Polymetal to Buy 22.5% Strategic Stake

Chesterfield Resources Plc / EPIC: CHF / Market: LSE / Sector: Mining

26 November 2020

Polymetal International to buy a 22.5% strategic stake in Chesterfield Resources

Chesterfield Resources is pleased to announce that Polymetal International Plc, the FTSE 100 precious metals mining group, has agreed to invest £2,100,000 in Chesterfield to take a 22.5% strategic stake in the company. Polymetal is one of the ten largest gold mining companies in the world with a market capitalisation of approximately £7.4 billion. This is in line with Polymetal's strategy to invest in mining companies in its regions of operation, and increase its exposure to copper. Chesterfield is a copper and gold exploration company focussed on Cyprus.

Highlights:

Martin French, Executive Chairman of Chesterfield Resources said, "We are delighted to have attracted the investment of a tier-one mining company of the stature of Polymetal International. We are an ambitious young company and this strategic investment represents an important step in our growth trajectory. We greatly look forward to working with Polymetal to build value for it, and all of our shareholders who have joined us in our venture." 

Polymetal will become the largest shareholder in Chesterfield and a strategic partner. The deal, at a price of 9p, presents a strong opportunity for Chesterfield and its shareholders. The transaction is contingent upon the approval of a prospectus by the FCA (Financial Conduct Authority).

Chesterfield is currently completing its first pass diamond drilling and geophysics exploration campaign on its licence district at Troodos West in Cyprus. This financing will fund its next phase of exploration. The company is planning geophysics surveys over the winter, with a renewed campaign of diamond drilling in the second quarter of 2021.

Chesterfield and Polymetal have entered into a relationship agreement that envisages granting one board seat to a Polymetal representative and will continue for as long as the Polymetal group maintains an interest of more than 15% of the company's voting rights. Details of this relationship agreement will be included in the prospectus which is anticipated to be published in due course.

On the recommendation of the Remuneration Committee, the Board has agreed to issue Martin French with options over 1,000,000 ordinary shares of 0.1p each in the capital of the company. These options will vest immediately and will expire five years from the date of issue with an exercise price of 9.0p.

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About Chesterfield Resources

Chesterfield Resources is a copper-gold exploration company active in Cyprus, where it holds the largest mineral exploration licence area of any operator on the island.

Cyprus is regarded as a good quality exploration location. It is a member of the EU, and its legal system is based on English common law. There has been minimal exploration activity on the island in the last 46 years since the invasion by Turkey in 1974 put a halt to what had been a very active mining industry.

Since that time, exploration technology and geological knowledge has improved significantly. The company is exploring for VMS (Volcanognic Massive Sulphide) deposits, which typically occur in stacks and clusters. Historically only those deposits which were visible from surface have been mined. It is believed that many more deposits remain undiscovered buried near surface, and the company is using modern techniques to locate them.

While copper is the main exploration target, it is noteworthy that gold was not historically exploited in Cyprus as its price was pegged to just $35 per ounce when the mining industry was active in the 1960s and 1970s (less than 50 times today's price). Gold has been encountered in several locations in the exploration target area and is an important part of the exploration objective.

The exploration team is led by three very senior geologists: Neil O'Brian, formally Head of Exploration, Lundin Mining, Dave Cliff, previously Head of Exploration Europe, Rio Tinto, and Mike Parker, previously a senior geologist with First Quantum Mining

The current focus of exploration is in the Troodos West group of licences belonging to the company, with around 30 defined targets in an area measuring 10km by 10km. The objective is to discover several VMS deposits in close proximity to each other to create a mining project with a centralised processing unit.

Chesterfield Resources is committed to world-class environmental standards in all of its operations to mine copper, which is essential to developing clean technology projects worldwide. The company hopes to develop industry and opportunities for the benefit of the Republic of Cyprus.

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.

NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY ASSOCIATED WITH THEM 

**ENDS**

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