REG - Lexington Gold Ltd - Completion of Acquisition, Issue of Equity and TVR

Lexington GoldAnnouncement

07/09/2023 10:00

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RNS Number : 7219L  Lexington Gold Limited  07 September 2023

7 September 2023

Lexington Gold Ltd

("Lexington Gold" or the "Company")

 

Completion of Acquisition of White Rivers Exploration (Pty) Ltd,

Issue of Equity, Additional Subscription

and Total Voting Rights

 

Lexington Gold (AIM: LEX), the gold exploration and development company,
further to its announcement of 15 May 2023 and associated circular to
shareholders published on 2 June 2023, is pleased to announce, inter alia, the
completion of its acquisition of White Rivers Exploration Proprietary Limited
("WRE"), an exploration and development company with significant gold assets
in South Africa.

 

Accordingly, WRE has now exited its business rescue process with no creditors
other than the Lexington Gold group, and the Company, through its wholly owned
subsidiary Lexington Gold South Africa Proprietary Limited, is now the sole
shareholder of WRE, with a 26 per cent. interest in WRE to be issued to
Lexington Gold's Broad-Based Black Economic Empowerment ("BBBEE") partners in
due course which will reduce Lexington Gold's remaining interest in WRE to 76
per cent. Capitalised terms in this announcement have the same meanings as
ascribed to them in the Company's announcement of 15 May 2023 unless indicated
otherwise.

 

Highlights:

·     Lexington Gold is now the sole ultimate beneficial owner of WRE
with a 26 per cent. interest to be issued to Lexington Gold's BBBEE partners
in due course which will serve to reduce Lexington Gold's resultant interest
in WRE to 76 per cent. Lexington Gold is currently finalising arrangements
with a well-known BBBEE group in South Africa and will announce further
details when this transfer of a 26 per cent. ownership interest has been
completed.

·     In accordance with the terms of the acquisition, Lexington Gold is
issuing 36,129,032 new common shares (the "Initial Consideration Shares") to
settle £2.24 million, representing 35 per cent. of the maximum Lexington Gold
Equity of up to £6.4 million to be paid as consideration under the WRE
Acquisition and Loan Agreements.

·     The Initial Consideration Shares are being issued at a price of
6.20 pence per new common share (the "Issue Price") based on the 30-day VWAP
to Tuesday, 5 September 2023 being 2 business days prior to this announcement.

·     The balance of the consideration due under the WRE Acquisition and
Loan Agreements is to be settled by way of the issue of new common shares in
Lexington Gold at the Issue Price based on certain milestones being achieved.

·     The Initial Consideration Shares are being issued as follows:

o  27,142,784 shares to Mark Creasy or his nominee; and

o  8,986,248 shares to Sunswell Holdings Pty Limited or its nominees.

·     In addition, Mark Creasy has invested an amount of £100,000 by way
of a subscription for 1,666,666 new common shares (the "Creasy Subscription
Shares") and 1,666,666 associated Fundraising Warrants on the same commercial
terms as the Company's approximate £2.5 million equity fundraising announced
on 10 July 2023.

·     Following the issue of the Initial Consideration Shares and the
Creasy Subscription Shares, Mr Creasy will own 33,867,065 common shares
representing approximately 9.16 per cent. of the Company's enlarged issued
share capital.

Edward Nealon, Lexington Gold's Non-Executive Chairman, commented:

"The Company is delighted to have completed this potentially game changing
acquisition, which received the overwhelming support of our shareholders. We
are also excited to be working with Mark Creasy as we commence our initial
work programmes seeking to convert the internally estimated 37 million ounces
of non-compliant gold resource to an independent JORC code compliant estimate
and unlocking long term shareholder value from these promising assets."

Deferred consideration milestones, extension of consent deadline and WRE's
licence interests

The balance of the Lexington Gold Equity payable, being up to £4.16m, will
fall due to be issued at the Issue Price upon the achievement of the following
milestones:

 Lexington Gold Equity
 %         No. of common shares  Amount    Milestone event
 45%       46,451,613            £2.88m    Later of 30 November 2023 and the date of renewal of four of the Prospecting
                                           Rights split, 25%, 10%, 8% and 2% respectively between the four Prospecting
                                           Rights concerned.
 20%       20,645,161            £1.28m    Receipt of Ministerial Consent.

 

Table 1 below shows the current status of WRE's Prospecting licences and
Prospecting Right applications.

