REG - Critical Metals PLC - Update re Proposed Acquisition of DRC Project

Critical MetalsAnnouncement

23/12/2021 07:00

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RNS Number : 4127W  Critical Metals PLC  23 December 2021

 

 

 

Critical Metals plc / EPIC: CRTM / Market: Main Market / Sector: Closed End
Investments

 

23 December 2021

Critical Metals plc

("Critical Metals" or the "Company")

 

Update re Proposed Acquisition of DRC Copper/Cobalt Project

 

 

 

Critical Metals plc, a mining investment company established to acquire mining
opportunities in the critical and strategic metals sector, is pleased to
provide an update on its proposed acquisition of a majority interest in the
copper/cobalt project located within Small Scale Mining License PEPM 14784 in
the Democratic Republic of Congo (the "Molulu Project") that was announced on
20 May 2021 (the "Proposed Acquisition").

 

Throughout the second half of 2021, the Board, alongside the Company's
advisers, has been focussed on progressing the Proposed Acquisition, including
completing the requisite due diligence, corporate structuring, and preparation
of the documentation associated with the Proposed Acquisition and Reverse
Takeover process under the FCA's Listing Rules.

 

The Board confirms that, despite delays, the Proposed Acquisition still
represents an excellent opportunity to acquire a controlling interest in a
highly prospective copper/cobalt project which has previously been in
production and can be quickly brought back into operation to generate
near-term free cashflow.

 

Process Update

 

The Proposed Acquisition is in a non-English speaking jurisdiction and is
therefore inherently more time consuming and often complex in terms of
understanding Mining Laws and legal frameworks written in French that cover
the governance of agreements.  As such it is imperative that due diligence is
completed thoroughly and the Board considers that additional time was, and is,
needed to prepare several agreements according to the Laws of the DRC.

 

In addition, the Company has sought to establish a corporate structure for the
enlarged group so as to optimize its tax position and ensure the unimpeded
repatriation of any future dividends. This process has now been completed.

 

It is noted that, on 20 November 2021, DRC President Tshisekedi announced that
the Ministry of Mines in the Democratic Republic of Congo (DRC) would conduct
a mining license audit, which included a temporary ban on issuing and
transferring mining permits until such audit is complete. In addition, the
DRC Mining Code requires a company to offer a 10% free carry in any company
that possess a mining exploitation license, and the DRC Government is
assessing all companies holding mining licences as to compliance with this
term.

 

These recent mining Governance rulings have been taken into consideration in
relation to the Proposed Acquisition, requiring the rewording of several
agreements and consideration of transaction structure. This process began as
soon as the announcement from the DRC President was released and is expected
to be finished shortly.

 

The Company can also confirm that the PEPM 14784 mining license is current,
not under threat of removal due to the new mining audit decree, and all
government taxes on the license have been paid.

 

The Board understands that shareholders are anxious for the Proposed
Acquisition to complete and for the ordinary shares of the enlarged group
(inclusive of new ordinary shares to be issued for funding requirements) to be
readmitted to trading, and continues to work hard towards completing this
objective whilst ensuring the Company is responsible corporate citizen that
upholds the highest ESG standards as a guest in the DRC. The Board expects
that the Proposed Acquisition can be completed in Q1 2022, setting up the
Company to make significant operational progress within 2022.

 

As noted previously, all key advisers have been engaged and workstreams in
relation to due diligence and application for readmission to trading on the
Standard List, including the preparation of a Prospectus, are underway. A
Competent Persons Report has been prepared in respect of the Molulu Project
and the audit and conversion of the Madini Occidental Ltd accounts into an
IFRS compliant format is progressing. It is expected that a draft Prospectus
will be submitted to the FCA for review early in Q1 2022.

 

The Board also notes that the Company continues to assess further potential
acquisition opportunities in the copper-cobalt, tantalum-tin,
vanadium-titanium, and tantalum-niobium sectors in line with its stated
strategy.

 

The Board looks forward to providing further updates in due course.

 

**ENDS**

 

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

 

 Russell Fryer                        Critical Metals plc                           Tel: +44 (0)20 7236 1177

 Rory Murphy / James Bellman          Strand Hanson Limited                         Tel: +44 (0)20 7409 3494

                                      Financial Adviser

 Lucy Williams /                      Peterhouse Capital Limited, Corporate Broker  Tel: +44 (0)20 7469 0936

 Heena Karani                                                                       Tel: +44 (0)20 7469 0933

 Catherine Leftley / Isabelle Morris  St Brides Partners Ltd,                       Tel: +44 (0)20 7236 1177

                                      Financial PR

 

About Critical Metals

Critical Metals was formed as an investment company and intends to make equity
investments into operators or near-term production operators within the
natural resources development and production sector in the continent of
Africa. It is envisaged that such acquisition or acquisitions will trigger a
reverse takeover in accordance with the listing rules. The Company intends to
search initially for acquisition opportunities in the natural resources sector
on known deposits and more specifically minerals that are perceived to have
strategic importance to future economic growth. Commodities such as antimony,
beryllium, cobalt, copper, fluorspar, gold, rare earth elements, tin,
tungsten, titanium, and vanadium have been identified by several governments
as "critical minerals" and so guaranteeing supplies is seen as a strategic
necessity. The Company therefore believes that the market conditions for these
minerals will remain strong in the short-to-long term.

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