TIDMLEX
RNS Number : 3346Z
Lexington Gold Limited
15 May 2023
15 May 2023
Lexington Gold Ltd
("Lexington Gold" or the "Company")
Proposed Acquisition of White Rivers Exploration (Pty) Ltd
Lexington Gold (AIM: LEX), the gold exploration and development
company with projects in North and South Carolina, USA, is pleased
to announce that, on 13 May 2023, it entered into, via its wholly
owned recently incorporated subsidiary, conditional share
subscription and loan agreements to acquire 76 per cent. of White
Rivers Exploration Proprietary Limited (" WRE ") an exploration and
development company with significant gold assets in South
Africa.
Highlights :
Summary information on WRE
-- WRE is a major tenement holder in the Witwatersrand gold
fields of South Africa, with tenement interests covering
approximately 89,499 hectares.
-- WRE's current tenement interests have been estimated by WRE's
management to contain potential resources of over 37 million ounces
of gold (non-JORC/non-SAMREC nor other international standard
compliant estimate). WRE has focussed its exploration efforts in
particular on shallow (200 to 1,200m depth) deposits close to well
established infrastructure (refer to Table 1 below for further
details).
-- WRE's tenement interests comprise 10 prospecting rights (six
granted licences and four renewal applications) which are grouped
into five projects.
-- WRE has an incorporated Joint Venture ("JV") arrangement with
Avgold Limited a subsidiary of Harmony Gold Mining Company Limited
(JSE:HMY) ("Harmony Gold"), the largest gold producer by volume in
South Africa. Such JV project, referred to as the Jelani Resources
JV, has a non-code compliant independently estimated resource of
6.02 million ounces of gold at an average grade of 6.47 g/t.
-- The Witwatersrand gold fields area was historically the
largest single gold producing district in the world. Total
historical gold production over a century of mining activity was 2
billion ounces. It is estimated that a further 1.2 billion ounces
of gold resource still remains in the Witwatersrand.
-- WRE's Kroonstad project, has an independently estimated
non-code compliant gold exploration resource target of between 6.06
million ounces and 62.41 million ounces with a gold grade of
between 4.96 g/t and 11.54 g/t and potentially constitutes a new
Witwatersrand goldfield.
-- WRE is believed to own the world's largest Witwatersrand
drillhole data base compiled over a ten-year period and consisting
of some 2,500 mother holes with their associated assays.
-- WRE was established by well-known Australian explorer, Mark
Creasy, in 2002, with whom the Company has on 12 May 2023 entered
into a one-year unsecured loan agreement for a principal amount of
GBP0.3m (the "Mark Creasy Loan Agreement"). Mr Creasy will become a
significant shareholder of Lexington Gold on completion of the
proposed acquisition.
Edward Nealon, Lexington Gold's Chairman, commented :
"The Board is very pleased to announce this proposed
acquisition, which the Directors consider to be a substantial
development for the Company. WRE's assets are located in a
world-renowned gold producing area known both to me personally and
our South African based CEO, Bernard Olivier. The Witwatersrand
gold fields have been the source of almost a third of the world's
gold production since 1886 and are estimated to still hold over one
billion ounces . The results of exploration activities across these
tenements have so far been extremely encouraging, with early stage
assessments indicating sizeable non-code compliant gold resources
across the five projects.
" The Board believes that this transaction has significant
potential for creating shareholder value, as we seek to progress
WRE's assets into an independently verified multi-million ounce
JORC-compliant resource base . The Company will also continue with
its current exploration work across its highly promising Carolina
projects ."
Bernard Olivier, Lexington Gold's CEO, commented :
"This proposed acquisition of WRE, with its substantial
portfolio of gold assets, represents a tremendous opportunity for
Lexington Gold. The projects are all considered shallow level in
terms of gold mining in South Africa and the portfolio comprises,
in our view, one of the best gold asset packages in the world. We
also look forward to working closely with Mark Creasy who will
become a significant shareholder of Lexington Gold on completion.
Mr Creasy is considered to be one of Australia's most successful
mining entrepreneurs and we are delighted to welcome him as a
supportive partner in our enlarged business."