 

Table 1: WRE's Prospecting Licences and Prospecting Right Applications

 Project           Tenement                Area (hectares)  Status                  Expiry date
 Jelani Resources  FS 30/5/1/1/2/10350 PR  956.76           Renewal Awarded         (1)
 Kroonstad         FS 30/5/1/1/2/889 PR    13,845.77        Renewal under appeal    (2)
 Kroonstad         FS 30/5/1/1/2/10520 PR  12,429.45        Renewal under appeal    (2)
 Kroonstad         FS 30/5/1/1/2/10519 PR  22,193.1         Executed                28-May-24
 Bothaville        FS 30/5/1/1/2/10578 PR  9,510            Executed                03-Mar-24
 Bothaville        FS 30/5/1/1/2/10579 PR  9,119.58         Executed                17-Mar-24
 Ventersburg       FS 30/5/1/1/2/888 PR    8,418.7          Executed                09-Dec-23
 Ventersburg       FS 30/5/1/1/2/10489 PR  8,965.9          Executed                09-Dec-23
 Ventersburg       FS 30/5/1/1/2/10528 PR  2,248.6          Executed                21-Aug-24
 Klerksdorp        NW 30/5/1/1/2/11335 PR  1,816.9          Renewal under appeal    (2)
 Total                                     89,504.79
 (1) In South Africa renewals are for 3 years from the grant date of the
 renewal.

 (2) Renewals under appeal by WRE following an initial rejection due to
 technical non-compliance of original renewals previously submitted by WRE. New
 applications by Lexington Gold SA have also been submitted over the same
 areas.

 

Further to Lexington Gold South Africa Proprietary Limited's receipt of its
interest in WRE, the procedural application for Ministerial Consent in respect
of the transaction will be made shortly and the parties to the WRE Acquisition
and Loan Agreements have agreed that the deadline for obtaining such consent
will be extended to 31 August 2024 or such later date as may be further agreed
between the parties.

 

Lock-up and Orderly Market Arrangements

 

The Initial Consideration Shares and future issues of Lexington Gold Equity
are subject to a 12-month lock-up from the date of issue and thereafter to a
further 12-month orderly market arrangement via Lexington Gold's broker.

 

Application to trading on AIM and Total Voting Rights

 

Application will be made to the London Stock Exchange for the 36,129,032
Initial Consideration Shares and the 1,666,666 Creasy Subscription Shares
(together, the "New Common Shares") to be admitted to trading on AIM
("Admission"). It is expected that Admission will become effective and that
dealings in the New Common Shares will commence at 8.00 a.m. on or around 14
September 2023.

 

On Admission, the number of common shares in issue outside treasury and the
total voting rights in the Company will be 369,894,673. This figure may be
used by shareholders in the Company as the denominator for the calculations by
which they will determine if they are required to notify their interest in, or
a change to their interest in, Lexington Gold under the notification
provisions incorporated in the Company's Bye-laws.

 

Full details on WRE and its asset portfolio are set out in the Company's
announcement of 15 May 2023 and associated circular of 2 June 2023.

 

Planned Work Programme

The Company's Directors believe that a multi-million ounce JORC 2012/SAMREC
compliant Mineral Resource Estimate ("MRE") can be established in respect of
WRE's asset portfolio and intends, subject to additional funding as necessary,
for the Company to:

 

·   Undertake detailed analysis and modelling of the existing geological
database and extensive drilling data set; and

·   Establish and implement the requisite work required to convert the
current non-JORC/non-SAMREC complaint Mineral Resources into a code compliant
MRE including verification and duplication drilling, as appropriate, as well
as the re-sampling and assaying of historical drill core, where possible.

 

Furthermore, the Directors plan to unlock value from the Jelani Resources JV
by engaging and working closely with Harmony Gold with the aim of progressing
the project into future gold production.

 

Whilst WRE has internally estimated that it potentially has over 37 million
ounces of non-code compliant gold resources across over its projects, there
can be no guarantee that the planned exploration and technical work by the
Company will be sufficient to establish JORC (2012) compliant Mineral
Resources.

 

 

For further information, please contact:

 

 Lexington Gold Ltd                                      www.lexingtongold.co.uk (http://www.lexingtongold.co.uk)


 Bernard Olivier (Chief Executive Officer)               via Yellow Jersey

 Edward Nealon (Chairman)

 Mike Allardice (Group Company Secretary)

 Strand Hanson Limited (Nominated Adviser)               www.strandhanson.co.uk (http://www.strandhanson.co.uk)

 Matthew Chandler / James Bellman / Abigail Wennington   T: +44 207 409 3494

 WH Ireland Limited (Joint Broker)                       www.whirelandplc.com (http://www.whirelandplc.com)
 Katy Mitchell                                           T: +44 207 220 1666

 Peterhouse Capital Limited (Joint Broker)               www.peterhousecap.com (https://peterhousecap.com/)

 Duncan Vasey / Lucy Williams (Broking)                  T: +44 207 469 0930

 Eran Zucker (Corporate Finance)

 Yellow Jersey PR Limited (Financial Public Relations)   www.yellowjerseypr.com (http://www.yellowjerseypr.com)

 Charles Goodwin / Annabelle Wills / Soraya Jackson      T: +44 7747 788 221

 

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.

 

 

 

Note to Editors:

 

Lexington Gold (AIM: LEX) is a gold exploration and development company
currently holding interests in four diverse gold projects, covering a combined
area of approximately 1,675 acres in North and South Carolina, USA and in five
gold projects covering approximately 89,505 hectares in South Africa.

 

Further information is available on the Company's website:
www.lexingtongold.co.uk (http://www.lexingtongold.co.uk) . Neither the
contents of the Company's website nor the contents of any website accessible
from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.

 

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