REG - Nativo Resources Plc - Morrocota Gold Mine Acquisition & Issue of Equity

Nativo ResourcesAnnouncement

06/12/2024 07:00

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RNS Number : 0561P  Nativo Resources Plc  06 December 2024

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

6 December 2024

 

Nativo Resources Plc

("Nativo" or the "Company")

 

Acquisition of Morrocota Gold Mine, Peru

&

Issue of Equity

Nativo Resources plc (LON:NTVO), which has interests in precious metals mining
and production in Peru, is pleased to announce it has signed a binding term
sheet to acquire the Morrocota Gold Mine ("Morrocota"), located in the
Arequipa province, 3km from the Bonanza Gold Mine ("Bonanza") which is held by
Nativo's 50%-owned joint venture, Boku Resources SAC ("Boku").  The company
that owns the exploitation contract at Morrocota is owned privately by Mr
Emilio Jimenez Velarde and Mr Ignacio Jimenz Velarde, both Peruvian nationals.

Morrocota, which shares a central camp and facilities with Bonanza, is in the
preparation stage with vertical development of 38 metres in the main shaft and
horizontal development of an aggregate 48 metres along three galleries. The
mine is targeting the same mesothermal quartz vein systems being exploited at
Bonanza and is anticipated to be brought into production in approximately
three months.

Sampling from vein material recovered during the preparation stage indicates
grades of up to 23.4g/t Au in the best developed ore chutes. Morrocota has
stockpiled 7-9t of vein material at surface, which will be transferred to
Nativo as part of the acquisition.

For the past five months, Morrocota has been operated by Boku under contract
from its current Peruvian owners (the "Vendors"). Under the terms of the
transaction, Boku will continue to manage operations and will prepare an
accelerated exploitation plan for the mine to optimise production.

Upon completion of the Morrocota acquisition, Nativo will own 100% of the mine
and production through a wholly owned Peruvian subsidiary. Completion is
conditional upon the satisfaction of customary Peruvian small mining sector
regulatory requirements anticipated to take up to several months
("Completion"). Any vein material produced between the signing of the binding
agreement and Completion will belong to Nativo.

The consideration for the acquisition of Morrocota of approximately £124,557
will be satisfied through the issue to the Vendor upon Completion of
4,332,402,186 new ordinary shares in the Company (the "Consideration Shares")
at a price of 0.00288p (the "Issue Price"), representing a premium of
approximately 15% to the closing share price on 5 December 2024. The
Consideration Shares are to be issued and held in escrow, pending completion
of the acquisition. In the event that the acquisition does not complete, the
Consideration Shares will instead be transferred to be held in treasury.

The Vendors will also be issued upon Completion with one warrant to subscribe
for one new Ordinary Share for every two Consideration Shares to be issued
(the "Warrants"). The Warrants will be exercisable for up to two years from
the date of issue with an exercise price of 0.00359p, a premium of
approximately 25% to the Issue Price.

Additionally, the Vendors have unconditionally agreed to invest further in
Nativo by way of an immediate cash subscription for 347,826,086 new ordinary
Shares at the Issue Price (the "Subscription Shares"). Once the Consideration
Shares and Subscription Shares have been issued, the Vendors will hold
approximately 7.05% of Nativo.

The accounts for the company holding the exploitation contract at Morrocota
show a loss before tax of $123,460 for the latest management accounts between
June and November 2024 with the total investment quantum to develop the mine
to its current position of around $185,000.

Stephen Birrell, Chief Executive Officer of Nativo, commented:

"This is a great opportunity to accelerate gold production and cashflow,
bringing two neighbouring mines together under the Nativo and Boku umbrella,
with all the associated operational and financial economies of scale. The
operations and mining geology are symbiotic with what we are developing with
Bonanza. We are effectively buying a mine in development which will deliver
early cash flow by the second quarter of 2025.

The Vendors are highly supportive of Nativo's strategy as reflected in their
decision to convert their interests in Morrocota into a shareholding in our
Company alongside a further cash investment."

Admission and Total Voting Rights

Application will be made to the London Stock Exchange for admission of the
Consideration Shares and Subscription Shares to trading on AIM ("Admission").
It is expected that Admission will become effective and dealings will commence
at 8.00 a.m. on or around 12 December 2024.

The Consideration Shares and Subscription Shares will be issued fully paid and
will rank pari passu in all respects with the Company's existing Ordinary
Shares.

Following Admission, the total number of Ordinary Shares in the capital of the
Company in issue will be 66,394,773,292 with voting rights. This figure, which
also stands to amend the Total Voting Rights figure stated in the Company's 21
October 2024 announcement which was incorrect by one share due to rounding,
may be used by shareholders 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, the Company's share capital pursuant to (i) the
Company's Articles, (ii) the Financial Conduct Authority's Disclosure Guidance
and Transparency Rules and/or (iii) the AIM Rules for Companies issued by the
London Stock Exchange plc as amended from time to time.

For further information please contact:

 

 Nativo Resources                           Via Vigo Consulting

 Stephen Birrell, Chief Executive Officer   nativo@vigoconsulting.com (mailto:nativo@vigoconsulting.com)

 Zeus (Nominated Adviser and Joint Broker)  Tel: +44 (0)20 3829 5000

 James Joyce

 James Bavister

 Peterhouse Capital limited (Joint Broker)  Tel: +44 (0)20 7469 0930

 Duncan Vasey

 Lucy Williams

Rose Greensmith

 Vigo Consulting (Investor Relations)       Tel: +44 (0)20 7390 0234

 Ben Simons                                 nativo@vigoconsulting.com (mailto:nativo@vigoconsulting.com)

 Peter Jacob

Anna Sutton

 

About Nativo Resources plc

 

Nativo has interests in gold mining and exploration projects in Peru. Through
a 50:50 joint venture established in July 2024 with an experienced local
partner, Nativo secured an opportunity to scale operations at the Tesoro Gold
Concession, owning 50% of the production and resources, targeting early cash
flow generation in Q4 2024. In December 2024, Nativo agreed to acquire
directly a 100% interest in the Morrocota Gold Mine, proximal to the Tesoro
Gold Concession. Production from Morrocota is anticipated to commence by the
end of Q1 2024. Longer-term, the Company plans to establish its own gold ore
processing plant to retain a higher margin from production at its mines.

 

In addition to primary gold mining projects, the Company also holds the Ana
Lucia Polymetallic concession and is investigating low capex strategies to
appraise and exploit tailings deposits to recover gold.

 

Qualified Persons Statement

The scientific and technical information contained within this announcement
has been reviewed and approved by Dr Alberto Rios Carranza, a geologist with
over 27 years' experience, who holds a doctorate cum laude awarded by the
Polytechnical University of Madrid, Spain and who has published or co-authored
over 17 scientific papers on the mineralisation across Peru. Alberto is a
member of the Geological Society of Peru, the Colombian Society of Geology and
the Institute of Mining Engineers of Peru. He is a Qualified Person as defined
by the AIM Guidance Note on Mining and Oil & Gas Companies dated June
2009.

 

Follow us on social media:

 

LinkedIn: https://uk.linkedin.com/company/nativoresources-plc
(https://uk.linkedin.com/company/nativoresources-plc)

X (Twitter): https://x.com/nativoresources (https://x.com/nativoresources)

 

Glossary of Terms

 

 Au               gold
 g/t              grams per tonne

 km               kilometers

 m                meters
 Ordinary Shares  ordinary shares of 0.0001p each in the Company
 t                tonnes
 tpd              tonnes per day

 

 

 

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