Group Eleven Acquires Teck Stake in Stonepark

RNS Number : 5544Q

Connemara Mining Company plc

13 September 2017

 

13^th September 2017

Connemara Mining Company plc ("Connemara")

Group Eleven Acquires 76.56% Teck Stake in Stonepark Zinc Licences

Connemara Maintains 23.44% Stake

The board of Connemara Mining Company plc (AIM: CON) have been informed that Group Eleven Resources Corp. ("G11"), a private company, has acquired the 76.56% interest held by Teck Ireland ("Teck") in TILZ Minerals, the joint venture company, which holds six (6) prospecting licences covering the Stonepark zinc project in Limerick, Ireland.  Connemara owns the remaining 23.44%.

G11 is a private Canadian company with extensive base metal licence holdings in Ireland.  MAG Silver Corp. and Teck Resources (both listed Canadian companies) hold 22.0% and 6.3% respectively of the equity on a fully diluted basis.  G11 have announced that they are preparing to list publicly in Canada later in 2017.

John Teeling, chairman, stated "This is very good news for shareholders.  Stonepark is an advanced asset which we believe has great potential, a view shared by our new partner G11.  Rather than accept a cash and royalty offer from G11 we have decided that the best interest of shareholders lies in keeping the 23.44% interest in Stonepark.  The consideration which Connemara would have received assuming all buybacks represents approximately 75% of the current market capitalisation of the company.  We look forward to a resumption of active exploration on the block. "

Stonepark

The Stonepark property covers an area of 183.5 square kilometres and hosts three main pods of known mineralization (Stonepark North, Stonepark and Stonepark West), located approximately 2 to 4 kilometres west of the Pallas Green zinc deposit.  Known mineralisation at the Stonepark Project is generally shallow, approximately 200-300m.

Best drill intersections at Stonepark previously released by Connemara include:

·    TC-2638-045 - 7.45m @ 27.8% Zn+Pb (starting from 209.1m depth) at Stonepark North

·    TC-2638-026 - 7.20m @ 15.3% Zn+Pb (starting from 216.1m depth) at Stonepark North

·    TC-2638-036 - 5.35m @ 16.4% Zn+Pb (starting from 202.7m depth) at Stonepark North

·    TC-2638-099 - 7.20m @ 8.5% Zn+Pb (starting from 244.8m depth) at Stonepark West

·    TC-2638-004 - 4.00m @ 15.1% Zn+Pb (starting from 376.1m depth) at Stonepark

Zinc sulphide mineralization at Stonepark North has been continuously intersected by drilling (six holes in total) for over 550m in strike.

The Project also hosts five (5) zinc prospects (Crecora, Rockfield, Rochestown-Fedamore, Rathmore and Limerick South).  Each prospect hosts preliminary levels of drilling and at least some zinc mineralization (e.g. 7.5% Zn+Pb over 0.62m at Crecora; 0.29% Zn+Pb over 13.0m at Fedamore; and 0.44% Zn+Pb over 8.0m at Limerick South).

Significant mineralisation was first discovered at Stonepark in late 2007.  The remaining five prospects are at a relatively early stage of exploration.  The three known pods of mineralisation at Stonepark continue, in G11's opinion, to be largely open.  G11 views Stonepark as an advanced exploration asset and has stated that its primary focus will be to expand known mineralisation on the block.

Consideration for the Acquisition

Consideration for the above acquisition by G11 of the Teck stake is summarised below:

·    C$2,150,000 in cash - Paid

·    Net smelter return (NSR) royalty of 4.5% (on 76.56% of production) with buy-back provisions:

o 0.5% for C$2,000,000 - at any time

o 1.0% for C$1,000,000 - on delivery of a preliminary economic assessment (PEA)

o 1.0% for C$1,000,000 - on delivery of a preliminary feasibility study (PFS)

o 1.0% for C$3,000,000 - on delivery of a bankable feasibility study (BFS) 

This would leave Teck with a 1.0% NSR if all buy-back provisions were exercised. 

Connemara was offered equivalent terms as above and if Connemara had chosen to sell then the consideration for Connemara's stake (assuming all buybacks were exercised) would be C$2.80 million and an NSR of 1% on 23.44% of production.

Following discussions with G11 the board of Connemara decided to retain its 23.44% interest rather than sell on the same terms as Teck.

Information on Connemara Mining

Connemara is a diversified exploration company with principal assets in gold, zinc and lead exploration licences in Ireland.  The Company holds interests in a total of 35 licences, including joint ventures with Teck at the Oldcastle block, with Hendrick Resources in Gold and the newly announced joint venture with G11.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

ENDS

Enquiries:

Connemara Mining Company Plc
John Teeling, Chairman	[phone]
Jim Finn, Director
Patrick Cullen, CEO	[phone]
Northland Capital Partners Limited
Matthew Johnson / Gerry Beaney	[phone]
John Howes / Bonnie Hughes (Broking)
Blytheweigh	[phone]
Nick Elwes	[phone]
Camilla Horsfall	[phone]
Teneo PSG
Luke Hogg	[phone]
Alan Tyrrell	[phone]

www.connemaramining.com

 

END

 

 

MSCLLFSEASIFLID