26
February 2024
Tertiary Minerals plc
("Tertiary" or the "Company")
Agreement with Mwashia
Resources
The Company is pleased to advise
that a new joint venture agreement (the "JVA") has been signed with
local partner Mwashia Resources Ltd ("Mwashia") that will
consolidate ownership of the Jacks, Mukai and Mushima North
exploration licences (the "Licences") into a new Zambian company
("Newco") to be 90% owned by Tertiary's 96% owned subsidiary,
Tertiary Minerals (Zambia) Limited ("TMZ") and 10% by
Mwashia.
Currently all of the Licences are
held by Mwashia. Tertiary holds the right to a 90% joint venture
interest in the Jacks licence and options to earn a 90% joint
venture interest in each of the Mukai and Mushima North licences by
meeting certain expenditures and making payments totalling
US$60,000 to Mwashia, details of which were given in the Company's
news releases dated 18 November 2021 and 4 November
2022.
The JVA effectively relieves
Tertiary of the expenditure obligations due under its option
agreements on the Mukai and Mushima North licences, brings forward
the above payment to Mwashia and puts ownership of the Licences
under a common entity controlled by TMZ. Mwashia's 10% interest
will be carried by TMZ with carried costs being recovered as a
priority from future profits.
Commenting today executive
Chairman, Patrick Cheetham said:
"This joint venture agreement is a win-win for Tertiary and
Mwashia and a further example of the excellent working relationship
we have developed with our local partner which enabled the recent
agreement with KoBold Metals on the exciting Konkola West Project.
This new agreement simplifies our corporate structure in Zambia,
brings forward our 90% ownership holding in all three of the
Licences and creates a vehicle by which the partners can better
consider joint venture approaches from third parties on the
Licences."
Further information
Tertiary Minerals plc:
|
Patrick Cheetham, Executive
Chairman
|
+44 (0) 1625 838
679
|
SP
Angel Corporate Finance LLP
Nominated Adviser and Broker
|
Richard Morrison
|
+44 (0) 203 470 0470
|
Caroline Rowe/Harry
Davies-Ball
|
|
Peterhouse Capital Limited
Joint Broker
|
Lucy Williams
|
+ 44 (0) 207 469 0930
|
Duncan Vasey
|
|
Market Abuse Regulation
The information contained within
this announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication
of this announcement via Regulatory Information Service ('RIS'),
this inside information is now considered to be in the public
domain.
Detailed Information
Background
The Licences that are the subject of
the JVA are:
·
Exploration Licence 27069-HQ-LEL ("Jacks
Licence")
·
Exploration Licence 27066-HQ-LEL "(Mukai
Licence")
·
Exploration Licence 27068-HQ-LEL ("Mushima North
Licence")
Currently the Licences are held in
the name of Mwashia. The Jacks Licence is subject to a conditional
joint venture agreement whereby TMZ is entitled to a 90% interest
and where Mwashia holds a 10% carried interest. In the cases of the
Mukai and the Mushima North Licences, TMZ holds an option to earn
an initial 50% and the right to move to 90% ownership by meeting
certain expenditure obligations and making certain payments to
Mwashia.
Further details of these
arrangements can be found in the Company's news releases dated 18
November 2021 and 4 November 2022.
Key Terms of the new
JVA
The JVA between TMZ and Mwashia was
executed on 23 February 2024 and establishes a joint venture
between TMZ and Mwashia in respect of the Licences with the
following key terms:
1) A Zambian company,
"Newco", will be established with a share capital of ZMW15,000 to
be owned 90% by TMZ and 10% by Mwashia.
2) In consideration of
the issue of its 10% equity interest in Newco, Mwashia will
transfer all three of the Licences into Newco.
3) TMZ will fund or
arrange funding for 100% of all of the costs of the Joint Venture
and Newco with those costs attributable to Mwashia's 10% equity
interest being recovered from 80% of future cash flows.
4) On completion of the
transfer of the Licences to Newco, TMZ will enter into a
shareholder's agreement (the "Shareholders' Agreement") in the form
set out in the JVA.
5) Tertiary will be the
manager of the joint venture until such time as the Shareholders'
Agreement is signed, after which time TMZ will be entitled to
identify and appoint the Chief Executive of Newco.
6) The Board of Newco
will comprise three directors, two appointed by TMZ and one
appointed by Mwashia.
7) Any future dealing on
the Licences with a third party will require a majority vote for
shareholders, with one vote per share.
8) The JVA is subject to
the following conditions precedent:
a) the incorporation of
Newco;
b) approval of the terms
and conditions of the JVA and all ancillary documents thereto by
any relevant government authority, including but not limited to any
approval required under the Mining Act for the transfer of the
Licences;
c) Mwashia having
obtained the requisite tax clearance certificates from the Zambian
Revenue Authority for the payment of property transfer tax on the
transfer of the Licences to Newco or an exemption from the payment
of property transfer tax in the event that the Zambian Revenue
Authority considers the transfer of the Licences to be Mwashia's
consideration for its equity in Newco (as is anticipated);
and
d) approval of the terms
of the JVA by the boards of TMZ and Mwashia.
9) On satisfaction of
the conditions precedent, TMZ will make a payment to Mwashia of
US$60,000, a payment otherwise becoming due under the existing
options agreements with Mwashia.
10) TMZ is to hold a first right of
refusal over Mwashia's interest in Newco. Should Mwashia wish to
sell its interest in Newco to a third party then TMZ has the right
to match any offer that is made to Mwashia.
11) TMZ is to hold drag-along rights
over Mwashia's interest in Newco. Should TMZ wish to sell its
interest in Newco to a third party it can compel Mwashia to sell
its 10% equity interest on the same terms pro-rata to the interests
being sold.