Details of the Proposed WRE Transaction
As indicated above, Lexington Gold, via its subsidiary, has
entered into conditional share subscription and loan agreements to
acquire 76 per cent. of WRE, an exploration and development company
with significant gold assets in South Africa (the "WRE Share
Subscription and Loan Agreements"), as well as directly into
conditional loan assignment agreements with each of Mark Creasy and
Sunswell Holdings Pty Ltd. ("Sunswell") to acquire all of the
outstanding loans they have historically made to WRE (the "WRE Loan
Assignments") (together, the "WRE Acquisition and Loan
Agreements"). The aggregate amount payable by the Company under the
WRE Acquisition and Loan Agreements is GBP0.3m, by way of the
provision of a subordinated loan to WRE, and up to GBP6.4m to be
settled by way of the issue of new common shares in Lexington Gold
based on certain pre-determined milestones being satisfied with any
such shares being subject to a 12-month lock-up arrangement
followed by a 12-month orderly market arrangement from the date of
their issue (the "Proposed WRE Transaction").
For so long as Mr Creasy is interested in 10 per cent. or more
of Lexington Gold's issued common shares post completion of the
Proposed WRE Transaction, he shall be entitled to nominate a
director to the Company's Board. Mr Creasy has no existing
shareholding or other interest in the Company.
The WRE Acquisition and Loan Agreements are conditional, inter
alia, on approval from Lexington Gold's shareholders. The Company
will make a further announcement when the formal notice of the
requisite general meeting is published in respect of seeking such
shareholder approval.
WRE was established by well-known Australian explorer, Mark
Creasy, in 2002, with whom the Company has on 12 May 2023 entered
into a one-year unsecured loan agreement for a principal amount of
GBP0.3m (the "Mark Creasy Loan Agreement").
WRE Share Subscription and Loan Agreements :
As part of the transaction, Lexington Gold is required to
advance a GBP0.3m subordinated loan to WRE (the "WRE Loan") and
will be issued 76 per cent. of WRE's voting shares with the
remaining 24 per cent. to be issued to Lexington Gold's Broad-Based
Black Economic Empowerment ("BBBEE") partners.
The WRE Loan will be used to settle all existing WRE creditors
other than Mark Creasy and Sunswell and the costs associated with
WRE's current South African business rescue process.
The WRE Share Subscription and Loan Agreements are conditional,
inter alia, on the receipt of approval from Lexington Gold's
shareholders at a duly convened general meeting, formal
notification of which will be announced and sent to shareholders in
due course.
WRE Loan Assignments :
The GBP6.4m aggregate amounts payable in respect of the
assignment of Mark Creasy's loans with a face value of ZAR197m
(approximately GBP8.5m) and Sunswell's loans with a face value of
US$2m (approximately GBP1.59m) advanced historically to WRE are to
be settled by the issue of new common shares in Lexington Gold (the
" Consideration Shares ").
The Consideration Shares will be issued based on certain
pre-determined milestones being achieved, as described in the
Appendix to this announcement, and will be subject to a 12-month
lock-up arrangement and thereafter a 12-month orderly market
arrangement from the date of their issue.
The WRE Loan Assignments are subject to Lexington Gold
shareholders' approval.
Mark Creasy Loan Agreement :
Mr Mark Creasy, who is cited by Forbes ( www.forbes.com ) as
being "one of Australia's most successful prospectors", is the
founder, controlling majority shareholder and the main financier
and creditor of WRE.
Mr Creasy has, on 12 May 2023, entered into a GBP0.3m, one-year
unsecured, loan agreement with Lexington Gold, at an interest rate
of 7.5 per cent. per annum which will accrue until the scheduled
maturity date.
Additional Information on WRE's assets
1. Technical summary of WRE's projects
WRE is a major tenement holder in the Witwatersrand gold fields,
with tenement interests covering approximately 89,499 ha. Such
tenements comprise 10 prospecting rights (six granted licences and
four renewal applications), which are grouped into five projects,
including the Jelani Resources JV which is an incorporated joint
venture arrangement with Avgold Limited, a subsidiary of Harmony
Gold . The areas of interest represent brownfield and greenfield
targets predominantly located in the Free State Province and one
project situated in the North West Province. The main commodity to
be explored for is gold, with uranium as a possible by-product.
