Option to Acquire Interests in Colombia

RNS Number : 7262F

Bezant Resources PLC

16 November 2015

Bezant Resources Plc

("Bezant" or the "Company")

Option to Acquire Interests in Platinum and Gold Licences in Colombia

Highlights:

· Option entered into to potentially acquire 100 per cent. of Leeward Islands Exploration LLC ("Leeward"). Leeward is a special purpose vehicle which has rights to potentially acquire interests in up to 2,750ha of near-surface, alluvial platinum and gold mining and exploration licences in the Choco Department of Colombia, in an area historically mined using dredges (the "Project")

· US$50,000 upfront option fee and US$350,000 loan facility to be provided to Leeward by Bezant towards directly supervised working capital on the Project. Option valid until 31 December 2015 and, if exercised, Bezant will be required to pay:

· US$1,000,000 cash consideration;

· US$1,000,000 to be satisfied via the issue, credited as fully paid, of new ordinary shares of £0.002 each in the capital of Bezant ("Ordinary Shares") at the volume weighted average share price of the Ordinary Shares for the 20 business days immediately preceding their date of allotment.

· Bezant's Board has a track record of successfully developing platinum group metal (PGM) projects outside of standard reef models, including at Aquarius Platinum plc and Sylvania Platinum Limited

· Objective to potentially achieve low capex and opex platinum and gold production

· Negotiations ongoing in respect of the group's Mankayan copper-gold project but continue to be hampered by uncertainty regarding the taxation of mining operations in the Philippines and the significant capex requirement for potential future development

Bezant (AIM: BZT) is pleased to announce that, on 13 November 2015, it entered into an agreement (the "Option Agreement") for a fee of US$50,000, with the shareholders of Leeward (the "Leeward Shareholders"). The Option Agreement affords the Company the option to acquire 100 per cent. of Leeward's issued share capital (the "Leeward Option") and is exercisable entirely at Bezant's discretion. The Company is providing Leeward with a US$350,000 working capital loan which will be utilised for Project expenses under the supervision of the Company (the "Bezant Loan Facility").

Leeward, via one of its subsidiaries, holds options to acquire a 100 per cent. interest in licences (FKJ-083, HCA-082 and HGE-082) covering 2,659ha and, pending the successful outcome of an existing licence application, a 70 per cent. interest in a licence covering 91ha, all such licence areas having prospectivity for platinum and gold and being located in the Choco Department of Colombia (together, the "Project Licences"). A map showing the location and boundaries of the Project Licences can be viewed by accessing the following link:

http://www.rns-pdf.londonstockexchange.com/rns/7262F_-2015-11-13.pdf

The Company believes that the Project Licences represent an attractive opportunity to potentially generate long term shareholder value via the creation of a low cost platinum and gold production operation outside of South Africa. Whilst PGM prices are currently depressed, significant pressure on major platinum sources and depleting stock-piles should enable Bezant to realise potentially significant margins from the successful future development of such licence areas. The Board of Directors of Bezant (the "Board") has significant past experience of successfully developing world-class PGM group production sources with the Company's Non-Executive Chairman, Edward Nealon, having founded Aquarius Platinum plc and Sylvania Resources Limited.

Bezant continues to pursue opportunities for its existing Mankayan copper-gold project in the Philippines. Whilst negotiations are ongoing regarding a potential sale or joint venture of the project, due to the continuing uncertainty surrounding the taxation regime and upcoming elections in the Philippines, combined with the significant capital expenditure needed to ultimately develop such a large porphyry system at depth via a block caving model, realising value from a suitable transaction in the near term remains uncertain.

A further announcement in respect of the potential exercise of the Leeward Option will be made in due course following the completion of comprehensive due diligence investigations on the Project Licences.

Ed Nealon, Non-Executive Chairman, commented:

"I have spent considerable time assessing these attractive Project Licences over the course of the last few months and believe that the licence areas afford the opportunity to yield significant future value. I further believe that the acreage is situated in one of the world's most significant and largely undeveloped platinum regions, being the source where platinum was first discovered.

"Junior mining, exploration and development companies in the current challenging global environment need to monetise resources quickly and efficiently and with minimum dilution to shareholders. With traditional platinum mining operations in South Africa suffering due to the depth of their resources and cost issues, near surface platinum assets such as these in Colombia should be capable of yielding real future cash flow following the successful application of modern mining development practices."

Bernard Olivier, Chief Executive Officer, commented:

"Bezant has the existing expertise and capability to build value for shareholders through potential future production from one or more of these attractive Project Licences. Whilst we continue to pursue the realisation of further value from our Mankayan project, taxation and political conditions in the Philippines and the appetite for major capital expenditure programmes worldwide, remain challenging.

