TIDMFRG
RNS Number : 5646J
Firering Strategic Minerals PLC
17 August 2023
Firering Strategic Minerals plc / EPIC: FRG / Market: AIM /
Sector: Mining
17 August 2023
Firering Strategic Minerals Plc
("Firering" or the "Company")
Option to acquire an interest in ex-Glencore Limestone
Project
Project is commission ready with the potential to be in
production within 12 months
Firering, an exploration company focusing on critical minerals,
is pleased to announce that it has signed an option deed ("Option
Deed") dated 16 August 2023 to acquire up to 28.33% of Limeco
Resources Limited ("Limeco"), the owner of a Limestone project
located 22km west of Lusaka in Zambia for an aggregate of US$5.1
million across two tranches. The project comprises of a limestone
quarry with an estimated non-JORC compliant mineral resource of
more than 73 million tonnes (Source: Golder Associates, October
2017) and a quicklime production facility with the potential to
produce between 500 and 600 tonnes of quicklime per day
("Project").
Highlights
-- The Option Deed entered into by Firering and Clearglass
Investments Limited ("Clearglass") as co-option holders with the
current shareholders of Limeco ("Vendors") for an option over
33.33% of Limeco ("Option") (Firering 28.33%, Clearglass 5.00%)
-- Quicklime has multiple uses and is an essential reagent
widely used during flotation of copper sulphide minerals.
-- Limeco is in the process of commissioning a Lime Plant in
Zambia of which over US$100m has been invested to date. The Lime
Plant is ready for immediate commission and includes:
o Existing limestone quarry with an estimated resource* of
73.7Mt @ 95.3% CaCO(3) .
o Two stage crushing circuit with an installed primary
throughput of 500tph of limestone, and a lime plant comprising of
eight kilns for burning crushed limestone to produce between 500
and 600 tonnes of quicklime per day.
o A limestone stockpile of 200,000 tonnes to be used for
immediate production.
o Existing infrastructure of main access roads, power and
water.
o Advanced discussions ongoing for Lime offtake with major
copper producers.
-- Firering will have the option to acquire up to 28.33% of
Limeco across two tranches for an aggregate amount of US$5.1
million.
-- Clearglass to pay a non-refundable US$500k fee for the grant
of the Option, in exchange for up to 5% of Limeco upon exercise of
the Option by Firering, such amount to be made available to Limeco
as a loan from the Vendors to bring the project into operation.
-- On completion of the first tranche of the Option, which is
exercisable by Firering at any time over the next 12 months,
Firering will pay US$2.5 million to the Vendors and receive 17.5%
of Limeco's shares, with Clearglass receiving 2.5%.
-- On completion of the second tranche of the Option, which is
exercisable at any time in the 12 months following exercise of the
first tranche of the Option, Firering will pay US$2.6 million and
will receive a further 10.83% of Limeco's shares, with Clearglass
receiving a further 2.5%.
-- Limeco is expected to be profitable and delivering cashflow
within 12-24 months with the view of paying dividends to
shareholders as soon as possible.
-- Given the expected positive cashflow, Firering will be
assessing debt financing options to acquire its stake in
Limeco.
-- Shareholders' Agreement entered into between Firering,
Clearglass and the Vendors with Firering given the right to appoint
either the CEO or CFO of Limeco with effect from the grant of the
Option in order for Firering to oversee and manage the initial
commissioning and commencement of production through the
established lime plant at the Project throughout the period of the
Option.
*The non-JORC compliant resource is based on all available
drilling data as at August 2017. The Mineral Resources estimates
are at this stage reported as an in situ Mineral Resources estimate
only, as further work is required in order to be able to report the
Mineral Resources estimates in accordance with the guiding
principles and minimum standards set out in the 2012 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves" (the JORC Code) and the Company's
internal estimates, which are also not JORC compliant, are still
subject to verification, validation, and external review;
accordingly, such numbers are provided for guidance only. There can
be no guarantee the final JORC-compliant resource estimate will
reconcile with these early-stage calculations.
The Company intends to commission a JORC compliant report when
operations have been fully commissioned.