The Witwatersrand gold fields have accounted for more than a
third of the world's total gold production since 1886 and,
collectively, represent the world's largest single gold producing
district. It is estimated that the Witwatersrand gold fields have
produced over 2 billion ounces of gold during over a century of
mining activity and that approximately 1.2 billion ounces of gold
still remains in situ.
WRE has a database with a vast number of borehole logs
(approximately 2,500 mother holes) and associated assays from
historically drilled holes in the Witwatersrand Basin. Such
borehole database was assembled from 25 different sources and is
considered by WRE to be the most comprehensive collection of
surface Witwatersrand exploration drilling data within South
Africa.
WRE's existing licences and renewal applications are divided
into five projects (see Figure 1 below) namely:
1. Jelani Resources JV (JV with Harmony Gold);
2. Kroonstad;
3. Bothaville NE;
4. Klerksdorp South; and
5. Ventersburg.
Jelani Resources JV :
The Jelani Resources JV is located adjacent to Harmony Gold's
Target Mine lease area in the north-western portion of the Welkom
Goldfield. It comprises one Prospecting Right and is currently
jointly held by WRE (65%) and Avgold Limited (35%). The Jelani
Resources Prospecting Right covers an area of 956 ha (see Table 2
below).
In 2018, WRE established an independently estimated gold
resource attributable to the Jelani Resources JV but such
estimation has not yet been formally verified or accepted by the
partners. A lthough not audited/code compliant, the resource
estimate comprised 6.02Moz of gold, of which approximately 2.95Moz
would potentially be attributable to WRE if all hurdles in respect
of the JV are ultimately achieved, including successful feasibility
studies, a decision to mine being made by the JV partners and if
WRE choses to participate in the funding of future development
costs to retain a 49 per cent. interest in the JV. The Mineral
Resources within the one kilometre Buffer Zone are attributable
solely to Harmony Gold (100%). Harmony Gold has previously
indicated that the Jelani Resources JV, subject to the successful
completion of a bankable feasibility study, will be afforded the
opportunity to mine the resources in the Buffer Zone on tribute
once a commercially acceptable future agreement has been negotiated
between the parties.
Non-JORC/Non-SAMREC compliant resource estimates
WRE's internally estimated non-JORC/non-SAMREC compliant
resources for all five of its projects are set out in Table 1
below.
Table 1 : WRE's non-code compliant Resource estimates derived
utilising WRE's internal historical database
Project Mt Grade Grade Au Moz
cmg/t Au g/t
------------------ ------ ------ ------- -------
Jelani Resources
JV* 14.18 717 6.47 2. 95
Kroonstad 31 .00
Bothaville NE 6.8 330 3.33 0.73
Ventersburg 10.55 521 6.91 2.34
Klerksdorp South 0.52
------------------ ------ ------ ------- -------
Total : 37.54
Notes:
* - WRE's attributable resource post a potential future decision
to mine (WRE assumed retained JV interest of 49%; Harmony Gold
51%).
WRE's Kroonstad project, has an independently estimated non-code
compliant gold exploration target of between 6.06 million ounces
and 62.41 million ounces with a gold grade of between 4.96 g/t and
11.54 g/t and potentially constitutes a new Witwatersrand
goldfield.
Table 2 : WRE's Prospecting Licences and Prospecting Right
Renewal Applications
Project Tenement Area Status Expiry date
(hectares)
----------------- -------------------- ----------- ----------------- -----------
Jelani Resources FS 30/5/1/1/2/10350 956 Renewal Submitted *
PR
Kroonstad FS 30/5/1/1/2/889 13,845 Renewal Submitted *
PR
Kroonstad FS 30/5/1/1/2/10520 12,429 Renewal Submitted *
PR
Kroonstad FS 30/5/1/1/2/10519 22,193 Executed 28-May-24
PR
Bothaville FS 30/5/1/1/2/10578 9,510 Executed 03-Mar-24
PR
Bothaville FS 30/5/1/1/2/10579 9,119 Executed 17-Mar-24
PR
Ventersburg FS 30/5/1/1/2/888 8,418 Executed 09-Dec-23
PR
Ventersburg FS 30/5/1/1/2/10489 8,965 Executed 09-Dec-23
PR
Ventersburg FS 30/5/1/1/2/10528 2,248 Executed 21-Aug-24
PR
Klerksdorp NW 30/5/1/1/2/11335 1,816 Renewal Submitted *
PR
----------------- -------------------- ----------- ----------------- -----------
Total 89,499
--------------------------------------- ----------- ----------------- -----------
* - renewals of prospecting rights are for 3 years from the grant
date of the renewal.
