TIDMSAV
RNS Number : 6343X
Savannah Resources PLC
01 September 2020
1 September 2020
Savannah Resources Plc
('Savannah' or the 'Company')
Divestment of the Company's Copper Projects in Oman
Savannah Resources plc (AIM: SAV, FWB: SAV and SWB: SAV), the
resource development company, is pleased to announce that following
the completion of its strategic review it has agreed to divest its
copper projects in Oman (the "Projects") to Force Commodities Ltd
("Force"), an ASX listed mine development company, pursuant to the
terms of a share purchase agreement (the "Transaction").
Transaction Highlights
-- Consideration and other payments (subject to Settlement):
o 50,000,000 new ordinary shares to be issued by Force (deemed
issue price of 1 cent per Force share)
o Preferential payment of AUD$3,500,000 of an existing loan from
cash flow from production
o Payment of a 1.0% net smelter royalty on future metal
sales
-- Settlement of The Transaction is subject to certain
conditions being achieved or waived, and is expected to be
completed in October 2020
-- Savannah retains exposure to the Projects' economic success
David Archer, Savannah's CEO commented: "With the Company's
focus moving to the further development and subsequent
commercialisation of the Mina do Barroso Lithium project in
Portugal, which continues to increase in significance from a
European battery value chain perspective, an opportunity has arisen
to divest our Omani Copper Projects to Australian listed company
Force Commodities. The divestment allows us to retain exposure to
the upside of the Projects through the shareholding in Force,
together with a loan and royalty payable when the Projects go into
production.
"Force has recently restructured its Board and we are very
excited by this opportunity to work with the impressive team that
Chairman Jess Oram has established and which sees the CEO role
filled by mining industry expert Simon Pooley, who brings over 30
years of broad international experience encompassing roles in
corporate, mine development, operations, and exploration areas. We
look forward to seeing the Projects developed to their full
potential under the stewardship of Force."
Simon Pooley, Force's CEO commented "The acquisition of the
Projects is a major milestone in cementing Force's position as a
multi-commodity exploration and development company and represents
the first step in our strategy of establishing the Company as a
copper producer. The Transaction provides Force with exposure to
one of the most prospective Ophiolite belts in the world."
"We believe that with the application of systematic exploration
and further commercial transactions, the opportunity exists in Oman
to become a significant mid-tier copper producer."
Details of the Transaction
The Transaction constitutes a substantial transaction under AIM
Rule 12. The key terms are summarised below:
-- Consideration (payable at Settlement):
o Force to issue 50,000,000 new shares in the capital of Force
to Savannah at a (deemed issue price of AUD$ 1 cent per Force
share). These are not subject to any trading restrictions, but
Savannah does not intend to divest these.
-- Payments from production:
o Preferential payment of AUD$3,500,000 in cash of an existing
loan to the Company, which was announced on 10 April 2014, from
cash flow generated from production on Block 5
o Payment of a 1% net smelter royalty on metal sales (the 1% is
pertaining to Force's proportional ownership of each project)
-- Conditions for Settlement
o Settlement of the Transaction ("Settlement") is subject to
certain conditions being achieved or waived, and notably includes
Force undertaking the steps necessary to be re-admitted to trading
on the ASX and obtaining certain consents in Oman. This is expected
to be completed in October 2020.
-- Legal entity structure divestment
o At Settlement the Company will transfer 100% ownership of
Savannah Resources B.V. which in turn holds Savannah's interest in
the Projects (being 65% in Block 5 via its shareholding in Al
Fairuz Mining LLC and 51% (earning up to 65%) in Block 4 via its
shareholding in Al Thuraya Mining LLC.
About Force
Force is a base metals exploration and development focused
company headquartered in Perth, Western Australia and are listed on
the Australian Stock Exchange (ASX:4CE) but are currently in
voluntary suspension pending relisting. Force went into voluntary
suspension in January 2020 to restructure and refinance the company
and to change the senior management of the company following the
failure of several of their business opportunities and the
inability to raise further capital. Over the past 6 months Force
has been undergoing a structured process to relist the company
including changing senior management and identifying new sources of
capital. Force has steadily gained momentum during the restructure
through the identification of a high-quality project for
acquisition and appointments of high calibre senior professionals
to its Board and Executive. The culmination of the relisting
process is the injection of new funds (a process overseen by
boutique corporate advisory firm 62 Capital) based on the
acquisition of the Projects.
Regulatory Information
In its 2019 Financial Statements the Company reported a loss of
GBP0.5m for the year, and assets of GBP5.5M (primarily intangible
exploration assets) in respect of the Projects being divested under
the Transaction.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
**ENDS**
For further information please visit www.savannahresources.com
or contact:
Savannah Resources PLC Tel: +44 20 7117 2489
David Archer, CEO
SP Angel Corporate Finance LLP (Nominated Tel: +44 20 3470 0470
Advisor)
David Hignell / Charlie Bouverat
finnCap Ltd (Joint Broker) Tel: +44 20 7220 0500
Christopher Raggett
WH Ireland Limited (Joint Broker) Tel: +44 20 7220 1698
James Joyce/ Matt Chan (Corporate Finance)
Adam Pollock/ Jasper Berry (Corporate
Broking)
St Brides Partners Ltd (Financial PR) Tel: +44 20 7236 1177
Charlotte Page / Cosima Akerman
About Savannah
Savannah is a diversified resources group (AIM: SAV) with a
portfolio of energy metals projects - lithium in Portugal and
copper in Oman - together with the world-class Mutamba Heavy
Mineral Sands Project in Mozambique, which is being developed in a
consortium with the global major Rio Tinto. The Board is committed
to serving the interests of its shareholders and to delivering
outcomes that will improve the lives of the communities we work
with and our staff.
The Company is listed and regulated on AIM and the Company's
ordinary shares are also available on the Quotation Board of the
Frankfurt Stock Exchange (FWB) under the symbol FWB: SAV, and the
Börse Stuttgart (SWB) under the ticker "SAV".
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END
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