t
| Date | 8 Nov 2021 |
| Time | 15:56:54 |
| Category | Miscellaneous |
| ID | 7004R |
MINERAL AND FINANCIAL INVESTMENTS LIMITED
HIGHLIGHTS:
· An initial mining contract term for 20 years and extendable to up to 50 years
· Two distinct phases for work development are clearly defined
· The contract defines a fixed royalty on the value at the mouth of the mine of mining products or concentrates shipped or used, being paid 66.6% to 33.3% payable to 1/3 being paid to the local Municipalities where the project is located
· The Company is required to outline its reclamation plans and minimization of the environmental impact of the operation
· Redcorp & Ascendant to commence infill drilling immediately and will begin work towards a Bankable Feasibility Study ("BFS") early in 2022
George Town, Cayman Islands - 8 November 2021 - Mineral and Financial Investments Limited (LSE-AIM: MAFL) ("M&FI" or the "Company") is extremely pleased to announce that 75% owned Redcorp Empreedimentos Mineiros Lda ("Redcorp") and Ascendant Resources Ltd ("Ascendant") signed on October 28, 2021 with the Portuguese Government, through the General Directorate for Energy and Geology (the "DGEG"), the definitive mining concession contract for the Lagoa Salgada VMS Project (the "Lagoa Salgada Project") in the prolific Iberian Pyrite Belt, Portugal. The development costs are funded and guided by Ascendant Resources, which owns 25% of Redcorp, as part of Ascendant's previously announced earn-in agreement with M&FI (please refer to the RNS of August 1, 2018 which has been amended (see announcement dated July 1, 2020)).
Jacques Vaillancourt, President & CEO of M&FI stated, "We are extremely pleased with the signing of the definitive mining concession contract as this represents another huge step towards the full development of the Lagoa Salgada Project. We would like to thank the Portuguese Government for their ongoing support of the Lagoa Salgada Project and Redcorp's local management team led by Joao Barros. We look forward to Redcorp and Ascendant moving Lagoa Salgada to the next stage of its development and expect the project will be an important contributor for the region and country's social-economic development."
A summary of the main legal and contractual obligations of the contract are highlighted below.
· An initial contract term for 20 years, commencing on 28 October 2021, renewable for two extension periods of 15 years each;
· Two distinct phases for work development are defined. Phase 1 having a duration of six (6) years from signing to present and get approval of an Environmental Impact Assessment ("EIA") and a Definitive Feasibility Study ("DFS") and in Phase 2, to start within nine (9) years of signing to commence the exploitation of the mineral deposits and to build an ore treatment industrial facility (mill);
· During Phase 1, Ascendant plans to execute all necessary exploration and other works that aim to contribute to the improved knowledge of their mineral deposits and improve resources through the delivery of an NI 43-101 Feasibility Study during 2022, which will define the planned development and economic potential of the Lagoa Salgada Project;
· Phase 2 can occur simultaneously to Phase 1, if it proves to be technically feasible and provided that the necessary authorizations and approvals are obtained;
· The contract stipulates a 3% royalty on the value at the mouth of the mine of mining products or concentrates shipped or used, being those divided in: 2/3 being paid to the DGEG and 1/3 being paid to the Municipalities where the project is located;
· The Company is required to outline its reclamation plans and minimization of the environmental impact of the operation within five (5) years after the start of the exploration program, corresponding to 10% of the financial charges foreseen for the execution of safety plans, environmental protection, management of waste and the landscape recovery and integration plan contained in the mining plan approved by the DGEG, and may not be less than €1,000,000.
ASCENDANT EARN-IN AGREEMENT WITH M&FI
The option earn-in agreement details announced via RNS on August 1, 2018 (which has been amended (see announcement dated July 1, 2020)) are as follows:
1. In the first part of the transaction, Ascendant acquired an initial effective 25% interest for an upfront payment of US$2.45 million composed of US$0.80m in cash (US$0.40m on closing of the transaction and US$0.40m on July 15, 2018) and US$1.65 million in Ascendant shares.
2. The second part of the Agreement is an earn-in option which has a minimum total value, if fully exercised, of US$15.00 million. Earn-in transaction terms are as follows:
a. Ascendant has the right to earn a further effective 25% interest via staged payments and funding obligations as outlined below:
b. Investing a minimum of US$9.00 million directly in the operating company, Redcorp, within 48 months of the closing date, to fund exploration drilling, metallurgical test work, economic studies and other customary activities for exploration and development; and
c. Making payments totalling US$3.50 million to TH Crestgate according to the following schedule or earlier:
I. 6 months after the closing date: US$0.25 million (Received)
II. 12 months after the closing date: US$0.25 million (Received)
III. 18 months after the closing date: US$0.50 million (Received)
IV. 24 months after the closing date: US$0.50 million (Received)
V. 36 months after the closing date: US$1.00 million (Received)
VI. 48 months after the closing date: US$1.00 million
3. Ascendant then has the option to earn an additional 30%, totalling an 80% interest in Redcorp, the operating subsidiary, by completing a feasibility study within 54 months and making a further payment of US$2.50 million to TH Crestgate.
4. Redcorp owns 85% of the Lagoa Salgada Project. Empresa Desenvolvimento Mineiro SA ("EDM"), a Portuguese state-owned company holds 15%, upon which M&FI/Redcorp has a right of first refusal. M&FI agreed to the repurchase of the interest with EDM. The Portuguese Government has withheld approval of the transaction. It remains M&FI's intention to conclude this repurchase.
REVIEW OF TECHNICAL INFORMATION
The scientific and technical information in this press release has been reviewed and approved by references in this announcement to exploration results and resource updates have been approved for release by Joao Barros, BSc (Engineering), MSc (Geology), who has more than 16 years of relevant experience in the field of activity concerned. Mr. Barros is a Member of the Portuguese Engineers Association. Mr. Barros is employed by Redcorp Empreedimentos Mineiros, Lda., a 75% owned subsidiary of M&FI, and has consented to the inclusion of the material in the form and context in which it appears.
FOR MORE INFORMATION:
Jacques Vaillancourt - Mineral & Financial Investments Ltd. +44 780 226 8247
Katy Mitchell and Ben Good - WH Ireland Limited +44 207 220 1666
Jon Belliss - Beaufort Securities Limited +44 207 382 8300
Dominic Baretto - Yellow Jersey PR Limited +44 203 004 9512