Figure 1 : WRE's tenement interests located in the Witwatersrand
Goldfields (including major estimated historic gold production
.
Figure 2 : Location of Jelani Resources JV relative to Harmony
Gold's existing Target Mine operations . Historically mined out
areas, shaft positions and underground developments are indicated
.
2. Proposed Work Programme
The Company's Directors believe that a multi-million ounce JORC
2012/SAMREC compliant Mineral Resource Estimate (" MRE ") can be
established in respect of WRE's asset portfolio and intends,
subject to funding, for the Company to:
-- Undertake detailed analysis and modelling of the existing
geological database and extensive drilling data set; and
-- Establish and implement the requisite work required to
convert the current non-JORC/non-SAMREC complaint Mineral Resources
into a code compliant MRE including verification and duplication
drilling, as appropriate, as well as the re-sampling and assaying
of historical drill core, where possible.
Furthermore, the Directors plan to unlock value from the Jelani
Resources JV by engaging and working closely with Harmony Gold with
the aim of progressing the project into potential future gold
production.
Whilst WRE has internally estimated that it potentially has over
37 million ounces of non-code compliant gold resources across its
projects (see Table 1 above) there can be no guarantee that the
planned exploration and technical work by the Company, subject to
funding, will be sufficient to establish JORC (2012) compliant
Mineral Resources.
3. Shareholder Approval
Although the Company currently has sufficient share capital
authorities in place to proceed with the Proposed WRE Transaction,
the Board has elected to make the proposed acquisition subject to
shareholder approval and will also be seeking approval for the
issue of shares on the potential future exercise of the Mark Creasy
Milestone Option (defined below) (which would potentially increase
Mr Creasy's interest in the Company to over 30 per cent.) without
triggering the requirement in the Company's Bye-laws for him to
then make an offer for the Company.
4. Further information on WRE
WRE was incorporated and registered in South Africa as a private
company in 2002 and its principal activity is that of mineral
exploration and development. It was founded and funded by Mr Creasy
to seek to explore the Witwatersrand basin's significant gold
potential.
In 2014, WRE entered into a joint venture arrangement with
subsidiaries of Harmony Gold via a vehicle now known as Jelani
Resources Proprietary Limited (formerly called Friedshelf 1541
Proprietary Limited) based on the potential for identifying a JORC
compliant gold resource. WRE, through Jelani Resources,
commissioned independent scoping studies to assess and determine
potential mining rates from different shafts, potential annual gold
production rates and an overall mine plan for the joint venture
partners.
On 12 January 2023, WRE was placed in business rescue
proceedings in South Africa and the Proposed WRE Transaction has
subsequently been approved by its creditors and shareholders as
part of the business rescue process overseen by the appointed
business rescue practitioners. On completion of the Proposed WRE
Transaction, WRE will exit business rescue with no creditors other
than Lexington Gold.
The last audited financial statements prepared in respect of WRE
are for its financial year ended 30 June 2021 which showed a net
loss of ZAR33.2m (approximately GBP1.44m), total assets of ZAR61.5m
(approximately GBP2.67m) and total liabilities of ZAR406m
(approximately GBP17.6m).
Mr Creasy is entitled to a gross production royalty at a rate of
2.5 per cent. in respect of WRE's existing projects. Such royalty
obligation will remain in place post completion of the Proposed WRE
Transaction in respect of any future production from the existing
project areas.
Competent Person's Statement
The technical information contained in this announcement that
relates to WRE and its existing projects is based upon information
compiled by Edward Nealon, Chairman of Lexington Gold. Mr Nealon is
a Member of the Australasian Institute of Mining and Metallurgy
(AusIMM) and has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and
to the activity being undertaken to qualify as a Competent Person
as defined in the December 2012 edition of the "Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves" (JORC Code). Mr Nealon consents to the inclusion in this
announcement of the matters based upon the information in the form
and context in which it appears.
