Reverse Takeover and Suspension of Listing

RNS Number : 8377C

Alkemy Capital Investments PLC

25 February 2022

 

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS FOR THE PURPOSES OF THE PROSPECTUS REGULATION RULES OF THE UK FINANCIAL CONDUCT AUTHORITY ("FCA") OR OTHERWISE AND IS NOT AND DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION, INCLUDING IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN.

Neither this announcement, nor anything contained herein, shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not purchase any ordinary shares of £0.02 in the capital of the Company ("Ordinary Shares") referred to in this announcement except in compliance with applicable securities laws and regulations and on the basis of information contained in the final prospectus (the "Prospectus") including the risk factors set out therein, to be published by Alkemy Capital Investments Plc (and any supplement thereto), in connection with the proposed admission of its Ordinary Shares on the standard listing segment of the Official List of the FCA and admission to trading on the main market for listed securities of London Stock Exchange plc ("LSE"). A copy of the Prospectus is available for inspection on the Company's website at www.alkemycapital.co.uk/investors/prospectus .

25 February 2022

Alkemy Capital Investments Plc

("Alkemy" or the "Company)

Reverse Takeover Transaction and Suspension of Listing

Formation of Operating Subsidiary to Develop the UK's First Lithium Hydroxide Processing Facility in Teesside

 Entry into an Exclusivity Agreement for Agreement for Lease

The Company is pleased to announce that it has entered into an exclusivity agreement with Sembcorp Utilities (UK) Limited in respect of its proposal to enter into a lease over a brownfields site at Wilton International, a well-established chemical engineering park located in Teesside, on which it intends to construct a lithium hydroxide processing facility. It is also today forming a wholly owned subsidiary company called Tees Valley Lithium Limited ("TVL") to pursue this new strategy and intends to finance and construct the processing facility through TVL.  

This constitutes a Reverse Takeover under the Listing Rules and therefore, at the request of the Company, the FCA has suspended the listing of the Company's Ordinary Shares on the standard segment of the Official List and trading of the Ordinary Shares on the main Market of the LSE as of 8 a.m. today.

The Company proposes to seek readmission to the Official List, standard segment and to trading on the Main Market of the LSE ("Readmission") and expects to publish the Prospectus in support of its application to the Official List, standard segment shortly.  It is expected that the Company's Ordinary Shares will remain suspended until Readmission.

HIGHLIGHTS

· The Company is incorporating an operating subsidiary, Tees Valley Lithium, which is being established to finance and construct a lithium hydroxide processing facility in Teesside, UK.

· The lithium hydroxide conversion market is currently dominated by China, but there is a need for such processing facilities in the western world to meet the demands of energy storage markets.

· The processing facility will aim to produce 24,000 tonnes per annum of lithium hydroxide monohydrate to be sold in the energy storage markets.

· The Company is aiming to establish one of the world's most sustainable producers of lithium hydroxide and to form a processing hub for multiple potential sources of feedstock.

· An exclusivity agreement, which appends a heads of terms, has been entered into by the Company in respect of a proposed lease over a brownfields site at Wilton International (the "Exclusivity Agreement").

· The Exclusivity Agreement affords the Company a six-month period of exclusivity to prepare an option to lease and a lease, which, if following satisfactory diligence of the proposed site, shall be entered into by TVL.

LITHIUM HYDROXIDE MARKET

Alkemy has recognised that China dominates lithium conversion capacity and increasingly is moving upstream to secure feedstock. The market for lithium hydroxide has been well articulated by many analysts with a consensus forecasting that it will go into deficit causing prices to rise significantly over the medium term.

It is also expected that Europe and the US will continue to use the higher performance NMC batteries which require a lithium hydroxide feedstock.

LITHIUM HYDROXIDE FACILITY - TEES VALLEY

Alkemy is looking to develop, construct and operate one of the world's most sustainable producers of lithium hydroxide with a view to becoming a key supplier to the UK and European mobile energy market.

Alkemy has identified a brownfields site in a well-established chemical engineering park located in Teesside, a major UK Freeport.

Alkemy has conducted initial high level due diligence into the feasibility of establishing a Lithium Hydroxide Monohydrate ("LHM") plant at the site which will aim to initially produce 24,000 tonnes per annum from lithium feedstock from various sources, to be sold to the UK and European mobile energy markets but will need undertake a more formal feasibility study.

Whilst it would be possible to import and process a spodumene concentrate with the attendant materials handling and waste disposal issues it is viewed as only a near term option given the carbon.

Alkemy is currently reviewing several methodologies for the production of lithium hydroxide and it considers that processing LHM by either causticisation or electrochemical processing, will afford the Company with greater levels of output and are therefore the most suitable for the Company.

The proposed development timeline is based on progressing production by way of causticisation having achieved better results in recent studies and is also based on knowledge of the accelerated development timelines being achieved on other projects known to the Directors.

