TIDMFCR TIDMMAFL
RNS Number : 5889K
Ferrum Crescent Ltd
22 September 2016
22(nd) September 2016
Ferrum Crescent Limited
("Ferrum Crescent", the "Company" or the "Group")(ASX, AIM, JSE:
FCR)
Exercise of Option to Acquire Interests in Lead-Zinc Exploration
Projects in Spain & Planned Work Programme
Highlights:
Acquisition of GoldQuest
-- Ferrum Crescent has now acquired 100 per cent. of the share
capital of GoldQuest Iberica, S.L. ("GoldQuest") further to the
exercise of its option.
-- GoldQuest owns 100 per cent. of two lead-zinc exploration
projects in the provinces of Le n and Galicia, in historic Spanish
mining areas (the "Iberian Projects").
-- Consideration comprised GBP326,500 in cash and the issue of
100 million new ordinary shares in the capital of Ferrum
Crescent.
2016 Spanish zinc work programme
-- Analysis and re-interpretation of existing historic data on
the Iberian Projects to commence in September 2016.
-- Planned work programme, to be overseen by the Company's
Senior Project Adviser, Merlin Marr-Johnson, to comprise:
- re-mapping of the main Toral Project area applying
re-interpreted geological understanding of the regional controls on
mineralisation;
- in-fill surveys over the main prospect area where detailed
soil geochemistry has not previously been conducted;
- structural mapping of the existing adits, outcrop and the
nearby mineralisation occurrences in order to gauge the balance
between local (not fully tested) and regional (well documented)
controls on mineralisation;
- re-logging of historical drill-core and re-assaying of areas
where incomplete assays were taken previously in order to seek to
identify potential new shallow high grade targets at the Toral
Project;
- creation of a revised geological model incorporating existing
and new geological data (geochemistry, structural interpretation,
assays, logs, maps); and
- generation of a highly targeted drill plan, focused on
high-grade near-surface ore shoots linking known surface
occurrences and known high-grade mineralisation at depth, for
testing in 2017.
Justin Tooth, Executive Chairman of Ferrum Crescent,
commented:
"We are delighted to have completed the acquisition of such
exciting lead-zinc assets in Spain with significant amounts of
historic geological and exploration data available. The acquisition
process has taken longer than initially anticipated, however
GoldQuest is now well placed for the next stage of its development
as part of our group. Our project team has designed a low-cost work
programme focused on testing our assumptions, with respect to
various extrapolations made by prior owners, through the structured
re-interpretation and analysis of the original raw data. I look
forward to announcing our progress with this initial work programme
in due course."
Merlin Marr-Johnson, Ferrum Crescent's Senior Project Adviser,
commented:
"Though high grade ore has historically been mined at Toral, the
project has not previously been systematically explored. Historic
soil geochemistry surveys are incomplete and the principal logic of
regional structural controls on mineralisation have not yet been
applied, despite evidence of numerous artisanal workings at surface
and drill intersections at depth. Historic drilling has not
seemingly tested shallow targets nor intersected the full thickness
of the mineralised corridor. I believe that the Toral asset, in
particular, has real potential to host a substantial resource and
it will therefore be the primary focus of our planned structured
work programme as we seek to refine our geological theories before
commencing drilling activities."
Ferrum Crescent, the ASX, AIM and JSE quoted metals project
developer, announces that, further to its announcements of 16
February 2016, 22 July 2016 and 31 August 2016, TH Crestgate GmbH
("Crestgate") has now satisfactorily addressed the conditions
precedent to enable Ferrum Crescent to proceed to exercise its
option and complete the acquisition of 100 per cent. of the issued
share capital of Crestgate's indirect wholly-owned subsidiary,
GoldQuest (the "Acquisition").
GoldQuest, a private company incorporated in Spain, owns 100 per
cent. of licences covering 2,024ha in the Province of Le n (the
"Toral Project") and licences in the Province of Galacia (the "Lago
Project"), such licence areas in northern Spain having high
prospectivity for lead and zinc.
Further to completion of this Acquisition, Ferrum Crescent's
project team led by Merlin Marr-Johnson will now swiftly progress
with a structured work programme as detailed above. Mr Marr-Johnson
has over twenty years' experience in the resources sector with a
BSc. (Hons) in Geology and an MSc. (DIC) in Mineral Deposit
Evaluation. He is a Fellow of the Geological Society.