For further information, please contact :
Lexington Gold Ltd www.lexingtongold.co.uk
Bernard Olivier (Chief Executive Officer) via Yellow Jersey
Edward Nealon (Chairman)
Mike Allardice (Group Company Secretary)
Strand Hanson Limited (Nominated Adviser) www.strandhanson.co.uk
Matthew Chandler / James Bellman / Abigail T: +44 207 409 3494
Wennington
WH Ireland Limited (Joint Broker) www.whirelandplc.com
Katy Mitchell / Ben Good / Enzo Aliaj T: +44 207 220 1666
Peterhouse Capital Limited (Joint Broker) www.peterhousecap.com
Duncan Vasey / Lucy Williams (Broking) T: +44 207 469 0930
Eran Zucker (Corporate Finance)
Yellow Jersey PR Limited (Financial Public www.yellowjerseypr.com
Relations) T: +44 7948 758 681
Charles Goodwin / Annabelle Wills / Soraya
Jackson
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 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended by virtue of the Market Abuse
(Amendment) (EU Exit) Regulations 2019.
APPIX
1. WRE Share Subscription and Loan Agreements : summary of
principal commercial terms
Date 13 May 2023
------------------------------ -------------------------------------------------
Parties Lexington Gold South Africa Proprietary
Limited (a recently incorporated wholly
owned subsidiary of Lexington Gold Ltd)
and WRE
------------------------------ -------------------------------------------------
Issue of new shares Lexington Gold or its nominee will be
in WRE and cancellation issued 76 ordinary shares in the capital
of old shares of WRE and Lexington Gold's BBBEE partner
will be issued 24 ordinary shares in
the capital of WRE which are to be subscribed
for and allotted/issued for an aggregate
subscription price of ZAR100 (approximately
GBP5) following which all of the existing
issued shares of WRE as held by the current
WRE shareholders are to be cancelled.
Accordingly, Lexington Gold will have
a 76 per cent. shareholding in WRE
------------------------------ -------------------------------------------------
Conditions Precedent 1) the change of control of WRE being
formally communicated in writing to Avgold
Limited the co-shareholder in the Jelani
Resources JV;
2) Confirmation that the Proposed WRE
Transaction does not constitute a reverse
takeover under the AIM Rules for Companies
("AIM Rules"); (This condition has already
been satisfied)
3) Lexington Gold receiving a valid title
opinion confirming the validity and status
of all licences and renewal applications
held by WRE and Jelani Resources in respect
of their Prospecting Rights;
4) Lexington Gold shareholders' approval
of these agreements and the WRE Loan
Assignments including but not limited
to the issue of new Lexington Gold common
shares;
5) all other approvals required by applicable
law in respect of the Proposed WRE Transaction
being obtained including the consent
required from the South African Minister
of Mineral Resources and Energy to the
change of control of WRE in terms of
section 11 of the Mineral and Petroleum
Resources Development Act 28 of 2002
("MPRDA") (" Ministerial Consent ");
------------------------------ -------------------------------------------------
Long Stop Date The long stop date by which the remaining
Conditions Precedent above must be satisfied
is 30 November 2023 or such later date
as may be agreed between the parties.
------------------------------ -------------------------------------------------
GBP300k loan to WRE The GBP300k five year loan to WRE (the
"WRE Loan") will be subordinated to the
extent necessary to render WRE factually
solvent, and will be subordinated in
favour of all other creditors whose liabilities
are incurred after 6 January 2023 being
the date the WRE business rescue commenced,
until such time as, in the opinion of
WRE's auditors, the assets of the Company,
fairly valued, exceed the liabilities
of WRE.
The WRE Loan will be drawn down in stages
with GBP50k due within three business
days of the signing of this agreement,
GBP50k due within five business days
of the signing of this agreement and
the balance of GBP200k within five business
days of this agreement becoming unconditional
save for Ministerial Consent.
Interest is payable at the prime overdraft
rate quoted by the South African Reserve
Bank plus 2.5 per cent. compounded monthly.
------------------------------ -------------------------------------------------
Representations, indemnities, The agreement also contains certain commercial
warranties and rule and other representations, warranties
of law and indemnities customary for a transaction
of this nature and is governed by South
African law.
