Conditional Acquisition of Metrock Resources Ltd

22 December 2020

Bezant Resources Plc

("Bezant" or the "Company")  

Conditional Acquisition of 100% of Metrock Resources Ltd

and its mineral exploration licences in Southern Botswana,

comprising the Kanye Manganese project

Bezant (AIM: BZT), the copper-gold exploration and development company, is pleased to announce the conditional acquisition of 100% of Metrock Resources Ltd ("Metrock") and its manganese mineral exploration licences in Southern Botswana comprising the Kanye Manganese Project.

Kanye Manganese Project Highlights: 

·    4,043 sq km land package with 125 km of potential on trend manganese mineralisation across the licences 

·    Trenching results have yielded in the case on one prospect of between 53% and 74% manganese oxide ("MnO")

·    Bezant will acquire 100% of Metrock by i) issuing 150,000,000 new shares to settle   £405,000 and ii) issuing 31,800,000 unlisted options exercisable at 0.40 pence per share up to 30 September 2024 and deferred consideration of £225,000 also to be settled in new shares should an Indicated Resource be delineated and settle Metrock's creditors of £45,100 and acquire loans due by Metrock of £198,213 by issuing a further 84,597,407 new shares and paying approximately £14,900 in cash. The new shares to be issued on completion of the acquisition represent approximately 6.26% of the enlarged share capital after this share issue (further details provided below under the heading Share Purchase Agreement)

·    Project Area being acquired is near the ground of a TSX listed public company that has a preliminary economic assessment showing high rates of return based on a MnO grade of 27.3

Share Purchase Agreement:  The Company has entered into a conditional share purchase agreement with the shareholders of Metrock (the "Vendors") dated 21 December 2020 to acquire 100% of Metrock Resources Ltd, incorporated in Australia (ACN 634 959 274) ("Metrock") (the "Acquisition"). Metrock through its 100% owned Australian subsidiary Coastal Resources Pty Ltd (ACN 624 968 752) owns i) 100% of Cypress Sources Pty Ltd incorporated in Botswana which owns PLs 377/2018, 378/2018, 379/2018, 420/2018, 421/2018, 423/2018, 424/2018, 425/2018, and ii) 100% of Coastal Minerals Pty Ltd Incorporated in Botswana which owns PL129/2019. The initial consideration payable by Bezant at completion of the Acquisition ("Completion") is i) £405,000 by the issue of 150,000,000 new ordinary shares of 0.002 pence each in the capital of the Company ("Bezant Shares") at a deemed issue price of 0.27 pence per Bezant Share ("Ordinary Shares Consideration") which is a premium of 12.5% to the closing price of 0.24 pence on 21 December 2020 being the last practicable date prior to this announcement, ii) the issue of 31,800,000 Unlisted Options in the share capital of Bezant. The options will have a strike price of 0.40 pence per share and will have an expiry date of 30 September 2024 ("Option Consideration"). The Company will also issue a total of 84,597,407 Bezant Shares to acquire Loans of £198,213 and settle creditors of £30,200 owed by Metrock which will be issued i) to two of the Vendors namely 50,422,222 Bezant Shares to Breamline Pty Ltd and 5,860,370 Bezant Shares to M&A Wealth Pty Ltd and  ii) 28,314,815 Bezant Shares to Tiger Royalties and Investments Plc (AIM:TIR) ("Loan Accounts Consideration Shares") (the "Consideration"). The Company will at Completion settle creditors of Metrock of approximately A$26,508 (approximately £14,900) in cash.  The Ordinary Shares Consideration and the Loan Accounts Consideration Shares will, once issued, in aggregate represent approximately 6.26% of the enlarged share capital of the Company. The Acquisition is subject to the Conditions Precedent including Botswana Ministerial consent detailed below under the heading Key Terms of the Acquisition.

