Schedule One - Erris Resources PLC | RNS | Ticker

Schedule One - Erris Resources PLC

RNS Announcement

RNS Number : 5022B

AIM

08 October 2020

ANNOUNCEMENT TO BE MADE BY THE AIM APPLICANT PRIOR TO ADMISSION IN ACCORDANCE WITH RULE 2 OF THE AIM RULES FOR COMPANIES ("AIM RULES")

COMPANY NAME:

Erris Resources plc - to be renamed as Zinnwald Lithium plc from Admission

COMPANY REGISTERED OFFICE ADDRESS AND IF DIFFERENT, COMPANY TRADING ADDRESS (INCLUDING POSTCODES):

Registered office: 29-31 Castle Street, High Wycombe, Bucks, England, HP13 6RU

COUNTRY OF INCORPORATION:

England and Wales

COMPANY WEBSITE ADDRESS CONTAINING ALL INFORMATION REQUIRED BY AIM RULE 26:

Current: https://www.errisresources.com/

From Admission: www.zinnwaldlithium.com

COMPANY BUSINESS (INCLUDING MAIN COUNTRY OF OPERATION) OR, IN THE CASE OF AN INVESTING COMPANY, DETAILS OF ITS INVESTING POLICY). IF THE ADMISSION IS SOUGHT AS A RESULT OF A REVERSE TAKE-OVER UNDER RULE 14, THIS SHOULD BE STATED:

Erris Resources plc ("Erris" or the "Company") is a European focussed mineral exploration company. As part of its ongoing corporate strategy, the Board has been reviewing projects in low risk jurisdictions internationally with a specific emphasis on finding more advanced assets that are closer to production. The Company is proposing to acquire, from Bacanora Lithium plc ("Bacanora", BCN.L), 50 per cent. of the issued share capital of Deutsche Lithium GmbH ("Deutsche Lithium"), the principal asset of which is the Zinnwald Lithium Project ("Zinnwald" or the "Project") in Germany of which it has joint operational control (the "Proposed Acquisition"). The other 50 per cent. owner of Deutsche Lithium is SolarWorld AG, a company which has been in administration since 1 August 2017.

Zinnwald, which is located in the industrial heartland of Germany, is a late stage, high value lithium project with highly attractive economics and a mining licence already in place. A Feasibility Study, first published in 2019, on the Project estimated that it has a pre-tax, discounted at 8%, NPV of approximately €428 million; an Internal Rate of Return ('IRR') of 27.4%; and an average LOM (life of mine) annual EBITDA of €58.5 million.

In addition to acquiring a 50 per cent. shareholding in Deutsche Lithium, Erris will receive €1.35m in cash from Bacanora. The consideration for the Proposed Acquisition will be satisfied by the issue to Bacanora of 90,619,170 Ordinary Shares in Erris as well as a royalty agreement which Erris will grant to Bacanora.

In addition to the Proposed Acquisition, the Board of Erris believes that the Company's existing Loch Tay gold project would be better developed on a standalone basis in a private company that can more efficiently utilise its financial resources to advance the project. Consequently, if the Proposed Acquisition proceeds, it is intended that Erris Gold Resources, which owns the Loch Tay gold project, will be spun out to the existing shareholders of Erris, who have funded Loch Tay to date. A cash balance of €400,000 will be provided to Erris Gold Resources as part of the Divestment.

The Company's investments in Abbeytown and Brännberg will be retained on a care and maintenance basis with the ultimate aim that Erris Resources will seek to partner or divest these.

In conjunction with the Proposed Acquisition, a resolution will be put to shareholders at the general meeting to approve a change in the Company's name to Zinnwald Lithium plc, which the Directors believe better reflects the Company's proposed new corporate strategy to develop Zinnwald into a supplier of high value lithium products to Europe's rapidly growing electric vehicle and energy storage markets.

Pursuant to Rule 14 of the AIM Rules for Companies, the Acquisition constitutes a reverse takeover. Shareholder approval for the Acquisition is being sought at a general meeting convened for 26 October 2020.

DETAILS OF SECURITIES TO BE ADMITTED INCLUDING ANY RESTRICTIONS AS TO TRANSFER OF THE SECURITIES (i.e. where known, number and type of shares, nominal value and issue price to which it seeks admission and the number and type to be held as treasury shares):

204,455,957 ordinary shares of GBP0.01each ("Ordinary Shares"), comprising:

· 38,836,787 existing Ordinary Shares in issue;

· 75,000,000 new Ordinary Shares to be issued at 5p per share pursuant to the placing; and

· 90,619,170 new Ordinary Shares to be issued at 5p per share pursuant to the Acquisition

No shares are held in treasury.

