REG - Metals Exploration - Further Statement re: Possible Offer for Condor

Metals ExplorationAnnouncement

02/12/2024 11:30

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RNS Number : 4338O  Metals Exploration PLC  02 December 2024

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

 

THIS ANNOUNCEMENT DOES NOT CONSTITUTE A FIRM INTENTION TO MAKE AN OFFER UNDER
RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND THERE CAN
BE NO CERTAINTY THAT ANY FIRM OFFER WILL ULTIMATELY BE MADE.

 

2 December 2024

METALS EXPLORATION PLC

Further Statement re: Possible Offer for Condor Gold plc

and Irrevocable Undertaking

Metals Exploration plc (AIM: MTL) ("Metals Exploration", "MTL" or the
"Company") is pleased to confirm, further to its announcement earlier today,
details of an irrevocable undertaking received and the proposed consideration
in respect of its Possible Offer. Pursuant to the Possible Offer, each Condor
shareholder would be entitled to fixed consideration comprising of 4.0526 new
ordinary shares of £0.0001 each in the capital of the Company ("MTL Share")
and 9.9p in cash for each Condor Share held (the "Fixed Consideration").

Based on the closing middle-market price per MTL Share on 29 November 2024
(being the last Business Day prior to this announcement), the Fixed
Consideration values Condor's existing issued ordinary share capital at
approximately £67.5 million, representing approximately 33.0p per Condor
Share.

In addition, pursuant to the terms of the Possible Offer, each Condor
Shareholder would be entitled to receive one Contingent Value Right (the
"CVR") (the "CVR Consideration"), which would entitle them to their pro rata
share of US$18.00 per ounce (to be paid in pounds sterling at the prevailing
exchange rate at the time of payment) of additional contained gold JORC
Mineral Resource discovered in excess of Condor's base case Mineral Resource
Estimate at the Condor Group's La India, Rio Luna and Estrella projects (the
"Gold Projects") (subject to a cap of 1.6Moz), over the five-year period
following the earlier of (i) the first date upon which a suitable drilling rig
to carry out certain agreed work commitments has been mobilised to the La
India Project (as agreed with an independent CVR representative); and (ii) six
months following the proposed scheme of arrangement's effective date (or
equivalent) (the "CVR Commencement Date"). Payments due under the CVR would be
settled by way of the issue of either new MTL Shares or loan notes issued by
MTL with a maturity of six months and one day after their date of issue (the
"Loan Notes"), or a combination thereof, at MTL's sole election, following the
third and fifth anniversary of the CVR Commencement Date.

Accordingly, the maximum potential CVR Consideration payable pursuant to the
Possible Offer, would amount to US$28.8 million (approximately £22.6 million
at the prevailing exchange rate), representing 11.1p per Condor Share (the
"Maximum CVR Consideration"). Accordingly, the Fixed Consideration and the
Maximum CVR Consideration (at the prevailing exchange rate), in aggregate,
would amount to approximately £90.1 million, representing approximately 44.1p
per Condor Share.

The CVRs are complex instruments and a number of factors will determine the
amount, if any, that would ultimately be paid to Condor shareholders by way of
the Contingent Value Rights if the Possible Offer is made on the terms set out
herein.

There can be no certainty that any firm offer will ultimately be made. This
announcement does not amount to a firm intention to make an offer under Rule
2.7 of the Code, nor does it impose any obligations on the Company to make an
offer.

Irrevocable Undertaking

Metals Exploration has received an irrevocable undertaking from Galloway
Limited ("Galloway") to vote (or procure the vote) in favour of, or accept (or
procure the acceptance of) (as applicable), the proposed acquisition by or on
behalf of the Company of all the issued and to be issued shares in Condor,
whether implemented by way of a scheme of arrangement or a contractual offer
(whether on the terms of the Possible Offer or including any revision or
variation in the terms of any such acquisition which may be made by or on
behalf of the Company from time to time) (the "Acquisition"), provided that
the Company has announced the Acquisition under Rule 2.7 of the Code by 5:00
p.m. on 4 December 2024 (or such later time and/or date as the Company and
Condor may agree) (the "Irrevocable Undertaking"). In addition, the
Irrevocable Undertaking provides that Galloway shall vote against any
resolution to approve any transaction or other corporate action which is
proposed in competition with, or which might reasonably be expected to
otherwise frustrate, impede or delay, the Possible Offer.

Galloway is beneficially owned by Mr Jim Mellon, Non-Executive Chair of
Condor. The Irrevocable Undertaking is in respect of Galloway's entire
existing holding of 50,512,597 Condor Shares (representing approximately 24.7%
of Condor's existing issued ordinary share capital), together with any Condor
Shares that would be issued upon the exercise of the 892,857 warrants over
Condor Shares which are currently also held by Galloway (representing
approximately a further 0.4% of Condor's existing issued ordinary share
capital). Further details regarding the irrevocable undertaking are set out in
Appendix 1 to this announcement.

