REG - Corcel PLC - Sale of Mambare Nickel/Cobalt Interest

CorcelAnnouncement

16/10/2023 07:00

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RNS Number : 2071Q  Corcel PLC  16 October 2023

 

Corcel PLC

("Corcel" or the "Company")

 

Sale of Mambare Nickel/Cobalt Interest

16 October 2023

Corcel Plc (London AIM: CRCL), the Angolan focused exploration and production
company, announces that it has received a revised offer from Integrated
Battery Metals ("IBM") to purchase the Company's 41% interest in the Mambare
nickel/cobalt project.

Proposed Transaction Terms:

IBM has conditionally agreed to purchase Corcel's 41% interest in the Mambare
nickel/cobalt project (including the outstanding shareholder loans due to
Corcel by Oro Nickel Limited, the operational joint venture entity) for up to
US$4.1M, broken out as follows:

o  US$1.6M due at completion of the sale and purchase of Corcel's 41%
interest in Oro Nickel Vanuatu("ONV"), the project holding company

 

o  Also at completion, a further US$1.4M payable in cash or the issuance of
1.5M shares of IBM at an issue price of USD1 per share at the discretion of
Corcel

 

o  24 months after completion a further payment of US$1.0M either in cash or
in IBM shares (at the sole discretion of Corcel); The IBM shares are to be
valued as follows:

o  If listed, then priced at the 5-day volume weighted average price on the
last five days prior to the 2(nd) anniversary or;

o  If IBM is not publicly listed then USD1.0 per share

 

o  Separately, and not included in the main transaction, US$0.148M for the
sale and purchase of Corcel's gross smelter royalty in respect of the Mambare
nickel/cobalt project

 

Antoine Karam, Executive Chairman of Corcel, commented: "This proposed
 revised transaction offers a new and enhanced exit of the Mambare asset, at
a significantly higher valuation than the original deal, while still providing
on-going exposure to the underlying nickel asset in the form of a potential
interest in IBM.  We strongly recommend that all shareholders of Corcel
support the resolutions at the upcoming General Meeting to allow this proposal
to be consummated.

More broadly, this agreement demonstrates our clear strategic focus on our oil
and gas opportunities as well as providing key near term funding for the
Company's operations in Angola. We look forward to results from the initial
well there, while allowing the pre-emption process relating to the Mambare
exit adequate time to conclude."

Loan Note:

To ensure the Company is properly capitalised for its near term operations in
Angola, upon signature of the SPA (i.e. prior to initiating the pre-emption as
outlined below and prior to formal completion), IBM will provide Corcel an
unsecured loan of US$1.6M which will be interest free and repayable upon
either the completion of the sale of Corcel's 41% interest in ONV or in the
event that Battery Metal's Australasia's ("BMA") (Corcel's partner on the
Mambare project) pre-emption rights are not waived, then the conclusion of the
transaction with BMA.  If the loan is repaid later than 10 business days via
BMA's pre-emption, then the loan will attract an interest rate of 6%.

If the loan is not repaid by the 2(nd) anniversary of the drawdown of the
loan, IBM will be released from all its payment obligations from the sale of
the Company's Wowo Gap project, as previously announced on 12 June 2023, and
the loan will be deemed to have been repaid in full.

The Company's interest in Mambare was most recently held in the interim
balance sheet at £3.27M and the attributable losses for the year ended 30
June 2022 were approximately £7,075.

Completion Process:

In view of the size of the disposal relative to the existing size of the
Company, the disposal constitutes a fundamental disposal in accordance with
rule 15 of the AIM Rules for Companies.  The sale of the Wo Wo Gap Nickel
Project announced on 12 June 2023 was to the same vendor and within the last
12 months, it thus needs to be aggregated with the current disposal in
accordance with rule 16 of the AIM Rules for Companies. As such, it is a
requirement of the AIM Rules for Companies that the disposal be approved by
 Shareholders at a general meeting of the Company. The Company will convene a
General Meeting in due course.

Following Corcel shareholder approval, the Company will formally notify BMA of
a bonafide offer for its interest, starting a 45-day period in which BMA can
legally pre-empt the transaction.  Additional announcements on the completion
of the sale will be made as appropriate.

Consequently the disposal is conditional on shareholder approval and the non
exercise of the pre-emption right by BMA.

Initial Mambare Offer Termination:

The Company has mutually agreed with IBM to terminate the original offer for
the Mambare asset as announced on 1 March 2023.  As such, BMA has been
formally notified that the Company has rejected its claim to have accepted
pre-emption of the original transaction, as the proposal put forth by BMA did
not fully match the various elements included in the original transaction, and
included elements, such as the Company's gross smelter Royalty (the
"Royalty"), that did not fall under any pre-emption rights available to BMA
under the original 2011 Shareholder and Funding Agreement between the parties.

Sale of Royalty Interest:

Corcel has further agreed with IBM to sell its 1% Gross Smelter Royalty over
the Mambare Nickel/Cobalt project for US$0.148M.  As this interest is not
subject to BMA's pre-emption rights, the sale of the royalty will conclude
immediately.

Further announcements regarding a general meeting will be made in due
course.

For further information, please contact:

Antoine
Karam
Corcel Plc Executive Chairman

Development@Corcelplc.com (mailto:Development@Corcelplc.com)
 

James Joyce / James Bavister /Andrew de Andrade             WH
Ireland Ltd NOMAD & Broker

0207 220 1666
 
 

Patrick d'Ancona
 
Vigo Communications IR

0207 3900 230
 

 

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation (EU) No.
596/2014 which is part of UK law by virtue of the European Union (withdrawal)
Act 2018. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.

 

 

 

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