REG - Critical Metals PLC - Issue of Convertible Loan Notes & Corporate Update

Critical MetalsAnnouncement

10/04/2024 07:00

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RNS Number : 0031K  Critical Metals PLC  10 April 2024

 

Critical Metals plc / EPIC: CRTM / Market: Main Market

10th April 2024

Critical Metals plc

("Critical Metals" or the "Company")

 

 Issue of Convertible Loan Notes and Corporate Update

Advancing the Molulu Copper/Cobalt Project

 

Critical Metals plc, developer and operator of the Molulu Copper/Cobalt
Project ("Molulu") in the Democratic Republic of Congo ("DRC"), is pleased to
announce that it has raised £1,603,600 through an oversubscribed private
placement of convertible loan notes to existing shareholders and new investors
(the "CLN Holders").

 

The funds raised will be used for the following purposes:

1.    Improve the public road to Molulu, which is key step implementing
sales of copper ore;

2.    Advance the initiated Phase 1 drilling plan and drilling programme
with the aim of establishing a JORC resource;

3.    Create a block model and mine plan; and

4.    General working capital purposes.

 

Terms of the Convertible Loan Notes

On 9(th) April 2024 the Company created £1,603,600 unsecured convertible loan
notes ("CLNs"). The principal amount due under the CLNs shall be converted
into a corresponding number of new fully paid ordinary shares of £0.005 each
("Ordinary Shares") at the conversion price of the lower of: 4.8 pence per
Ordinary Share or 10% discount to the volume weighted average price of the
Ordinary Shares on the Main Market for the 5 trading days prior to the
publication of the Secondary Prospectus (as defined below) ("Conversion
Price").

 

As the Company does not currently have sufficient headroom to admit the
Ordinary Shares to be issued on conversion of the CLNs to trading on the
London Stock Exchange's Main Market, the conversion of the CLNs into Ordinary
Shares is conditional upon (i) publication by the Company of a simplified
prospectus approved by the Financial Conduct Authority ("FCA"), which includes
a disclosure referring to the conversion of the CLNs ("Secondary Prospectus")
and (ii) admission to the standard segment of the Official List of the FCA and
trading on the London Stock Exchange's Main Market of the new Ordinary Shares
to be issued on conversion of the CLNs provided that the issue of such new
Ordinary Shares will not result in any such CLN Holder, together with any
persons acting in concert, holding 30% or more of the voting rights of the
Company at any time (the "Conversion Conditions"). The Company will endeavour
to meet the Conversion Conditions as soon as reasonably practicable.

 

Other key terms are as follows:

 

·    all the CLNs when issued and while they are outstanding shall rank
pari passu, equally and rateably;

 

·    the Ordinary Shares arising on conversion of the CLNs shall be
credited as fully paid and rank pari passu with the Ordinary Shares already in
issue;

 

·    interest shall be payable on any outstanding CLNs (so far as not
converted) at a fixed coupon of 10 per cent of the outstanding principal
amount of the CLNs on the first anniversary of the CLNs or on conversion, such
interest to be paid in cash or Ordinary Shares at the option of the CLN
Holders;

 

·    if the Company fails to pay redemption monies when due, interest will
continue to accrue on the unpaid amount at the default interest rate of 5 per
cent per annum above the Barclays Bank plc's base rate during the relevant
period of default.

 

Terms of the Subscriptions

The CLN Holders irrevocably subscribed in cash for and agreed to purchase from
the Company on a private placement basis the CLNs ("Subscription").

 

The Company has created a warrant instrument pursuant to which it has granted
on completion of the Subscription, 600,675 warrants over new Ordinary Shares
to Fox Davies Capital Limited exercisable at the Conversion Price for a period
of three years from the date of issue of the CLNs.

 

Background, Rational for the Placing & Allocation of Funds

Molulu is a historically producing copper/cobalt project situated within the
prolific Katangan Copperbelt. It is in close proximity to copper smelters in
Lubumbashi and Likasi, and there was an off-take agreement with OM Metals
& Resources SARL in the Project that the Company intends to renew.  The
Company aims to recommence production in H2 2024 upon successful restart and
conclusion of its planned drilling campaign, the creation of a block model,
and approving a restart mining plan to target monthly production of 10,000
tonnes of copper ore.  A mining contractor has been selected.

 

The initial use of the CLNs funds will be for the rehabilitation the 17
mile/28 kilometre public road leading to Molulu Project, which the Company
will upgrade to make it more resilient to the anticipated traffic and the
effect of the rainy season.  This work will allow the resumption of sales of
existing copper ore currently sitting on the ore pad and extend benefits to
the surrounding community, aligning with the Company's ongoing commitment to
engage with local villages and stakeholders. The Company has already selected
a road contractor (see RNS dated 8 January 2024), which will commence work as
soon as a deposit is lodged, which is anticipated to happen shortly after this
announcement.  The Company will update the market once the road improvements
begin. The Company has been advised the works may take between 60 and 90 days.

 

It is the intention of the Company to advance the Phase 1 drill programme in
order to increase the input data for the block model, in order to construct
the mine restart plan, and ultimately create a JORC report. The timing of the
commencement of the drill programme is currently under discussion and the
market will be updated in due course.

 

The remaining portion of the capital raised will be allocated towards
finalising the OTCQB listing in the United States and supporting general
working capital requirements.

 

US$100,00 of the net proceeds of the CLN will be used to repaid to sums
borrowed by the Company under the facility announced on 18 September 2023.
The lender of that facility has agreed to apply US$79,500 of interest and fees
due under, and related to, that facility to subscribe for CLNs.  This
US$79,500 forms part of the £1,603,600 gross sums raised from the issue of
the CLNs.