Further information relating to the Code

In accordance with Rule 2.5(a) of the Code, the Company reserves the right to
introduce other forms of consideration and/or to vary the mix or composition
of consideration of any firm offer. In addition, the Company reserves the
right to make an offer for Condor at a lower value or on less favourable terms
than the Possible Offer: (i) with the agreement or recommendation of the Board
of Condor; (ii) if a third party announces a firm intention to make an offer
for Condor which, at that date, is of a value less than the value of the
Possible Offer; or (iii) following the announcement by Condor of a Rule 9
waiver transaction pursuant to Appendix 1 of the Code or a reverse takeover
(as defined in the Code). If Condor declares, makes or pays any dividend or
distribution or other return of value or payment to its shareholders, the
Company reserves the right to make an equivalent reduction to the Possible
Offer.

A further announcement(s) will be made in due course, as and when appropriate.

Unless otherwise defined, capitalised terms used in this announcement shall
have the same meanings as those ascribed in the Company's announcement earlier
today.

For further information, please visit or contact:

 Metals Exploration PLC
 Via BlytheRay                                              +44 (0) 207 138 3204

 Nominated & Financial Adviser:                             STRAND HANSON LIMITED
 James Spinney, James Dance, Matthew Chandler, Rob Patrick  +44 (0) 207 409 3494

 Public Relations:                                          BLYTHERAY
 Megan Ray, Said Izagaren                                   +44 (0) 207 138 3204

 

Web:                www.metalsexploration.com
(http://www.metalsexploration.com)

X:                     @MTLexploration
(https://twitter.com/MTLexploration)

LinkedIn:           Metals Exploration
(https://www.linkedin.com/company/metals-exploration-plc)

 

 

Important notices

Strand Hanson Limited, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting exclusively as financial adviser
and nominated adviser to the Company and no one else in connection with the
matters set out in this announcement and will not be responsible to anyone
other than the Company for providing the protections afforded to its clients
or for providing advice in relation to such matters.

This announcement is not intended to and does not constitute an offer to sell
or the solicitation of an offer to subscribe for or buy or an invitation to
purchase or subscribe for any securities or the solicitation of any vote in
any jurisdiction.

The release, publication, or distribution of this announcement in
jurisdictions outside the United Kingdom may be restricted by law and
therefore persons into whose possession this announcement comes should inform
themselves about and observe such restrictions. Any failure to comply with
such restrictions may constitute a violation of the securities law of any such
jurisdiction.

Publication on a website

In accordance with the rules of the Code, a copy of this announcement will be
made available (subject to certain restrictions relating to persons in
restricted jurisdictions) at www.metalsexploration.com
(https://metalsexploration.com/) by no later than 12 noon today. The content
of this website is not incorporated into and does not form part of this
announcement.

Appendix 1 - Details of the Irrevocable Undertaking

Metals Exploration has received the Irrevocable Undertaking from Galloway in
respect of Galloway's entire existing holding of 50,512,597 Condor Shares,
representing approximately 24.7 per cent. of Condor's existing issued ordinary
share capital, to vote in favour of or accept a firm offer for Condor
announced under Rule 2.7 of the Code by Metals Exploration. In addition, the
Irrevocable Undertaking provides that Galloway shall vote against any
resolution to approve any transaction or other corporate action which is
proposed in competition with, or which might reasonably be expected to
otherwise frustrate, impede or delay, the Possible Offer.

The Irrevocable Undertaking also applies to any holdings in Condor Shares
otherwise acquired in the period from the date of the Irrevocable Undertaking,
being 28 November 2024, until it lapses. Galloway also holds 892,857 warrants
over Condor Shares, representing approximately a further 0.4 per cent of
Condor's existing issued ordinary share capital.

Galloway is beneficially owned by Mr Jim Mellon, Non-Executive Chair of
Condor.

The irrevocable undertaking shall lapse if: (a) Metals Exploration has not
released a firm offer announcement under Rule 2.7 of the Code for Condor by
5.00 p.m. on 4 December 2024, (or such later date agreed between the Company
and Condor) or (b) if, having made such an announcement, Metals Exploration
announces, with the consent of the Panel, that it does not intend to proceed
with the Acquisition and no new, revised or replacement firm offer for Condor
is announced by it under Rule 2.7 of the Code at the same time; (c) if a
scheme document is not published within 28 days of any firm offer announcement
by the Company (or such longer period as the Panel may agree); (d) the offer
lapses or is withdrawn in accordance with its terms; or (e) if a competing
offer becomes unconditional or, if proceeding by way of a scheme of
arrangement, becomes effective in accordance with its terms.

 

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