REG - Keras Resources PLC - Nayéga Agreement & Strategic Update

Keras ResourcesAnnouncement

18/05/2023 07:00

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RNS Number : 8018Z  Keras Resources PLC  18 May 2023

Keras Resources plc / Index: AIM / Epic: KRS / Sector: Mining

 

18 May 2023

 

Keras Resources plc ('Keras' or the 'Company')

 

Nayéga Agreement & Strategic Update

 

Keras Resources plc (AIM: KRS) is pleased to announce that it has agreed with
the Republic of Togo (the "State") on 17 May 2023 ("Agreement") on a way
forward for the Nayéga Manganese project ("Nayéga") in Northern Togo.

 

TRANSACTION OVERVIEW

·    Keras and the State have agreed that Nayéga is a Togolese strategic
asset and the exploitation permit will be awarded to Société Togolaise de
Manganèse, a Togolese incorporated company 100% owned by the State ("STM")
and Keras will no longer pursue the Nayéga exploitation permit;

·    The Company will transfer all its intellectual knowledge on Nayéga
to the State and provide  advisory and brokerage services to fast track the
development of Nayéga;

·    In addition Keras will initialise the process to liquidate its
interest in SGM, the company through which Keras holds its interest in
Nayéga;

·    The State will pay Keras a cash consideration of US$1.7m (one million
seven hundred thousand United States dollars) ("Cash Payment") on 17 July 2023
and thereafter;

o  Keras will be paid an advisory fee of 1.5% (one and a half percent) of
gross revenue generated from the Nayéga mine for the provision of advisory
services for 3 (three) years ; and

o  Keras will be paid 6.0% (six percent) of gross revenue generated from the
Nayéga mine for the provision of brokerage services for the lesser of 3.5
(three and a half) years or 900,000 (nine hundred thousand) tonnes of
beneficiated manganese ore produced and sold from Nayéga.

 

 

STRATEGIC OVERVIEW

·    Keras has now completed its transition into a fully focussed North
American business targeting the robust organic fertiliser market through
Diamond Creek, the Company's high-grade organic rock phosphate mine located in
Utah, wholly owned through Falcon Isle Resources LLC ("Falcon Isle");

·    The Cash Payment, after costs, will be used to fund the second
US$800,000 tranche for the acquisition of Falcon Isle in July 2022, and for
general working capital. The ongoing advisory and brokerage fees will
significantly augment the already cashflow-positive Diamond Creek mine.  The
Company is now fully funded to fast-track the following projects in Utah:

o  Start the exploration programme to prove up a NI 43-101 compliant mineral
resource;

o Conversion of the current mining permit to a large-scale mining permit
which will create significant flexibility in medium to long term mining
operations;

o Completion of the build of the Granulator Plant; and

o Research into the development of liquid organic products from our existing
product streams in order to access markets not already served.

 

Graham Stacey, CEO of Keras, commented, "This transaction not only finalises
Keras's transition into a fully focussed high grade organic fertiliser
producer in the United States but draws a line through the uncertainty related
to the Nayéga asset.

 

This Agreement is a reflection of the constructive relationship we have with
the State and sets a very clear picture of how the asset will now be developed
to the benefit all stakeholders and rewards Keras for its investment to date.

 

The upfront Cash Payment due on 17 July 2023 and ongoing cashflows associated
with this Agreement underpins the already robust Diamond Creek mine economics
which Keras will continue to develop  into the premier organic phosphate
producer in the US."

 

 

AIM Rule disclosures

The unaudited loss for the year ended 31 December 2022 attributable to the
assets being disposed of was £75,000.

 

The unaudited estimated carrying value of the assets being disposed of was
approximately £1.5 million.

 

 

For the purposes of MAR and Article 2 of Commission Implementing Regulation
(EU) 2016/1055, this announcement is being made on behalf of Graham Stacey,
Chief Executive Officer.  This announcement contains inside information for
the purposes of Article 7 of Regulation (EU) 596/2014.

 

**ENDS**

 

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

 

 Graham Stacey                             Keras Resources plc             info@kerasplc.com

 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

 Financial & Corporate Communications      Celicourt                       +44 (0) 774 884 3871

 Felicity Winkles

Notes:

Keras Resources (AIM: KRS) wholly owns the Diamond Creek organic phosphate
mine in Utah, US. Diamond Creek is one of the highest-grade organic
phosphate deposits in the US and is a fully integrated mine to market
operation with in-house mining and processing facilities. The operation
produces a variety of organic phosphate products that can be tailored to
customer organic fertiliser requirements.

 

The Company is focused on continuing to build market share in the
fast-growing US organic fertiliser market and build Diamond Creek into the
premier organic phosphate producer in the US.

 

 

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