Savannah Resources Plc / Index: AIM / Epic: SAV / Sector: Mining
28 March 2014
Savannah Resources Plc ('Savannah' or the 'Company')
Sale of Legacy Mali Exploration Permits
Savannah Resources plc (AIM: SAV) announces that it has sold its remaining Malian gold exploration permits to AIM quoted Alecto Minerals Plc ('Alecto') following a strategic review of the Company's assets.
Overview
• Strategic review results in sale of 100% interest in the Karan and Diatissan gold projects (the 'Projects') in western Mali to Alecto
• Sale price of £250,000 ('Sale Price') to be satisfied by the issue of 20,000,000 new shares in Alecto - increases Savannah's effective shareholding in Alecto to 17.9%
• Alecto has an established operational capability in Mali, and is well positioned to evaluate the Projects
• Savannah focussed on evaluating the Jangamo Heavy Mineral Sands Project in Mozambique - two broad mineralised zones identified with intercepts of 18m at 3.5% Total Heavy Minerals ('THM'), 24m at 3.2% THM and 10m at 2.2% received
• Disposal of legacy assets helps Savannah focus on Mozambique and developing a pipeline of opportunities
Savannah's CEO David Archer said, "The sale of these legacy assets streamlines our portfolio whilst providing us with an indirect interest in their potential upside. Alecto is very well placed to add value to these projects on the back of its in-country capabilities.
''As a result, we are now focussed on progressing our highly prospective Jangamo Project. With a 1,812m drilling programme completed, a scoping review underway to assess the potential scale and grade of the project, and the objective of defining a maiden JORC compliant heavy mineral resource by the end of the year, we look forward to delivering updates on developments at Jangamo. In addition, we have a very active business development programme underway aimed at developing a pipeline of exciting projects."
Further Information
Details of the Sale Agreement
Savannah has signed an agreement with Alecto to sell its subsidiary NewMines Holdings Limited ('NewMines') (the "Sale Agreement"), which, through its wholly owned subsidiary Tobon Tondo, holds the exploration rights to the Karan and Diatissan gold projects in western Mali.
The consideration payable to Savannah will be 20,000,000 Alecto shares priced at 1.25p, having an aggregate value of £250,000 (the 'Consideration Shares'). This will increase Savannah's effective shareholding in Alecto to 17.9% of the issued share capital.
Under the terms of the Sale Agreement Savannah undertakes that it shall not, in the period to 4 October 2014 (the "Lock-in Period"), sell, transfer of otherwise dispose of, or create any encumbrance over, any of the Consideration Shares (or any interest in them), or enter into any agreement to do so.
The draft unaudited accounts of NewMines at 31 December 2013 ('Draft Accounts') value the assets divested in the Sale Agreement ('Sale Assets') at €301,750 (£250,000) which includes a write down of the historical carrying value of the intangible exploration assets, by €1,605,095 (£1,337,579), to the Sale Price for the Sale Assets to Alecto. The majority of the costs relating to the intangible explorations assets were incurred in 2011 and 2012.The impairment charge represents the majority of the €1,618,866 (£1,349,054) loss attributable to the Sale Assets in the Draft Accounts.
**ENDS**
For further information please visit www.savannahresources.com or contact:
David Archer |
Savannah Resources plc |
Tel: +44 20 3664 9330 |
James Maxwell / Jen Boorer |
N+1 Singer |
Tel: +44 20 7496 3000 |
Felicity Edwards/ Charlotte Heap |
St Brides Media & Finance Ltd |
Tel: +44 20 7236 1177 |
Notes
About Savannah
Savannah Resources Plc (AIM: SAV) is a multi-commodity focussed exploration and development company. Through its 80% ownership of Matilda Minerals Limitada it operates the Jangamo exploration project in a world class mineral sands province in Mozambique which borders Rio Tinto's Mutamba deposit, one of two major deposits Rio Tinto has defined in Mozambique, which collectively have an exploration target of 7-12Bn tonnes at 3-4.5% THM (published in 2008). In addition, Savannah owns an effective 20.9% strategic shareholding in Alecto Minerals Plc (www.alectominerals.com) which provides Savannah with exposure to both the highly prospective Kossanto Gold Project in the prolific Kenieba inlier in Mali, the wholly owned Wad Amour IOCG Project in Mauritania and to the Wayu Boda and Aysid Meketel gold / base metal projects in Ethiopia for which Alecto has a joint venture with Centamin Plc. Under this joint venture, Centamin Plc is committing up to US$14m in exploration funding to earn up to 70% of each project. The Company is also evaluating additional opportunities to expand its portfolio and geographical focus.
