Acquisition of Producing Copper Mine in Morocco
17/10/2024 16:09
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RNS Number : 6571I MetalNRG PLC 17 October 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET
ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK
MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
17 October 2024
MetalNRG plc
(the "Company" or "MetalNRG")
Acquisition of Producing Copper Mine in Morocco
Proposed Change of Name and Management
MetalNRG plc (LON:MNRG), the natural resources company, is pleased to announce
that it has signed a binding sale and purchase agreement (the "SPA") to
acquire the entire issued share capital of Compagnie Minière de Oumejrane
("CMO") from Managem S.A. ("Managem" or the "Seller"), a mining company listed
on the Casablanca Stock Exchange in Morocco, with mining operations throughout
Africa (the "Acquisition").
The Acquisition will include 100% ownership of the Oumejrane copper mine,
which is in production, cash generative and a profitable operation, located in
the Eastern Anti-Atlas of Morocco. OMF Fund IV SPV K LLC, a fund managed by
Orion Resource Partners ("Orion"), has entered into a US$25,000,000
convertible loan note (the "CLN") with MetalNRG, the proceeds of which will be
used by MetalNRG to complete the Acquisition. The closing of the CLN remains
subject to the satisfaction of the conditions precedent set forth therein. The
Acquisition is conditional on the grant of certain customary regulatory
approvals in Morocco.
To reflect this transformative transaction and the new strategic direction of
the Company, the Company is proposing to change its name to Atlas Metals Group
plc on completion of the Acquisition. In addition, a new management team
will be put in place with Christopher Chadwick being appointed as the
Company's Chief Executive Officer with immediate effect and other changes to
the Company's board of directors and senior management team expected at
completion, including the appointment of Vinesh Karia as Chief Financial
Officer and Neil Gawthorpe as Chief Operating Officer, who will both bring
significant skills and experience to the Company.
Highlights
· Binding agreement to acquire 100% of CMO for an initial consideration
of US$30 million on the basis of a locked box transaction with an economic
effective date as at 29 February 2024, with an additional US$2 million payable
on the first anniversary of completion of the Acquisition, together with a
final contingent payment based on a formula using the average copper price
over the 12 months following completion. The Company is exploring funding
options for the remaining US$5m of the initial consideration
· CMO owns the producing and profitable Oumejrane copper mine, located
in the Eastern Anti-Atlas of Morocco
· Revenue at the Oumejrane copper mine in the year to 31 December 2023
was US$28.0m
· Completion of the Acquisition is contingent upon certain local
regulatory and governmental approvals in Morocco and the fulfilment of a
limited number of other conditions precedent
· The Acquisition will constitute a reverse takeover under the Listing
Rules
· The Company expects also to enter into a strategic partnership with
Managem to explore additional opportunities to collaborate on mining projects
in Morocco and elsewhere
· Orion, has entered into the CLN with MetalNRG, the funds from which
will provide financing to MetalNRG to complete the Acquisition. The closing of
the CLN remains subject to the satisfaction of the conditions precedent set
forth therein
· Proposed change of the Company's name to Atlas Metals Group plc
· New management team with Christopher Chadwick being appointed as the
Company's Chief Executive Officer, Vinesh Karia to be appointed as Chief
Financial Officer and Neil Gawthorpe to be appointed as Chief Operating
Officer
Christopher Chadwick, Chief Executive Officer of MetalNRG, commented:
"We are delighted to have reached agreement with Managem to acquire Compagnie
Minière d'Oumejrane, with financing support from Orion. This will be a
transformational transaction for the Company, giving us 100% equity ownership
of a fully operational, producing and profit generating copper mine. Beyond
the immediate gains, this strategic move opens the door to substantial upside
potential and a wider relationship with the Managem Group. We are working to
expedite completion of the Acquisition as soon as possible and look forward to
providing further updates in due course."
Further Details of the Acquisition
In consideration for the Acquisition, MetalNRG will pay the Seller an initial
consideration of US$30 million. An additional US$2 million will be payable
on the first anniversary of the closing date. In addition, an additional
contingent payment based on the average copper price over the next 12 months
following the closing date of the Acquisition will be payable.
The Acquisition is conditional, inter alia, upon certain local regulatory and
governmental approvals and is expected to complete in late Q4 2024.
Definitive documentation has been executed between the Company and Orion with
respect to the CLN, and subject to the satisfaction of conditions precedent in
this documentation, Orion will provide the Company with financing enabling the
Company to complete the Acquisition.
Orion Resource Partners is an US$8 billion global asset management firm that
specializes in institutional investment strategies in precious and energy
transition metals and minerals. Headquartered in New York City and with
offices in Denver, London, and Sydney, Orion includes a team of 80
professionals with backgrounds in metals finance, physical metals logistics
and sales, and in-house technical professionals responsible for risk
assessment and portfolio management.