CAPITAL TO BE RAISED ON ADMISSION (AND/OR SECONDARY OFFERING) AND ANTICIPATED MARKET CAPITALISATION ON ADMISSION:

Capital to be raised on Admission: £3.75 million

Anticipated market capitalisation on Admission: £10.22 million

PERCENTAGE OF AIM SECURITIES NOT IN PUBLIC HANDS AT ADMISSION:

59.07%

DETAILS OF ANY OTHER EXCHANGE OR TRADING PLATFORM TO WHICH THE AIM SECURITIES (OR OTHER SECURITIES OF THE COMPANY) ARE OR WILL BE ADMITTED OR TRADED:

None

FULL NAMES AND FUNCTIONS OF DIRECTORS AND PROPOSED DIRECTORS (underlining the first name by which each is known or including any other name by which each is known):

Directors:

Mr. Jeremy John Martin -Non Executive Chairman

Mr. Anton du Plessis -Chief Executive Officer

Mr. Osman Cherif Rifaat - Chief Financial Officer

Mr. Graham Maxwell Brown - Non Executive Director

Proposed Director:

Mr. Peter Anthony Secker - Proposed Non Executive Director

FULL NAMES AND HOLDINGS OF SIGNIFICANT SHAREHOLDERS EXPRESSED AS A PERCENTAGE OF THE ISSUED SHARE CAPITAL, BEFORE AND AFTER ADMISSION (underlining the first name by which each is known or including any other name by which each is known):

Shareholder	Percentage of existing ordinary share capital held before Admission
David Hall	17.58
Osisko Gold Royalties Limited	15.13
Richard Thomas	5.49
Graham & Christine Donaldson	5.15

Shareholder	Percentage of enlarged ordinary share capital held on Admission
Bacanora Lithium plc	44.32
Henry Maxey	14.67
David Hall	3.34

NAMES OF ALL PERSONS TO BE DISCLOSED IN ACCORDANCE WITH SCHEDULE 2, PARAGRAPH (H) OF THE AIM RULES:

None

(i) ANTICIPATED ACCOUNTING REFERENCE DATE

(ii) DATE TO WHICH THE MAIN FINANCIAL INFORMATION IN THE ADMISSION DOCUMENT HAS BEEN PREPARED (this may be represented by unaudited interim financial information)

(iii) DATES BY WHICH IT MUST PUBLISH ITS FIRST THREE REPORTS PURSUANT TO AIM RULES 18 AND 19:

i) 31 December

ii) 30 June 2020 (unaudited interim financial information for Erris Resources plc and Deutsche Lithium GMbH)

iii) 30 June 2021 (annual report for the year ended 31 December 2020), 30 September 2021 (interim report for the six months ended 30 June 2021) and 30 June 2022 (annual report for the year ended 31 December 2021)

EXPECTED ADMISSION DATE:

29 October 2020

NAME AND ADDRESS OF NOMINATED ADVISER:

Allenby Capital Limited

5 St. Helen's Place

London

EC3A 6AB

NAME AND ADDRESS OF BROKER:

Turner Pope Investments (TPI) Ltd

8 Frederick's Place,

London, EC2R 8AB

OTHER THAN IN THE CASE OF A QUOTED APPLICANT, DETAILS OF WHERE (POSTAL OR INTERNET ADDRESS) THE ADMISSION DOCUMENT WILL BE AVAILABLE FROM, WITH A STATEMENT THAT THIS WILL CONTAIN FULL DETAILS ABOUT THE APPLICANT AND THE ADMISSION OF ITS SECURITIES:

The admission document is available to download from www.errisresources.com/ . The admission document contains full details about the Company and the admission of its securities.

THE CORPORATE GOVERNANCE CODE THE APPLICANT HAS DECIDED TO APPLY

QCA Corporate Governance Code

DATE OF NOTIFICATION:

8 October 2020

NEW/ UPDATE:

New

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

PAAFZMGGNRMGGZG

RNS metadata

Title: Schedule One - Erris Resources PLC
Time: 09:00:02
Date: 8 Oct 2020
Category: Capital structure
ID: 5022B