REG - Keras Resources PLC - Increase in Diamond Creek Ownership to 100%

Keras ResourcesAnnouncement

30/03/2022 09:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220330:nRSd5686Ga&default-theme=true

RNS Number : 5686G  Keras Resources PLC  30 March 2022

Keras Resources plc

('Keras' or 'the Company')

 

Keras increases ownership of the Diamond Creek Phosphate Mine in Utah, USA to
100%

 

Keras Resources plc (AIM: KRS) is pleased to announce that it now owns 100% of
Falcon Isle Resources LLC and Falcon Isle Holdings LLC (collectively 'Falcon
Isle'), having acquired the outstanding 49% minority interests of Falcon Isle
from the Helda Living Trust ('HLT'). Falcon Isle owns the high-grade Diamond
Creek organic phosphate lease and mine, ('Diamond Creek') and the Spanish
Fork processing facility ('Processing Facility') in Utah, USA. Keras has now
assumed full management of Falcon Isle and production has recommenced
operations at the Processing Facility.

 

As previously announced, Keras had been looking to resolve the funding
shortfall at Falcon Isle and engaged local US legal representatives to enforce
its rights of the terms of the transaction agreed in June 2020, under which
Keras secured a 51% stake in Falcon Isle effective 29 December 2020. Further
to these discussions, agreement has been reached whereby Keras has purchased
the outstanding 49% equity interest in Falcon Isle for a total consideration
of US$3.2m including loans repaid to the vendor of Falcon Isle of
US$1,816,527. To preserve cashflow for developing the project, this will be
paid in four annual instalments of US$800,000 commencing on 1 July 2022 with
the final payment on 1 July 2025. Importantly, concluding this agreement has
ensured that the Company avoids a lengthy and costly litigation process in the
United States and allows Falcon Isle to recommence operations to meet demand
in the key spring season.

 

The losses in the financial year ended 31 December 2021 attributable to the
49% interest in Falcon Isle acquired were US$24,187.

 

The transaction set out above constitutes a related party transaction pursuant
to AIM Rule 13 of the AIM Rules for Companies as a beneficiary of the HLT is
also a director of Falcon Isle. The directors of Keras, all of whom are
independent for the purposes of this transaction, having consulted with the
Company's Nominated Adviser, consider that the terms of the transaction are
fair and reasonable insofar as the shareholders of Keras are concerned.

 

Russell Lamming, CEO of Keras , commented, "We are delighted to have acquired
100% of Falcon Isle, securing the high-grade Diamond Creek phosphate mine and
strategically located Spanish Fork processing plant in a very buoyant organic
fertiliser market. Although processing operations were temporarily suspended
whilst we sought this resolution, our management team has been on site
regularly to oversee sales from our inventory of processed material and ensure
business continuity, specifically retaining our customer base and maintaining
relationships with key contractors. The payment terms have been structured to
use cash generated from the operation and minimise additional funding.  We
have a 3-month window to explore financing options before the first tranche is
due and have already initiated discussions with key customers to look at
funding solutions.

 

"This acquisition has brought what has been an incredibly frustrating period
for the Company to a close and results in Keras now having complete autonomy
over all mine to market activities. With a total mined inventory of over
10,000 tons, including 4,000 tons of processed, saleable product available, we
are extremely well placed to convert this to cashflow and increase our market
share. We will also be consolidating the long term future of the Company
through a targeted exploration programme to underpin future production. The
organic phosphate market is on an upward trajectory, with robust long term
fundamentals, operations have recommenced and we look forward to realising the
full and true value inherent within the Diamond Creek asset."

 

The information contained within this Announcement is deemed by the Company to
constitute inside information as stipulated under Article 7 of the Market
Abuse Regulation (EU) No. 596/2014 (as amended) as it forms part of the
domestic law of the United Kingdom by virtue of the European Union
(Withdrawal) Act 2018 (as amended). Upon the publication of this Announcement
via the Regulatory Information Service, this inside information is now
considered to be in the public domain.

For further information please visit www.kerasplc.com
(http://www.kerasplc.com) , follow us on Twitter @kerasplc or contact the
following:

 

 Russell Lamming                       Keras Resources plc             annabel@kerasplc.com

 Annabel Redford

 Nominated Adviser & Joint Broker      SP Angel Corporate Finance LLP  +44 (0) 20 3470 0470

 Ewan Leggat / Charlie Bouverat

 Joint Broker                          Shard Capital Partners LLP      +44 (0) 207 186 9900

 Damon Heath / Erik Woolgar

 

 

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  ACQSDUSWSEESELD