HONG
KONG, Feb. 28, 2023 /PRNewswire/ -- China
Natural Resources Inc. (NASDAQ: CHNR) (the "Company" or
"CHNR")
announced today that the Company has entered into a
definitive agreement (the "Sale and Purchase Agreement") with
Feishang Group Limited and Top Pacific (China) Limited (together, the "Sellers"), and
Mr. Li Feilie and Mr. Yao Yuguang, to acquire Williams Minerals
(Pvt) Ltd ("Williams Minerals"), which owns the mining permit for a
Zimbabwean lithium mine (the "Acquisition"). Feishang Group Limited
(CHNR's controlling shareholder) owns 70% of Williams Minerals and
Top Pacific (China) Limited, a non-affiliate, owns the remaining
30%. Under the Sale and Purchase Agreement, it is expected that the
Company will indirectly acquire all interests in Williams Minerals
in the second fiscal quarter of 2023, and that the Company's
"ownership" (as defined in the Sale and Purchase Agreement) of the
Zimbabwean lithium mine will vest cumulatively, region by region
from 2024 through 2026, contingent upon the issuance of independent
technical reports and the Company's full settlement of the purchase
consideration in cash and restricted shares. For each region of the
lithium mine, until the Company's ownership vests, the Sellers will
maintain legal possession and control, including the right to
exploration, sales of lithium, and the revenue derived therefrom,
as well as liability for operational costs and third-party
claims.
Subject to the terms and conditions of the Sale and Purchase
Agreement, the Company plans to issue restricted shares as 50% of
the consideration for the Acquisition, with the remaining 50% of
the consideration comprised of a promissory note and/or cash, for
maximum consideration of US$1.75
billion (3.5 million estimated tons of measured, indicated
and inferred resources of lithium oxide (grade 1.06% or above in
accordance with the standard under the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves) priced at US$500 per ton).
The Company may issue restricted CHNR shares at a discount to the
market price to secure a portion of the required capital. The
Company will pay an aggregate of US$35
million by way of promissory notes and/or cash as a deposit
if it chooses to proceed with the Acquisition after completion of
due diligence, and an aggregate of US$140
million by way of promissory notes and/or cash as an initial
installment.
Completion of the Acquisition is contingent upon the
satisfaction of a number of conditions, including, among other
things, financing, due diligence results, issuance of independent
technical reports, and the Company's cash and restricted share
settlement of the total consideration. There is no guarantee
that the Acquisition will close or be completed at the anticipated
valuation and terms, or at all.
Mr. Wong Wah On Edward, Chairman
of the Company, commented, "Lithium has become one of the most
sought-after and highest appreciating minerals given its proven
power advantages. At the same time, there is a significant supply
shortage, which puts an even greater value on asset owners and
mines. We hope to be able to leverage our mining expertise, sales
and distribution platforms and balance sheet, as we continue to
execute on our long-term business strategy."
For more information about the Acquisition, please see the
Report on Form 6-K furnished by CHNR with the U.S. Securities and
Exchange Commission (the "SEC") on February
28, 2023.
This press release is not an offer of securities for sale in
the United States. Securities may
not be offered or sold in the United
States absent registration or an exemption from
registration. Any public offering of securities to be made in
the United States will be made by
means of a prospectus that may be obtained from the issuer and will
contain detailed information about the company and management, as
well as financial statements.
About China Natural Resources:
China Natural Resources, Inc. (NASDAQ: CHNR), a British Virgin Islands corporation, through
its operating subsidiaries in the
People's Republic of China (the "PRC"), is currently engaged
in the wastewater treatment industry in the PRC, and the
acquisition and exploitation of mining rights in Inner Mongolia,
including preliminary exploration for nickel, lead, silver and
other nonferrous metal, and is actively exploring further business
opportunities in the healthcare sector, natural resources sector
and other sectors.
Forward-Looking Statements:
This press release includes forward-looking statements within
the meaning of the U.S. federal securities laws. Any express or
implied statements contained in this press release that are not
statements of historical fact may be deemed to be forward-looking
statements, including, without limitation, statements regarding the
intent, belief and current expectations of the Company, its
directors or its officers with respect to the ability to locate and
execute on strategic opportunities; the impact of the rising
commodity prices; the potential presence of minerals in the
Zimbabwean lithium mine; the potential closing of the Acquisition;
the vesting of ownership of the regions of the Zimbabwean mine and
the timing thereof; the level of demand for lithium and other
precious minerals; and the availability of internally generated
funds and funds for the payment of operating expenses, capital
expenditures and the Company's growth strategy. Forward-looking
statements are not a guarantee of future performance and involve
risks and uncertainties, and actual results may differ materially
from those in the forward-looking statements as a result of various
factors. Among the risks and uncertainties that could cause the
Company's actual results to differ from its forward-looking
statements are: uncertainties regarding the governmental, economic
and political circumstances in the PRC; the impact on the Company's
financial position, growth potential and business from an
investment in the natural resources sector generally and in the
Zimbabwean lithium mine specifically; uncertainties related to the
Company's ability to identify potential partners or acquisition
targets as it considers strategic alternatives; uncertainties
related to the Company's ability to settle in cash the
consideration due in connection with this Acquisition;
uncertainties associated with metal price volatility; uncertainties
concerning the viability of mining and estimates of reserves at the
Zimbabwean lithium mine; uncertainties associated with the issuance
of and accuracy of the independent technical reports; uncertainties
related to geopolitical events and conflicts, such as the conflict
between Russia and Ukraine; uncertainties regarding the impact of
the COVID-19 pandemic on domestic PRC and global economic
conditions, demand for the mineral reserves that we may locate or
extract, our workforce, whether due to illness or restrictions on
movement, and on the price of our common shares; uncertainties
related to possible future increases in operating expenses; the
fluctuations of interest rates and foreign exchange rates;
uncertainties related to the results of the next assessment by the
Staff of the Nasdaq Listing Qualifications department of the
Company's compliance with the Nasdaq Listing Rules; uncertainties
related to the political situation between the PRC and the United States; uncertainties regarding the
ability of the Public Company Accounting Oversight Board to
continue to fully inspect auditors located in the PRC and
Hong Kong, the implementation by
the SEC of more stringent disclosure and/or other requirements for
companies located in the PRC or that have operations in the PRC
that are listed on exchanges in the
United States, and increasing regulation by PRC government
agencies of companies located in the PRC but listed elsewhere; and
other risks detailed from time to time in the Company's filings
with the SEC, including, without limitation, the information set
forth in the Company's Annual Reports on Form 20-F under the
heading "Risk Factors." When, in any forward-looking statement, the
Company, or its management, expresses an expectation or belief as
to future results, that expectation or belief is expressed in good
faith and is believed to have a reasonable basis, but there can be
no assurance that the stated expectation or belief will result or
be achieved or accomplished. Except as required by law, the Company
undertakes no obligation to update any forward-looking
statements.
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SOURCE China Natural Resources, Inc.