REG - Corcel PLC - Proposed Battery Metals Joint Venture

CorcelAnnouncement

17/10/2022 07:00

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RNS Number : 0224D  Corcel PLC  17 October 2022

Corcel PLC

("Corcel" or the "Company")

 

Proposed Battery Metals Joint Venture, New Cornerstone Investor, Placing, and
TVR

17 October 2022

 

Corcel, the natural resource exploration and development company with
interests in battery metals and flexible energy generation and storage
announces it has entered into a memorandum of understanding  ("MOU") for the
 reorganization of the Company's battery metal mining interests in PNG into a
new carried battery metal led Asian joint venture ("JV") structure alongside
the introduction of a new cornerstone investor through an equity placing.

MOU Highlights:

o  Intended creation of a Singapore based upstream Battery Metal joint
venture which will, subject to contract, own CRCL's position in the Mambare
and Wowo Gap projects alongside the Doncella lithium project in Argentina

o  Corcel intends to own 50% of the proposed JV, benefit from a $1.5m carried
interest and a 1.5% gross revenue royalty on Wowo Gap and nominate half of the
Board of the JV - It is the intention of the parties to list the JV in
Singapore in the medium term

o  Introduction of a new cornerstone investor with Corcel plc Board
representation as part of a fundraising of £200,000 at a price of £0.004 (no
discount to the closing price) with 1 for 1 warrants exercisable at £0.005
per share

James Parsons, Executive Chairman, commented: "I am delighted to welcome Mr
Yan Zhao to the Board and to the shareholder register.  We believe this
proposed PNG restructuring, with its associated carry, and an ultimate
Singapore listing, is the best way to bulk up and ultimately unlock the
significant value in our battery metals portfolio."

Battery Metals Interest Restructuring and Joint Venture

Further to the previously announced offtake discussions with Shandong New
Powder COSMO AM&T ("NPC"), Corcel and NPC have signed an MOU to form a new
joint venture company, Integrated Battery Metals ("IBM") in Singapore, in
order to pursue an Asian focused battery metals strategy with direct links to
offtake partners and end users of these critical battery metals.  It is both
parties view that Singapore is the ideal listing forum for this expanded
battery metals portfolio.

o  Corcel has agreed, subject to contract, to inject its 41% interest in the
Mambare nickel/cobalt project as well as its 100% interest in Wowo Gap
nickel/cobalt projects, and NPC has agreed to inject its 4.48% interest in
Hanacolla S.A., owner of the Doncella lithium project in Argentina, with
additional lithium and other battery metal interests expected to follow.  The
4.48% interest in Hanocolla has been recently externally valued at $4.1M by
reference to a funding for 10% of Hanocalla valuing the business at $92m.  In
addition to its 50% stake in IBM, Corcel will receive a carry of up to two
years or the award of a mining lease at Wowo Gap capped at $1.5m. Corcel will
also receive a 1.5% gross revenue royalty over the Wowo Gap project.

NPC and CRCL intend to operate IBM via a standard joint venture structure with
CRCL receiving 50% board representation, and NPC and CRCL have agreed to seek
to list IBM in Singapore.  It is expected that use of the IBM structure will
allow access to the industrial led capital required to take all of IBM's
battery metal interests forward through feasibility and ultimately into
production and offtake.

Signature of the transaction is expected to occur in the coming weeks with
completion of this transaction being conditional on CRCL's Mambare partner's
pre-emption rights being waved, as well as the relevant administrative
approvals required by the PNG government to complete the required asset
transfers.

Doncella Lithium Project

The Doncella lithium project is Hanacolla's flagship project located in the
Arizaro Salar, in the Salta province of NW Argentina; approximately 170km from
Salta.  The project consists of 725km(2) of lithium salt brine style mineral
tenements located within the Salar de Arizaro Basin.  Arizaro is the largest
salar in Argentina and one of the most important in Puna Region.  The Puna
constitutes the southern end of the high platform of the Central Andes, better
known on a continental scale as the Altiplano, which develops closely related
to the Cenozoic volcanic arc.

 

Salta is considered a prospective area within the "Lithium Triangle" according
to the Fraser Institute.  The "Lithium Triangle" is the stylized name from a
geographic region circumscribed to the S. American meso-Andean plateau, on
which three countries simultaneously have territory: Argentina, Bolivia and
Chile, and owes its name to the lithium available in lithium brine-based
deposits.

 

The Doncella project is a lithium in brine deposit. This type of project is
characterized by being located in structural lows that form restricted basins
that are mainly filled with halite, clay, silt, sand and gravel.  Lithium
rich brine is lodged in the pores of the deposited sediments.  As the lithium
remains dissolved in fluid form, it has the ability to move and mix with other
adjacent fluids once extraction has begun.  Exploration is focussed on
developing lithium resources by gaining better understanding of the aquifers
and the variations of the porosity and grades within them. As conducted by the
previous owners to date, a total of 112 trench samples and 35 drill samples
have been collected and have yielded lithium values between 100 and 247ppm,
the average being between 150 and 160ppm.

 

Additionally, the General Belgrano railway between Salta and Antofagasta port
passes over the Arizaro Salar very close to Hanacolla's tenements, offering
favourable logistics supporting future exploitation and development.
Hanacolla recently raised $9.2m in new equity valuing the entirety of the
business at $92m and funding the ongoing exploration and development
programme.

 

Equity Raise:

The fundraising has raised gross proceeds of £200,000 from the issue of
50,000,000 new ordinary shares of £0.0001 (Ordinary
Shares) at £0.004 (the "Placing Price") per share ("Placing Shares") to
Shangdong New Power COSMO AM&T ("NPC").

The Company has also issued the equity investor with one warrant for every one
share exerciseable at £0.005 per new warrant share at any time over the
next year ("Warrants").

Upon completion of the fundraising, NPC will have the right to nominate a
Non-Executive Director, Mr. Yan Zhao, to the Board of the Company, subject to
director background checks.

The Company intends to use the funds from this placing for working capital
purposes and to fund the costs associated with potential acquisitions
including origination, due diligence and advisors fees.

Total Voting Rights:

Application will be made for the 50,000,000 Initial Investment to be admitted
to trading on AIM and it is expected that their admission to AIM will take
place on or around 21 October 2022 (" Admission").

Following Admission, the Company's total issued share capital will consist
of 580,208,295 Ordinary Shares, with one voting right per share. The Company
does not hold any shares in treasury. Therefore, the total number of Ordinary
Shares and voting rights in the Company will be 580,208,295 from
Admission. This figure may be used by shareholders in the Company as the
denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change in their interest in, the
share capital of the Company pursuant to the FCA's Disclosure Guidance and
Transparency Rules.

For further information, please contact:

Scott Kaintz 020 7747 9960
                              Corcel Plc CEO

James Joyce / Andrew de Andrade 0207 220 1666
      WH Ireland Ltd NOMAD & Broker

Simon Woods 0207 3900
230
                             Vigo Communications
IR

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

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