REG - Ascent Resources PLC - ESG Strategy Update, Operational Update & Placing

Ascent ResourcesAnnouncement

18/01/2022 07:05

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RNS Number : 7424Y  Ascent Resources PLC  18 January 2022

18 January 2022

Ascent Resources plc

("Ascent" or the "Company")

ESG Strategy Update, Operational Update and £0.6m Placing

 

Ascent Resources Plc (LON: AST), the onshore Caribbean, Hispanic American and
European focused natural resources company, is pleased to announce an update
on its ESG Metals strategy, introducing Peru as its primary target geography
alongside the signature of a Joint Venture agreement with Peru-based Blanco
Safi SAC to collaborate on the identification and subsequent development of
precious and base metal rich tailing and processing operations.  The Company
also announces it has raised gross proceeds of £0.6m by way of an issue of
18,181,818 new ordinary shares ('Placing Shares') at 3.3 pence per Placing
Share ("Placing Price").

 

Highlights:

-     Peru introduced as primary target geography for new ESG Metals
strategy

-   Joint Venture collaboration agreement with Blanco Safi SAC, focused on
originating ESG Precious Metals processing transactions in Peru

-   Slovenia non-recourse funding for Slovenia ECT and BIT damages claim
expected to close shortly

-     Placing of £0.6m at a Placing Price of 3.3p (nil discount to
closing bid price)

 

ESG Metals Strategy Update and new Peruvian Joint Venture

In the Company's announcement of 11 February 2021 the Company set out its ESG
Metals strategy, which focuses on secondary mining and recovery opportunities
consistent with global Environmental, Social and Governance ('ESG')
principles. The company expects that these opportunities will typically
involve the reclassification, through highly efficient recovery techniques, of
surface stockpiled mining waste (previously viewed as a liability for mining
companies) as a valuable asset for processing/reprocessing ahead of commercial
sale to off-takers and/or other third-party buyers.

Whilst the Company continues to evaluate a number of ESG Metal transactions
across Latin and Hispanic America, it has now identified Peru as its primary
target geography. Peru is widely recognised as one of the largest and most
diversified mineral producers with some of the most extensive reserves in the
world with mining the most important sector in the Peruvian economy (some 10%
of national GDP).   Peru is currently the world's second largest Copper and
Silver producer and Latin America's largest Gold, Zinc, Tin and Lead
producer.

Peru's Long-Term Credit Rating is rated as BBB by most agencies, which is
amongst the strongest in the region.  The country also benefits from a long
history of mining, a robust mining legal framework and a significant pool of
local expertise. Most recently, the Country enacted a new law that extends the
process of formalisation of artisanal miners to 31 December 2024 alongside a
law that establishes a national policy for small-scale and artisanal mining.

The Company sees significant opportunity for attractive entry points in mining
following the global pandemic which has triggered international capital flight
and significant capital constraints for small-scale miners.  The Company
therefore initially expects to focus its attention on small-scale operations
(up to 350 tpd), which the Company considers affordable, of an efficient
operational scale and which have multiple local tax and permitting benefits.

To accelerate its entry into Peru, the Company has today signed a Joint
Venture agreement with Blanco Safi SAC ("Blanco"), based in Lima.  Blanco was
founded in 2010 and is a Peruvian registered professional investment manager
which arranges and invests discretionary fund and third party investment
monies in a variety of Peruvian businesses, where it currently manages over
$150 M in assets, including specifically a number of direct investments in
Peru's small-scale mining sector. The Blanco team has over 30 years experience
in the banking, finance, mine and resource sectors and is present across
offices in five regions throughout Peru, consequently Blanco have access to a
number of high quality precious metal small-scale mineral processing
operations throughout Peru.

The Joint Venture will focus its attention initially on the identification,
screening and then subsequent negotiation and potential acquisition of
small-scale yet sustainable ESG metals processing businesses in Peru, ideally
adjacent to surface stockpiled materials for processing. Blanco and the
Company already have a number of attractive prospective leads, as well as an
active network in the small and medium scale miner sector of Peru. Further
announcements will be made as appropriate.

Slovenia Dispute and Damages Claim

The Company anticipates that the completion of the conditions to the binding
damages-based agreement appointing Enyo Law LLP to represent it in its dispute
with the Republic of Slovenia, as announced 8 November 2021, will take place
shortly. Following completion, the Company and its legal advisor will
immediately progress to compile and execute the required materials and
officially submit the arbitration claim pursuant to the protections afforded
to the Company and its operating subsidiary under the Energy Charter Treaty
and UK-Slovenia Bilateral Investment Treaty.

