REG - Caerus Mineral Res. - Potential RIWAQ Acquisition

Critical Mineral ResourcesAnnouncement

13/12/2022 07:00

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RNS Number : 5088J  Caerus Mineral Resources PLC  13 December 2022

13 December 2022

Caerus Mineral Resources PLC

('Caerus' or the 'Company')

Potential RIWAQ Acquisition

Caerus Mineral Resources (Caerus or the Company) the exploration and
resource development company focused on developing mineral resources to
support the global 'Clean Energy' initiative is pleased to announce it has
entered into an exclusive option agreement with EV Metals Group Plc ("EVM") to
acquire 90% of RIWAQ Al Mawarid for Mining ("RIWAQ").

RIWAQ is a special purpose subsidiary of EVM focused on the development of the
Saudi supply chain through the production of critical raw materials from the
exploration, mining and processing of minerals and metals in the Kingdom of
Saudi Arabia ("KSA"). This is a key strategic objective and undertaking of EVM
in the agreement between EVM and the National Industrial Development Centre
for the development of the Battery Chemicals Complex of EVM in KSA.

This agreement is reflective of Caerus' evolved strategy to invest in
larger-scale opportunities aligned with, and gained through, the EVM
partnership. This reflects the Company's evolution from developing a single
project into a company looking to be a part of the European critical minerals
supply chain.

Caerus will pay a fully refundable GBP 500,000 deposit in return for an
extendable three-month due diligence period of RIWAQ's portfolio. The final
transaction value is dependent on the Company's assessment of the RIWAQ
Licenses and a final negotiation stage.

RIWAQ is developing a strategically valuable portfolio of critical minerals
projects comprising applications for and granted exploration licences covering
areas with potential for minerals containing critical metals such as nickel,
cobalt, copper, platinum group metals and rare earth elements. Caerus
considers the KSA to be one of the best new frontiers for exploration of
transition metals and RIWAQ's KSA portfolio to be one of significant and
strategic value.

Portfolio Background

RIWAQ's portfolio consists of 11 granted exploration licenses alongside 142
licence applications which are under processing. The granted licenses
encompass 1,093 km(2) in an area prospective for lithium pegmatites known as
Balthaga. The remaining applications cover 11,350km(2) and include ground
prospective for nickel, cobalt, copper and platinum group metals hosted in
sulphide, volcanic hosted massive sulphide, and porphyry type deposits. There
are also several applications for rare earth element granite systems.

Kingdom of Saudi Arabia potential

The geology of Saudi Arabia is split between ancient, Precambrian aged,
igneous and metamorphic rocks in the west and sedimentary rocks on the eastern
side. The Precambrian rocks are part of the Arabian-Nubian Shield ("ANS"), a
geological region well known for hosting numerous base metal, gold, rare metal
and industrial mineral deposits.

In the context of acknowledged resource-rich regions with mining potential,
the KSA is largely undeveloped. This is expected to change due to new mining
investment laws, a streamlined license application process and much improved
data sharing. Important changes include up to 100% foreign ownership, 20%
corporation tax, attractive loans for industrial projects from the Saudi
Industrial Development Fund, and no restrictions on the repatriation of
capital.

EVM has been operating in the Kingdom since 2018 and has established offices
in Jeddah and Al Khobar.

 

Commenting Chris Lambert, Chairman, stated:

We are delighted to announce this agreement. It is entirely in line with our
evolved strategy to invest in larger scale opportunities. We are moving to a
world powered by critical minerals for energy storage, EV batteries and
alternative renewable energy sources. Whilst Caerus is set to undertake a
comprehensive review of the licenses, we believe they hold considerable value
for the energy revolution and the opportunity for long-term development.

With Vision 2030, Saudi Arabia has made clear its intentions regarding the
development of its mining sector - namely it is a vital industry pillar for
development. The country's recent changes to its mining investment regulations
underpin this ambition, ensuring a supportive regulatory backdrop for the
development of the kingdom's significant mineral resources. We look forward to
starting our review of the licenses and keeping the market appraised of our
progress.

 

Memorandum of Understanding

The MOU is between Caerus and EVM, the 90% owner of RIWAQ. The acquisition of
interests in RIWAQ by Caerus is subject to any regulatory approvals in KSA
including those under the Mining Investment Law. The MOU includes the
following conditions:

Exclusivity and Option

Caerus will pay a GBP500,000 fully refundable deposit to gain exclusivity with
EVM for negotiations concerning the 90% acquisition of RIWAQ. The refundable
deposit provides Caerus with the option to acquire 90% of RIWAQ, exercisable
on or before 31 April 2023.

Due Diligence

Caerus and EVM agree to share information through the Due Diligence exercise
relating to the RIWAQ Portfolio in order to enable Caerus to make a decision
on its involvement in or acquisition of RIWAQ.

Refundable Deposit

Should Caerus elect not to proceed with the purchase of 90% of RIWAQ, EVM will
return the GBP500,000 Refundable Deposit to Caerus within 10 days of receipt
of written notice from Caerus that it elects not to proceed.

 

Related Parties

EVM is a significant shareholder of the Company holding as at the date of this
announcement approximately 16.34 per cent. of the voting rights of the
Company.

Mr Russell Thomson is a statutory director of EVM and Mr Dominic
Traynor is corporate secretary to EVM. Mr Thomson and Mr Traynor did not
form part of the quorum and did not vote on the proposal to approve the terms
of the MOU. The independent directors of the Company have determined that the
terms of the MOU are fair and reasonable and in the best interest of its
shareholders other than EVM.

 

For further information, please contact:

 

 Caerus Mineral Resources plc             info@caerusmineralresources.com (mailto:info@caerusmineralresources.com)

 Charles Long, Chief Executive Officer
 Novum Securities                         +44 (0) 20 7399 9425

 Jon Belliss

 

 

 

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