"The Board has experience of, and a very successful track record in, delivering producing platinum projects. In light of prevailing conditions in South Africa and our understanding of platinum's stock pile depletion, we believe that securing the Leeward Option will allow us to potentially unlock a valuable development cycle in future platinum mining."

Bezant Loan Facility

Under the terms of a facility agreement also entered into on 13 November 2015 between the Company and Leeward, Bezant has agreed to make available to Leeward, with immediate effect, an unsecured, interest-free, working capital loan facility of up to US$350,000 for the purposes of making certain staged payments in respect of the options held by Leeward's subsidiary and the short term working capital requirements of the Leeward group in relation to the Project Licences. The Bezant Loan Facility does not have a fixed term and is repayable on the earlier of (i) terms agreed between Bezant and Leeward upon Bezant exercising the Leeward Option, and (ii) Leeward ultimately generating sufficient cash flow to repay the loan amounts drawn-down.

The Bezant Loan Facility is considered to be essential to securing the underlying options over the Project Licences by assisting Leeward in making certain of the requisite staged payments pursuant to the terms of such options and generally maintaining the good standing of the Leeward group and the Project Licences during the due diligence process and the Leeward Option exercise period. The Bezant Loan Facility can be drawn down in tranches or multiples of US$50,000, and the agreement provides that Bezant will have absolute control over the application of the amounts drawn down by Leeward.

Further Terms of the Option Agreement

The Leeward Option expires on 31 December 2015 (or such later date as the parties may agree) and is exercisable entirely at the discretion of Bezant. Under the terms of the Option Agreement, should Bezant elect to exercise the Leeward Option and acquire Leeward during the exercise period, the consideration payable to the Leeward Shareholders comprises:

(a) cash consideration of US$1,000,000; and

(b) US$1,000,000 to be satisfied via the issue, credited as fully paid, of new ordinary shares of £0.002 each in the capital of Bezant ("Ordinary Shares") at the average closing middle market price for an Ordinary Share for each of the preceding 20 business days prior to their date of allotment.

The Board will require shareholder authority to be able to allot and issue the abovementioned new Ordinary Shares pursuant to the share element of the consideration, approval for which will be sought at the Company's forthcoming Annual General Meeting.

Should Bezant elect to exercise the Leeward Option, the Leeward Shareholders would likely become substantial shareholders in the Company. Therefore, pursuant to the terms of the Option Agreement, the Leeward Shareholders have agreed that they will enter into a relationship agreement with the Company at the time of exercise, in order to govern their relationship, and to ensure that the Leeward Shareholders are not able to exert any undue influence or control over the Company's affairs.

The parties have the right to terminate the Option Agreement in the event that exercise of the Leeward Option would constitute a reverse takeover pursuant to AIM Rule 14. In the event of such termination, the option fee of US$50,000 is non-refundable.

Further information on the Leeward group

Leeward is a special purpose vehicle incorporated and based in Nevis which has spent over a year developing the Project and has invested over US$880,000 todate. Leeward holds the options over the Project Licences via its wholly owned subsidiary, Ulloa Recursos Naturales S.A.S. ("Ulloa"). Ulloa is also interested in 70 per cent. of the issued share capital of Aguaclara Compania Minera S.A.S. ("Aguaclara") which, pending the successful outcome of an existing licence application, will be interested in a licence covering 91ha. Both Ulloa and Aguaclara were incorporated in Colombia for the purposes of acquiring platinum and gold mining and exploration licences in the Choco Department of Colombia.

Ulloa has two options, Option 1 is over licences FKJ-083 and HCA-082 and Option 2 is over licence HGE-082. The exercise period for Option 1 is 12 months following drilling approval being granted and the exercise period for Option 2 expires on 23 October 2016.

The aggregate payments outstanding in relation to Options 1 and 2 which would become payable by Bezant, should it elect to purchase Leeward and exercise both Option 1 and Option 2 to acquire the Project Licences is US$582,500 of which US$120,000 is intended to be funded from the Bezant Loan Facility.

For the unaudited 12 month period ended 26 October 2015, Leeward incurred a pre-tax loss of US$165,869 and had net liabilities as at 26 October 2015 of US$24,704. Bezant will now undertake and complete a period of comprehensive due diligence on the Project Licences, following which a decision will be made as to whether to exercise the Leeward Option. The Company's ultimate objective is to potentially develop a future platinum and gold production project capable of sustained economically robust operations on one or more of the licence areas.

For further information, please contact:

Bernard Olivier

Chief Executive Officer, Bezant Resources Plc

Laurence Read

Non-Executive Director, Bezant Resources Plc

James Harris / Matthew Chandler / James Dance

Strand Hanson Limited (Nomad)

Gavin Burnell

Sanlam Securities UK Limited (Broker)

or visit http://www.bezantresources.com

Tel: +61 40 894 8182

Tel: +44 (0)20 3289 9923