REG - Aterian PLC - Off-take Agreement and Trade Finance Facility

AterianAnnouncement

10/07/2024 07:00

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RNS Number : 7619V  Aterian PLC  10 July 2024

10 July 2024

 

Off-take Agreement

 and Trade Finance Facility

 

Aterian Plc

("Aterian" or the "Company")

 

Aterian plc (LSE: ATN), the critical metal-focused exploration and development
company, is pleased to announce the successful completion of a metal
concentrate Off-take Agreement ("Agreement") by its Rwandan subsidiary,
Eastinco Limited ("Eastinco") with a major international trading house. This
key strategic partnership allows for the sale and distribution of Eastinco's
tantalum-niobium and tin concentrate secured from Rwandan-based artisanal and
small scale mining ("ASM") companies and cooperatives, significantly enhancing
the company's ability to generate revenue from aggregating and upgrading ASM
concentrate supplies.

 

In conjunction with this Agreement, Aterian has agreed terms for a US$ 1.0
million secured trade finance debt facility ("Facility") from a financial
investor. This Facility is a 5-month revolving debt facility with 14.4% annual
interest rate, subject to the completion of due diligence and legal
documentation. The Facility will provide the Company with the necessary
working capital requirements for trading operations, ensuring seamless
execution and operational efficiency. Confidentiality has been agreed amongst
the parties to protect our mutual commercial interests.

 

Highlights:

 

·      The off-take agreement negotiated with a major international
commodity trading house.

·      Secured a committed buyer for mineral concentrate products with
no price risk and a minimum guaranteed fee based on volume deliveries.

·      Eastinco's management has spent the past year working to develop
key relationships with various miners across Rwanda, seeking to improve and
enhance their productivity and thereby securing the supply of metal
concentrates.

·      Eastinco has secured the ability to sell the metal concentrate in
Kigali, thereby significantly removing or reducing the typical transport,
logistics, and funding costs and risks associated with international
deliveries.

·      Coltan concentrate will be aggregated and upgraded at Eastinco's
existing facility in Kigali to meet the required delivery specifications and
provide a stable revenue stream for the company.

 

Trade Finance Facility

The Facility provides the necessary funding to support the trading operations.
This Facility will cover all working capital requirements, ensuring that
Aterian can meet its delivery obligations under the off-take agreement without
financial strain. The Facility has a funding rate of 14.4% per annum and is
repayable from trade receivables every five months. The investor has the
option to convert the Facility into Aterian equity at a fixed price of £1.00
per share and will receive warrants representing 30% of drawdown amounts; the
warrants convert into equity at a fixed price of £1.00 per share and have a
term of three years.

 

Charles Bray, Chair of Aterian plc, commented:

 

"We are delighted to announce these significant milestones for Aterian. The
off-take agreement not only validates the quality of our relationships in
Rwanda but also ensures a reliable sales channel with zero price risk. Coupled
with the secured trade finance facility which offers the investor a fixed
price conversion feature at a significant premium of £1.00 per share, we are
well-positioned to scale our operations and drive revenue growth along with
the margins from trading.  This "fourth leg" of our strategy has been long in
the making, but we have been determined to do it in a manner which takes
minimal risk while delivering revenue in a fully traceability-compliant model.
Ultimately, we aspire to have trading generate the revenue to support our
advancing exploration efforts in Rwanda, Morocco, and Botswana. We believe
these strategic partnerships in trading will supplement and contribute to our
strategic exploration partnerships and the long-term success and
sustainability of Aterian."

 

- ENDS -

 

 

This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (as amended).

 

For further information, please visit the Company's website:
www.aterianplc.com (http://www.aterianplc.com) or contact:

 

Aterian Plc:

Charles Bray, Executive Chairman - charles.bray@aterianplc.com
(mailto:charles.bray@aterianplc.com)

Simon Rollason, Director - simon.rollason@aterianplc.com
(mailto:simon.rollason@aterianplc.com)

 

Financial Adviser and Joint Broker:

Novum Securities Limited

David Coffman / George Duxberry

Colin Rowbury

Tel: +44 (0)207 399 9400

 

Joint Broker:

SP Angel Corporate Finance LLP

Ewan Leggat / Kasia Brzozowska

Tel: +44 20 3470 0470

 

Financial PR:

Bold Voodoo - ben@baldvoodoo.com

Ben Kilbey

Tel: +44 (0)7811 209 344

Notes to Editors:

About Aterian plc

www.aterianplc.com (http://www.aterianplc.com)

 

Aterian plc is an LSE-listed exploration and development company with a
diversified African portfolio of critical metals projects.

Aterian plc is actively seeking to acquire and develop new critical metal
resources to strengthen its existing asset base whilst supporting ethical and
sustainable supply chains as the world transitions to a sustainable, renewable
future. The supply of these metals is vital for the development of the
renewable energy, automotive and electronic manufacturing sectors that are
playing an increasing role in reducing carbon emissions and meeting climate
ambitions globally.

 

The Company has entered into a joint venture agreement with Rio Tinto Mining
and Exploration Limited for Rio Tinto to earn into the HCK project in
southern Rwanda and holds two further partnerships in Rwanda exploring and
developing lithium-tantalum-niobium-tin mining operations. Aterian currently
holds a portfolio of multiple copper-silver and base metal projects in the
Kingdom of Morocco, with a total area of 897 km(2). In January 2024, the
Company announced the acquisition of a 90% interest in Atlantis Metals. This
private Botswana registered company holds seven mineral prospecting licences
for copper-silver in the Kalahari Copperbelt and three for lithium brine
exploration in the Makgadikgadi Pans region. The total licence area in
Botswana is 4,486 km(2).

 

The Company's strategy is to seek new exploration and production opportunities
across the African continent and to develop new sources of critical mineral
assets for exploration, development, and trading.

 

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