TIDMPERE
RNS Number : 0472B
Pembridge Resources plc
04 June 2019
THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS DEEMED BY THE
COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE EU
MARKET ABUSE REGULATION (596/2014). UPON PUBLICATION OF THE
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION
IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
4(th) June 2019
Fully Funded Acquisition of Minto Copper-Gold-Silver Mine
from Capstone Mining Corp
London, United Kingdom - Pembridge Resources plc (LSE:PERE)
("Pembridge" or the "Company"), a mining-focused special purpose
acquisition company, is pleased to announce that it has signed a
definitive share purchase agreement dated 3(rd) June 2019 (the
"SPA") with Capstone Mining Corp. ("Capstone") and closed the
acquisition of 100% of Minto Explorations Ltd. ("Minto") (the
"Acquisition"). The SPA replaces the agreement signed between the
parties and first announced on 15 February 2018.
The consideration for the Acquisition, which is unconditional,
comprises up to US$20 million in total payments due to Capstone
payable out of future cash flows and realisations from Minto and
based on certain hurdles linked to production levels at Minto as
well as future copper prices.
In addition, financing of US$10 million to fund the
recommencement of operations has been secured from Copper Holdings,
LLC ("Copper Holdings"), a New York based private equity group and
Cedro Holdings I, LLC, an entity managed by Lion Point Capital,
L.P. ("Lion Point"), a New York based asset manager, pursuant to a
shareholder and financing agreement between the Company, Copper
Holdings and Lion Point dated 3(rd) June 2019 (the "Shareholder and
Financing Agreement", together with the Acquisition, the
"Transaction").
The Company expects to recommence commercial production at Minto
during the fourth quarter 2019.
Key highlights
-- Staged payment structure of the Acquisition will allow Minto
to achieve a cash generative operating state before any payments
are made to Capstone
-- The first payment from Minto to Capstone of US$5 million will
be due once production at Minto has reached a steady state 60% of
mill capacity
-- A second payment from Minto to Capstone of US$5 million will
be due once production at Minto has reached 60% of mill capacity
and the copper price has averaged over US$3.00/lb (US$6,615/t) for
two consecutive quarters
-- A final payment from Minto to Capstone of US$10 million will
be due upon the copper price achieving an average of US$3.50/lb
(US$7,717/t) for two consecutive quarters
-- The Financing Agreement allows Pembridge to immediately commence the restart process at Minto
-- Initiatives have been identified by the Company to seek to
extend mine life and significantly improve on previous operating
margins at Minto
-- Pembridge, Minto, Copper Holdings and Lion Point have entered
into the Shareholder and Financing Agreement, under which:
o Copper Holdings and Lion Point will provide, in aggregate,
US$10 million to Minto with an 8% coupon (the "Debt")
o Copper Holdings and Lion Point will acquire non-voting B
shares in Minto which will represent a one third economic interest
each in Minto once the Debt has been repaid
o Pembridge has right of first refusal to buy out Copper
Holdings' and Lion Point's respective interests in Minto
o Copper Holdings and Lion Point have no voting rights in
Pembridge
-- The Transaction assumes economic benefits only from Minto,
not from any further transactions that may be entered into by
Pembridge
-- Concurrent with signing of the SPA, GBP400,000 of working
capital for Pembridge has been raised at 16 pence per ordinary
share of nominal value 1 pence each in the capital of the Company
(each, an "Ordinary Share"), an approximate 25% premium to the
price per Ordinary share at which the Ordinary Shares were
suspended on 15 February 2018
-- An updated investor presentation is available on the
Company's website www.pembridgeresources.com
David Linsley, Chief Executive Officer commented:
"We have said all along that the acquisition of Minto represents
a transformational opportunity for Pembridge and its shareholders
which is why we continued to pursue the Transaction despite last
year's downturn in commodity markets and the challenging
environment for raising capital. While market conditions impacted
closing of the Transaction, we were able to use this time to
achieve a deal and financing package which we expect to be value
accretive for Pembridge shareholders.
We welcome our new partners, Copper Holdings and Lion Point, and
look forward to commencing the restart process at Minto and
executing our initiatives to seek to extend mine life and
significantly improve on previous operating margins at Minto."
Frank McAllister, Chairman said:
"I congratulate the Pembridge management team who have
persevered throughout the past 12 months to complete the
Transaction. It was vital to ensure that the Company achieved
favourable deal terms rather than pursuing a deal at any cost
regardless of the time it may take to complete.
The opportunity offered by Minto aligns with our goal of
acquiring a producing or near production mining operation, to which
we can add value. While we very much see Minto as a cornerstone
asset, the Pembridge management team and board of directors
continue to evaluate further acquisition and investment
opportunities, consistent with our strategy to build Pembridge into
a mid-tier mining company."
A prospectus, which details the terms of the Transaction, will
shortly be re-submitted to the UK Financial Conduct Authority and
we will update the market in due course in that regard.
The person who arranged for the release of this announcement on
behalf of the Company was David Linsley, Chief Executive
Officer.
ENDS
NOTES TO EDITORS
About Pembridge Resources plc
Pembridge is a mining-focused special purpose acquisition
company admitted to listing on the standard segment of the Official
List of the FCA and to trading on the main market for listed
securities of London Stock Exchange plc.
The Company's management is composed of a team of senior leaders
with experience in various board and executive positions with a
complementary mix of expertise in geology, engineering, project
appraisal, and commercial development across a wide range of
commodity groups and mining jurisdictions.
About Minto
Minto is an open pit and underground copper-gold-silver mine
located in central Yukon, approximately 240 kilometres north of the
capital Whitehorse along the Klondike Highway. The Minto mine has
been in continuous production since 2007 and is presently the only
operating mine in Yukon territory. In excess of US$350 million of
capital expenditure has been invested into Minto operations since
site construction began some 12 years ago.
About Copper Holdings
Copper Holdings is a private investment vehicle based in New
York run by a team of experienced mining investors.
About Lion Point
Lion Point Capital is a global special situations investment
adviser based in New York that seeks to invest in equity and debt
securities of public and private companies.
Enquiries:
Pembridge Resources plc: +44 20 7917 2968
David Linsley, Chief Executive Officer
Paul Fenby, Chief Financial Officer
Brandon Hill Securities - United Kingdom: +44 (0)20 3463 5016
Jonathan Evans
SI Capital - United Kingdom: +44 14 8341 3500
Nick Emerson
Tavistock Communications - United Kingdom: +44 20 7920 3150
Charles Vivian
Gareth Tredway
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END
ACQEZLBBKQFBBBE
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