10
July 2024
Off-take
Agreement
and Trade Finance
Facility
Aterian Plc
("Aterian" or the
"Company")
Aterian plc
(LSE:
ATN), the critical metal-focused
exploration and development company, is pleased to announce the successful completion of a metal
concentrate Off-take Agreement
("Agreement") by its
Rwandan subsidiary, Eastinco Limited
("Eastinco") with a
major international trading house. This key strategic partnership
allows for the sale and distribution of Eastinco's tantalum-niobium
and tin concentrate secured from Rwandan-based artisanal and small
scale mining ("ASM") companies and cooperatives, significantly
enhancing the company's ability to generate revenue from
aggregating and upgrading ASM concentrate
supplies.
In conjunction with this
Agreement, Aterian has agreed terms for a US$ 1.0 million secured
trade finance debt facility ("Facility") from a
financial investor. This Facility is a 5-month revolving debt
facility with 14.4% annual interest rate, subject to the completion
of due diligence and legal documentation. The Facility will provide
the Company with the necessary working capital requirements for
trading operations, ensuring seamless execution and operational
efficiency. Confidentiality has been agreed amongst the parties to
protect our mutual commercial interests.
Highlights:
· The off-take agreement
negotiated with a major international commodity trading house.
· Secured a committed
buyer for mineral concentrate products with no price risk and a
minimum guaranteed fee based on volume deliveries.
· Eastinco's management
has spent the past year working to develop key relationships with
various miners across Rwanda, seeking to improve and enhance their
productivity and thereby securing the supply of metal concentrates.
· Eastinco has secured
the ability to sell the metal concentrate in Kigali, thereby
significantly removing or reducing the typical transport,
logistics, and funding costs and risks associated with
international deliveries.
· Coltan concentrate will
be aggregated and upgraded at Eastinco's existing facility in
Kigali to meet the required delivery specifications and provide a
stable revenue stream for the company.
Trade Finance
Facility
The Facility provides the
necessary funding to support the trading operations. This Facility
will cover all working capital requirements, ensuring that Aterian
can meet its delivery obligations under the off-take agreement
without financial strain. The Facility has a funding rate of 14.4%
per annum and is repayable from trade receivables every five
months. The investor has the option to convert the Facility into
Aterian equity at a fixed price of £1.00 per share and will receive
warrants representing 30% of drawdown amounts; the warrants convert
into equity at a fixed price of £1.00 per share and have a term of
three years.
Charles Bray, Chair of
Aterian plc, commented:
"We are delighted
to announce these significant milestones for Aterian. The off-take
agreement not only validates the quality of our relationships in
Rwanda but also ensures a reliable sales channel with zero price
risk. Coupled with the secured trade finance facility which offers
the investor a fixed price conversion feature at a significant
premium of £1.00 per share, we are well-positioned to scale our
operations and drive revenue growth along with the margins from
trading. This "fourth leg" of our strategy has been long in
the making, but we have been determined to do it in a manner which
takes minimal risk while delivering revenue in a fully
traceability-compliant model. Ultimately, we aspire to have trading
generate the revenue to support our advancing exploration efforts
in Rwanda, Morocco, and Botswana. We believe these strategic
partnerships in trading will supplement and contribute to our
strategic exploration partnerships and the long-term success and
sustainability of Aterian."
- ENDS -
This announcement contains information which,
prior to its disclosure, was inside information as stipulated under
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations
2019/310 (as amended).
For further information, please visit the
Company's website: www.aterianplc.com or
contact:
Aterian Plc:
Charles Bray, Executive Chairman - charles.bray@aterianplc.com
Simon Rollason, Director - simon.rollason@aterianplc.com
Financial Adviser and Joint
Broker:
Novum Securities Limited
David Coffman / George Duxberry
Colin Rowbury
Tel: +44 (0)207 399 9400
Joint Broker:
SP Angel Corporate Finance LLP
Ewan Leggat / Kasia Brzozowska
Tel: +44 20 3470 0470
Financial PR:
Bold Voodoo
- ben@baldvoodoo.com
Ben Kilbey
Tel: +44 (0)7811 209 344
Notes to Editors:
About Aterian plc
www.aterianplc.com
Aterian plc is an LSE-listed exploration
and development company with a diversified African portfolio of
critical metals projects.
Aterian plc is actively seeking to acquire and develop new
critical metal resources to strengthen its existing asset base
whilst supporting ethical and sustainable supply chains as the
world transitions to a sustainable, renewable future. The
supply of these metals is vital for the development of the
renewable energy, automotive and electronic manufacturing sectors
that are playing an increasing role in reducing carbon emissions
and meeting climate ambitions globally.
The Company has entered into a joint venture
agreement with Rio Tinto Mining and Exploration
Limited for Rio Tinto to earn into the HCK project in
southern Rwanda and holds two further partnerships
in Rwanda exploring and developing
lithium-tantalum-niobium-tin mining operations. Aterian currently
holds a portfolio of multiple copper-silver and base metal projects
in the Kingdom of Morocco, with a total area of 897
km2. In January 2024, the Company announced the
acquisition of a 90% interest in Atlantis Metals. This private
Botswana registered company holds seven mineral prospecting
licences for copper-silver in the Kalahari Copperbelt and three for
lithium brine exploration in the Makgadikgadi Pans region. The
total licence area in Botswana is 4,486 km2.
The Company's strategy is to seek new
exploration and production opportunities across the African
continent and to develop new sources of critical mineral assets for
exploration, development, and trading.
