REG - Europa Metals Ltd - Notice of General Meeting

Europa MetalsAnnouncement

01/10/2024 11:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241001:nRSA4643Ga&default-theme=true

RNS Number : 4643G  Europa Metals Ltd  01 October 2024

1 October 2024

Europa Metals Ltd

("Europa Metals", the "Company" or the "Group") (AIM, AltX: EUZ)

Notice of General Meeting

Europa Metals Ltd, ("Europa" or the "Company") the European focused lead, zinc
and silver developer, announces that it will hold a General Meeting ("GM") of
its Shareholders at 10.00 a.m. (UK time) on Friday, 25 October 2024.

Further to the Company's announcement of 17 September 2024, the resolution to
be considered at the GM seeks Shareholder approval for the sale of a 100%
interest in the Company's wholly-owned subsidiary, EMI, to Denarius Metals
Corp.

The Notice and the accompanying Explanatory Statement are being posted to
Shareholders (where required), and the Explanatory Statement is set out in
full at the end of this announcement and should be read by Shareholders in its
entirety. In addition, the Notice can be viewed and downloaded from the
Company's website via the following link:
http://www.europametals.com/site/aim-rule-261/shareholder-communication
(http://www.europametals.com/site/aim-rule-261/shareholder-communication)

Defined terms used in this announcement have the same meanings as those
ascribed to them in the Notice and/or Explanatory Statement unless the context
requires otherwise.

In the year to 30 June 2023, EMI reported a loss of A$ 3,221,565 and had no
revenue. The Proposed Transaction will result in the disposal of EMI which is
currently accounted for as an investment in an associate (and therefore is not
recognised on the Company's balance sheet at 30 June 2023. The investment is
carried at NIL as at 30 June 2023 as the EMI accounts (adjusted for EUR group
reporting) report a net liability and net loss position.

South African shareholders are advised that the record date to participate and
vote at the GM is Wednesday, 23 October 2024 and the last day to trade to
participate and vote at the GM is Friday, 18 October 2024. The record date to
receive the Notice is Friday, 27 September 2024.

For further information on the Company, please visit www.europametals.com or
contact:

 

Europa Metals Ltd

Dan Smith, Non-Executive Director and Company Secretary (Australia)

T: +61 8 9486 4036

E: dsmith@europametals.com

Myles Campion, Executive Chairman and acting CEO (UK)

E: mcampion@europametals.com

 

Beaumont Cornish (Nominated Adviser/Broker)

James Biddle/Roland Cornish

T: +44 (0) 20 7628 3396

 

Questco Corporate Advisory Proprietary Limited (JSE Sponsor)

Danielle Christodoulou

T: +27 (11) 011 9216

 

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.

 

Nominated Adviser

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.

 

 

EXPLANATORY STATEMENT TO SHAREHOLDERS

INTRODUCTION

This Explanatory Statement has been prepared for the information of
Shareholders in connection with the Resolution to be considered at the General
Meeting of the Shareholders of Europa Metals Ltd to be held at 11.00 a.m. (UK
time) / 7.00 p.m. (AWST) on Friday, 25 October 2024 at the offices of Reynolds
Porter Chamberlain LLP, Tower Bridge House, St Katharine's Way, London E1W
1AA.

This Explanatory Statement should be read in conjunction with the accompanying
Notice of Meeting.

The purpose of this Explanatory Statement is to provide information that the
Directors believe to be material to Shareholders in deciding whether or not to
pass the Resolution set out in the Notice.

 

1. RESOLUTION 1: APPROVAL OF THE PROPOSED TRANSACTION WITH DENARIUS

1.1 Background

On 23 November 2022, Europa Metals entered into a definitive option agreement
(the "Toral Definitive Agreement") with Denarius pursuant to which Europa
granted two options to Denarius to acquire collectively up to an 80% ownership
interest in Europa Metals Iberia S.L. ("EMI"), a wholly-owned Spanish
subsidiary of Europa which holds the Toral Zn-Pb-Ag Project in the Leon
Province, Northern Spain.   Under the AIM Rules for Companies (the "AIM
Rules"), the Toral Definitive Agreement was deemed to constitute a fundamental
change of business for the Company that required Shareholder approval, which
was obtained on 30 December 2022.

Pursuant to the Toral Definitive Agreement, Denarius was granted an option
("First Option"), exercisable until November 22, 2025 (subject to a 90-day
extension in certain circumstances), to subscribe for a 51% equity interest in
EMI by:

(i)         spending, as operator, a total of USD$4,000,000 on the
Toral Project over the three-year period,

(ii)        completing a preliminary economic assessment, and

(iii)       completing and submitting a mining license application in
respect of the Toral Project to the local mining authority by July 31, 2023
(this has been done).

Under the second option agreement ("Second Option") Denarius had the right to
acquire a further 21% ownership interest in EMI (for collectively an 80%
ownership interest) by exercising the First Option, completing a NI 43-101
report for the Toral Project and paying the Company US$2 million.

Upon exercise of the Second Option the Company would hold 20% of EMI and be
required to fund its portion of ongoing activities for the Toral Project,
failing which it would be diluted based upon the parties' contributions to
date and deemed contributions by Denarius of US$4,000,000 (prior to exercising
the Second Option) or US$6,000,000 (after exercising the Second Option), and
by the Company of US$3,843,137 (prior to the Second Option being exercised) or
US$1,500,000 (after the Second Option being exercised).

Whilst Denarius has been undertaking ongoing work at Toral to satisfy the
First Option conditions, as announced on 17 September 2024, Europa has now
signed a binding letter of intent ("LOI") with Denarius, who will, subject to
shareholder approval, documentation and due diligence to Denarius'
satisfaction, acquire 100% of the issued and outstanding shares of EMI (the
"Proposed Transaction"). The Board expect that the definitive share purchase
agreement will materially reflect the terms of the LOI and that, given
Denarious' knowledge of the Toral Project, the due diligence condition should
be completed shortly and therefore the Proposed Transaction can complete
shortly after the EGM.