Colin Bird, Executive Chairman of Bezant, commented: 

"Bezant has in the last year been focussing on Southern Africa and has made significant additions to its copper gold portfolio in both Zambia and Namibia. This growing presence in Southern Africa gave rise to the opportunity to acquire the Kanye Manganese Project in Botswana in an area where high grade battery manganese has been discovered which is much sought after for tomorrow's energy storage equation.  The underlying mineral licences represent exploration rights to a very large area of highly prospective manganese bearing ground.  Botswana has an excellent reputation as a host for foreign mining investment and continues to be very supportive of mining initiatives. We are very excited with this opportunity, the project has clear evidence of manganese and immediate drill ready targets which we intend to pursue early in the New Year once the Acquisition has completed. "

Background on the Kanye Manganese Project

Licences, location, ownership: The Kanye Manganese Project ("Kanye Managnese Project") comprises a collection of nine prospecting licenses, namely PLs 377/2018, 378/2018, 379/2018, 420/2018, 421/2018, 423/2018, 424/2018, 425/2018 and PL129/2019 (the "Project Licences"), located in south-central Botswana south of the town of Jwaneng and west of the town of Kanye and 150 km by road from the capital Gaborone. The licenses cover a total area of 4,043 km² and provide the holder with the right to prospect for Metals. Eight licenses are held by Cypress Sources Pty Ltd, a 100% owned subsidiary of Coastal Resources Pty Ltd which in turn is 100% owned by Metrock Resources Limited. The ninth licence is held by Coastal Minerals Pty Ltd which is 100% owned by Coastal Resources Pty Ltd.

Geological setting: The target for manganese mineralisation is manganiferous shale horizons located on the contact between the Taupone Group and the underlying Black Reef Formation. This geological setting is similar to that of the Giyani Metals Corp manganese occurrences on their Kwgakgwe Hill (K-Hill), Otse and Lobatse projects which are located just a few kilometres off the Kanye property. The most significant of these (K-Hill) comprises a manganese-rich black shale formation within the lower Taupone Group containing an Inferred Mineral Resource of 1.24Mt @ 27.3% MnO at a cut-off grade of 8.9% MnO prepared in accordance with Canadian National Instrument 43-101. (As reported by Giyani Metals Corp. in April 2020). A full Feasibility Study is currently under way on this project, with completion due in H1 2021.

Previous exploration and initial objective: Previous exploration on the Kanye property has highlighted numerous manganese prospects which have not been systematically explored. These include: the Moshaneng Borrow Pit where a number of grab samples assaying up to 71% MnO are reported from massive manganese mineralisation; the Mheelo prospect, where reports mention that "pure manganese ore to a depth of 1.8m was intersected and the base of the mineralization was not reached". Historical channel samples on the Mheelo Prospect (located within PL129/2019) yielded grades of 53.1% to 74.2% MnO; the Loltware Prospect, approximately 4km to the west of Mheelo where historical reports note manganese outcrop with sample assays up to 43.6% MnO; the Lowe Prospect, comprised of chert that yielded historical manganese assay results up to 58.5% MnO; a local talc mine where six large bulldozed trenches are reported with historical sample assays up to 54% MnO. It is the Company's intention upon completion of the Acquisition to undertake a programme of systematic exploration including reconnaissance geological mapping and sampling, accompanied by geophysical overview to evaluate the licences. Work will focus initially on PL 129/2019 close to the Giyani Metals K-Hill deposit where most of the known manganese occurrences are located. This will be followed by detailed sampling, trenching and RC drilling to evaluate confirmed high-grade occurrences.

Prospecting Licences: Prospecting Licences are issued for three (3) years with two (2) options to renew, each period not exceeding two (2) years, renewal applications are to be submitted no later than three months to the expiry of a Prospecting Licence. The holder of a Prospecting License is entitled to enter onto any land to which its Prospecting License relates and may prospect thereon for the minerals to which the Prospecting License relates, drill bore holes, make excavations, erect camps and put up temporary buildings for machinery necessary for prospecting purposes. The Prospecting Licences PLs 377/2018, 378/2018, 379/2018, 420/2018, 421/2018, 423/2018, 424/2018, 425/2018 and 129/2019, are for metals and were issued for initial three (3) year terms. PLs 377/2018, 378/2018, and 379/2018 expire 20 September 2021, PLs 420/2018, 421/2018, 423/2018, 424/2018, and 425/2018 expire 31 December 2021 and PL129/2019 expires 31 December 2022.