------------------------------ -------------------------------------------------
2 . WRE Loan Assignment Agreement : Mark Creasy
Summary of principal commercial terms
Date 12 May 2023
-------------------------- --------------------------------------------------------------------------------
Parties Lexington Gold Ltd, Mark Creasy, Yandal
Investments Pty Limited (a company wholly
owned by Mr Creasy) and WRE
-------------------------- --------------------------------------------------------------------------------
Assignment of Loans Lexington Gold or its nominee will be
assigned Mark Creasy's loans with a face
value of approximately ZAR197m (approximately
GBP8.5m) and Sunswell's loans with a
face value of US$2m (approximately GBP1.59m)
-------------------------- --------------------------------------------------------------------------------
Mark Creasey Portion " Lexington Gold Equity " means an amount
of the Lexington Gold of new common shares in Lexington Gold
Equity consideration which equates to GBP6.4m to be issued
payable for the Loan by Lexington Gold to Mark Creasy or his
Assignment nominee(s) and Sunswell in accordance
with the WRE Loan Assignments in the
following proportions:
1) US$2m (approximately GBP1.59m) worth
of Lexington Gold common shares are to
be issued to Sunswell or its shareholders
based on the GBP/US$ foreign exchange
rate two business days prior to the first
portion of the equity settlement falling
due to be issued to Mark Creasy or his
nominee(s) (the " Sunswell Portion ");
and
2) The balance of the GBP6.4m to be issued
to Mark Creasy or his nominee(s) (the
"Mark Creasey Portion")
-------------------------- --------------------------------------------------------------------------------
Conditions Precedent 1) the change of control of WRE being
formally communicated in writing to Avgold
Limited the co-shareholder in the Jelani
Resources JV;
2) Confirmation that the Proposed WRE
Transaction does not constitute a reverse
takeover under the AIM Rules; (This condition
has already been satisfied)
3) Lexington Gold receiving a valid title
opinion confirming the validity and status
of all licences and applications held
by WRE and Jelani Resources in respect
of their Prospecting Rights;
4) Lexington Gold shareholders' approval
of the WRE Loan Assignments and the WRE
Share Subscription and Loan Agreements
including but not limited to the issue
of Lexington Gold shares;
5) all other approvals required by applicable
law in respect of the Proposed WRE Transaction
being obtained including the consent
required from the South African Minister
of Mineral Resources and Energy to the
change of control of WRE in terms of
section 11 of the Mineral and Petroleum
Resources Development Act 28 of 2002
("MPRDA") (" Ministerial Consent ").
-------------------------- --------------------------------------------------------------------------------
Condition Fulfilment The date by which the remaining Conditions
Date Precedent must be satisfied which is
30 November 2023 or such later date as
may be agreed between the parties.
-------------------------- --------------------------------------------------------------------------------
Transaction related The Mark Creasy Portion of the equity
milestones in respect settlement shall be issued based on the
of the issue of the 30-day volume weighted average price
Mark Creasy Portion ("VWAP") for Lexington Gold's common
of the equity settlement shares two days prior to the date of
issue of the first tranche of the equity
settlement in 1) below:
1) 35% of the equity settlement on the
Condition Fulfilment Date, even if Ministerial
Consent remains outstanding;
2) 20% of the equity settlement on the
later of the Condition Fulfilment Date
and the date that Ministerial Consent
is granted; and
3) 45% of the equity settlement on the
later of the Condition Fulfilment Date
and the date of renewal of four of the
Prospecting Rights split, 25%, 10%, 8%
and 2% respectively between the four
Prospecting Rights concerned.
-------------------------- --------------------------------------------------------------------------------
Deferred consideration The deferred consideration value accretive
Milestone in respect milestone is the announcement by Lexington
of the issue of the Gold of the establishment of at least
Mark Creasy Milestone 1 million ounces of JORC/SAMREC-compliant
Option gold resource in respect of any of WRE's
existing projects excluding the Jelani
Resources JV (the "Milestone").
Upon the later of 12 months from the
date of this agreement and the Milestone
being achieved, Mark Creasy or his nominee(s)
will be granted an option over 110,000,000
new Lexington Gold common shares (the
"Mark Creasy Option Shares") for a period
of 12 months following the date of the
announcement of the Milestone being achieved
at an exercise price of GBP0.075 (7.5
pence) per Lexington Gold share which
can be exercised in full or in part (the
"Milestone Options").
If the Milestone Options were to be issued
and exercised in full, their potential
future exercise would provide an GBP8.25m
cash inflow to the Company.
