REG - Celsius Resources Ld - Local partner agreement to progress MCB project

Celsius ResourcesAnnouncement

20/03/2023 08:15

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RNS Number : 5049T  Celsius Resources Limited  20 March 2023

20 MARCH 2023

 

Celsius enters into initial binding deed and agreement with local companies to progress MCB Project

 

HIGHLIGHTS

· Binding deed entered into with Sodor, Inc. to attain the required 60%
Filipino legal ownership in Celsius' wholly-owned subsidiary, MMCI.

 

· Filipino legal ownership over 60% of MMCI's outstanding shares is among the
pre-requisites toward MMCI's signing of a Mineral Production Sharing Agreement
(MPSA) with the Philippine Government to build and operate the Company's
flagship Maalinao-Caigutan-Biyog Copper-Gold Project ("MCB" or "MCB
Project"). 1 

 

· Accompanying binding letter agreement entered into with Sodor Inc. and PMR
Holding Corp. to agree on timeline for, and that delivery of share
certificates representing 60% of MMCI's outstanding shares shall be made to
Sodor Inc. only after the funding by Sodor Inc. and PMR Holding Corp. of
approximately ~US$43 million for a 30% economic interest in the MCB Project.

 

· The MCB Project is composed of MMCI and PDEP, Inc., both wholly owned
subsidiaries of Celsius. MMCI will hold only the assets that require 60%
Filipino ownership while PDEP will hold the remainder.

_______________________________________________________________________________

Celsius Resources Limited ("Celsius" or "the Company") is pleased to announce
that on 17 March 2023 the Company's wholly owned subsidiary, Makilala Holding
Limited ("MHL"), entered into a binding deed ("Deed") with Sodor, Inc.
("Sodor") for Sodor to acquire a 60% legal ownership in Makilala Mining
Company, Inc. ("MMCI") for consideration of PHP 300 million (approximately
A$8.2 million as at the date of this announcement) ("MMCI Consideration"), on
terms and conditions described in the following paragraphs.

 

The signing of the Deed is a significant milestone as it will enable MMCI to
apply for an MPSA for the MCB Project with the Philippine Government. As
previously advised by the Company, under Philippine law, an MPSA must be held
by a company that is at least 60% Filipino owned. 2 

 

In addition, the Company and its wholly owned subsidiaries MHL, MMCI, and PDEP
Inc. ("PDEP") entered into an accompanying binding letter agreement with Sodor
and its affiliate PMR Holding Corp. ("PMR")  (together, the "Parties") to
agree on the timeline for, and that delivery to Sodor Inc. of share
certificates representing 60% of MMCI's outstanding shares pursuant to the
Deed shall be made only after, the funding by Sodor Inc. and PMR of
approximately ~US$43 million for a 30% economic interest in the MCB Project
("Funding Commitment"). 3  The MCB Project will be composed of MMCI and PDEP,
both wholly owned subsidiaries of Celsius. The Parties shall rescind the Deed
if Sodor and PMR are not able to provide the Funding Commitment within two
years from signing, unless the period is shortened or extended by mutual
agreement of the Parties.

 

 

 Image 1: Signing of Binding Deed and Agreement (Left to right: PMR Holding
 Corp. President Dan Chalmers, CLA Chairman and MMCI President Atty. Julito
 "Sarge" Sarmiento, Sodor, Inc. President Ms. Erika Chalmers, and CLA Executive
 Director and MMCI Country Operations Director, Peter Hume).

 

As at the date of this announcement the amount of the Funding Commitment, which is inclusive of the MMCI Consideration, is approximate as the Parties will confirm the size and timing of payment of the Funding Commitment following completion of a bankable feasibility study on the MCB Project. Provision of the Funding Commitment also remains subject to completion of negotiation and execution of binding definitive long form legal documentation.

 

 

The Philippine Government has otherwise advised MMCI that it has met all of
the other technical requirements to obtain the MCB Project's required
environmental and mining permits.

Celsius Non-Executive Chairman and MMCI Chairman and President, Atty Julito R.
Sarmiento, commented:

 

"We are indeed honored to have Sodor Inc. as our local partner in our vision
to develop the MCB Project as a model for Transformative Mining in the
Philippines. Our principles and visions are aligned, which is a powerful step
towards developing and operating the MCB Project in a responsible and
sustainable manner benefitting both our shareholders and local stakeholders.

 It has always been our commitment, particularly to the Balatoc Tribal
Community, that central to the mine development is cultural respect, social
development, and environmental protection. Sodor Inc. shares the same
commitment, and is thus a perfect partner in developing the MCB Project."

