REG - Firering Strategic - Non-dilutive funding strategy

Firering Strategic MineralsAnnouncement

15/11/2024 07:00

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RNS Number : 4105M  Firering Strategic Minerals PLC  15 November 2024

Firering Strategic Minerals plc / EPIC: FRG / Market: AIM / Sector: Mining

15 November 2024

Firering Strategic Minerals plc

("Firering" or "the Company")

 

Funding Update

 

Non-dilutive funding strategy to deliver shareholder value

 

Firering Strategic Minerals plc, an emerging quicklime production and critical
mineral exploration company, is pleased to provide a funding update as it
fast-tracks its quicklime project in Zambia ("Limeco") towards the start of
phased commissioning in Q4 2024.

 

HIGHLIGHTS

·    Prioritising non-dilutive funding options to maximise shareholder
value.

·    18-month unsecured bridge loan notes (the " Bridge Loan") of up to
£1,000,000:

o  Accrues interest at 15% per annum, payable semi-annually.

o  Strong participation from existing shareholders.

·    Subscriptions received for the first tranche of £850,000 under the
Bridge Loan to complete the 6.7% acquisition instalment of Limeco (of
$1,016,667) due by 31 December 2024.

·    Company has submitted a loan application to a prominent Zambian bank
with the goal of securing funds to complete the entire Limeco acquisition to
take Firering's interest to 45% and to repay the Bridge Loan.

·    Limeco is already generating positive operational cash flow and the
quicklime production coming on stream has the potential to deliver significant
additional cash flow.

 

Yuval Cohen, Chief Executive of Firering, said: "This non-dilutive unsecured
Bridge Loan, which saw strong participation from existing shareholders,
enables us to maintain full shareholder value as we accelerate Limeco's
quicklime project toward phased commissioning beginning in Q4 2024. In
parallel, we have submitted a loan application to a major Zambian bank, with
the objective of financing the remainder of the Limeco acquisition increasing
our stake to 45% and to repay the Bridge Loan. Funding strategies are always a
priority for growth businesses, so we are pleased to have successfully
navigated this initial funding process, positioning Firering to take full
advantage of this exceptional opportunity that promises to generate
significant cash flow."

 

DETAILS

Bridge Loan

Firering has put in place an 18-month unsecured Bridge Loan of up to
£1,000,000. A total of £850,000 of the Bridge Loan has been subscribed to
settle the 6.7% acquisition instalment of its quicklime project in Zambia
("Limeco") of $1,016,667, which is due by 31 December 2024. This will take its
interest in Limeco from the current 10% to 16.7%. The notes ("Notes") issued
under the Bridge Loan accrue interest at 15% per annum with interest payable
semi-annually and a minimum 15% return to Subscribers should the Bridge Loan
be repaid early within the next 12 months. Under the Bridge Loan, the Company
is permitted to issue up to an additional £150,000 of Loan Notes. The Company
will announce any further subscriptions via RNS accordingly.

 

In addition, the Company has submitted a loan application to a prominent
Zambian bank with the goal of securing funds of c.$7.5 million to settle the
balance of consideration (of $1,033,333 due by 30 April 2025 to acquire a
further 3.9% interest) in respect of the Limeco acquisition (as notified on 28
May 2024) and exercise of the option ("Option") (with an aggregate exercise
cost of $4.65 million) to acquire a further 24.5% stake and take Firering's
interest in Limeco to 45% and to repay the Bridge Loan. The exercise of the
Option will fall to be assessed under the class tests of the AIM Rules for
Companies at the time of exercise.

 

The Company is prioritising non-dilutive funding options to maximise
shareholder value.

 

Related Party Transactions

Certain directors of the Company, being Youval Rasin, Shai Kol and Vassilios
Carellas, ("Subscribing Directors") together with persons closely associated,
have subscribed for Notes under the Bridge Loan as set out below:

 

 Name of Director    Notes Subscribed (£)
 Youval Rasin        £50,000
 Shai Kol            £25,000
 Vassilios Carellas  £37,500

 

The participation of the Subscribing Directors in the subscription for Notes
constitute related party transactions under AIM Rule 13 of the AIM Rules for
Companies.

No commission or fee has been paid to any Subscribing Director or any other
party in relation to the participation by Subscribing Directors in
subscription for Notes.

 

The independent Directors for the purposes of these transactions, being Yuval
Cohen and Remy Welschinger, consider, having consulted with SPARK Advisory
Partners Limited, the Company's nominated adviser, that the terms of the
participation of each of the Subscribing Directors in the subscription for
Notes are fair and reasonable in so far as Shareholders are concerned.

 

Issue of Warrants

In consideration for services rendered in connection with the subscription of
Notes in the Bridge Loan, the Company has also agreed to grant warrants over a
total of 72,727 ordinary shares of €0.001 each to the Company's brokers
("Broker Warrants"). The Broker Warrants will have an exercise period of 3
years from the date of grant and are exercisable at a price of 4.95 pence per
share representing the closing mid-market share price on 14 November 2024.

 

Limeco

As notified in the RNS issued on 5 November 2024, Limeco is on track to
commission the first of eight kilns by the end of Q4 2024, ramping up
operations through 2025 to support daily production of 600-800 tonnes of
quicklime.  To contextualise, quicklime prices have ranged from US$160 to
US$218 per tonne over the past two years, underscoring the significant value
of the asset. Notably, Limeco is already generating positive operational cash
flow with the sale of aggregate, which commenced in October 2023, and a
two-year logistics services revenue agreement signed in early August 2024.

 

*** ENDS ***

 

For further information visit www.fireringplc.com or contact:

 

 Firering Strategic Minerals                          E: info@firering-holdings.com

 Yuval Cohen
 SPARK Advisory Partners Limited (Nominated Adviser)  T: +44 20 3368 3550

 Neil Baldwin / James Keeshan / Adam Dawes
 Optiva Securities Limited (Joint Broker)             T: +44 20 3137 1903

 Christian Dennis / Daniel Ingram
 Shard Capital Partners LLP (Joint Broker)            T: +44 20 7186 9950

 Damon Heath / Erik Woolgar
 St Brides Partners Limited (Financial PR)            E: firering@stbridespartners.co.uk

 Isabel de Salis / Susie Geliher / Seb Weller

 

Notes

Firering Strategic Minerals plc is an AIM listed resource company set to
commence commissioning a significant quicklime project in Zambia in Q4 2024 to
produce 600-800 tonnes of quicklime per day along with ancillary products.
With over US$100 million in historical investment, the project is
strategically positioned to support the expanding copper producers in the
Zambian Copper Belt, which are currently reliant on imported quicklime from
South Africa.  Firering currently holds an SPA over a 20.5% stake in Limeco
Resources Limited ("Limeco") with a stake of 10% (increasing to 16.7% once the
proceeds of the Bridge Loan are deployed to settle the next instalment of the
Limeco acquisition) and an option to increase this to 45%. Additionally, the
Company is advancing the Atex Lithium-Tantalum Project in northern Côte
d'Ivoire, an exploration project rich in lithium and tantalum-niobium, with
drilling results indicating significant resource potential in this established
mining jurisdiction.

 

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