Slovenia Operations

Whilst production from PG-10 and PG-11A continues to decline as expected, the
production is sold to local industrial buyers at Central European Gas Hub
daily spot prices. The Company and its JV partners continue to discuss
historic disputes, as previously announced on 10 March and 11 October 2021, as
well as the Company challenging to renegotiate the monthly fixed cost fee
requested by a service provider (a related party to the Company's JV partner)
which were agreed in 2013 when the project contemplated initial production
levels which were significantly higher than the current production levels
(which have been stifled due to the inability to mechanically re-stimulate the
wells, and which forms a part of the Company's dispute with the Republic of
Slovenia).

The JV partner, who is the Concession License holder for the Petisovci field,
has filed the required materials, ahead of the required deadline, to be
granted an automatic 18-month concession extension pursuant to Article 11 of
the Act on Intervention Measures implemented in Slovenia to assist the economy
in mitigating the consequences of the COVID-19 pandemic. Accordingly, the
concession expiry date will now be 28 November 2023. The Company and its JV
partner are continuing their workstreams to progress the formal long-term
extension of the concession which is now expected to be finalised early next
year.

New Funding & Issue of Equity

The Company is pleased to announce that it has raised gross proceeds of £0.6m
to fund its continued working capital requirements and wider business
development activities as it continues to execute on its ESG Metals growth
strategy.

The Company has today raised total gross new equity proceeds of £0.6m by way
of issue of 18,181,818 Placing Shares each with a nominal value of 0.5 pence
per share, to new and existing shareholders, at a Placing Price of 3.3 pence,
representing a nil discount to the closing bid price. The subscribers for the
new equity shall each receive one new equity warrant for each Placing Shares
subscribed for, with each warrant being exercisable into one new ordinary
share at any time over the next two years by paying a warrant exercise price
of 5 pence per new warrant share. The Company is also issuing 818,182 Fee
Warrants in connection with costs of the fund raising. The Company has also
agreed to satisfy a £10,000 Consultant Invoice with the issue of £10,000
worth of new equity on the same terms as the Placing. The Company has
therefore agreed to issue a further 303,030 Consultancy Shares.

Align Research Limited, who are a substantial shareholder of Ascent, have
subscribed for £50,000 of the new equity issue and this transaction
constitutes a related party transaction pursuant to the AIM Rules for
Companies. The independent directors (being all of the directors), having
consulted with WH Ireland Limited, consider the transaction to be fair and
reasonable insofar as the Company's shareholders are concerned.

Following the placing and pursuant to the terms of the 3,600,000 Warrants
issued to RiverFort in December 2021, RiverFort have agreed to waive the right
to have the exercise price reset to the Placing Price and the Company has
instead agreed with RiverFort for their December 2021 Warrants to be reset to
the placing warrant price of 5 pence per warrant share and in compensation for
this agreement the Company has agreed to issue RiverFort with 1,000,000
Warrants on the same term as the placing warrants.

Admission and Total Voting Rights

Application has been made to the London Stock Exchange for the Placing Shares
and Consultancy Shares to be admitted to trading on AIM ("Admission") and it
is expected that such Admission will occur at 8.00 a.m. on  27 January
2022 . The Placing and Consultancy Shares will be issued credited as fully
paid and will rank in full for all dividends and other distributions declared,
made or paid after the admission of the Placing and Consultancy Shares,
respectively and will otherwise be identical to and rank on Admission pari
passu in all respects with the existing Ordinary Shares. The Placing and
Consultancy Shares are not being made available to the public and are not
being offered or sold into any jurisdiction where it would be unlawful to do
so.

 

Following Admission of the Placing Shares and Consultancy Shares, the Company
will have 127,861,652 Ordinary Shares in issue, none of which will be held in
treasury. Accordingly, the total number of voting rights in the Company will
be 127,861,652  and shareholders may use this figure 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 Company under the
FCA's Disclosure Guidance and Transparency Rules.

 

Andrew Dennan, CEO, comments; "I am delighted to announce our joint venture
with Blanco Safi. Peru offers huge potential for our ESG metals strategy and
our relationship with our partner will provide us with both market insight and
local access to transformative precious metals processing opportunities. In
addition, today's fundraising reinforces our financial platform as we look to
build the business materially this year."

 

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

 John Belliss

 

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