**Source: Data Bridge Market Research
Yuval Cohen, Chief Executive Officer of Firering, said:
"Firering has been keen to add a production asset to its
portfolio. We believe this is a unique opportunity for Firering to
diversify its investments and secure a stake in an advanced project
which is commission ready with the potential to be in production
within a year.
"In 2021, Glencore sold its Mopane copper mine in Zambia to ZCCM
Investments Holdings plc for US$1.5billion resulting in Limeco
being surplus to its requirements. Limeco has been at an effective
standstill whilst the above sale of the Mopane copper mine was
being negotiated.
"Firering has wasted no time in establishing a technical team
responsible for the refurbishment of the crushing system.
Commissioning and modifications to the plant consisting of eight
kilns will gradually be brought online and is estimated to produce
between 500 and 600 tpd of quicklime. Initial cashflow is expected
within 12-24 months, which will increase after the plant has
reached steady state production. Should both options be exercised,
our 28.33% stake in Limeco is expected to generate cashflow for
Firering.
I am looking forward to keeping the market updated with our
achievements at Limeco".
Proposed Transaction
Firering has been granted the Option, together with Clearglass
Investments Limited ("Clearglass") to acquire an interest in Limeco
by Kai Group Ltd ("Kai") and Samfuel Ltd ("Samfuel"), the current
shareholders in Limeco. The total Option is over 33.33% of Limeco
shares and is exercisable in two tranches. If the first tranche of
the option is exercised, Firering will acquire 17.5% of the
existing issued share capital of Limeco ("Shares") together with
17.5% (approximately US$18.3 million) of the shareholder debt
("Debt") (which in total amounted to approximately US$104.5 million
as at 31 December 2022)) and Clearglass will acquire 2.5% of the
Shares together with 2.5% of the Debt, in consideration for which
Firering shall pay to the Vendors US$2.5 million (the "First
Option"). If the second tranche of the option is exercised,
Firering will acquire 10.83% of the Shares, together with 10.83%
(cUS$13.1m) of the Debt and Clearglass will acquire 2.5% of the
Shares together with 2.5% of the Debt, in consideration for which
Firering shall pay to the Vendors US$2.6 million (the "Second
Option").
Main terms of the Option Deed
The main terms of the Option Deed are:
-- the First Option and Second Option (together "the Options")
are exercisable at Firering's sole discretion;
-- the First Option may be exercised at any time during the
period of 12 months from the date of the Option Deed. If the First
Option is not exercised during this time, the First Option and
Second Option will both lapse;
-- the Second Option may be exercised at any time during the
period of 12 months after the exercise of the First Option;
-- a non-refundable sum of US$500,000 shall be paid by
Clearglass to the Vendors within 10 business days of the signing of
the Option Deed, such amount to be made available by the Vendors to
Limeco to fund the initial development of the Project;
-- the consideration payable for the First Option is
US$2,500,000 which shall be satisfied in cash by Firering to Kai
and Samfuel in equal proportions;
-- the consideration payable for the Second Option is
US$2,600,000 which shall be satisfied in cash by Firering to Kai
and Samfuel in equal proportions; and
-- Kai, Samfuel and Limeco to provide customary warranties and
undertakings to the Company and Clearglass.
Main terms of the shareholders' agreement
In connection with the Option, and given that Firering and
Clearglass will acquire a shareholding in Limeco if the Option is
exercised, Kai, Samfuel, Firering and Clearglass have entered into
a shareholders' agreement (the "Shareholders' Agreement") to
regulate the operation of the business and affairs of the Company
and each of the parties' rights in relation to Limeco. The main
terms of the Shareholders' Agreement are:
-- each of Kai, Samfuel and Firering (the "Major Shareholders")
are entitled to appoint one director to the board of directors of
Limeco with effect from the date of the Option;
-- the board of directors of Limeco shall determine the overall
policies, objectives, operations, business and management of
Limeco. However, certain critical business matters require the
consent of either (i) whilst the Option remains to be exercised,
all of the Major Shareholders (notwithstanding that Firering will
not yet hold shares in Limeco), or after exercise of the Option,
shareholder approval of shareholders holding at least 70% of Limeco
Shares, or (ii) approval of at least one director appointed by
Firering and one director appointed by either Kai or Samfuel;
-- Firering shall have the right to nominate either the Chief
Executive Officer or Chief Financial Officer to the Limeco board
with effect from the grant of the Option;
-- the Shareholders' Agreement contains other standard
provisions such as pre-emption rights in respect of the issue and
transfer of shares, drag along and tag along rights, and
restrictive covenants relating to competing businesses and
solicitation of staff and customers.