-------------------------- --------------------------------------------------------------------------------
Lock-up re Lexington The Lexington Gold shares to be issued
Equity Consideration in connection with the terms of this
agreement shall not be disposed of for
a period of 12 months after their date
of issue (the "Lock-Up Period"). Following
expiry of the Lock-Up Period, there will
be a 12-month orderly market arrangement
in respect of the potential sale of such
Lexington Gold shares.
-------------------------- --------------------------------------------------------------------------------
Representations and The agreement also contains certain commercial
warranties and rule and other representations and warranties
of law customary for a transaction of this nature
and is governed by South African law.
-------------------------- --------------------------------------------------------------------------------
3 . WRE Loan Assignment Agreement: Sunswell
Summary of principal commercial terms
Date 13 May 2023
--------------------------- --------------------------------------------------------------------------------
Parties Lexington Gold Ltd, Sunswell Holdings
Pty Ltd and WRE
--------------------------- --------------------------------------------------------------------------------
Assignment of Loans Lexington Gold or its nominee will be
assigned Mark Creasy's loans with a face
value of approximately ZAR197m (approximately
GBP8.5m) and Sunswell's loans with a
face value of US$2m (approximately GBP1.59m).
--------------------------- --------------------------------------------------------------------------------
Sunswell Portion of " Lexington Gold Equity " means an amount
the Lexington Gold of new common shares in Lexington Gold
Equity consideration which equates to GBP6.4m to be issued
payable for the Loan by Lexington Gold to Mark Creasy or his
Assignment nominee(s) and Sunswell in accordance
with the WRE Loan Assignments in the
following proportions:
1) US$2m (approximately GBP1.59m) worth
of Lexington Gold common shares are to
be issued to Sunswell or its shareholders
based on the GBP/US$ foreign exchange
rate two business days prior to the first
portion of the equity settlement falling
due to be issued to Mark Creasy or his
nominee(s) (the " Sunswell Portion "
); and
2) The balance of the GBP6.4m to be issued
to Mark Creasy or his nominee(s) (the
"Mark Creasey Portion").
--------------------------- --------------------------------------------------------------------------------
Conditions Precedent 1) the change of control of WRE being
formally communicated in writing to Avgold
Limited the co-shareholder in the Jelani
Resources JV;
2) Confirmation that the Proposed WRE
Transaction does not constitute a reverse
takeover under the AIM Rules; (This condition
has already been satisfied)
3) Lexington Gold receiving a valid title
opinion confirming the validity and status
of all licences and applications held
by WRE and Jelani Resources in respect
of their Prospecting Rights;
4) Lexington Gold shareholders' approval
of the WRE Loan Assignments and the WRE
Subscription and Loan Agreements including
but not limited to the issue of Lexington
Gold shares;
5) all other approvals required by applicable
law in respect of the Proposed WRE Transaction
being obtained including the consent
required from the South African Minister
of Mineral Resources and Energy to the
change of control of WRE in terms of
section 11 of the Mineral and Petroleum
Resources Development Act 28 of 2002
("MPRDA") (" Ministerial Consent ").
--------------------------- --------------------------------------------------------------------------------
Condition Fulfilment The date by which the remaining Conditions
Date Precedent must be satisfied which is
30 November 2023 or such later date as
may be agreed between the parties.
--------------------------- --------------------------------------------------------------------------------
Transaction related The Sunswell Portion of the equity settlement
milestones in respect shall be issued based on the 30-day VWAP
of the issue of the for Lexington Gold's common shares two
Sunswell Portion of days prior to the date of issue of the
the equity settlement first tranche of the equity settlement
in 1) below:
1) 35% of the equity settlement on the
Condition Fulfilment Date, even if Ministerial
Consent remains outstanding;
2) 20% of the equity settlement on the
later of the Condition Fulfilment Date
and the date that Ministerial Consent
is granted; and
3) 45% of the equity settlement on the
later of the Condition Fulfilment Date
and the date of renewal of four of the
Prospecting Rights split, 25%, 10%, 8%
and 2% respectively between the four
Prospecting Rights concerned.
