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Worthington Group (WRN)

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Friday 26 September, 2014

Worthington Group

GREP Update

RNS Number : 7790S
Worthington Group PLC
26 September 2014
 





Worthington Group plc ("the Company" or "Worthington")

26th September 2014

FOR IMMEDIATE RELEASE

Paatusoq Rare Earths field survey on schedule and Worthington agree to fund further License purchase by Greenland Rare Earth Mining Project Limited ("GREP")

 

Worthington is pleased to announce that survey work has begun in the Paatusoq field by EON Geosciences Inc ("EON"), one of the world's top teams of geophysicists with extensive artic experience on the ground.  The geophysical survey of the field is the prelude to a multi-phase, field program in 2015. Photographs and reports from the field are now on the GREP website, www.greelandraeeath.com, they show helicopters and other equipment being brought in to support the international team of experts undertaking the survey. The Company believes that it is vital to complete this first stage of surveying before the winter weather sets in; reports from the field confirm that the survey is well on track.

 

The Company is also pleased to report that a further agreement has been reached whereby it will, subject to the successful conclusion of GREP's negotiations to acquire a neighbouring License ("NL"), invest a further US$500,000 in order to purchase an additional 10% interest in GREP. This will help finance working capital and assist GREP in the purchase of the NL; this, together with Worthington's existing GREP shares and options, will increase Worthington's interest in GREP to 51%.

 

In order to finance this second phase of the GREP investment, Worthington is placing up to GBP 500,000 of unsecured convertible loan notes ("UCLN") with specialist investors. The UCLNs will pay an interest coupon of 4.5% per annum, they are convertible at any time after three months from the date of issue, at the option of the loan note holders, into Worthington ordinary shares at a price per Worthington ordinary share of £1.70. To the extent that the loan notes have not been converted within three years from the date of issue, Worthington may elect to, either redeem the loan notes for cash, or issue to the Loan Note holders new Worthington ordinary shares at a price per Worthington ordinary share of £1.60.

 

Doug Ware, CEO of the Company said: "I'm really excited for the GREP team. Having seen EON, the internationally renowned geophysical team, arriving in the area really brings this project into sharp focus. These are exciting times, and we're very pleased to be playing our part. It will take until next year for us to have a better understanding of the extent of the reserves; however, we hope that we may be as fortunate as Greenland Minerals and Energy ("GME"), who already have estimated reserves worth more than $1bn based on today's metal prices in the neighbouring field. There is no obvious geological difference between the NL site and an adjacent site belonging to GME. It follows on that this acquisition of a second license in the area significantly improves our chances of success, whilst also spreading any risk that may be involved."

 

Commenting on the fundraising, Mr Ware also said: "My belief is that, when buying Worthington shares, the best value should be that which is obtainable in the market. Buyers of a large number of shares in the market would normally expect to pay a premium price, rather than obtain shares at a discount. We are therefore pleased that investors purchasing the UCLNs have been willing to subscribe at a premium, thereby sharing our confidence that Worthington has the potential to rapidly develop into a substantial International Investment Company."

 

Exploration is focused on the Paatusoq syenite complex in South East Greenland within the Gardar Alkaline Igneous Province, which contains the two largest proven Rare Earth Element ("REE") resources outside of China. The site is within the nearby Ilimaussaq Intrusion, Kringlerne and Kvanefjeld area which is acknowledged as having the world's 5th largest uranium deposits. Also nearby is the Motzfeldt Intrusion, acknowledged as having the largest known niobium-tantalum deposits on earth.

 

GME, a competitor of GREP, operates the nearby Kvanefjeld mining project in southern Greenland, this is also part of the Motzfeldt area.  This field has already been explored, and has large resources of REEs, including 280 million Kg of U3O8 and 10.33 million tonnes of total rare earth oxides; a further 2.25 million tonnes of zinc has also been found there.

 

The eastern section of the Gardar Province, in which Paatusoq site sits, has not been subject to any significant exploration. Apparently, there is no significant geological difference between the areas that have been explored and those still be explored. This leads the GREP/Worthington team to believe that the Paatusoq Syenite Complex represents one of the most significant remaining exploration targets in this world class alkaline igneous province.

 

Rare Earth Elements comprise a group of 17 chemical (metallic) elements appearing in the periodic table. Vital to some of the world's fastest growing industries, the demand for REEs is proven and is accelerating. REEs unique chemical properties means that they find their way into everything, from the consumer's high tech tablet device, to the mobile phone, solar panels, and even high performance clean burning engines. According to the U.S. Congressional Research Service, only a few mining companies are developing REEs, and, because of long lead times needed from discovery to refined elements, supply constraints are likely in the short term. The Chinese government estimates that, at the current pace of mining, China will run out of all heavy REEs to be found in China in approximately 15 years' time.

 

Commenting on the start of exploration, Patrick Newman CEO of GREP said, "It's very encouraging to see that EON, the team with possibly the best artic geophysical surveying experience around, are making such a good start this year. Every indication suggests that the region as a whole looks promising, with our project lying in an area known to contain some of the earth's largest deposits of critical metals. This continuation of the area in the South East coast of Greenland has remained unexplored so far; therefore, the potential for REE reserves is incalculable.