Completion of the Acquisition would constitute a reverse takeover under the UK
Financial Conduct Authority's ("FCA") Listing Rules as it will exceed 100% of
the relevant class tests. On completion of the Acquisition, MNRG's existing
listing will be cancelled pursuant to Listing Rule 21.2.2(5). The Company
intends, subject to meeting eligibility criteria, to publish a new prospectus
on the enlarged group in due course and seek admission of the Company's shares
to the Official List of the FCA in the "commercial company" segment and to
trading on the main market for listed securities of the London Stock Exchange
plc.
The parties intend to proceed as quickly as possible with the Acquisition,
however, there can be no certainty that the Acquisition will be successfully
completed. Further announcements will be made in due course as appropriate.
Further information on CMO and the Oumejrane Copper Mine
The Oumejrane mine (the "Mine"), owned 100% by CMO, is a copper mine situated
in eastern Morocco, which has been operational since 2014. For the year
ended 31 December 2023, revenue at the Oumejrane copper mine was US$28.0m.
The Mine, employing approximately 300 people, utilises both open pit and
underground mining methods, with a processing capacity of 1,000 tonnes per day
through a conventional circuit involving crushing, grinding, and flotation.
It is well located alongside a national road with well-established mining,
processing and site infrastructure, including grid provided power.
In addition, CMO owns four exploitation licenses covering a substantial area
of just over 200 square km. To date structures of approximately 10 km in
length have been explored of the approximately 200km of mapped structures.
Core drilling has identified copper mineralization at a depth of 296 meters,
with the current mining activities limited to 140 meters. The Company
therefore believes that there is the opportunity to expand the resource both
at depth and laterally.
The Company along with its funders and advisers have carried out an extensive
due diligence process on the Oumejrane mine and CMO. This comprehensive
evaluation included on-site visits, involving participants from Orion's
commercial and technical teams, alongside external consultants. Orion and
the Company were impressed by the operation, as well as the team responsible
for managing it and remain supportive as the Company advances the transaction
towards completion.
Managem
The Managem group is a pan-African, fully integrated mining group that has
been developing and mining a balanced portfolio between gold and energy
transition metals for over 90 years. The group operates throughout the entire
mining cycle, from exploration to the trading of commodities. With 5,000
employees and operations in seven African countries, including Morocco, the
group is majority-owned by Al Mada, a pan-African private equity fund.
More information on the Managem group can be found at:
https://www.managemgroup.com/en (https://www.managemgroup.com/en)
Board Changes
Christopher Chadwick, formerly an Executive Director of the Company, has been
appointed as Chief Executive Officer with immediate effect. On completion of
the Acquisition, it is expected that Vinesh Karia will be joining the Group as
Chief Financial Officer and Neil Gawthorpe will join as Chief Operating
Officer, which will provide the Company with an experienced core senior
management team.
Vinesh Karia holds a degree in Economics, is a qualified chartered accountant
and has spent the last c.20 years of his career in Investment Banking advising
clients on M&A, IPOs, debt capital markets, leveraged finance and credit
ratings. His coverage included specializing in the metals and mining and
energy sectors and has most recently acted as a consultant to a number of
clients in the commodities sector with assets in emerging markets.
Neil Gawthorpe holds a degree in Mineral Engineering and has enjoyed a
successful career in the mining industry spanning over 30 years. Neil has
worked with a number of mining companies across Africa, including Allied Gold
and Sierra Rutile. Most recently, Neil was the CEO of Tungsten West PLC,
where he successfully restructured the company and was instrumental in the
company receiving all necessary permits to restart production at the Hermerdon
mine.
On completion of the Acquisition it is anticipated that there will be a number
of other changes to the Company's board of directors. At the time these
changes are made, the Company expects to appoint a number of new independent
Non-executive Directors.
For further information, please contact:
MetalNRG PLC:
Christopher Chadwick +44 (0) 207 796 9060
Rolf Gerritsen
Hannam & Partners - Financial Adviser and Joint Broker
Andrew Chubb +44 (0) 207 907 8500
SPARK Advisory Partners Limited - Sponsor
James Keeshan +44 (0) 203 368 3550
Andrew Emmott +44 (0) 203 368 3550
Peterhouse Capital Limited - Joint Broker:
Lucy Williams + 44 (0) 207 469 0930
Duncan Vasey + 44 (0) 207 469 0930
S I Capital Limited - Joint Broker:
Nick Emerson +44 (0) 1483 413500
IFC Advisory Limited - Financial PR and IR
Tim Metcalfe +44 (0) 203 934 6630
Florence Chandler +44 (0) 203 934 6630
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