Acquisition

RNS Number : 3685W

Equatorial Mining & Exploration PLC

08 February 2017

 

Equatorial Mining & Exploration Plc ("EME" or the "Company")

Acquisition Option Agreement

The Directors of EME are pleased to announce that they have signed a conditional option agreement with SPV Corporation Pty Limited ("SPV") (the "Option Agreement"), to acquire a Mexican mining and exploration project with substantial interests in copper, gold and molybdenum.  This acquisition will be part of a fundraising of at least £2 million and a move by the enlarged company from the NEX Exchange to the London Stock Exchange (the "Transaction"). The Company also wishes to announce its intention to strengthen the Board and to arrange, as part of this Transaction, a consolidation of the Company's shares.

Proposed General Meeting

Subject to the continuation of the above mention Transaction, the Company plans to call a General Meeting of its shareholders and will circulate the required notice in due time.

The Option Agreement

The Option is valid for 90 days from today and will allow the Company to complete its due diligence into the company and assets being acquired.

If the Transaction proceeds, the acquisition consideration is expected to be £10.4m which will be satisfied by the issue of new shares in the Company, following the proposed General Meeting as mentioned above. 

Information on SPV Corporation Pty Limited

SPV has a conditional agreement to acquire 100% of Mexican company; VV Mining S de R.L. de A.C (VVM) which has secured an option to farm-in to a project known as Tango.  The Tango polymetallic project consists of four tenements along the western Edge of the Sierra Madre Occidental plateau which overlaps a significant porphyry system centred in Southern Sinaloa State, Mexica. The Tango polymetallic project is owned by Minera Camargo S.S de C.V and is prospective for poly-metallic deposits of gold, silver and molybdenum with over 100 historic workings in the vicinity of Tango together with significant historic exploration.

Tango Polymetallic Project highlights

·     3,954 hectares in four contiguous concessions

·     Drilling permit applications approved, environmental impact and local community agreements in place

·     Complete team in place and work is immediately ready to advance

·     Two drill ready gold/silver veins with immediate past production and two drill ready targets identified

·     Multiple swarms of gold-rich veins running >15g/t gold

·     Drill hole programme on one of the veins is anticipated to deliver >340,000 oz gold

·     There are no mineral resource or reserve estimates calculated

Proposed Board changes

As part of this transaction the Board proposes to appoint Mr Brett Clark to the board once it has completed the appropriate documentation and a further announcement on this will be made in due course. 

Proposed Capital Raising

In the immediate term, to facilitate the Transaction and allow the Company to continue with its work in Nigeria, an interim fund raise of £250,000 at 0.00125p a share is planned.

As part of the Transaction, the Company intends to raise at least £2 million to enable the Tango project to advance to the point of production, although the pricing of this larger fund raise is not yet known and subject to advice.

Proposed Share consolidation

At the General Meeting the Company will also bring forward proposals to consolidate the shares on the basis of a 1 new share for 650 currently in issue.  The date for this will be set out when the Notice of Meeting is distributed.

Change of Exchange

The Company will, as part of the Transaction, apply for its shares to be listed on the Standard Listing of the London Stock Exchange.  No application has been made for this at this time. 

Nicholas Nelson, Executive Chairman, commented:

"Since the formation of Equatorial Mining in 2012, our stated objective has been to explore and capitalise upon industrial minerals. As a company, we have been agnostic as to the geographical region, but due to very tight capital constraints, have had no choice but to limit our focus on potentially high margin Nigerian coal. 

"The Agreement with SPV Corporation Pty has brought with it capital for our existing business and an opportunity for diversified risk by allowing us the opportunity to acquire a Mexican mining and exploration company with substantial interests in copper, gold and molybdenum.  It is hoped that these interests can be advanced to the point of production in the short term.

"Nigeria still holds an abundance of opportunity and this Transaction will help us to continue pursuing and widening our minerals interests out there. 

"In addition today's planned acquisition will bring much needed Company stability to our shareholders and in due course, liquidity for their shares."

8 February 2017

Enquiries:

Equatorial Mining & Exploration Plc: Nicholas Nelson, Executive Chairman	[e-mail]
NEX EXCHANGE Adviser and Broker Alexander David Securities James Dewhurst	[phone]

The Directors take responsibility for this announcement.

 

END

 

 

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