Limeco
Limeco was initially established by Glencore plc due to the
shortage of quicklime in Zambia and the need for quicklime at its
Mopane operations in Zambia. In total, over $US100m has been
invested in establishing the limestone quarry and constructing the
current lime plant. The lime plant consists of a two stage crushing
circuit with an installed primary throughput of 500tph of
limestone, and a quicklime production unit comprising eight kilns
for burning crushed limestone to produce between 500 and 600 tonnes
of quicklime per day.
In October 2017, Golder Associates visited Limeco and produced
an in-situ mineral resource estimate of 73.7Mt @ 95.3% CaCO(3)
(Source: Golder Associates, report 1776596-002-R-Rev0, 05 October
2017).
First geological mapping and diamond drilling were completed in
2012 when 37 drill holes were drilled with an average depth of 66m
for a total of 2,517m. This was followed by the development of a
resource model in 2013. A further drilling programme (23 drillholes
totalling 1,610m) was then completed southeast of the drilling done
in 2012. This was followed in 2017 with an infill drilling
programme comprising another 65 drillholes totalling 4,022m.
Limestone production from the quarry commenced in March 2016 and
ceased in January 2017. Crushed limestone (-90mm +60mm) was fed to
only two kilns during that time. The majority of the blasted
limestone was stockpiled adjacent to the primary crusher and will
serve as initial feedstock when the kilns are being commissioned. T
he circa US$100 million investment was made via a shareholders'
loan into Limeco. This loan (see Limeco Financials section below)
remains outstanding to the current Vendors of Limeco, in proportion
to their shareholdings.
Pictures of the project from May 2023
Figure 1: View of plant from primary crusher
Figure 2: View of kilns
Quicklime Market
Global quicklime market is forecast to gain significant growth
for the period 2022 to 2029. According to a report by Data Bridge
Market Research, the market would grow at a CAGR of 4.2% in the
forecast period from 2022 to 2029 is and expected to reach US$9.8
billion by 2029.
Quicklime, or CaO, is a white powder with a high melting point
of 2,600 degrees Celsius. It forms slaked lime when it interacts
with water. Quicklime high calcium and dolomitic, which are
extensively used as a flux in purifying steel. It provides durable
mortar and plaster and soil stabilization. It also improves water
quality, especially for water softening and arsenic removal.
Quicklime can be applied on various applications, such as building
and construction materials, metallurgy, chemicals, mining, paper,
and pulp production among others.
The major drivers contributing to the growth of the quicklime
market include growing usage of precipitated calcium carbonate and
high adoption of quicklime in building & construction industry.
The major restraints which may impact the global quicklime market
growth are volatility in the prices of quicklime raw materials and
complicated process for producing quicklime.
Several opportunities associated with the quicklime market
include increasing demand for iron and steel from different
industries and rising mining activities. In order to fulfil the
growing demand for quicklime products in building and construction
and water treatment industry, some companies are expanding their
production capacities and entering in agreement across different
regions. Besides, strict government regulations for manufacturing
and commercializing of quicklime is challenging the growth of the
market.
Limeco Financials
In its most recent published accounts (financial year ended 31
December 2022) Limeco posted a loss before and after tax of
US$828,052 on turnover of US$0. As at 31 December 2022 Limeco had
net liabilities of US$104,535,988. Liabilities include
US$104,509,835 due to shareholders. If Firering exercises the First
Option and Second Option respectively, it will acquire the right to
17.5% (cUS$18.3m) and 10.83% (cUS$11.3m) of this shareholder
debt.