--------------------------- --------------------------------------------------------------------------------
Lock-Up re Lexington The Lexington Gold shares to be issued
Gold equity consideration in connection with the terms of this
agreement shall not be disposed of for
a period of 12 months after their date
of issue (the "Lock-Up Period"). Following
expiry of the Lock-Up Period, there will
be a 12-month orderly market arrangement
in respect of the potential sale of such
Lexington Gold shares.
--------------------------- --------------------------------------------------------------------------------
Representations and The agreement also contains certain commercial
warranties and rule and other representations and warranties
of law customary for a transaction of this nature
and is governed by South African law.
--------------------------- --------------------------------------------------------------------------------
4 . Mark Creasy Loan Agreement: principal commercial terms
Date 12 May 2023
-------------------- ---------------------------------------------------------
Parties Lexington Gold Ltd and Mark Creasy
-------------------- ---------------------------------------------------------
Amount of Loan GBP300,000
-------------------- ---------------------------------------------------------
Drawdown date Three business days after the date of
the agreement.
-------------------- ---------------------------------------------------------
Use of proceeds The Borrower shall utilise all monies
borrowed under the agreement solely for
its general working capital purposes
including settling its liabilities to
third parties or to satisfy operating
costs and/or advancing the same to one
or more of its subsidiaries to settle
their liabilities to third parties or
to satisfy t heir operating costs in
the normal course of business.
-------------------- ---------------------------------------------------------
Interest rate 7.5% p.a.
-------------------- ---------------------------------------------------------
Repayment Date 12 months from t he drawdown date.
-------------------- ---------------------------------------------------------
Representations and The agreement also contains certain commercial
warranties and other representations and warranties
customary for a transaction of this nature.
-------------------- ---------------------------------------------------------
-S -
Glossary of technical terms
"Au" gold;
"g/t" grammes per tonne;
"ha" Hectare;
"Indicated Mineral that part of a Mineral Resource for
Resource" which quantity, grade (or quality),
densities, shape and physical characteristics
are estimated with sufficient confidence
to allow the application of modifying
factors in sufficient detail to support
mine planning and evaluation of the
economic viability of the deposit;
"Inferred Mineral Resource" that part of a Mineral Resource for
which quantity and grade (or quality)
are estimated on the basis of limited
geological evidence and sampling. Geological
evidence is sufficient to imply but
not verify geological and grade (or
quality) continuity. It is based on
exploration, sampling and testing information
gathered through appropriate techniques
from locations such as outcrops, trenches,
pits, workings and drill holes;
"JORC" the Australasian Code for Reporting
of Exploration Results, Mineral Resources
and Ore Reserves, as published by the
Joint Ore Reserves Committee of The
Australasian Institute of Mining and
Metallurgy, Australian Institute of
Geoscientists and Minerals Council
of Australia;
"JORC (2012)" the 2012 edition of the JORC Code;
"km(2) " square kilometres;
"Mineral Resource" a 'Mineral Resource' is a concentration
or occurrence of solid material of
economic interest in or on the Earth's
crust in such form, grade (or quality),
and quantity that there are reasonable
prospects for eventual economic extraction.
The location, quantity, grade (or quality),
continuity and other geological characteristics
of a Mineral Resource are known, estimated
or interpreted from specific geological
evidence and knowledge, including sampling.
Mineral Resources are sub-divided,
in order of increasing geological confidence,
into Inferred, Indicated and Measured
categories;
"Mt" millions of tonnes;
"oz" ounces;
"SAMREC" the South African code for the reporting
of exploration results, mineral resources
and mineral reserves; and
"ZAR" South African Rand.
Note to Editors :
Lexington Gold (AIM: LEX) is a gold exploration and development
company currently holding interests in four diverse gold projects,
covering a combined area of approximately 1,675 acres in North and
South Carolina, USA. The projects are situated in the highly
prospective Carolina Super Terrane ("CST"), which has seen
significant historic gold production and is host to several
multi-million-ounce mines operated by majors. It was also the site
of the first US gold rush in the early 1800s, before gold was
discovered in California.
Further information is available on the Company's website:
www.lexingtongold.co.uk . Neither the contents of the Company's
website nor the contents of any website accessible from hyperlinks
on the Company's website (or any other website) is incorporated
into, or forms part of, this announcement.
This information is provided by RNS, the news service of the
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END
ACQMZGMKGFNGFZZ
(END) Dow Jones Newswires
May 15, 2023 02:00 ET (06:00 GMT)
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