The anticipated timeline is as follows:

· Class 4 Capex and Opex study - completed in Q1 2022

· FEED - completed in Q3 2022

· Long lead time procurement - Q3 2022 to Q2 2023

· Financing - Q4 2022

· Main Construction, subject to financing - Q4 2022 to Q4 2023.

Alkemy is currently in discussions with several potential providers of primary lithium sulphate feedstock and expects to make further announcements on this in due course.

Alkemy is also considering various funding options for the project including private equity, a structured bond and an institutional equity component and will update the market on this in due course. As it is intended to finance and operate the facility via its operating subsidiary TVL, if this is achieved it is anticipated that there will be no immediate dilution to Alkemy's shareholders as part of the proposed financing process. 

MANAGEMENT

The Company is currently interviewing a range of candidates for the role of CEO and other senior positions. Once the CEO has been appointed the intention is to recruit for key positions within the executive team.

It is expected that a project delivery team will be recruited for the construction phase and this team will work with the engineering, procurement and construction management contractor.

EXCLUSIVITY AGREEMENT

Under the terms agreed with the owner of the proposed site, in consideration for a fee of £50,000, Alkemy has been granted the exclusive right for six months to further evaluate the proposed site and to negotiate and agree the forms of an agreement to lease (which in effect extends the period of exclusivity and grants an option to the Company to enter into a lease in respect of the proposed site), the lease, a utilities agreement and a services agreement, although Alkemy envisages that this along with the necessary permitting will be concluded in advance of this deadline.

The Company is also incorporating a subsidiary TVL which will act as the group's operating company and will enter into the agreement to lease and the lease.

Sam Quinn (Director) commented:

"We are delighted to have transitioned Alkemy into an operating company now focussed on the exciting lithium downstream processing sector to support the burgeoning electric vehicle and energy storage markets. Although we are in the early stages, our aim is to build the most sustainable significant producer of lithium hydroxide, utilising the advantages of the UK's chemical processing skills, infrastructure, green energy and legislation. We expect to update the market shortly on further exciting developments as we continue to advance the project."

SUSPENSION OF TRADING, PROSPECTUS AND READMISSION

The entry into the Exclusivity Agreement and incorporation of a subsidiary constitutes a reverse takeover transaction as this is "a fundamental change in the business of the Company" pursuant to Listing Rule 5.6.4.  As this constitutes a Reverse Takeover under the Listing Rules therefore, at the request of the Company, the FCA has suspended the Company's listing of the Company's Ordinary Shares as set out above.

The Company has prepared a prospectus in connection with Readmission which, subject to being approved by the FCA, is expected to be published shortly and will then be published and made available on the Company's website: www.alkemycapital.co.uk and will be available on the National Storage Mechanism: https://data.fca.org.uk/#/nsm/nationalstoragemechanism . It is expected that the Company's Ordinary Shares will remain suspended until Readmission.

Subject to the approval and publication of the Prospectus, the company is seeking Readmission of the Company's entire issued ordinary share capital, consisting of 5,999,999 Ordinary Shares, and it is expecting to be re-admitted to the Standard Listing segment of the Official List of the FCA and to trading on the LSE's Main Market for listed securities under the ticker symbol: ALK and ISIN: GB00BMD6C023, in accordance with the following timetable:

Event	Date
Entry into the Exclusivity Agreement	25 February 2022
Incorporation of operating subsidiary TVL	25 February 2022
Payment of the exclusivity fee	25 February 2022
Suspension of the Company's listing	25 February 2022
Publication of the Prospectus	On or around 25 February 2022
Readmission and lifting of the suspension	8.00am on or after 2 March 2022

Further announcements will be made in due course as required by market rules.

A copy of this announcement will be available on the Company's website www.alkemycapital.co.uk.

** Ends **

For further information, please contact:
 

Sam Quinn  
Director, Alkemy Capital Investments Plc
Telephone: [phone]

Email: [e-mail]

FORWARD LOOKING STATEMENT  

This news release contains forward ‐ looking information. The statements are based on reasonable assumptions and expectations of management and Alkemy provides no assurance that actual events will meet management's expectations. In certain cases, forward ‐ looking information may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Although Alkemy believes the expectations expressed in such forward ‐ looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those projected. Mining exploration and development is an inherently risky business. In addition, factors that could cause actual events to differ materially from the forward-looking information stated herein include any factors which affect decisions to pursue mineral exploration on the relevant property and the ultimate exercise of option rights, which may include changes in market conditions, changes in metal prices, general economic and political conditions, environmental risks, and community and non-governmental actions. Such factors will also affect whether Alkemy will ultimately receive the benefits anticipated pursuant to relevant agreements. This list is not exhaustive of the factors that may affect any of the forward ‐ looking statements. These and other factors should be considered carefully and readers should not place undue reliance on forward-looking information.

 

END

 

 

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