Proposed Investment, Subscription & Board Changes

Armadale CapitalAnnouncement

24/04/2024 08:30

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240424:nRSX8475La&default-theme=true

RNS Number : 8475L  Armadale Capital PLC  24 April 2024

Armadale Capital Plc ('Armadale' or 'the Company')

 

Proposed Investment,

Subscription to raise £650,000

and

Board Changes

 

Armadale Capital Plc (TIDM:ACP), an AIM quoted investment company focused on
natural resource projects, is pleased to announce:

 

·      it has entered into a binding heads of terms agreement to
'earn-in' over 50% in Africo American Incorporated ("AAI"), a company
incorporated under the laws of the State of Idaho, the holding company of the
Canyon Silver lead, zinc and silver exploration asset based in Northern Idaho,
USA ("Canyon Silver");

 

·      a subscription to raise £650,000; and

 

·      Board changes.

 

Canyon Silver highlights:

 

·      Acquisition of a majority stake in AAI provides exposure to the
silver, lead and zinc, commodities markets where demand is increasing for
these metals due to their wide range of application and limited supply.

 

·      The directors believe that there is an opportunity for growth,
fueled by developments in the energy capture, storage and
transmission sectors which could drive the demand for silver, lead and zinc,
as these essential metals remain vital components in all forms of energy use.

 

·      The Canyon Silver operations are in close proximity to dozens of
+100-year-old mine and ore deposits that began their productive life shortly
after silver was first discovered in the late 19(th) century in Burke Canyon,
a neighboring deposit to the Canyon Silver project.

 

Armadale has an initial option to acquire an initial 25% interest in AAI
through the purchase of new shares for $US500,000 in cash before 31 December
2024. If this initial option is exercised (which is at the entire discretion
of Armadale), Armadale has a further option to increase its interest to 43.8%
in AAI, through the purchase of new shares for $US1.0m in cash. Once this
second option is exercised, Armadale has a further, final option to acquire an
additional 7% interest in AAI (taking its total holding to 50.8%) for
$US280,000. If Armadale exercises the final option to gain greater than 50% of
the Project the Vendor has the right to sell the remaining stake to Armadale
for approximately $US1.0m giving Armadale 100% ownership of the project. As at
31 December 2023 AAI made a net loss of approximately $US 105k and had net
total assets of $US1.06m.

 

The directors of Armadale believe that silver is a highly strategic resource
with a wide range of, medical, electronic and industrial applications. It is
in line with Armadale's strategy to build a portfolio of high-growth, low
cost, near term resource projects. The opportunity to invest in a controlling
stake of a precious metal project in one of the richest and well known silver
regions in North America, is a significant step for Armadale. Furthermore,
Idaho has a mining friendly economy with a well-established, secure mining
code. Not only are there significant historical records in the Canyon Silver
project, but it lies within very close proximity to a number of North
America's large silver deposits and producers, which have been proven to be
profitable.

 

Armadale will be focused on ensuring the investment advances work toward
identifying known resources, realising near term production and improving the
understanding of the ore body. The operation has several adits on a large
mountain, a previously mined underground vertical shaft and six levels that
are accessible at little cost.

 

Only seasonal (April- October) surface-infrastructure civils has been
occurring since April 2021 when the current owners, Africo American Inc fully
acquired all the Canyon Silver Mine claims, licenses and information on the
deposit. Work done between 2017-2019 was mainly geologic, opening most of the
original development and explorations tunnels, modelling, mapping and data
collection.

 

The main Portal (No 3) where all production has come from since 1927 has been
excavated and supported 90ft into the 300ft thick talus mountain side and
should be fully open by August 2024. The No 2 Portal, 100ft vertically above
No 3, has been opened, supported, modeled and sampled but needs cleaning out
and support around the winze that ties into No 3 level below.

 

No 2 level mined the original Formosa vein orebody of CSM and approximately
1,000 tons of lateral development ore and waste was removed and milled from
1890-1906 in a rudimentary gravity concentrator. Some of the new funding is
earmarked for planned geophysics with drone based instruments, followed up by
'on-ground' geophysics that will trace the outcrop from near the top of the
mountain and its original discovery tunnels, all the way down to No 3 tunnel,
800 vertical feet below. Surface geophysics will be followed up by 'in-mine'
geophysical investigations once the No 2 and 3 tunnels are fully open,
connected, made safe, mapped, sampled, measured and modeled.

Subscription to raise £650,000

The initial option to acquire an initial 25% interest in AAI is to be part
financed through the issue of 91,428,562 new ordinary shares of 0.1 pence each
in the Company (the "Subscription Shares") to new and existing investors in
the UK and Australia, at a price of 0.7 pence per Subscription Share, raising
a total of £650,000. The funds raised will be used to commence work on the
Canyon Silver Project as well as continue to advance the Mahenge Graphite
Project together with funding ongoing working capital requirements.

