THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

17 October 2024

MetalNRG plc

(the "Company" or "MetalNRG")

Acquisition of Producing Copper Mine in Morocco

Proposed Change of Name and Management

MetalNRG plc (LON:MNRG), the natural resources company, is pleased to announce that it has signed a binding sale and purchase agreement (the "SPA") to acquire the entire issued share capital of Compagnie Minière de Oumejrane ("CMO") from Managem S.A. ("Managem" or the "Seller"), a mining company listed on the Casablanca Stock Exchange in Morocco, with mining operations throughout Africa (the "Acquisition").

The Acquisition will include 100% ownership of the Oumejrane copper mine, which is in production, cash generative and a profitable operation, located in the Eastern Anti-Atlas of Morocco.  OMF Fund IV SPV K LLC, a fund managed by Orion Resource Partners ("Orion"), has entered into a US$25,000,000 convertible loan note (the "CLN") with MetalNRG, the proceeds of which will be used by MetalNRG to complete the Acquisition.  The closing of the CLN remains subject to the satisfaction of the conditions precedent set forth therein. The Acquisition is conditional on the grant of certain customary regulatory approvals in Morocco.

To reflect this transformative transaction and the new strategic direction of the Company, the Company is proposing to change its name to Atlas Metals Group plc on completion of the Acquisition.  In addition, a new management team will be put in place with Christopher Chadwick being appointed as the Company's Chief Executive Officer with immediate effect and other changes to the Company's board of directors and senior management team expected at completion, including the appointment of Vinesh Karia as Chief Financial Officer and Neil Gawthorpe as Chief Operating Officer, who will both bring significant skills and experience to the Company.

Highlights

·    Binding agreement to acquire 100% of CMO for an initial consideration of US$30 million on the basis of a locked box transaction with an economic effective date as at 29 February 2024, with an additional US$2 million payable on the first anniversary of completion of the Acquisition, together with a final contingent payment based on a formula using the average copper price over the 12 months following completion. The Company is exploring funding options for the remaining US$5m of the initial consideration

·    CMO owns the producing and profitable Oumejrane copper mine, located in the Eastern Anti-Atlas of Morocco

·    Revenue at the Oumejrane copper mine in the year to 31 December 2023 was US$28.0m

·    Completion of the Acquisition is contingent upon certain local regulatory and governmental approvals in Morocco and the fulfilment of a limited number of other conditions precedent

·    The Acquisition will constitute a reverse takeover under the Listing Rules

·    The Company expects also to enter into a strategic partnership with Managem to explore additional opportunities to collaborate on mining projects in Morocco and elsewhere

·    Orion, has entered into the CLN with MetalNRG, the funds from which will provide financing to MetalNRG to complete the Acquisition. The closing of the CLN remains subject to the satisfaction of the conditions precedent set forth therein

·    Proposed change of the Company's name to Atlas Metals Group plc

·    New management team with Christopher Chadwick being appointed as the Company's Chief Executive Officer, Vinesh Karia to be appointed as Chief Financial Officer and Neil Gawthorpe to be appointed as Chief Operating Officer

Christopher Chadwick, Chief Executive Officer of MetalNRG, commented:

"We are delighted to have reached agreement with Managem to acquire Compagnie Minière d'Oumejrane, with financing support from Orion.  This will be a transformational transaction for the Company, giving us 100% equity ownership of a fully operational, producing and profit generating copper mine.  Beyond the immediate gains, this strategic move opens the door to substantial upside potential and a wider relationship with the Managem Group.  We are working to expedite completion of the Acquisition as soon as possible and look forward to providing further updates in due course."

Further Details of the Acquisition

In consideration for the Acquisition, MetalNRG will pay the Seller an initial consideration of US$30 million.  An additional US$2 million will be payable on the first anniversary of the closing date.  In addition, an additional contingent payment based on the average copper price over the next 12 months following the closing date of the Acquisition will be payable.

The Acquisition is conditional, inter alia, upon certain local regulatory and governmental approvals and is expected to complete in late Q4 2024.

