Redcorp Earn-In Agreement Update - Ascendant

MINERAL AND FINANCIAL INVESTMENTS LIMITED

Amended terms to Redcorp Earn-In Agreement with Ascendant Resources

HIGHLIGHTS:

·    Amendment to one payment of Redcorp Earn-In Option Agreement with Ascendant

·    M&FI received US$100,000 on June 22, 2020 and additionally costs of US$62,000 have been reimbursed

·    M&FI has received the equivalent of 32.4% of the expected payment in June 2020

·    Amendments result in US$600,000 of monthly cash payments in lieu of a US$500,000 single payment scheduled for June 22, 2020

·    In the event of a financing, or change of control, the amount owed will be paid on closing

George Town, Cayman Islands - 1 July 2020 - Mineral and Financial Investments Limited (LSE-AIM: MAFL) ("M&FI" "MAFL" or the "Company") is pleased to provide an update on the Earn-In Option Agreement with Ascendant Resources Inc. The Directors of M&FI are pleased to announce what it believes is a mutually satisfactory resolution to the financial issues which its partner have encountered in 2020. This an example as to how M&FI can work constructively with its investee companies while securing improved returns for MAFL shareholders. M&FI, through its wholly owned Swiss subsidiary TH Crestgate GmbH, currently owns 75% of Redcorp Empreedimentos Mineiros Lda, whose main asset is the 23Mt Lagoa Salgada Polymetallic project in Portugal. Ascendant must fulfil its work obligations, totalling US$9.0m and pay M&FI US$2.5M over the next 2 years to reach 50% ownership. To reach 80% ownership of Redcorp, Ascendant must complete a Feasibility and pay M&FI an additional US$2.5m.

Amendment

M&FI has agreed with Ascendant Resources Inc, in the face of the extraordinary circumstances in part created by the global shut-down caused by the Coronavirus pandemic, an amendment to the payment schedule set out in the Earn-In Option Agreement, ("Option Agreement").  

In accordance with the terms of the Amendment to the Option Agreement, the US$500,000 payment due to be paid by Ascendant on June 22, 2020  will instead be satisfied by the six monthly payments of US$100,000 (a total of US$600,000), and an additional security pledge, in accordance with the following schedule:

The final payments due to MAFL under the Option Agreement at intervals of 36 months and 48 months after completion, remain unchanged. In the event of a default the option would lapse, and ownership would be frozen at the then level of ownership, operatorship would remain at the Redcorp level and Ascendant would be subject to dilution by further investment into Redcorp.

Additionally, in the event that Ascendant succeeds in raising third party financing in excess of US$1.0 million during the six month period beginning June 22, 2020, or if there is a change of control of Ascendant, they will have to pre-pay the remaining amount to be paid of the amended Option payment.
 

Original Agreement

On 2 August 2018, the Company announced the details of an Option Earn-in agreement, the details 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$800,000 in cash (US$400,000 on closing of the transaction and US$400,000 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$15.0 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:

(1)  Investing a minimum of US$9.0 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

(2)  Making payments totaling US$3.5 million to TH Crestgate (M&FI) according to the following schedule or earlier:

I.     6 months after the closing date:     US$0.25 million

II.   12 months after the closing date:    US$0.25 million

III.  18 months after the closing date:    US$0.5 million

IV.  24 months after the closing date:     US$0.5 million (this payment has been amended)

V.    36 months after the closing date:     US$1.0 million

VI.  48 months after the closing date:     US$1.0 million

b)   Ascendant then has the option to earn an additional 30%, totaling an 80% interest in Redcorp, the operating subsidiary, by completing a Feasibility study within 54 months (i.e. 30 months from June 22, 2020) and making a further payment of US$2.5 million to TH Crestgate (M&FI).

FOR MORE INFORMATION:

Jacques Vaillancourt, Mineral & Financial Investments Ltd.                       +44 780 226 8247

Katy Mitchell and Matt Chan, WH Ireland Limited                                    +44 207 220 1666

Jon Belliss, Beaufort Securities Limited                                                      +44 207 382 8300

ABOUT MINERAL AND FINANCIAL INVESTMENTS LIMITED:

Mineral and Financial Investments Limited is a Cayman Island based investment company quoted on AIM, a market of the London Stock Exchange. M&FI has 20 investments in the natural resource sector with the majority in the metals and minerals sector and has about 38% of its investment portfolio in precious metal investments. M&FI's Net Asset Value per share (NAVPS)is 15.11p, as of March 31, 2020 M&FI's NAVPS has risen at a Compound Annual Growth Rate (CAGR) of 31.2% since December 31, 2016.