 

Application will be made for the 91,428,562 Subscription Shares to be admitted
to trading on AIM ("Admission") and it is expected that Admission will occur
on or around 15 May 2024.

 

Following Admission, the Company's issued share capital will consist of
678,958,457 ordinary shares with one voting right each ("Ordinary Shares").
The Company does not hold any Ordinary Shares in treasury. Therefore, the
total number of Ordinary Shares and voting rights in the Company will be
678,958,457. With effect from Admission, this figure may be used by
shareholders in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest in, or a
change to their interest in, the share capital of the Company under the FCA's
Disclosure Guidance and Transparency Rules.

 

In addition, attached to each Subscription Share is a warrant, exercisable
within 36 months at a price of 1.2p (the "Warrants") with each Warrant
entitling each Warrant holder the right to subscribe for a further Ordinary
Share in Armadale. Following the issue of the Warrants pursuant to the
Subscription the Company will have warrants outstanding over 110,317,451
Ordinary Shares.

 

Director participation in the Subscription

 

Matt Bull, Executive Director of the Company is participating in the
Subscription as follows:

 

 Name           Current number of Ordinary Shares held      % of existing number of Ordinary Shares      Number of Placing Shares subscribed for      Number of Ordinary Shares held post-Admission      % of issued share capital as enlarged by the Placing
 Matt Bull      47,783,284                                  8.1%                                         14,285,714                                   62,068,998                                         9.1%

 

Following the transaction Matt Bull will also hold warrants over 14,285,714
Ordinary Shares.

 

The issue of Subscription Shares and Warrants to Matt Bull constitutes a
related party transaction pursuant to Rule 13 of the AIM Rules by virtue of
his status as a Director of the Company.

 

The Independent Director, being Greg Entwistle, considers, having consulted
with the Company's nominated adviser, Cavendish Capital Markets Limited, that
the terms of Matt Bull's participation in the Subscription is fair and
reasonable insofar as the Company's shareholders are concerned.

 

Board Changes

 

Armadale Capital also announces that it has appointed Greg Entwistle as
Non-Executive director of the Company with immediate effect. Greg is an
experienced mining executive who has functioned in multiple countries
worldwide. He has played a key role in the development of mines across many
commodities. Greg has over 40 years' experience in design, development and
operations in various roles including as a project director, mine manager and
Chief Operations Officer.

 

Further information pursuant to Schedule 2 paragraph (g) of the AIM Rules is
included below.

 

Nick Johansen has tendered his resignation as Chairman of Armadale in order to
focus on other opportunities. The Company thanks Mr Johansen for his
contribution and service to the Company and wishes him well in his future
endeavours.

 

 

Matt Bull, CEO of Armadale said:

 

"The board believes that the Canyon Silver transaction creates a significant
opportunity for Armadale in a safe and proven geographic, legislative and
perhaps most of all a rich and proven geologic area of North America.
Industries using silver, lead and zinc are well known and continuing to grow
with exciting demand fundamentals. Concurrently, the silver, lead and zinc
producing areas of North America have been in hibernation or shrinking since
the early 1980's until now. Today they are turning to growth, with America's
focus on local production and refining of these core strategic metals for
energy and related technology. In addition, silver is invaluable in solar
panels, certain batteries and electronic components and always as an
alternative and complimentary money and store of value alongside gold."

 

Competent Person statement

 

The information in this announcement that relates to exploration results is
based on information compiled by Mr Matt Bull, a competent person, who is a
Member of the Australian Institute of Geoscientists. Mr Bull has sufficient
experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to
qualify as a competent person as defined in the 2012 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves". Mr Bull consents to the inclusion in the report of the matters
based on his information in the form and context in which it appears.

 

 

 Enquiries:

 Armadale Capital Plc                                   +44 (0) 20 7236 1177

 Matt Bull, Executive Director

 Greg Entwistle, Non-Executive Director

 Tim Jones, Company Secretary

 Nomad & Broker: Cavendish Capital Markets Limited      +44 (0) 20 7220 0500

 Simon Hicks / Seamus Fricker

 

---------------------------------------------------------------------------------------------------------------------

INFORMATION REQUIRED UNDER RULE 17 AND SCHEDULE 2, PARAGRAPH (G) OF THE AIM
RULES FOR COMPANIES ("AIM RULES")

 Full name:                                  Gregory John Entwistle
 Age:                                        69
 Shares held in the Company:                 Nil

 Current directorships and/or partnerships:  Historic directorships and/or partnerships (within the last five years):
                                             None

 Armadale Capital plc

 BGE Pty Ltd

 Paterson Resources Limited

 

There is no further information to be disclosed in relation to the appointment
pursuant to Rule 17 and Schedule 2, paragraph (g) of the AIM Rules.

The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

 

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  IOEEAXLLAFALEEA