Option to sell Sturec

19^th November 2019

 

Arc Minerals Ltd

('Arc' or the 'Company') 

Option to sell Šturec

 

Arc Minerals ("Arc" or the "Company") is pleased to announce that the Company has today entered into a binding term sheet setting out an option (the "Option" or the "Agreement") to sell its interest in the Šturec gold project ("Šturec" or the "Project") in Slovakia to MetalsTech Limited ("MTC"), An Australian listed mineral exploration company for a gross consideration of up to US$8m (the "Disposal").  

 

The option fee receivable by Arc amounts to A$30,000 (the "Option Fee") and is non-refundable. The Option is exercisable by MTC at any time during the period of 45 days from the date of this announcement (the "Option Period"). The Option shall be exercised by MTC notifying Arc that it is exercising the Option and notifying Arc of a proposed completion date, such date not being more than 45 days following the date of the exercise notice ("Completion Date").

 

If MTC does not exercise the Option within the Option Period, the Option will lapse, and the Parties will be released from their obligations. Similarly, if the Option is exercised but completion does not occur by the Completion Date as a result of the conditions precedent set out at 1) and 2) below failing to be satisfied, the Option will lapse.

 

The net proceeds of the disposal will be applied to exploration and development activities in Zambia and for general working capital purposes.

 

Nick von Schirnding, Executive Chairman of Arc commented: "We are delivering on our stated strategy of exiting our gold interests and this is an excellent outcome for Arc as we focus on developing our core copper assets in Zambia.  With further significant upside to increasing the Sturec resource, Arc maintains an exposure to the development of this asset going forward which will benefit our shareholders."

 

 

Conditions Precedent

Completion of the Disposal is conditional upon the satisfaction (or waiver) of the following conditions precedent:

 

1)    MTC completing the relevant commercial, legal, financial and technical due diligence investigations;

 

2)    MTC obtaining all necessary regulatory approvals or waivers and shareholder approvals;

 

3)    The Company obtaining all necessary regulatory approvals or waivers and shareholder approvals pursuant to any law or statute and all third-party approvals, consents and necessary documentation.

  

 

First Payment and Second Payment

Once the Option is exercised Arc will receive two phased cash payments namely A$450,000 (less the Option Fee) within 10 business days of a formal SPA being executed (the "First Payment"), followed by a second payment of A$300,000 (the "Second Payment") within six months of the Completion Date, bringing the total cash proceeds payable to Arc of A$750,000 (c. US$500,000). 

 

The Resource Upgrade Royalty

If, within 2 years of the Disposal, the Šturec JORC Indicated and Measured Resource exceeds 1.5 million ounces gold at a grade greater than 2.5g/t (inclusive of recoverable Ag equivalent), MTC will pay Arc a further A$2 royalty per additional ounce of gold . This royalty is capped at 7 million ounces of gold.

 

Any consideration due under the Resource Upgrade Royalty may be satisfied in such form of consideration or instrument acceptable to MTC, in its sole discretion (including, but not limited to cash or shares in MTC).

 

Substantial transaction

Šturec is a large prospective gold exploration license. The Project is located in central Slovakia approximately 1.5km north east of the town of Kremnica and, as the crow flies, 17km west of central Slovakia's largest city, Banská Bystrica. The Project has a JORC (2004) compliant mineral Resource of 1.36 million ounces of gold equivalent. A Pre-Feasibility Study ("PFS") of the mining aspects of the Šturec Project was completed by SRK Consultants ("SRK"), a leading international engineering firm in April 2013. The sale of the Project constitutes a substantial transaction under AIM Rule 12.  As at 31 March 2019, the reported net book value of Ortac s.r.o and other subsidiaries in Slovakia, which own the Project was £6m and incurred a loss of £25,000 for the year ended 31 March 2019 (from discontinued activities). 

 

 

**ENDS**

Contacts

Arc Minerals Ltd Nick von Schirnding (Chairman)	+44 (0) 20 7917 2942
SP Angel (Nominated Adviser & Broker) Ewan Leggat / Soltan Tagiev	+44 (0) 20 3470 0470

 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

Forward-looking Statements

This news release contains forward-looking statements that are based on the Company's current expectations and estimates. Forward-looking statements are frequently characterised by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements. Such factors include, among others: the actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; possible variations in ore grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing; and fluctuations in metal prices. There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.

Notes to the Editors

Arc Minerals is an AIM listed exploration and mine development company focused on a diversified portfolio of mining projects with interests in Slovakia, Eritrea, the Democratic Republic of the Congo and Zambia. 

ARC Minerals current holdings include:

●   100% interest in CASA Mining Limited, a private company that has a 71.25% interest in the 3-million-ounce inferred Resource Akyanga gold deposit in the DRC. Arc announced a conditional sale of Casa Mining Limited on 13 November 2019, which is expected to be completed no later than 10 January 2020.

●   A 66% equity interest in Zamsort Limited ("Zamsort"), a private company focused on a prospective copper licence in the Zambia Copperbelt, together with a convertible loan to Zamsort which converts into approximately a five percent additional equity interest in Zamsort.

●   A 47.5% equity interest in Zaco Limited ("Zaco"), a private company focussed on a prospective copper and cobalt license adjacent to Zamsort.

●    100% ownership of the Kremnica Mining Licence Area in Slovakia which host the 1.3Moz AuEq  PFS stage Ṧturec Gold Project.

For more information visit www.arcminerals.com

 

 

Forward-looking Statements

This news release contains forward-looking statements that are based on the Company's current expectations and estimates. Forward-looking statements are frequently characterised by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements. Such factors include, among others: the actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; possible variations in ore grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing; and fluctuations in metal prices. There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.