Definitive documentation has been executed between the Company and Orion with respect to the CLN, and subject to the satisfaction of conditions precedent in this documentation, Orion will provide the Company with financing enabling the Company to complete the Acquisition.

Orion Resource Partners is an US$8 billion global asset management firm that specializes in institutional investment strategies in precious and energy transition metals and minerals. Headquartered in New York City and with offices in Denver, London, and Sydney, Orion includes a team of 80 professionals with backgrounds in metals finance, physical metals logistics and sales, and in-house technical professionals responsible for risk assessment and portfolio management.

Completion of the Acquisition would constitute a reverse takeover under the UK Financial Conduct Authority's ("FCA") Listing Rules as it will exceed 100% of the relevant class tests. On completion of the Acquisition, MNRG's existing listing will be cancelled pursuant to Listing Rule 21.2.2(5). The Company intends, subject to meeting eligibility criteria, to publish a new prospectus on the enlarged group in due course and seek admission of the Company's shares to the Official List of the FCA in the "commercial company" segment and to trading on the main market for listed securities of the London Stock Exchange plc.

The parties intend to proceed as quickly as possible with the Acquisition, however, there can be no certainty that the Acquisition will be successfully completed.  Further announcements will be made in due course as appropriate.

Further information on CMO and the Oumejrane Copper Mine

The Oumejrane mine (the "Mine"), owned 100% by CMO, is a copper mine situated in eastern Morocco, which has been operational since 2014.  For the year ended 31 December 2023, revenue at the Oumejrane copper mine was US$28.0m.

The Mine, employing approximately 300 people, utilises both open pit and underground mining methods, with a processing capacity of 1,000 tonnes per day through a conventional circuit involving crushing, grinding, and flotation.  It is well located alongside a national road with well-established mining, processing and site infrastructure, including grid provided power. 

In addition, CMO owns four exploitation licenses covering a substantial area of just over 200 square km.  To date structures of approximately 10 km in length have been explored of the approximately 200km of mapped structures.  Core drilling has identified copper mineralization at a depth of 296 meters, with the current mining activities limited to 140 meters.  The Company therefore believes that there is the opportunity to expand the resource both at depth and laterally.

The Company along with its funders and advisers have carried out an extensive due diligence process on the Oumejrane mine and CMO.  This comprehensive evaluation included on-site visits, involving participants from Orion's commercial and technical teams, alongside external consultants.  Orion and the Company were impressed by the operation, as well as the team responsible for managing it and remain supportive as the Company advances the transaction towards completion.

Managem

The Managem group is a pan-African, fully integrated mining group that has been developing and mining a balanced portfolio between gold and energy transition metals for over 90 years. The group operates throughout the entire mining cycle, from exploration to the trading of commodities.  With 5,000 employees and operations in seven African countries, including Morocco, the group is majority-owned by Al Mada, a pan-African private equity fund.

More information on the Managem group can be found at: https://www.managemgroup.com/en

Board Changes

Christopher Chadwick, formerly an Executive Director of the Company, has been appointed as Chief Executive Officer with immediate effect.  On completion of the Acquisition, it is expected that Vinesh Karia will be joining the Group as Chief Financial Officer and Neil Gawthorpe will join as Chief Operating Officer, which will provide the Company with an experienced core senior management team.

Vinesh Karia holds a degree in Economics, is a qualified chartered accountant and has spent the last c.20 years of his career in Investment Banking advising clients on M&A, IPOs, debt capital markets, leveraged finance and credit ratings.  His coverage included specializing in the metals and mining and energy sectors and has most recently acted as a consultant to a number of clients in the commodities sector with assets in emerging markets.

Neil Gawthorpe holds a degree in Mineral Engineering and has enjoyed a successful career in the mining industry spanning over 30 years.  Neil has worked with a number of mining companies across Africa, including Allied Gold and Sierra Rutile.  Most recently, Neil was the CEO of Tungsten West PLC, where he successfully restructured the company and was instrumental in the company receiving all necessary permits to restart production at the Hermerdon mine.

On completion of the Acquisition it is anticipated that there will be a number of other changes to the Company's board of directors.  At the time these changes are made, the Company expects to appoint a number of new independent Non-executive Directors.

For further information, please contact: