REG - Mineral & Financial - Redcorp & Ascendant - Mining Concession Contract

Mineral & Financial InvestmentsAnnouncement

08/11/2021 16:00

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RNS Number : 7004R  Mineral & Financial Invest. Limited  08 November 2021

MINERAL AND FINANCIAL INVESTMENTS LIMITED

Investment Update: Redcorp & Ascendant Sign Definitive Mining Concession Contract For The Lagoa Salgada Project In Portugal

 

HIGHLIGHTS:

·    An initial mining contract term for 20 years and extendable to up to
50 years

·    Two distinct phases for work development are clearly defined

·    The contract defines a fixed royalty on the value at the mouth of the
mine of mining products or concentrates shipped or used, being paid 66.6% to
33.3% payable to 1/3 being paid to the local Municipalities where the project
is located

·    The Company is required to outline its reclamation plans and
minimization of the environmental impact of the operation

·    Redcorp & Ascendant to commence infill drilling immediately and
will begin work towards a Bankable Feasibility Study ("BFS") early in 2022

 

 

George Town, Cayman Islands - 8 November 2021 - Mineral and Financial
Investments Limited (LSE-AIM: MAFL) ("M&FI" or the "Company") is extremely
pleased to announce that 75% owned Redcorp Empreedimentos Mineiros Lda
("Redcorp") and Ascendant Resources Ltd ("Ascendant") signed on October 28,
2021 with the Portuguese Government, through the General Directorate for
Energy and Geology (the "DGEG"), the definitive mining concession contract for
the Lagoa Salgada VMS Project (the "Lagoa Salgada Project") in the prolific
Iberian Pyrite Belt, Portugal. The development costs are funded and guided by
Ascendant Resources, which owns 25% of Redcorp, as part of Ascendant's
previously announced earn-in agreement with M&FI (please refer to the RNS
of August 1, 2018 which has been amended (see announcement dated July 1,
2020)).

 

Jacques Vaillancourt, President & CEO of M&FI stated, "We are
extremely pleased with the signing of the definitive mining concession
contract as this represents another huge step towards the full development of
the Lagoa Salgada Project. We would like to thank the Portuguese Government
for their ongoing support of the Lagoa Salgada Project and Redcorp's local
management team led by Joao Barros. We look forward to Redcorp and Ascendant
moving Lagoa Salgada to the next stage of its development and expect the
project will be an important contributor for the region and country's
social-economic development."

 

A summary of the main legal and contractual obligations of the contract are
highlighted below.

 

·    An initial contract term for 20 years, commencing on 28 October 2021,
renewable for two extension periods of 15 years each;

·    Two distinct phases for work development are defined. Phase 1 having
a duration of six (6) years from signing to present and get approval of an
Environmental Impact Assessment ("EIA") and a Definitive Feasibility Study
("DFS") and in Phase 2, to start within nine (9) years of signing to commence
the exploitation of the mineral deposits and to build an ore treatment
industrial facility (mill);

·    During Phase 1, Ascendant plans to execute all necessary exploration
and other works that aim to contribute to the improved knowledge of their
mineral deposits and improve resources through the delivery of an NI 43-101
Feasibility Study during 2022, which will define the planned development and
economic potential of the Lagoa Salgada Project;

·    Phase 2 can occur simultaneously to Phase 1, if it proves to be
technically feasible and provided that the necessary authorizations and
approvals are obtained;

·    The contract stipulates a 3% royalty on the value at the mouth of the
mine of mining products or concentrates shipped or used, being those divided
in: 2/3 being paid to the DGEG and 1/3 being paid to the Municipalities where
the project is located;

·    The Company is required to outline its reclamation plans and
minimization of the environmental impact of the operation within five (5)
years after the start of the exploration program, corresponding to 10% of the
financial charges foreseen for the execution of safety plans, environmental
protection, management of waste and the landscape recovery and integration
plan contained in the mining plan approved by the DGEG, and may not be less
than €1,000,000.

 

 

ASCENDANT EARN-IN AGREEMENT WITH M&FI

The option earn-in agreement details announced via RNS on August 1,
2018 (which has been amended (see announcement dated July 1, 2020)) are as
follows:

 

1.   In the first part of the transaction, Ascendant acquired an initial
effective 25% interest for an upfront payment of US$2.45 million composed of
US$0.80m in cash (US$0.40m on closing of the transaction and US$0.40m on July
15, 2018) and US$1.65 million in Ascendant shares.

2.   The second part of the Agreement is an earn-in option which has a
minimum total value, if fully exercised, of US$15.00 million. Earn-in
transaction terms are as follows:

a.   Ascendant has the right to earn a further effective 25% interest via
staged payments and funding obligations as outlined below:

b.   Investing a minimum of US$9.00 million directly in the operating
company, Redcorp, within 48 months of the closing date, to fund exploration
drilling, metallurgical test work, economic studies and other customary
activities for exploration and development; and

c.   Making payments totalling US$3.50 million to TH Crestgate according to
the following schedule or earlier:

I.    6 months after the closing date: US$0.25 million (Received)

II.  12 months after the closing date: US$0.25 million (Received)

III. 18 months after the closing date: US$0.50 million (Received)

IV. 24 months after the closing date: US$0.50 million (Received)

V.  36 months after the closing date: US$1.00 million (Received)

VI. 48 months after the closing date: US$1.00 million

3.   Ascendant then has the option to earn an additional 30%, totalling an
80% interest in Redcorp, the operating subsidiary, by completing a feasibility
study within 54 months and making a further payment of US$2.50 million to TH
Crestgate.

4.   Redcorp owns 85% of the Lagoa Salgada Project. Empresa Desenvolvimento
Mineiro SA ("EDM"), a Portuguese state-owned company holds 15%, upon which
M&FI/Redcorp has a right of first refusal. M&FI agreed to the
repurchase of the interest with EDM. The Portuguese Government has withheld
approval of the transaction. It remains M&FI's  intention to conclude
this repurchase.

 

REVIEW OF TECHNICAL INFORMATION

The scientific and technical information in this press release has been
reviewed and approved by references in this announcement to exploration
results and resource updates have been approved for release by Joao Barros,
BSc (Engineering), MSc (Geology), who has more than 16 years of relevant
experience in the field of activity concerned. Mr. Barros is a Member of the
Portuguese Engineers Association. Mr. Barros is employed by Redcorp
Empreedimentos Mineiros, Lda., a 75% owned subsidiary of M&FI, and has
consented to the inclusion of the material in the form and context in which it
appears.

 

FOR MORE INFORMATION:

 

Jacques Vaillancourt  -  Mineral & Financial Investments
Ltd.            +44 780 226 8247

 

Katy Mitchell and Ben Good  -  WH Ireland Limited
         +44 207 220 1666

 

Jon Belliss  -  Beaufort Securities Limited
                      +44 207 382 8300

 

Dominic Baretto  -  Yellow Jersey PR Limited
               +44 203 004 9512

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