Equity Placing to raise £6.1 million

 

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.  THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF AMUR MINERALS CORPORATION IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

 

25 August 2020

 

Amur Minerals Corporation

 

Equity Placing to raise £6.1 million

 

Acquisition of Carlo Holdings Limited

 

and

 

Investment in Australian Iron Ore

 

Amur Minerals Corporation ("Amur" or the "Company"), the nickel-copper sulphide mineral exploration and resource development company focused on the far east of Russia, is pleased to announce that it has raised £6.1 million (approx. US$7.97 million), before expenses, through the placing of 348,571,421 new ordinary shares of no par value of the Company (the "Placing Shares") at a price of 1.75 pence per Placing Share (the "Placing").

 

The proceeds of the Placing will be used, in part, to subscribe for US$4.67 million in secured convertible loan notes ("CLNs") in Nathan River Resources Pte Limited ("Nathan River Resources" or "NRR") which owns the Roper Bar Iron Ore Project (the "Project" or the "Roper Bar Project") located in the Northern Territory in Australia. The remaining US$3.26 million will be used to fund the continued development of the Kun-Manie nickel copper project, general working capital and to pay expenses relating to the Investment and the Placing.

 

Highlights

 

·    £6.1 million raised through the placing of 348,571,421 shares at a price of 1.75p

 

·    Acquisition of Carlo Holdings Limited ("CHL")

 

·    Investment in CLN's by CHL

 

§ 14% coupon paid quarterly

 

§ Convertible after 3 years to 19% of the equity of NRR for Amur (based upon current issued share capital of NRR)

 

·    Roper Bar Project

 

§ 446 million tonnes @ 39.9% Fe JORC resource defined 

 

§ 4.76 million tonnes @ 60.1% Fe JORC reserve defined

 

§ 194,000 tonnes of stockpile available to ship from October 2020

 

§ Pit-to-port infrastructure in place

 

§ Off-take agreement with Glencore

 

 

SP Angel Corporate Finance LLP ("SP Angel") acted as broker to the Company in connection with the Placing.

 

 

 

Robin Young, CEO of Amur Minerals Corporation, commented:

 

"Rarely do opportunities avail themselves where very near-term accretive value and cashflows are available to a mineral resource company.  Our due diligence has confirmed that there are several positive components that offer such upside potential.  Key to the successful restart of the Roper Bar Project, Nathan River Resource's management team is highly experienced in iron ore production.

 

"Further, the current near production status allows for a rapid resumption of the production and shipping of Direct Shipping Ore as substantial stockpiles of high-quality iron ore are currently ready for loading and transport to the Chinese market.  The long-term offtake agreement with Glencore, one of the world's largest global diversified natural resource companies provides us with security by having a partner of substantial import."

 

 

Adam Habib, Advisor to the Board of Amur Minerals Corporation, commented:

 

"Working with Glencore we have been able to co-invest in the Roper Bar Project which presents Amur with a potentially transformational investment opportunity, that will provide Amur with an income stream via the convertible bond leading to an equity stake in a significant iron ore asset that looks to provide real long term value. Iron ore has been performing very well with demand out of China expected to remain strong as continued stimulus measures are taken by the Chinese and other Governments."

 

 

 

Acquisition of Carlo Holdings Limited  

 

Amur has entered into an agreement with La Tourelle Consulting Limited ("La Tourelle"), a consultancy firm which is beneficially owned by Adam Habib's spouse, to acquire the entire issued share capital of Carlo Holdings Limited ("CHL") for £1.00 (the "Acquisition"), conditional on Admission (as defined below).

 

CHL is a recently incorporated special purpose company established for the purpose of completing this transaction which is wholly-owned by La Tourelle. La Tourelle, certain consultants to La Tourelle (the "La Tourelle Consultants") and Adam Habib have been working with Glencore for some time and more specifically on the Roper Bar Project since March 2020. La Tourelle is due to receive a cash fee of US$151,775 and 6,671,429 new ordinary shares of no par value in Amur as part of its remuneration ("La Tourelle Shares"). Furthermore, warrants over 4,105,495 ordinary shares exercisable at 1.75 pence per share will be granted, in the aggregate, to the La Tourelle Consultants.

 

On completion of the Acquisition, CHL will become a wholly-owned subsidiary of Amur and Amur will become the indirect beneficiary of the agreements that CHL has entered into.

