Update re Acquisition of CMO
27/11/2024 11:56
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RNS Number : 8880N MetalNRG PLC 27 November 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.
27 November 2024
MetalNRG plc
(the "Company" or "MetalNRG")
Update re Acquisition of CMO
MetalNRG plc (LON:MNRG), the natural resources company, is pleased to provide
an update regarding the progress of its agreement to acquire the entire issued
share capital of Compagnie Minière de l'Oumejrane S.A. ("CMO") from Managem
S.A. ("Managem" ) (the "Acquisition"), as announced on 17 October 2024.
Highlights
· The Company, working closely with Managem, is making significant
positive progress towards the completion of the Acquisition, with a number of
conditions precedent cleared.
· A term sheet has been entered into with a strategic investor to
provide, by way of an equity subscription, subject to customary conditions
precedent, the remaining US$5 million of the initial US$30 million
consideration for the Acquisition (the "Subscription Term Sheet"). As
announced on 17 October 2024, a fund managed by Orion Resource Partners
("Orion") is providing a US$25 million convertible loan note to MetalNRG to
enable completion of the Acquisition.
· A Competent Person's Report (the "CPR") has been prepared by Mining
Plus Pty Ltd ("Mining Plus") for the Company on the Oumejrane copper mine
owned by CMO (the "Oumejrane Mine"). An executive summary of the CPR (the
"Executive Summary") is available to view, subject to investor affirmation of
customary disclaimers, on the Company's website at:
https://www.metalnrg.com/investors/shareholder-documents
· Alongside progressing the required workstreams to complete the
Acquisition, the Company has been developing its 100-day plan and optimisation
strategy for the Oumejrane Mine, and all aspects of CMO, post-completion of
the Acquisition. Further details of the optimisation strategy is set out
below.
Further information on CMO, the Oumejrane Mine and the CPR
The CPR has been prepared in accordance with the reporting requirements of
JORC 2012 by Mining Plus, for Metal NRG (to be renamed Atlas Metals Group plc)
and describes the assets of CMO, chiefly the Oumjerane Mine in the Eastern
Atlas region of Morocco. CMO was created in 2011 and is 100% owned by
Managem group, an African mining company based in Morocco.
The operation consists of four operating underground mines, two active open
pit mines, and a process plant that has successfully produced 21% grade Copper
concentrates since 2014. In addition, CMO owns four exploitation licences.
The CPR provides information on the Oumjerane Mine currently in operation,
including: a review of the mineral inventory and mineable inventory as at 1
August 2024; recommendations for attaining JORC Code (2012) compliance; and
recommendations on the approaches taken to prepare the Mineral Resource
estimates and the mineable inventory.
Based on recommendations from the CPR, and taking into account other needs
defined for the CMO business, the Company intends to implement a number of
strategic initiatives from completion of the Acquisition in order to increase
production, improve mining efficiencies, and consequently enhance the returns
available from the CMO asset. These are expected to include:
· ESG initiatives: a comprehensive gap analysis across all aspects of
ESG including health and safety, occupational health, environmental impact
plan, water strategy, stakeholder mapping and engagement, and mine closure
plan;
· Tailings management: TSF1 life extension and feasibility study for
TSF2;
· Orebody knowledge: improved Reserve and Resource reporting, resource
drilling and reserve conversion, including further geometallurgical studies;
· Mining improvements: updating of mine planning systems, geotechnical
studies, hydrogeological studies and accelerated dewatering;
· Exploration: near-mine Life of Mine (LOM) extension drilling and
regional exploration programme;
· Processing enhancements: comprehensive review of comminution and
flotation circuits, orebody variability testing, metallurgical testing,
recovery and concentrate grade improvements, capacity expansion study; and
· Equipment management: purchase of new equipment (mining fleet and
processing plant) and increased maintenance spend.
The Company along with its funders and advisers have progressed an extensive
due diligence process on the Oumejrane Mine and CMO, in conjunction with the
CPR prepared by Mining Plus. This comprehensive evaluation has included
on-site visits, involving participants from commercial and technical teams of
Orion, alongside external consultants.
As noted in the Company's announcement of 17 October 2024 ("Acquisition
Announcement"), Orion had entered into a US$25 million convertible loan note
("CLN") with MetalNRG.
As announced today, MetalNRG has now also entered into a Subscription Term
Sheet with a strategic investor to provide the additional US$5 million
required to complete the Acquisition. The closing of the CLN and the
provision of the US$5 million strategic investment remains subject to due
diligence and the satisfaction of the conditions precedent set forth in the
respective documentation.
The Acquisition is conditional on, inter alia, the grant of certain customary
regulatory approvals in Morocco, MetalNRG shareholder approval at the general
meeting to be held on 5 December 2024, the publication of the associated
prospectus (containing the final long-form version of the CPR) (the
"Prospectus"), and admission of the Company's enlarged share capital to
listing on the equity shares (commercial companies) category of the Official
List of the Financial Conduct Authority and to trading on the main market for
listed securities of London Stock Exchange plc ("Admission").
As noted in the Company's circular of 11 November 2024, in order to implement
the Acquisition, the Company needs to raise new equity capital and intends to
conduct a placing to raise this new equity capital from investors in
connection with the closing of the Acquisition (the "Placing"). The Company
is proposing to raise up to £15 million pursuant to the Placing, which will
be conditional on Admission. The effect upon MetalNRG shareholders of the
Acquisition, the fundraise conducted in association with the Acquisition
(including the Placing), the conversion of the current convertible loan notes
in the Company, the exercise of warrants, the issue of fee shares and the
potential future conversion of the Orion convertible loan note is estimated to
result in the current MetalNRG shareholders aggregate percentage interests in
the enlarged share capital of the Company being diluted to not less than 38%
of the whole.
As noted in the Acquisition Announcement, 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, as the Company progresses
completion of the Acquisition.
Christopher Chadwick, Chief Executive Officer of MetalNRG, commented: "We are
making very good progress with the process to complete the CMO acquisition and
are delighted to have reached agreement with a strategic investor to provide
the remaining US$5 million required for the initial consideration. This is
in addition to the US$25 million that Orion has already committed. We are
progressing the FCA prospectus review process and will be holding a general
meeting of the Company on 5 December 2024 to seek shareholder approval of the
necessary resolutions to implement the Acquisition. In parallel, we are
developing our plans for CMO post completion of the Acquisition. These are
exciting times for MetalNRG as we progress our plans to become Atlas Metals
Group and the owner of a producing, cash generative operation in Morocco. I
look forward to providing further updates as matters progress."
For the purposes of UK MAR, the person responsible for arranging release of
this announcement on behalf of MetalNRG is Christopher Chadwick, Chief
Executive Officer.
For further information, please contact:
MetalNRG PLC:
Christopher Chadwick +44 (0) 207 796 9060
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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