Corporate Update

RNS Number : 9843B

Amala Foods PLC

17 February 2022

 

Amala Foods Plc

( " Amala " or the " Company")

Corporate Update

Amala Foods Plc (LON: DISH), a food technology company is pleased to provide a Corporate Update with regards to ongoing progress and development of the Company's plant-based Joint Venture business and in addition the latest update regarding the approach to potentially pivot into a new business direction.

Amala Foods Joint Venture

The plant-based foods Joint Venture Company has made further progress since the beginning of the year.  Amala is now supplying its plant-based burger to a Manila based restaurant owned by a well-known Filipino chef, Robby Goco.  The Company is also preparing to supply another local pizza chain with plant-based pepperoni. Encouragingly, various other local supply agreements are at varying stages of progress and the Company is confident that there is a significant market opportunity in the Philippines and the region.

Following management's recent trip to the USA last December, the Company believes that its product line will be able to compete both in terms of quality and pricing in the North American marketplace.  The Company is currently undergoing a regulatory process that will, upon successful completion, allow its products to be distributed in the USA. Should this be successful, management expects this to be a major market opportunity for the Company.

Potential Rare Earth Elements (REE) new direction

The Company recently published its Half Yearly Report and noted in the Directors Report that it has received several unsolicited approaches about utilising the Company's public listing for a different purpose that would value the Company significantly above its current market capitalisation.  To that extent the Company has now signed a Term Sheet with Terra Rara UK Limited ("Terra").

Terra Rara UK has acquired majority interests in several highly attractive Rare Earth Elements projects in Africa.

The projects are summarized below:

1) a 70% interest in the Mungo Rare Earth Elements Project in Angola (MREE Project). The MREE Project is located approximately 150km from London Stock Exchange Listed, Pensana Limited's (current market capitalisation £174m) Longonjo Project and is considered a major carbonatite rare earth and niobium deposit that has been subject to extensive historical exploration by major global mining company VALE.

Diamond drilling has confirmed the presence of very high grade and broad intersections of rare earth elements mineralisation, with key results including:  

· 12.9m from surface at 6.54% TREO

· 18m from surface at 5.09% TREO

· 5m at 4.8% TREO

· 51.4m at 3.27% TREO including 9.3m at 4.09% TREO and 4.4m at 4.42% TREO

· 72.90m at 3.09% TREO

· 60m at 2.35% TREO

· 142.4m at 2.55% TREO

Additionally, there is significant and high niobium mineralisation from diamond drilling including 24m at 3.05% Nb2O5.

2) an 80% interest in the Nankoma and Gulu Road Rare Earth Elements Projects in Uganda.

The Nankoma Project is located 120km east of the Ugandan capital of Kampala and along strike and adjoins Australian Stock Exchange listed Ionic Rare Earth Limited's Mukutu Project (current A$191M market capitalisation) which is considered a world class ionic adsorption clay rare earth deposit with a JORC compliant resource of 315Mt and a scoping study which confirmed EBITDA of US$1.28B and post - tax cashflow of US$766M.

The Gulu Road Project is located in a new area where Terra Rara UK Limited has secured a major landholding over an area considered to be highly prospective for a major ionic adsorption clay rare earth deposits and which offers the potential to be first mover in this potentially new globally significant high-grade rare earth elements mineralisation district.

The Term Sheet outlines the basis for a potential transaction subject to an exclusive due diligence period of thirty days and the execution of a Share Purchase Agreement.  Should the transaction result in a successful conclusion the Company would acquire the entire share capital of Terra, the terms of which currently value the Company at a significant premium to the current share price. Upon successful conclusion there would also be a change of management.  The transaction, should it progress, will require the future approval of the FCA. 

The Company will update the market as appropriate in due course.

Aidan Bishop, Director commented: "It gives me great pleasure to confirm that the Company's existing plant- based operation continues to gain traction both in product development and in the early stages of the commercialisation stage and that we are accreting value for potential monetisation options in the short-term.

We also have a potential complete transformation and pivot opportunity subject to successful due diligence and future regulatory approval by the FCA with regards to a key and globally strategic arena in the Rare Earths sector. Rare Earths Elements are becoming a geo-politically important area given China's present dominant position on these resources. We anticipate those companies with exposure to these important assets will command ever increasing strategic premiums in future years and the opportunity to be involved in this area is very exciting."

Enquiries:

Jonathan Morley-Kirk, Non-Executive Chairman

[e-mail]

 

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