TIDMMAFL
RNS Number : 7936H
Mineral & Financial Invest. Limited
28 November 2022
MINERAL & FINANCIAL INVESTMENTS LIMITED
Investment Update: Ascendant Closes US$15 Million Streaming
Financing Agreement with Sprott Private Resource for the Lagoa
Salgada Project
HIGHLIGHTS:
-- Ascendant secures Sprott Funding To Fund the Completion of Feasibility Study.
-- Mine Construction Decision Expected to be made by Q2-2023.
-- Provides Funding for M&FI's US$2.5M Earn-In Payment due in December 2022.
-- M&FI Secures Option to Possibly Sell Interest in Project
if in the best interest of shareholders.
GEORGE TOWN, CAYMAN ISLANDS, November 28, 2022 - Mineral and
Financial Investments Limited (LSE-AIM: MAFL) ("M&FI" or the
"Company") is pleased to report an investment update on a financing
package for the Lagoa Salgada Project, Portugal (the "Project").
The Project is held jointly by MAFL wholly owned subsidiary Mineral
and Financial Investments AG, Redcorp Empreedimentos Mineiros Lda
("Redcorp") and Ascendant Resources Inc ("Ascendant"), who are also
operating the project.
Stream Financing Agreement and Associated Secured Convertible
Loan Note
Ascendant has entered into a US$15 million metals stream
agreement (the "Stream Agreement") with Sprott Private Resource
Streaming and Royalty (B) Corp. ("Sprott") for the benefit of the
Lagoa Salgada VMS project located close to Lisbon Portugal (the
"Project"). This obligation is undertaken by Ascendant and M&FI
and Redcorp, are a party to the Stream Agreement o nly insofar as
to give effect of the undertaking by Ascendant .
Ascendant intends to use the proceeds from the Stream Agreement
to complete the ongoing 43-101 compliant feasibility study for the
Project, advance permitting activities: and for Ascendant's general
corporate and working capital purposes, which includes the
fulfillment of the earn-in.
The Stream Agreement provides for the sale and delivery to
Sprott of 1.75% of all metals produced from the Project at a rate
of 15% of the market price for gold until the delivery of 45,000
gold equivalent ounces. At which point the rate will be increased
to 75% of the market price. Ascendant also can buy down up to 50%
of the stream on or before 2 years following the date of
commencement of commercial production at the Project (as further
set out in the Stream Agreement) for up to US$10.5 million.
To facilitate funding in advance of commercial production, an
affiliate of Sprott has also issued a US$15 million secured note
(the "Note") to Ascendant, which bears interest at a rate of 10%
per annum, calculated and payable quarterly and which M&FI
understands will mature on the earlier of: i) the achievement of
commercial production at the Project together with certain other
conditions; and ii) November 25 , 2031.
Subject to the final approval of the TSX Exchange (the "TSX"),
Ascendant may elect to satisfy the payment of any accrued and
unpaid interest on the Note by the issuance of common shares of the
Ascendant (the "Common Shares") at a price per Common Share equal
to 95% of the volume weighted average price (the "VWAP") of the
Common Shares for the 5 trading days immediately prior to the date
payment of interest is due or any combination of cash and Common
Shares in the Ascendant's sole discretion up to a maximum of
32,617,109 Common Shares (subject to customary adjustment). Pledges
of shares and intercompany indebtedness were provided by Ascendant,
its wholly owned subsidiary, Ascendant Resources Portugal, and
Unipessoal LDA as security for the Note. In addition, Redcorp has
agreed to honor any transfer of shares between Ascendant and Sprott
should it occur. The Note security is intended to subordinate to
future project financing for the Project.
Ascendant has provided Sprott a first right of approval to
participate in any future stream or royalty type financing until
certain delivery thresholds are met.
Variation to Shareholders Agreement
As part of this arrangement, M&FI and Ascendant have also
amended the terms of the shareholders agreement made between (1)
Ascendant; (ii) M&FI; and (iii) Redcorp in relation to the
Project, to provide the following:
(a) That Ascendant shall not transfer, in whole or in part, any
of its rights or obligations under the Note or the Stream Agreement
to Redcorp without the written consent of M&FI; and
(b) M&FI shall have the right and option, but not the
obligation, to exercise an option within 6 months (plus 10 business
days) of the Stage Two Option Exercise Date (being the date when
Ascendant has earned 80% of Redcorp and being no later than June
22, 2023) to require Ascendant to purchase all, but not less than
all, of the shares in Redcorp at a defined price.
(c) The price would be an amount in US dollars, payable in cash,
equal to 5% of the post-tax net present value of the Project
provided in the feasibility study completed prior to the date of
exercise using a 10.5% discount rate (the "Put Option").
Fundamental Changes of Business
It is possible that the exercise of the Put Option could trigger
Rule 15 of the AIM Rule for Companies. This would require the
exercise to be conditional on the consent of its shareholders being
given in a general meeting, as well as a shareholder circular and
an announcement. Further updates will be provided in due course if
the Put Option is exercised.
Jacques Vaillancourt, Mineral and Financial Investment Limited's
President & CEO stated - "We are thrilled to be see our partner
- Ascendant, partnering with the very experienced team at Sprott
Streaming and Royalty to fully finance the feasibility study at
Lagoa Salgada . We believe Ascendant has made tremendous progress
throughout its technical work and studies for the Feasibility Study
at L a goa Salgada which leads us to expect to see a very robust
outcome. This should allow Ascendant to further advance the
development of the project to a construction decision . A
construction decision is expected to follow closely behind the
completion of the Feasibility Study. Importantly for M&FI, this
will allow Ascendant to fulfil one of its obligations under the
earn-in Agreement, that of paying M&FI US$2.5m on or before
December 22, 2023. Additionally, we have negotiated and agreed a
sale option agreement with Ascendant. Whilst we continue to explore
and consider all opportunities for our interest in the project,
nevertheless, this option provides M&FI the ability of
monetizing our remaining interest at a value linked to the project
Net Present Value (NPV) in the upcoming Feasibility Study".
FOR MORE INFORMATION:
Jacques Vaillancourt, Mineral & Financial Investments Ltd. +44 7 802 268 247
Katy Mitchell, WH Ireland Limited +44 207 220 1666
Jon Belliss, Novum Securities Limited +44 207 399 9400
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