 

The CLN Investment

 

Using part of the proceeds of the Placing, CHL has agreed to subscribe for CLNs to be issued by Nathan River Resources, a company which owns and operates the Roper Bar Project located in the Northern Territory in Australia. CHL has agreed to subscribe for CLNs with a principal amount of US$4.67 million

 

The CLNs will have a 14% coupon, paid quarterly, and will be convertible at the holder's option at any time from issue until 15 days prior to their maturity date on the third anniversary of issue. Amur's CLNs will be convertible into 19 per cent of the current issued share capital of NRR. Any CLNs not converted by the third anniversary of issue will be redeemable at par.  CLNs may be redeemed early by NRR at any time but in such circumstances the relevant holder is entitled to be issued with a warrant giving it subscription rights over shares in NRR equivalent to the conversion rights attaching to the CLNs and a penalty payment equal to all of the unpaid but due coupons to maturity. Working with Glencore, Amur has been able to co-invest in the Roper Bar Project.

 

CHL and Glencore will each be entitled to a seat on the boards of Nathan River Resources and NRR Group Pty Ltd, the NRR Australian holding company.

 

The CLNs will provide security over the issued share capital of NRR Group Pty Ltd and its subsidiary's interest in the mineral leases and mineral exploration licenses owned by it in connection with the Roper Bar Project once CHL and Amur receive Foreign Investment Review Board ("FIRB") confirmation that there is no objection to grant such security. 

 

 

Roper Bar Project

 

The Roper Bar Project was acquired by Nathan River Resources in 2017 and is located in the Northern Territory of Australia. The Roper Bar Project includes the rapid restart of mining operations that can be shipped without the need for significant processing, referred to as Direct Shipping Ore, and benefits from previously constructed pit-to-port infrastructure. Glencore has entered into an offtake agreement with NRR Trading PTE Limited, NRR's newly-established trading company in Singapore, for the marketing and distribution of the project's iron ore.

 

The Roper Bar Project has a fully integrated 'pit-to-port' logistics chain including a privately owned 171 km paved access road to a port which includes an existing load-out facility and product stockyard. NRR have a 2-stage restart programme with Stage 1 covering 4.0Mt of DSO¹ and 1.0Mt of DMS production at 1.5-1.8Mtpa over 3 years. Stage 2 expansion includes the installation of a silica flotation plant for the processing of 446Mt Resource with production at 4-5Mtpa. The Project has the following JORC Reserve.

 

¹ A portion of the pre-processed stockpiles is subject to a profit share arrangement which relates to the settlement of historic royalty and administrator arrangements, such payments are estimated by NRR's modeling to total approximately US$350,000 based on current iron ore prices.

 

Ore Reserve Estimate (@30% Fe cut off grade)

 

Ore Type	Category	Tonnes (MT)	Fe (%)	Al203 (%)	Si02 (%)	P (%)	LOI (%)
DSO	Proved	2.86	60.1	2.15	8.90	0.006	2.09
	Probable	1.15	60.1	2.23	8.99	0.008	1.78
	Total	4.01	60.1	2.17	8.93	0.007	2.00
DMS	Proved	1.03	50.8	2.79	20.73	0.007	2.50
	Probable	0.47	49.9	2.27	22.90	0.007	2.27
	Total	1.50	50.5	2.63	21.41	0.007	2.43

 

(Source: AMC Consultants Pty Ltd Report, January 2020)

 

Furthermore, the reserve contains 194,000 tonnes of stockpiles containing 46,500 tonnes of Direct Shipping Ore ("DSO") at 59% Fe and 147,800 tonnes of Dense Media Separation ore at 51.2% Fe.

 

The Project has the following JORC Resources (@ 30%Fe cut off grade):

 

Deposit	Measured (MT)	Indicated (MT)	Inferred (MT)	Total (MT)	Fe (%)	Si02 (%)	P (%)	Al203 (%)	LOI (%)
Total	67	228	151	446	39.9	28.5	0.006	2.7	9.3

 

(Source: AMC Consultants Pty Ltd Report, January 2020)

 

 

The Placing and Admission

 

The Company has, via SP Angel as broker, conducted a placing to raise gross proceeds £6.1 million by way of the issue of 348,571,421 new Ordinary Shares at the Placing Price of 1.75 pence per Ordinary Share. The Placing Price represents a discount of approximately 18 per cent. to the closing mid-market price of the Ordinary Shares on 24 August 2020 (being the last practicable dealing day prior to the date of this announcement).