 

 

Introduction to the Paatusoq Critical Metals Project (extract from NunaMinerals Release 18th August 2014)

 

"The Paatusoq Critical Metals Project is located at the head of the Paatusoq Fjord - a major deep-water fjord in South East Greenland that remains ice free for the majority of the year providing access for shipping and facilitating the mobilisation of exploration equipment. The project is focussed upon the Paatusoq Syenite Complex, which is positioned only 10 kilometres South of NunaMinerals' significant gold discovery at Jokum's Shear - part of the Nanortalik Gold Belt which also hosts the company's flagship Vagar Gold Project. The Paatusoq Syenite Complex is the most easterly of the major alkaline central complexes in the mid-Proterozoic (1350-1140 Ma) Gardar Alkaline Igneous Province of South Greenland. The Gardar Province is widely acknowledged as a major critical metals depository, including the Kvanefjeld, TANBREEZ and Motzfeldt Projects, all of which are regarded as world-class super giant deposits. All of the aforementioned deposits are polymetallic with multiple revenue drivers. Several companies in the region have submitted, or are close to submitting, applications for exploitation (mining) licences.

 

During a regional mapping campaign the Geological Survey of Denmark and Greenland (GEUS) erroneously interpreted Paatusoq as part of the Rapakivi Granite Suite, until dating of the complex later revealed its Gardar lineage (1144 ±1 Ma; U-Pb dating of zircon). Limited stream sediment sampling by GEUS demonstrates that the complex is coincident with rare earth and niobium anomalies, which support the presence of mineralisation. Limited fieldwork by NunaMinerals in 2013 established that the complex is not a homogeneous intrusion as previously mapped, but comprises of a complex series of nested syenite variants, including augite syenite, nepheline syenite, quartz syenite and alkali granite pegmatites, along with other minor rock types. The complex is considered prospective for rare earth elements, niobium, tantalum and zirconium. A number of anomalous areas were identified during 2013; however the majority of the complex remains un-sampled. Continued coverage of hard rock and sediment sampling directed by helicopter-borne geophysics will be used to guide subsequent exploration and identify prospective zones. On-going petrological and lithogeochemical studies, in addition to cathodoluminescence and biotite halogen analysis at the University of St Andrews (UK) is facilitating continued exploration. The most intensively mineralised complexes in the Gardar Province are associated with highly fluorine-rich fluids and red-luminescent alkali feldspars. Initial results provide evidence of fluorine and carbonate-rich mineralising hydrothermal activity associated with the syenite complex. Maximum Fluorine Line analysis for Paatusoq yields comparable gradients to that of the evolved Motzfeldt central complex, one of the most fluorine-rich fluid environments in the Gardar Province and host to one of the world's largest niobium-tantalum deposits, thus demonstrating that Paatusoq experienced a high degree of interaction with fluorine-bearing fluids.

 

The information presented in this announcement has been reviewed by both Dr Adrian A. Finch (CERSA, University of St Andrews) and Dr Denis M. Schlatter, EurGeol, a Qualified Person for the technical information presented under NI-43-101 standards. Dr Finch, a consultant geologist on the Paatusoq Critical Metal Project, has 25 years of experience with mineral deposits associated with alkaline magmatism and has provided consultancy for several companies exploring within the Gardar Province of South Greenland. Both Dr Schlatter and Dr Finch have been onsite at Paatusoq during 2013".

 

About Worthington Group Plc ("Worthington")

 

Worthington (Stock Exchange LSE: WRN) is a British investment company that  celebrates its 60th anniversary as a London Stock Exchange main market listed company this year. The company has four areas of investment focus: property, litigation claims, new economy and emerging markets. The Company believes that exceptional shareholder returns can be achieved by utilising its main market Sterling paper to acquire investments in these sectors worldwide.

 

Note: Forward-looking statements contained in this announcement, including descriptions of GREP/WorthingtonGroupplc/NunaMinerals' exploration and development projects, strategy and plans, as well as expectations for future revenue and earnings, reflect GREP/WorthingtonGroupplc/NunaMinerals' current views and assumptions with respect to future events and are subject to certain risks, uncertainties and assumptions. There are many factors that may cause actual results achieved by GREP/WorthingtonGroupplc/NunaMinerals to differ materially from expectations for future results and expectations that may be expressed in or form an assumption of such forward-looking statements. Such factors include risks related to exploration, development and mining activities, uncertainties related to the results of GREP/WorthingtonGroupplc/NunaMinerals' exploration and development projects, including risks of delays or closure of projects, price falls, currency fluctuations and changes in concession terms, legislation and administrative practices, as well as competition risk and

other unforeseen factors. If one or more of such risks or factors of uncertainty were to materialise, or should one or more of the statements provided prove to be incorrect, actual developments may differ materially from the forward-looking statements contained in this announcement. GREP/WorthingtonGroupplc/NunaMinerals are not under any duty to update the forward-looking statements contained in this announcement or to adjust such statements to actual results, except as may be required by law.

 Enquiries:

Charlotte Parham, Media information                           Tel: +44 203 291 1872

or email: [email protected]

 

PD Cosec - Company Secretary                                        Tel: +44 208 940 0963

Website: www.worthingtongroupplc.com

Statement ends.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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