Consideration for GoldQuest and further details of the
Acquisition
Pursuant to the terms of the previously announced option and
sale agreement, Ferrum Crescent has paid GBP326,500 cash
consideration to Crestgate's wholly owned subsidiary, GoldQuest
Mining (Spain) Corp. (the "Vendor"), from its existing cash
resources. In addition, Ferrum Crescent will issue 100 million new
ordinary shares (the "Consideration Shares") of no par value each
in the capital of Ferrum Crescent to the Vendor in settlement of
the share element of the consideration. The Company has applied to
ASX for a waiver to allow the issue of the Consideration Shares on
the basis of the shareholder approval obtained at the general
meeting on 6 April 2016. If this waiver is not granted, the Company
will convene a meeting for shareholders to approve the issue of the
Consideration Shares or otherwise issue the Consideration Shares as
and when it has capacity under Listing Rule 7.1.The Consideration
Shares represent approximately 5.95 per cent. of the Company's
enlarged issued share capital as enlarged by the issue of such
shares, will be fully paid and will rank pari passu in all respects
with the Company's existing ordinary shares. Pursuant to the terms
of the SPA, Ferrum Crescent is required to issue the Consideration
Shares to the Vendor within the next 8 days, failing which the
Company has agreed to pay the Vendor a late payment fee of
approximately GBP11,100 and a further US$1,000 per day
thereafter.
Ferrum Crescent, Crestgate and the Vendor have entered into a
share purchase agreement ("SPA") with respect to the Acquisition,
pursuant to which the Vendor has, inter alia, provided certain
customary warranties to the Company in respect of GoldQuest and the
Iberian Projects. Such warranties are subject to certain financial
caps and other limitations. In addition, the Vendor has agreed that
it shall not, during a period of twelve months following
completion, sell, transfer or otherwise dispose of any of the
Consideration Shares, except to another member of its group.
Furthermore, the SPA provides for Crestgate to have the right from
completion to nominate an appointee to the board of Ferrum Crescent
as a non-executive director (subject to regulatory approvals and
the approval of the Company's Nominated Adviser) for so long as its
group continues to hold 3 per cent. or more of the Company's issued
share capital from time to time.
In connection with the Acquisition process, the Vendor,
Crestgate, Lundin Mining Corporation ("Lundin") and others, entered
into an assignment and restatement agreement (the "Assignment
Agreement") with respect to certain residual historic rights held
by Lundin and its subsidiary over the Toral licence area. Pursuant
to the Assignment Agreement, the Vendor is required to:
i) make a one-off payment of US$2.5 million to Lundin at such
time as a decision is made to proceed with the construction of a
mine on the Toral licence area;
ii) make a further one-off payment of US$5 million to Lundin
following commencement of commercial production (as defined in the
agreement) on the Toral licence area; and
iii) pay Lundin's subsidiary a 1.5 per cent. net smelter return
royalty upon commencement of commercial production on the Toral
licence area.
The Vendor's abovementioned obligations to Lundin under the
Assignment Agreement are guaranteed by Crestgate and pursuant to
the terms of the SPA will be assumed by the Company within twelve
months of completion.
Application to trading
Application will be made for quotation of the abovementioned
Consideration Shares on the Australian Securities Exchange and the
JSE Limited and to the London Stock Exchange plc for such shares to
be admitted to trading on AIM ("Admission"). A further announcement
in respect of the issue of the Consideration Shares and application
for their quotation on the ASX and JSE and to trading on AIM will
be made in due course.
For further information on the Company, please visit
www.ferrumcrescent.com or contact:
Ferrum Crescent Limited
Justin Tooth, Executive Chairman
Grant Button, Company Secretary
T: +61 8 9474 2995
UK enquiries:
Laurence Read (UK representative)
T: +44 7557 672 432
Strand Hanson Limited (Nominated Adviser)
Rory Murphy/Matthew Chandler
T: +44 (0)20 7409 3494
Beaufort Securities Limited (Broker)
Elliot Hance
T: +44 (0)20 7382 8300
Bravura Capital (Pty) Ltd (JSE Sponsor)
Doné Hattingh
T (direct): +27 11 459 5037
Notes to Editors:
Further Information on GoldQuest and the Iberian Exploration
Projects
GoldQuest is a private company incorporated in Spain which owns
100 per cent. of both the Toral Project and the Lago Project in the
provinces of Le n and Galicia in northern Spain, each having high
prospectivity for lead and zinc.
Toral Project
The Toral Project has been extensively explored historically by
its previous owners Portex Minerals Inc. and Lundin Mining S.L. and
the 2,024ha of mineral rights contains extensive high grade zinc
mineralisation. Located in north-west Spain, approximately 400km
north-west of Madrid, the project's licence area hosts excellent
road, rail and power infrastructure and is situated in a known
historic mining jurisdiction. The asset also has a pre-existing NI
43-101 resource estimate reported by Micon International Co.
Limited on 30 April 2012.
Lago Project
The Lago Project is located approximately 54km to the north-east
of the Toral Project. Historical investigations completed by or on
behalf of the Spanish mining firm, Exploracion Minera International
Espana S.A. ("EXMINESA"), between 1985 and 1990, indicated that
mineralisation at the Lago Project may be similar to that
encountered at the Toral Project with vertical, lenticular bodies
(probably more than one) approximately 800m long by 300m wide.
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 ("MAR").
This information is provided by RNS
The company news service from the London Stock Exchange
END
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