 

The Placing Shares will represent approximately 25.7 per cent. of the ordinary share capital as enlarged by the Placing, and will, on Admission, rank pari passu in all other respects with the Company's existing Ordinary Shares.

 

The Placing Shares are being issued pursuant to the authorities granted to the Directors earlier this year and as such the issuance of the Placing Shares is not subject to shareholder approval.

 

Application has been made for the Placing Shares and the La Tourelle Shares to be admitted to trading on AIM. Admission is expected to become effective on or around 28 August 2020 ("Admission"). The Placing Shares and the La Tourelle Shares will rank pari passu in all respects with the existing Ordinary Shares including the right to receive any dividend or other distribution thereafter declared, made or paid. There are no Ordinary Shares held in treasury. Following Admission, the total number of voting rights in the Company will be 1,364,526,775.

 

The Placing and the Placing Agreement

 

In connection with the Placing, on 25 August 2020 the Company entered into the Placing Agreement pursuant to which SP Angel has agreed to act as agents for the Company and use its reasonable endeavors to place the Placing Shares with certain new and existing investors. The Placing is conditional, among other things, upon Admission occurring no later than 8.00 a.m. on 30 September 2020 (being the long stop date).

 

The Placing Agreement contains customary warranties from the Company in favour of SP Angel in relation to (amongst other things) matters relating to the Company and its business. In addition, the Company has agreed to indemnify SP Angel in relation to certain liabilities it may incur in undertaking the Placing. SP Angel has the right to terminate the Placing Agreement in certain circumstances prior to Admission. In particular, SP Angel may terminate in the event that there has been a breach of any of the warranties, the conditions of the agreement have become incapable of fulfilment or for force majeure. The Placing will not be underwritten.

 

Market Abuse Regulation Disclosure

 

Prior to its publication, certain information contained within this announcement was deemed to constitute inside information for the purposes of Article 7 of EU Regulation 596/2014 ('MAR'). In addition, market soundings (as defined in MAR) were taken in respect of the Placing with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR.  This inside information is set out in this announcement and such information is now considered to be in the public domain.  Accordingly, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

 

Competent Persons Statement

 

The information contained in this announcement has been reviewed and approved by the CEO of Amur, Mr. Robin Young.  Mr. Young is a Geological Engineer (cum laude), a Professional Geologist licensed by the Utah Division of Occupational and Professional Licensing, and is a Qualified Professional Geologist, as defined by the Toronto and Vancouver Stock Exchanges and a qualified person as defined by the AIM Rules for Companies.  An employee of Amur for 15 years, previously Mr. Young was employed as an independent consultant with Fluor Engineers, Fluor Australia and Western Services Engineering, Inc. during which time his responsibilities included the independent compilation of resources and reserves in accordance with JORC standards.  In addition, he was the lead engineer and participant of numerous studies and projects requiring the compilation of independent Bankable Studies utilised to finance small to large scale projects located worldwide.  Mr. Young is responsible for the content of this announcement.

 

Forward-Looking Statements:

 

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ''believe'' ''could'' "should" ''envisage'' ''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

 

S.P. Angel Corporate Finance LLP, which is a member of the London Stock Exchange, is authorised and regulated in the United Kingdom by the Financial Conduct Authority and is acting as nominated adviser and broker for the purposes of the AIM Rules for Companies.  S.P. Angel Corporate Finance LLP is acting exclusively for the Company in connection with the matters referred to in this announcement and for no-one else and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing any advice in relation to the contents of this announcement or any transaction, arrangement or matter referred to herein. 

 

This announcement is being issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by S.P. Angel Corporate Finance LLP , nor any of its affiliates or agents (or any of its directors, officers, employees or advisers) for the contents of this announcement, or any other written or oral information made available to or publicly available to any interested party or its advisers, or any other statement made or purported to be made by or on behalf of S.P. Angel Corporate Finance LLP or any of its affiliates in connection with the Company or the Placing and any responsibility therefor is expressly disclaimed. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by S.P. Angel Corporate Finance LLP , or any of its affiliates, agents, directors, officers or employees as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed

 

 

Enquiries:

 

Company Amur Minerals Corp.	Nomad and Broker S.P. Angel Corporate Finance LLP	Public Relations Blytheweigh
Robin Young CEO	Richard Morrison Soltan Tagiev	Megan Ray Tim Blythe
+7 (4212) 75 56 15	+44 (0) 20 3470 0470	+44 (0) 20 7138 3204

 

 

 

For further information, and Company updates see the Company website at www.amurminerals.com and twitter page @amur_minerals.