Funding of Option exercise
Limeco is expected to be profitable and generating cashflow
within 24 months. Given the expected cashflow and associated flow
of dividends FRG will be assessing debt financing options to
acquire its stake in Limeco.
Related Party Transaction
Clearglass is a party to the Option Deed and under the terms of
the Option Deed can acquire up to 5% of the Shares and 5% of the
Debt. Clearglass is also party to the Shareholders' Agreement with
Firering.
Clearglass is a Cypriot company (Company number HE351995).
Firering's Chairman and a substantial shareholder, Youval Rasin, is
a director and 40% shareholder in Clearglass. Clearglass's majority
shareholder, Eli Rasin, is the uncle of Youval Rasin. Eli Rasin is
also the legal and beneficial owner of Rompartner Limited which is
a substantial shareholder of the Company as defined under the AIM
Rules for Companies.
Therefore, the proposed transactions - entering into the Option
Deed and the Shareholders' Agreement - constitute related party
transactions under the AIM Rules for Companies. Accordingly, the
directors of the Company (other than Youval Rasin), who are
independent for the purposes of the transaction, consider, having
consulted with the Company's nominated adviser, SPARK Advisory
Partners Limited, that the terms of the Option Deed and the
Shareholders' Agreement are fair and reasonable insofar as the
Company's shareholders are concerned.
For the sake of clarity, given his involvement with Clearglass,
Youval Rasin will not participate in the Board decision to exercise
the First Option and Second Option.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
*** ENDS ***
For further information and updates on Firering's exploration
programme, visit www.fireringplc.com or contact the following:
Firering Strategic Minerals Tel: +44 20 7236
Yuval Cohen 1177
Vassilios Carellas
SPARK Advisory Partners Limited Tel: +44 20 3368
Nominated Adviser 3550
Neil Baldwin / James Keeshan / Adam
Dawes
Optiva Securities Limited Tel: +44 20 3137
Broker 1903
Christian Dennis / Daniel Ingram
St Brides Partners Limited T: +44 20 7236 1177
Financial PR E: firering @stbridespartners.co.uk
Ana Ribeiro / Susie Geliher / Isabelle
Morris
Notes to Editors:
Firering Strategic Minerals
Firering Strategic Minerals plc is an AIM-quoted mining company
focused on exploring and developing a portfolio of mines producing
critical minerals in the Côte d'Ivoire focused on Lithium and
Tantalum to support the global transition to net zero emissions. It
operates the Atex Lithium-Tantalum Project in northern Côte
d'Ivoire, which is prospective for both lithium and tantalum.
Firering's main focus is working together with Australian
diversified minerals company Ricca Resources to advance development
at Atex with a view to establishing a maiden lithium resource and
then progressing a Lithium project through to DFS. Firering is also
assessing pilot scale production of ethically sourced tantalum and
niobium to generate early revenues and support further exploration
work. Should pilot production be successful, a large-scale Tantalum
production facility may be developed, which will be supported by a
debt facility of FCFA 5,057,000,000 (approximately EUR7,500,000)
currently under negotiation to fund the entire scale-up plan to
develop a portfolio of ethically sourced mineral projects in the
Côte d'Ivoire, supplying EV batteries, high tech electronics and
other fast-growing end markets.
Forward-Looking Statements
This announcement may contain some references to forecasts,
estimates, assumptions and other forward-looking statements.
Although the Company believes that its expectations, estimates and
forecast outcomes are based on reasonable assumptions, it can give
no assurance that they will be achieved. They may be affected by a
variety of variables and changes in underlying assumptions that are
subject to risk factors associated with the nature of the business,
which could cause actual results to differ materially from those
expressed herein.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCEANPKFLSDEFA
(END) Dow Jones Newswires
August 17, 2023 02:00 ET (06:00 GMT)
Firering Strategic Miner... (LSE:FRG)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Firering Strategic Miner... (LSE:FRG)
Gráfica de Acción Histórica
De May 2023 a May 2024