REG - Kendrick Resources - Exercise of option over Norwegian Projects

Kendrick ResourcesAnnouncement

16/05/2022 07:00

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RNS Number : 5809L  Kendrick Resources PLC  16 May 2022

 

16 May 2022

Kendrick Resources Plc

("Kendrick" or the "Company")

Exercise of option over Norwegian Projects

 

Kendrick Resources Plc (LSE: KEN), a mineral exploration and development
company with projects in Scandinavia is pleased to announce that further to
its announcement on 6 May 2022, and the information in its Prospectus dated 28
April 2022, that on 13 May 2022, it exercised its option to conditionally
acquire the Espedalen, Hosanger, and Sigdal nickel-copper-cobalt exploration
projects in Norway (the "Norwegian Projects") (the "Acquisition") from EMX
Scandinavia AB (previously named Eurasian Minerals Sweden AB) ("EMX") by the
issue of 20,226,757 new ordinary shares in the Company to EMX or its nominee,
50% of these shares shall be subject to a three-month voluntary escrow and the
balance of 50% subject to a six-month voluntary escrow. Kendrick has also made
a payment of US$81,949 to EMX. This payment was to meet a shortfall of this
amount in the exploration expenditure to be incurred during the option period.

The Acquisition is conditional upon the Norwegian Directorate for Mineral
Administration approving the transfer of the licences to a wholly owned
subsidiary of Kendrick. The parties anticipate that this approval and transfer
process will be completed in approximately four weeks. At the time this
process is completed, the Company will apply for the 20,226,757 new ordinary
shares to be admitted to trading on the Standard Segment of the London Stock
Exchange.

Colin Bird, Executive Chairman of Kendrick Resources Plc, commented:

"I am pleased that we were able to conclude the Option agreement and to
welcome EMX as a shareholder in the Company.  EMX is a well-known name in the
royalty and mining investment business, and we will be pleased to have EMX
join the share register. The projects in Norway have excellent potential with
several of them containing raw data which is yet to be compiled, analysed, and
potentially generate a mineral resource estimate.  This is entirely a desktop
activity and, as such, will not involve expensive drilling, assays, and
associated work.  All of our projects are open ended and therefore have
potential to increase the current nickel resource and we look forward to
drilling the most promising projects at the earliest opportunity."

 

Project Highlights

·      The Norwegian Projects comprise:

 

o  The Espedalen Project consisting of 16 contiguous exploration permits
covering a combined area of 139.89 km(2).

o  The Sigdal Project consisting of three exploration licences totalling 30
km(2).

o  The Hosanger Project consisting of a coherent tenure package of four
exploration licences covering 40 km(2).

·      The Espedalen Project, currently contains the following two
nickel deposits:

o Stormyra deposit comprising 1.16Mt @ 1% Ni, 0.42% Cu & 0.04% Co and
classified as Inferred in accordance with JORC (2012)

o Dalen deposit comprising 7.8Mt @ 0.3% Ni, 0.12% Cu & 0.02% Co and
classified as Inferred in accordance with JORC (2012)

·      The Sigdal Project contains a geophysical conductor associated
with historical mine workings, which has only been tested with two short drill
holes, returning gold grades over 10g/t with encouraging nickel and copper
mineralisation including:

o 1.48m @ 0.36% Ni, 0.43% Cu, 10.1g/t Au, & 2.9g/t Ag from 22.6m in hole
ER2006-13

·      The Hosanger Project contains the historical Litland nickel mine
which produced 460,000t of nickel ore grading 1.05% Ni, 0.35% Cu and 0.05% Co
from 19151 and which remains open at depth ultimately producing 4,170 t of
contained nickel.

·      Nickel demand is rising due to an increased usage of Li-ion
batteries

 

Future commitments

·      On or before 13 January 2023, the Company has to pay an annual
advanced royalty of US$25,000 per Project to EMX which increases by US$5,000
annually per Project with effect from 13 January 2024.

 

·      On or before 27 April 2023, the Company has to issue to EMX or
its nominee the number of shares which is the lower of i) 9.9% of the
Company's then issued share capital and ii) the number of shares whose value
based on the then 5-day VWAP equals 20,000,000 of the shares issued at closing
of the acquisition (the "Established Value") divided by the 5 day VWAP at the
date of issue of these shares.

 

·      beginning on 13 May 2025 and ceasing on the date upon which the
Company commissions a Pre-Feasibility Study on any one of the Projects: the
Company has committed to one thousand meter drilling for each Project; and

 

·      upon attainment of each development milestone ((milestone 1)
being the completion of an economic assessment of mineral potential and
(milestone 2) the completion of a feasibility study), the Company shall pay
EMX the sum of USD$500,000. If milestone 1 is not met but milestone 2 is met
then an aggregate of USD$1,000,000, will become due

 

To facilitate the smooth transfer of the Project Licences the Company has for
SEK75,000 (approximately GBP5,700) acquired Caledonian Minerals AS a Norwegian
company established by EMX as a clean special purpose vehicle on 8 November
2021 which has to date not carried out any business and has no assets or
liabilities. Caledonian Minerals AB is Norwegian Company wholly owned by Viad
Royalties AB which is itself a wholly owned subsidiary of EMX and was
incorporated as a clean special purpose vehicle on 8 November 2021 and which
has to date not carried out any business and has no assets or liabilities.

 

Royalty Agreement: The Parties shall at closing of the Acquisition enter into
a royalty agreement under which a 3% net smelter royalty is payable to EMX on
commercial production from any of the three Norwegian Projects. A 1% interest
in this royalty may be bought back in stages for a total cash consideration of
US$1,000,000 on or before the fifth anniversary of the closing of the
Acquisition.

 

Further information on the Norwegian projects can be found on the Company's
website at: https://www.kendrickresources.com/nickel/
(https://www.kendrickresources.com/nickel/)

 

This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (as amended).

 For additional information please contact:
 Kendrick Resources Plc:     Tel: +44 203 961 6086

 Chairman                    Colin Bird

 Novum Securities            Tel: +44 7399 9400
 Financial Adviser           David Coffman / Lucy Bowden

 Joint Broker                Jon Bellis

 Shard Capital Partners LLP  Tel: +44 207 186 9952

 Joint Broker                Damon Heath / Isabella Pierre

 

About Kendrick Resources Plc

Kendrick Resources Plc is a mineral exploration and development company with
projects primarily based across Scandinavia. The principal of its business is
to explore the opportunities within the natural resources sector with a focus
on battery, base, and precious metals including but not limited to vanadium
and nickel. In doing so, the Company is looking to build a long term energy
metals business in Scandinavia which delivers energy metals to Europe to help
enable its renewable energy transformation by building a top tier energy
metals production business.

 

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