REG - Zinnwald Lithium PLC - Ocean Partners UK Ltd to acquire Erris Zinc Ltd

Zinnwald LithiumAnnouncement

13/03/2023 07:00

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RNS Number : 6580S  Zinnwald Lithium PLC  13 March 2023

Zinnwald Lithium plc / EPIC: ZNWD.L / Market: AIM / Sector: Mining

13 March 2023

Zinnwald Lithium plc

("Zinnwald Lithium" or the "Company")

 

Ocean Partners UK Limited to acquire Erris Zinc Ltd

 

Zinnwald Lithium plc, the German focused lithium development company, is
pleased to announce the signing of a Heads of Terms Agreement ("HOT") with
Ocean Partners UK Ltd ("Ocean"), a trader of base metal ores and concentrates
and parent company to Shanoon Resources Ltd ("Shanoon"), owner of the Galmoy
Prospecting Licence in Ireland, for it to acquire Erris Zinc Ltd, the
Company's 100% owned subsidiary that owns the Abbeytown Zinc License in
Ireland ("Abbeytown").

 

Whilst the HOT is non-binding, it is anticipated that a definitive legal
agreement reflecting these terms will be entered into between the Company and
Ocean within the next month.  This legal agreement shall also be subject to
final approval by the Irish Geoscience Regulation Office.

 

HIGHLIGHTS

·    Ocean to acquire Erris Zinc Ltd for €1

·    Ocean commits to spend €130,000 to end 2025 or Zinnwald can effect
buy-back

·    Zinnwald to receive 1% Net Smelter Royalty and €200,000 cash
payment six months after commencement of commercial production from Abbeytown

 

Zinnwald Lithium CEO, Anton du Plessis, said: "We are pleased to have found a
partner to develop Abbeytown whilst we focus on advancing our Zinnwald Lithium
Project towards the planned completion of a Bankable Feasibility Study at the
end of 2023 and commencement of production in Q4 2026.  As the core asset
that underpinned our original listing on AIM in 2017, our 2018/19 exploration
work identified excellent mineralisation at Abbeytown in the original drill
holes, while the metallurgical review showed that a good quality concentrate
could be produced.  We look forward to Ocean taking the exploration further
and, hopefully in the longer term, into production."

 

Shanoon Resources MD, Alan Buckley, said: "We are delighted that through Ocean
we have been able to secure the rights to this highly prospective licence with
high priority drilling targets identified."

 

DETAILS

Background

Zinnwald's subsidiary, Erris Zinc Ltd, owns the Abbeytown License in Ireland
(PL 3735).  The licence was originally granted for six years in 2013 and in
Q3 2019 Erris Zinc Ltd extended this licence for a further six years.  In
2021, following its acquisition of 100% of Deutsche Lithium GmbH and its
Zinnwald Lithium Project, the Group elected to put its Irish operations on
care and maintenance whilst it looked for a joint venture partner to take the
asset forward.   In 2021, the Company undertook the required further
exploration work to maintain the licence in good standing, but also fully
impaired the carrying value of this asset in its 2021 accounts.

 

HOT

Under the terms of the HOT, Ocean shall acquire 100% of Erris Zinc Ltd on the
following basis:

 

·    Ocean shall acquire Erris Zinc Ltd, which owns the Abbeytown license,
for €1

·    Pre-pay to Erris Zinc the minimum license spend due in 2023 of
€30,000;

·    Commit to finance a further total license spend of €100,000 over
2024 and 2025.

·    If this additional spend is not incurred by March 2025, Zinnwald
shall have the right to buy-back Erris Zinc for €1

·    Ocean shall issue a 1% Net Smelter Royalty to Zinnwald; and

·    Ocean shall make a €200,000 cash payment to Zinnwald, due six
months after the start of commercial production from the Abbeytown license
area.

 

Ocean Partners UK Limited was founded in 2005 and is a global trader of base
metal ores and concentrates.  Its subsidiary, Shanoon Resources Ltd
("Shanoon"), is a mining and exploration company founded in 2016 with the
objective of sourcing and developing mining projects in Ireland. Its current
portfolio includes the Galmoy zinc and lead mine in County Kilkenny, which it
is in the process of re-developing.

 

.*ENDS*

 

 For further information visit www.zinnwaldlithium.com or contact:

 

 Anton du Plessis       Zinnwald Lithium plc  info@zinnwaldlithium.com

 Cherif Rifaat
 David Hart             Allenby Capital       +44 (0) 20 3328 5656

 Dan Dearden-Williams   (Nominated Adviser)
 Michael Seabrook       Oberon Capital Ltd    +44 (0) 20 3179 5300

 Adam Pollock           (Joint Broker)
 Richard Greenfield     Tamesis Partner LLP   +44 (0) 20 3882 2868

 Charles Bendon         (Joint Broker)
 Isabel de Salis        St Brides Partners    zinnwald@stbridespartners.co.uk (mailto:zinnwald@stbridespartners.co.uk)

 Paul Dulieu            (Financial PR)

 

Notes

AIM quoted Zinnwald Lithium plc (EPIC: ZNWD.L) is focussed on becoming an
important supplier of lithium hydroxide to Europe's fast-growing battery
sector. The Company owns 100% of the Zinnwald Lithium Project in Germany,
which has an approved mining licence, is located in the heart of Europe's
chemical and automotive industries and has the potential to be one of Europe's
more advanced battery grade lithium projects.

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