1.2 Material terms of the LOI

The Proposed Transaction replaces the Options and involves the sale by Europa
of 100% of the issued and outstanding shares of EMI to Denarius in
consideration of the issue by Denarius of 7,000,000 common shares at a deemed
issue price of CAD$0.50 per share (CAD$3,500,000) ("Consideration Shares").
The Consideration Shares will be subject to a 4-month holding lock following
issuance and will result in the Company holding approximately 8.6% of
Denarius' common shares based on Denarius' current ordinary shares on issue.

The Transaction is subject to:

(i)         each of the Company, Europa and EMI receiving all
necessary board, shareholder and regulatory approvals, as applicable;

(ii)        the parties negotiating, executing and delivering a
definitive share purchase agreement; and

(iii)       completion of all legal, financial, tax and operational due
diligence by and to the satisfaction of Denarius.

The closing of the Transaction ("Closing") is expected to occur no later than
31 October, 2024.

The binding LOI is governed by the laws of the Province of Ontario and the
federal Laws of Canada.

1.3 Benefits of the Proposed Transaction

The proposed Transaction will provide certainty that Denarius will acquire EMI
and give Europa exposure to Denarius' portfolio of projects within Spain and
Columbia via the Consideration Shares.  Based upon Denarius's last traded
price on 25 September 2024, the Consideration Shares have total value of
approximately C$4,550,000. Furthermore, the Consideration Shares provide
Europa with a liquid asset that could, should the need arise, be gradually
sold to provide funds for the Company.

Additionally, as announced on 17 September 2024, Europa Metals has entered
into a conditional Term Sheet regarding the proposed acquisition of Viridian
Metals Ireland Limited, ("Viridian"), and its 100% owned Tynagh brownfield
Pb/Zn/Cu/Ag project in the Republic of Ireland.

The Tynagh minesite operated as an oxide open pit and laterly as a small
sulphide underground operation between 1973 and 1980, where from the open pit
they mined secondary oxidised material containing 16-18% combined zinc and
lead. This oxidised material and limited processing technology at the time led
to poor recovery of the metals resulting in a high grade tailings product.

Today there is a 6.7Mt surface waste Mineral Resource declared in terms of the
Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards
("CIM Definition Standards") and reported in an NI 43-101, at the site, plus a
possible 3.0mt of non-compliant resources:

·      4.0mt@6.1% combined Zn+Pb, 1.4 Oz/t Ag (44g/t Ag), 18.95% BaO

·      2.7mt@1.7% combined Zn+Pb, 0.4 Oz/t Ag (13g/t Ag), 9.5% BaO

Viridian understands that the prior operators had realised that much of the
original metal content would be in the tailings and that re-treatment may be
possible, and carefully stored and segregated the material with this in mind.
The metal content in the tailing's facility is an equivalent grade to what is
being mined underground elsewhere today.  The Proposed Transaction will allow
the Company to focus on the Tynagh project and receive the Consideration
Shares, rather than (assuming Denarious exercises the Options, which is not
certain) receive US$2m and either fund its interest in ongoing activities at
the Toral Zn-Pb-Ag Project or be diluted.

Should the Proposed Transaction be approved by Shareholders and it completes,
pursuant to AIM Rule 15, the Company will become an 'AIM Rule 15 cash shell'
and, as such, will have six months from completion to make an acquisition or
acquisitions which constitute a reverse takeover under AIM Rule 14 after which
the Shares would be suspended.

1.4 Consequences if Shareholders do not approve the Proposed Transaction

If Shareholders do not approve the Proposed Transaction, or it does otherwise
does not complete, the Company will retain its existing interest in the Toral
project, subject to Denarius' rights and obligations under the Options.  This
may, depending upon whether Denarius exercises the Options, and in any event
following the Second Option being exercised, require the Company to contribute
to ongoing exploration and development of the Toral Project, failing which the
Company's interest in the project will be diluted.

Given the Company's share price whilst it held the Toral Project, the Company
may not be able to raise funds to continue exploration or any such raising may
be unduly dilutive to Shareholders.

1.5 AIM Rules for Companies

In accordance with AIM Rule 15, the Proposed Transaction is deemed to
constitute a fundamental change of business for the Company and therefore
requires the approval of shareholders at a duly convened general meeting.

If Resolution 1 is duly approved by the Company's Shareholders, the Proposed
Transaction will proceed subject to the satisfaction of any conditions
outstanding at that time.

If Resolution 1 is not approved by the Company's Shareholders, the Proposed
Transaction will not proceed and the joint venture, via EMI, between Denarius
and Europa Metals for the development of Toral will continue.

In the year to 30 June 2023, EMI reported a loss of A$ 3,221,565 and had no
revenue. The Proposed Transaction will result in the disposal of EMI which is
currently accounted for as an investment in an associate (and therefore is not
recognised on the Company's balance sheet at 30 June 2023. The investment is
carried at NIL as at 30 June 2023 as the EMI accounts (adjusted for EUR group
reporting) report a net liability and net loss position.

1.6 Directors' recommendation

Given the uncertainty as to whether Denarius will exercise the Options and the
risk that the Company may be require further funds for Toral Project along
with the proposed acquisition of Viridian as referred to herein, the Directors
unanimously recommend that Shareholders vote in favour of Resolution 1.  This
will satisfy a condition to completion of the Proposed Transaction which, if
completed, will result in the Company receiving the Consideration Shares.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  NOGFSLSUFELSEIS