 

MCB COPPER-GOLD PROJECT

 

The MCB Copper-Gold Project is located in the Cordillera Administrative Region
in the Philippines, approximately 320km north of Manila (Image 2). It is the
flagship project within the Makilala portfolio which also contains other key
prospects in the pipeline for permit renewal/extension.

 

A maiden JORC compliant Mineral Resource Estimate was declared for the MCB
Project in 12 January 2021, comprising 313.8 million tonnes @ 0.48% copper and
0.15 g/t gold, for 1.5 million tonnes of contained copper and 1.47 million
ounces of gold, of which 290.3 million tonnes @ 0.48% copper and 0.15 g/t gold
is classified as Indicated and 23.5 million tonnes @ 0.48% copper and 0.10 g/t
gold is classified as Inferred.

 

A Scoping Study for the MCB Project was announced by CLA on 1 December 2021,
which identified the potential for the development of a copper-gold operation
with a 25-year mine life. The Scoping Study was based on an underground mining
operation and processing facility to produce a saleable copper-gold
concentrate.

 

Highlights from the Scoping Study include a Post tax NPV (8%) of US$464m and
IRR of 31%, assuming a copper price of US$4.00/lb and gold price of
US$1,695/oz. Initial capital expenditure is estimated to be US$253m with a
payback period of approximately 2.7 years. The designed mine production is
matched to a 2.28Mtpa processing plant which will treat ore with an estimated
average grade of 1.14% copper and 0.54g/t gold for the first 10 years of
planned production with a C1 cash costs at just US$0.73/lb copper, net gold
credits.

 

 

 

Listing Rule 5.19 and 5.23 Disclosure

The information is this announcement with respect to the MRE for the MCB
Project was first announced by the Company to ASX on 12 December 2022. The
Company confirms that it is not aware of any new information or data that
materially affects the information included in the announcement dated
12 December 2022 and that all material assumptions and technical parameters
underpinning the MRE continue to apply and have not materially changed.

 

The information in this announcement with respect to the outcomes of the
Scoping Study for the MCB Project were first released by the Company to ASX on
1 December 2021. The Company confirms that all material assumptions
underpinning the production target and forecast financial information derived
from the production target referred to in the announcement of 1 December 2021
continue to apply and have not materially changed.

 

This announcement has been authorised by the Board of Directors of Celsius
Resources Limited.

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018.

 

Further to the publication of this announcement, and as referred to in the
announcement of 17 March 2023, the ASX has informed Celsius that the trading
halt has been lifted and trading of the Company's ordinary shares has resumed
on the ASX. The trading halt did not affect trading in the Company's shares on
the AIM market of the London Stock Exchange plc, where normal trade continued.

 

Celsius Resources Contact Information

Ground Floor, 16 Ord Street

West Perth WA 6005

 

PO Box 902

West Perth WA 6872

 

P: +61 8 9482 0500

E: info@celsiusresources.com.au (mailto:info@celsiusresources.com.au)

W: www.celsiusresources.com (http://www.celsiusresources.com)

 

 Celsius Resources Limited
 Peter Hume                                   P: +61 8 9482 0500

                                              E: info@celsiusresources.com.au (mailto:info@celsiusresources.com.au)

                                              W: www.celsiusresources.com (http://www.celsiusresources.com)
 Multiplier Media
 Jon Cuthbert                                 M: +61 402 075 707

                                              E: jon.cuthbert@multiplier.com.au (mailto:jon.cuthbert@multiplier.com.au)

 Beaumont Cornish Limited

 (Nominated Adviser)

 Roland Cornish/Felicity Geidt/Andrew Price   +44 (0) 207 628 3396

 SP Angel Corporate Finance LLP (Broker)
 Ewan Leggat                                  +44(0) 203 470 0470

 

 1  Refer to the Company's announcements on 14 December 2022 and 19 December
2022 for further information on the process of obtaining an MPSA.

 2  Refer footnote 1.

 3  The Deed allows the Company to file a new General Information Sheet
("GIS") with the Securities Exchange Commission reflecting 60% Filipino
ownership of MMCI. Notwithstanding that the GIS entry will show that Sodor has
a 60% ownership interest in MMCI, Sodor and the Company have agreed that the
share certificates representing the 60% interest of Sodor will be withheld and
only be provided to Sodor upon payment of the Funding Commitment. The Funding
Commitment is inclusive of the MMCI Consideration (i.e. Sodor has until 17
March 2025 to make the MMCI Consideration payment). The PHP 300 million
(A$8.2million) consideration referred to on page 1 is included in the total
US$43 million funding referred to on page 2 of this announcement.

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