TIDMKDNC
RNS Number : 5570G
Cadence Minerals PLC
30 March 2022
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Cadence enters into a Conditional Sale Agreement of its 31.5%
Equity Stake in Lithium Technologies and Lithium Supplies
Cadence is pleased to announce that along with all the Lithium
Technologies and Lithium Supplies ("LT and LS") shareholders; we
have reached an agreement to sell 100% of the equity of LT and
LS.
Highlights :
-- Cadence and all LT and LS shareholders have entered into a
conditional agreement to sell 100% of LT and LS for up to A$21.05
million (GBP11.82 million)
-- Cadence owns 31.5% of LT and LS and would receive up to
A$6.63 million (GBP3.72 million)
-- The consideration payable to LT and LS shareholders will be
via a mixture of cash and shares
-- The Buyer will spend a minimum of A$4 million over three
years from the completion of the sale on the exploration of the
Litchfield lithium prospect ("Litchfield") in Northern
Australia.
Cadence CEO Kiran Morzaria commented: "On behalf of the Cadence
board and the other LT and LS shareholders, we are pleased to
report that we have reached a conditional agreement with a public,
unlisted Australian company to sell LT and LS."
"Recent exploration and sampling work at the Litchfield project
and the project's proximity to Core Lithium's assets have led us to
believe that Litchfield has considerable potential to host lithium
mineralisation. In addtion to this the other lithium assets held by
LT and LS provides the Buyer with several attractive targets to
explore and develop."
"For Cadence, this transaction is, we believe, an excellent
balance of risk and reward. Firstly it provides an initial
consideration that more than covers our book investment. Secondly,
by partly paying the consideration in shares in the buyer and cash
payment on milestones we are exposed the the exploration upside.
Lastly, given the commitment of at least A$ 4 million to explore
the primary assets, this mitigates dilution to Cadence
shareholders."
"Moreover, this transaction will also allow our management team
to focus on delivering additional value through our ongoing
involvement in developing our flagship Amapa Iron Ore project.
"
The consideration for LT and LS is up to A$ 21.05 million
(GBP11.82 million). Cadence has 31.5% of LT and LS and would
receive up to A$ 6.63 (GBP3.72 million). The Buyer is a public,
unlisted company in Australia ("Buyer").
LT and LS, through their subsidiaries, are the holders of two
prospective exploration licenses and one exploration application in
Australia and a further seven exploration license applications in
Argentina.
All of the licenses and applications target prospective hard
rock lithium deposits. The most significant of these is the
Litchfield lithium prospect, which is contiguous to Core Lithium's
(ASX: CXO) strategic Finniss Lithium Project (JORC compliant ore
reserves: 7.4Mt @ 1.3% Li2O)2.
The acquisition of LT and LS has several conditions precedent,
including the completion of due diligence and the relevant
regulatory approval. Assuming this is successful, the Buyer will
acquire 100% of LT and LS through a mixture of cash and shares
partially paid on completion of the sale of LT and LS and the
remainder paid on the achievement of key performance
milestones.
The net loss of LT and LS were A$1,560 and A$1,306,
respectively, for the year ended 30 June 2021. As such, the net
loss attributable to the Company (being 31.5% of LT and LS) was
A$903 (GBP516). As of 31 December 2020, the carrying values of LT
and LS in the Company's balance sheet was approximately GBP337,000
and GBP237,000, respectively.
Timing Cash / Shares Share Price Value Approximate
Shares (A$) (A$) value to
KDNC (A$)
Completion of
Sale Cash N/A N/A 1,050,000 330,750
--------- ----------- ------------ ----------- ------------
Completion of
Sale Shares 45,000,000 0.20 9,000,000 2,835,000
--------- ----------- ------------ ----------- ------------
Milestone One
Payment Cash N/A N/A 2,500,000 787,500
--------- ----------- ------------ ----------- ------------
Milestone Two
Payment Cash N/A N/A 2,500,000 787,500
--------- ----------- ------------ ----------- ------------
Milestone Three
Payment Cash N/A N/A 3,000,000 945,000
--------- ----------- ------------ ----------- ------------
Milestone Four
Payment Cash N/A N/A 3,000,000 945,000
--------- ----------- ------------ ----------- ------------
Total 21,050,000 6,630,750
----------- ------------ ----------- ------------
The first three milestone payments are payable once a JORC
resource is of not less than 12 million tonnes of lithium oxide is
proved at Litchfield. The fourth milestone payment is payable on
completing a definitive feasibility study on Litchfield. The Buyer
can also pay the milestones payments in equity, using a defined
pricing mechanism.
The Buyer has committed to spending at least A$4 million on the
exploration of Litchfield during the three years post the
completion of the sale. Should the milestones not be achieved
during this period, the respective consideration will not be
payable.
The proceeds received by the Company will be used for
reinvestment as per our investment strategy, which is available
here . In relation to the shares received as part of the
consideration, the Company will be bound by an escrow agreement
with the Buyer as per the regulatory authorities in Australia and
will be in the form and substance consistent with the ASX Listing
Rules. After the lapse of the escrow arrangement, Cadence will
retain or dispose of these shares as per our investment strategy,
which is available here .
- Ends -
For further information: Cadence Minerals plc +44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD
& Broker) +44 (0) 207 220 1666
James Joyce
Darshan Patel
Novum Securities Limited
(Joint Broker) +44 (0) 207 399 9400
Jon Belliss
Qualified Person
Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the
information contained in this announcement. Kiran holds a Bachelor
of Engineering (Industrial Geology) from the Camborne School of
Mines and an MBA (Finance) from CASS Business School.
Forward-Looking Statements:
Certain statements in this announcement are or may be deemed to
be forward-looking statements. Forward-looking statements are
identi ed by their use of terms and phrases such as "believe"
"could" "should" "envisage" "estimate" "intend" "may" "plan" "will"
or the negative of those variations or comparable expressions
including references to assumptions. These forward-looking
statements are not based on historical facts but rather on the
Directors' current expectations and assumptions regarding Cadence
Minerals Plc's future growth results of operations performance,
future capital and other expenditures (including the amount. nature
and sources of funding thereof), competitive advantages business
prospects and opportunities. Such forward-looking statements re ect
the Directors' current beliefs and assumptions and are based on
information currently available to the Directors. Many factors
could cause actual results to differ materially from the results
discussed in the forward-looking statements, including risks
associated with vulnerability to general economic and business
conditions, competition environmental and other regulatory changes
actions by governmental authorities, the availability of capital
markets, reliance on key personnel uninsured and underinsured
losses and other factors many of which are beyond the control of
Cadence Minerals Plc. Although any forward-looking statements
contained in this announcement are based upon what the Directors
believe to be reasonable assumptions. Cadence Minerals Plc cannot
assure investors that actual results will be consistent with such
forward-looking statements.
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END
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