Colin Bird the Company's Chairman and Raju Samtani the Finance Director of the Company are also directors of Tiger Royalties and Investments Plc which will on completion of the Acquisition be issued 28,314,815 Bezant Shares at an issue price of 0.27 pence per share (£76,450) which is the same basis on which the Loan Creditors of Metrock will be settled at Completion. The issue of Bezant Shares to Tiger Royalties and Investments Plc is not a related party transaction as it is less than 5% on the AIM class tests. 

Colin Bird the Company's Chairman is a minority (2.73%) shareholder in Metrock and at Completion of the Acquisition will be issued 4,087,193 Bezant Shares at a deemed issue price of 0.27 pence per Bezant Share (approximate value £11,035) being 2.73% of the Ordinary Shares Consideration. The issue of Bezant Shares to Colin Bird is not a related party transaction as it is less than 5% on the AIM class tests. Colin Bird currently owns 87,500,000 Bezant Shares representing 2.49% of the issued share capital of the Company. Upon completion of the Acquisition Colin Bird will own 91,587,193 Bezant Shares representing 2.44% of the share capital of the Company as enlarged by the issue of the Ordinary Shares Consideration and the Loan Accounts Consideration Shares

Key Terms of the Acquisition

Parties:  The Company has entered into a conditional share purchase agreement with the Vendors dated 21 December 2020 to acquire 100% of the issued share capital of Metrock (the "Sale Shares") and 100% of the options issued by Metrock (the "Sale Options"). Metrock through its 100% owned Australian subsidiary Coastal Resources Pty Ltd (ACN 624 968 752) owns i) 100% of Cypress Sources Pty Ltd incorporated in Botswana which owns PLs 377/2018, 378/2018, 379/2018, 420/2018, 421/2018, 423/2018, 424/2018, 425/2018, and ii) 100% of Coastal Minerals Pty Ltd Incorporated in Botswana which owns PL 129/2019.

Consideration: The initial consideration payable by Bezant at completion of the Acquisition ("Completion") is i) £405,000 by the issue of 150,000,000 Bezant Shares  at a deemed issue price of 0.27 pence per Bezant Share  ("Ordinary Shares Consideration"), ii) the issue of 31,800,000 Unlisted Options in the share capital of Bezant. The options will have a strike price of 0.40 per share and will have an expiry date of 30 September 2024 ("Option Consideration"). The Company will also issue a total of 84,597,407 Bezant Shares to acquire Loans of £198,213 and settle creditors of £30,200 owed by Metrock which will be issued to i) two of the Vendors namely 50,422,222 Bezant Shares to Breamline Pty Ltd and 5,860,370 Bezant Shares to M&A Wealth Pty Ltd and  ii) 28,314,815 Bezant Shares to Tiger Royalties and Investments Plc (AIM:TIR) ("Loan Accounts Consideration Shares") (the "Consideration").

Deferred Consideration: Bezant has agreed to make a once off milestone payment to Breamline Pty Ltd and M&A Wealth Pty Ltd the original vendors of the Licenses (the "Original Vendors") should an Indicated Resource be delineated on any of Metrock's Prospecting Licenses (or on two contiguous licences) greater than 3 million tonnes of Manganese with a cut-off grade of 17% Manganese which can be refined into either Electrolytic Manganese Metal or Manganese Sulphate Monohydrate (the "Milestone Event"). Upon the Milestone Event, Bezant will issue £225 000 worth of Bezant Shares based on the 10 day VWAP prior to the announcement of the Milestone Event (the "Milestone Shares") with the Milestone Shares to be issued in equal portions to the Original Vendors.  

Metrock Creditors: The Company will at Completion settle creditors of Metrock of A$26,508 (approximately £14,900) in cash.

Net Smelter Return: Metrock has agreed to pay a Net Smelter Royalty of 2% on the Manganese Assets to Tiger Royalties and Investments Plc (AIM:TIR) which may be bought back from the holder  for £1 million or on a partial basis at a buy-out rate of £250,000 per 0.5% of the NSR.