 

New Non-Executive Director

As mentioned in the RNS dated 11 March 2024, Gordon Thompson has now joined
the Board of Critical Metals plc as a Non-Executive Director. Gordon has been
instrumental in building mines, improving processing operations, and designing
copper/cobalt plants in the DRC at mines such as Boss Mining (Mukundo
Mountain), SEK (Kipoi), and Chemaf. Gordon's expertise in this area is
unmatched and his next visit to Molulu will be in April 2024 along with the
Company's CEO.

 

US Government Funding

The US Government has many programmes that support corporate expansion in the
DRC. One of these programmes is guaranteeing bank loans that are provided by
African financial institutions.

 

Critical Metals has recently received a term sheet from one of the partner
financial institutions to provide a $11,000,000 loan at a market related
interest rate. As this term sheet is under discussion, further details will be
provided only once a term-sheet is executed. There is no guarantee this
term-sheet will be executed, and negotiations can take an extended time
period.

 

Meanwhile, other funding applications have been submitted to US Government
supported agencies. We will update the market on these applications as
required.

 

KASTRO SARL Plant Transaction

After a lengthy due diligence process, it was mutually agreed to terminate the
proposed transaction to rent and potentially acquire the assets of the Kastro
SARL processing plant.  The Company has entered early-stage discussions with
another processing plant and has visited the plant several times, which is on
care and maintenance in the Katanga province. Negotiations and discussions are
complex and further news will be released when appropriate.

 

Total Number of Shares

The total number of Ordinary Shares in issue is 67,389,680 and not 67,392,680
as set out in the Company's announcement of 8 January 2024, which was
incorrect due to an administration error. 67,389,680 Ordinary Shares is the
figure which may be used by shareholders as the denominator for the
calculations by which they will determine if they are required to notify their
interest in, or a change to their interest in the Company under the
Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency
Rules.

 

Appointment of Broker

The Company has appointed Fox-Davies Capital Limited broker.  Fox-Davies has
a 23-year track record of specialising in assisting junior natural resources
companies raise capital and advising on investor relations.

 

CEO Comment

 

Company CEO Russell Fryer commented: "I am delighted the Company has received
such strong support from existing and new institutional investors leading to
this placing being oversubscribed.  The additional funds will allow the
Company to significantly progress key items to help resume production and move
the Company closer to being cash generative.

 

The improvements to the road will allow the Company to ship ore in the near
term.  The JORC report will be an important milestone to allow the company to
implement the recommencement of the mine.  With the recent strong improvement
in the copper price, the entire Company is keen to move to cash flow as soon
as possible.  The appointment of Gordon Thompson to the team will greatly
enhance our inhouse technical resource and will be a great addition help in
meeting our objectives.

 

I am also looking forward to working with Fox-Davies Capital.  Peter Rose,
senior mining analyst at Fox-Davies, and I have known each other for over 20
years since we both worked together at Duetsche Bank, and I have great deal of
respect for his knowledge and experience.  I was delighted to have hosted
Peter on a site visit to the DRC last year.  We will work closely with the
entire team to increase investor engagement and awareness. "

 

PDMR Dealing

 

The Company has recently noted that although it announced on 31 May 2023
Russell Fryer's participation in its placing, this announcement did not
include the information in the prescribed form.  This information has been
included below at the request of the Financial Conduct Authority.

 

 

**ENDS**

 

For further information on the Company please visit www.criticalmetals.co.uk
(http://www.criticalmetals.co.uk/)  or contact: 

 

 Critical Metals plc

 Russell Fryer, CEO            critical@stbridespartners.co.uk
 Fox-Davies Capital Limited

 Corporate Broker

 Daniel Fox-Davies             Tel: +44 (0)20 3884 8450

 St Brides Partners Ltd

 Financial PR

 Ana Ribeiro/Isabelle Morris   critical@stbridespartners.co.uk

 

About Critical Metals

London listed Critical Metals plc is focused on identifying low CAPEX and OPEX
brown-field projects with near-term production and cash-flow, concentrating on
minerals that have strategic importance to future global economic growth.  In
line with this, and with an off-take partner already in place, the Company is
currently focused on recommencing production at the formerly producing Molulu
Copper/Cobalt Project in the Katangan Copperbelt in Democratic Republic of
Congo ('DRC').

 

Notification and public disclosure of transactions by persons discharging
managerial responsibilities and persons closely associated with them

 1    Details of the person discharging managerial responsibilities / person closely

    associated

 a)   Name                                                         Russell Fryer

 2    Reason for the notification

 a)   Position/status                                              Director of Critical Metals PLC

 b)   Initial notification /Amendment                              Initial notification

 3    Details of the issuer, emission allowance market participant, auction

    platform, auctioneer or auction monitor

 a)   Name                                                         CRITICAL METALS PLC

 b)   LEI                                                          213800MU3B7CS88PY290

 4    Details of the transaction(s): section to be repeated for (i) each type of

    instrument; (ii) each type of transaction; (iii) each date; and (iv) each
      place where transactions have been conducted

 a)   Description of the financial instrument, type of instrument  Ordinary Shares

      Identification code                                          GB00BJVR6M63

 b)   Nature of the transaction                                    Off market purchase of shares

 c)   Price(s) and volume(s)

                                                                                     Price(s)          Volume(s)
                                                                                     £0.25             40,000

 d)   Aggregated information

      - Aggregated volume                                          N/A Single transaction

      - Price

 e)   Date of the transaction                                      30 May 2023

 f)   Place of the transaction                                     London Stock Exchange

 

 

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