Conditions Precedents: The Acquisition is subject to the following conditions precedent:

(a)  all consents and approvals that are required for the transfer of the Sale Shares and Sale Options to Bezant or its nominee being granted including Botswana Ministerial consent; and

(b)  the performance of all necessary formalities in relation thereto to give the transfer of the Sale Shares and Sale Options full legal effect.

Long Stop Date: The long stop date for the completion of the Conditions Precedents is 15 March 2021 or such later date agreed between the parties.

Lock up and Orderly Market: The Ordinary Shares Consideration and the Loan Accounts Consideration Shares will be subject to orderly market trading and release schedule as follows;

(a)  25% (twenty-five per centum)  will be freely tradeable on Completion and Settlement; 

(b)  25% (twenty-five per centum) 5 (five) months after Completion and Settlement; 

(c)  50% (fifty per centum) - the balance- 10 (ten months after Completion

(the "Lock-in Periods").

For 12 months from the expiry of the Lock-in Periods (the "Orderly market Period") the holders of the Ordinary Shares Consideration and the Loan Accounts Consideration Shares shall first offer any Bezant Shares which they wish to sell to Bezant who shall have 20 calendar days to arrange a sale after which period the Vendors will be free to sell in an orderly manner.

Ongoing Project assistance: Metrock's current management of Christian Cordier and Modisana Botsile will continue to provide ongoing management services post completion of the Acquisition. With effect from Completion Bezant will enter into a business relationship and general management agreement with Christian Cordier or his nominated business entity for £2,500 per month.  Bezant will also with effect from Completion enter into an agreement with Modisana Botsile for £2,500 per month in his role as country representative responsible for managing and maintaining communication and relationships with all relevant government departments including the mines department.

Representations and warranties: The share purchase agreement also contains certain commercial and other representations and warranties customary for a transaction of this nature.

Significant Shareholder: 

Christian Cordier is a director of Tonehill Pty Ltd, Coreks Super Pty Ltd and Breamline Pty Ltd which in aggregate own 172,339,867 Bezant shares representing 4.904% of the current issued share capital of Bezant. Upon completion of the Acquisition these three companies will, as shown in the table below own 310,636,749 Bezant shares which will represent 8.287% of the share capital of the Company as enlarged by the issue of the Ordinary Shares Consideration and the Loan Accounts Consideration Shares.

Further information on Metrock

Metrock Resources Ltd was incorporated in Australia on 18 July 2019 (ACN 634 959 274) and owns 100 per cent of its Australian subsidiary Coastal Resources Pty Ltd (ACN 624 968 752) which in turn owns i) 100% of Cypress Sources Proprietary Limited incorporated in Botswana which owns PLs 377/2018, 378/2018, 379/2018, 420/2018, 421/2018, 423/2018, 424/2018, and 425/2018, and ii) 100% of Coastal Minerals Proprietary Limited incorporated in Botswana  which owns PL 129/2019. For the period from incorporation to 30 November 2020 Metrock Resources Ltd made an unaudited loss of A$68,063 and as at that date had net liabilities of A$66,488.

For further information, please contact:

or visit http://www.bezantresources.com 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. 

Qualified Person:

Technical information in this announcement has been reviewed by Edward (Ed) Slowey, BSc, PGeo, technical director of Bezant Resources Plc . Mr Slowey is a graduate geologist with more than 40 years' relevant experience in mineral exploration and mining, a founder member of the Institute of Geologists of Ireland and is a Qualified Person under the AIM rules.  Mr Slowey has reviewed and approved this announcement.

TECHNICAL GLOSSARY 

The following is a summary of technical terms:

Note:

Beaumont Cornish Limited ("Beaumont Cornish"), which is authorised and regulated in the United Kingdom by the FCA, is acting as Nominated Adviser ("Nomad") to the Company in connection with the matters set out in this announcement and will not be acting for any other person or otherwise be responsible to any person for providing the protections afforded to clients of Beaumont Cornish or for advising any other person in respect of the matters set out in this announcement or any transaction, matter or arrangement referred to in this announcement. Beaumont Cornish's responsibilities as the Company's Nomad are owed solely to London Stock Exchange and are not owed to the Company or to any Director or to any other person in respect of his or her decision to acquire any shares in the Company.