TIDMEUZ
RNS Number : 3957K
Europa Metals Ltd
21 December 2022
21 December 2022
Europa Metals Ltd
("Europa Metals", the "Company" or the "Group") (AIM, AltX:
EUZ)
Publication of Supplementary Explanatory Statement
Europa Metals, the European focused lead-zinc and silver
developer, further to the Company's announcement of 7 December
2022, wishes to provide additional information that the directors
of the Company consider may be beneficial to Shareholders in
deciding whether to approve the resolution to be proposed at the
general meeting scheduled to be held at 11.00 a.m. (UK time) on
Friday, 30 December 2022.
The Supplementary Explanatory Statement is set out in full at
the end of this announcement and should be read by Shareholders in
its entirety. In addition, the Supplementary Explanatory Statement,
together with the Explanatory Statement of 7 December 2022, can be
viewed and downloaded from the Company's website via the following
link:
http://www.europametals.com/site/aim-rule-261/shareholder-communication
Defined terms used in this announcement have the same meanings
as those ascribed to them in the Notice, Explanatory Statement
and/or Supplementary Explanatory Statement unless the context
requires otherwise.
For further information on the Company, please visit
www.europametals.com or contact:
Europa Metals Ltd
Dan Smith, Non-Executive Director and Company Secretary
(Australia)
T: +61 417 978 955
Myles Campion, Executive Chairman and acting CEO (UK)
T: +44 (0)20 3289 9923
Strand Hanson Limited (Nominated Adviser)
Rory Murphy/Matthew Chandler
T: +44 (0)20 7409 3494
WH Ireland Limited (Broker)
Harry Ansell/Dan Bristowe/Katy Mitchell/Sarah Mather
T: +44 (0)20 7 220 1666
Questco Corporate Advisory Proprietary Limited (JSE Sponsor)
Sharon Owens
T: +27 (11) 011 9212
EUROPA METALS LTD
ACN 097 532 137
SUPPLEMENTARY EXPLANATORY STATEMENT
TO SHAREHOLDERS
INTRODUCTION
This Supplementary Explanatory Statement has been prepared for
the information and assistance of Shareholders in connection with
the Resolution to be considered at the General Meeting of the
Company's Shareholders to be held at 11.00 a.m. (UK time) / 7.00
p.m. (AWST) on Friday, 30 December 2022 at the offices of The Ince
Group PLC at Aldgate Tower, 2 Leman Street, London E1 8QN.
This Supplementary Explanatory Statement should be read in
conjunction with the Notice of Meeting and Explanatory Statement
announced and sent to Shareholders on 7 December 2022.
Capitalised terms in this Supplementary Explanatory Statement
have the meanings given in the Notice of General Meeting and
Explanatory Statement to Shareholders unless otherwise stated.
The purpose of this Supplementary Explanatory Statement is to
provide certain additional information that the Directors believe
may be beneficial to Shareholders in deciding whether or not to
pass the Resolution set out in the Notice.
1. RESOLUTION 1 - APPROVAL OF THE PROPOSED TRANSACTION WITH
DENARIUS
1.1 Denarius
Denarius is a Canadian junior mining company listed on the TSXV
(ticker symbol: DSLV). It is engaged in the acquisition,
exploration, development and eventual operation of mining projects
in high-grade districts, with its principal focus being on its
Lomero-Poyatos Project (the Lomero Project) in Spain. Denarius also
owns the Zancudo and Guia Antigua Projects in Colombia.
Following appropriate due diligence, the Company is satisfied
that Denarius has a suitably qualified board and management team as
well as access to sufficient funds to be able to, inter alia,
properly carry out the planned twin drill programme and complete a
preliminary economic assessment to satisfy the conditions to be
able to exercise the First Option, and thereafter potentially
complete a NI 43-101 compliant pre-feasibility study on the Toral
Project and pay US$2 million cash to the Company to be able to
exercise the Second Option.
1.2 Toral Project
On 30 November 2022, the Company announced an updated mineral
resource estimate for the Toral Project. The Company confirms that
there have not been any material changes to the information set out
in that announcement. Further information on the Toral Project is
set out in the announcement and, if Shareholders are in any doubt
about its contents, they are recommended to seek independent
advice.
In the event that Shareholders do not approve the Resolution or
Denarius withdraws from the Option Agreement without substantially
completing the conditions to the exercise of the First Option or
Second Option, the Company would seek to either identify and secure
an alternative partner(s) to fund the Toral Project or raise
sufficient funds to progress the project. Progressing the Toral
Project will include further exploration work and completion of a
pre-feasibility study.
1.3 Loan
The proposed Loan to the Company's wholly-owned subsidiary EMI
will be a participating, or limited recourse, loan governed under
Spanish law, which converts into equity in EMI upon Denarius
exercising the First Option.
If the First Option is not exercised, Denarius will be required
to assign the Loan to Europa Metals in return for the payment by
the Company of US$1.
Interest of 5 per cent. will accrue on the Loan if EMI generates
a profit of at least EUR500,000 prior to it being converted into
equity.
1.4 JV Agreement and Shareholders' Agreement
In addition to the terms set out in the Explanatory Statement,
the JV Agreement contains the following terms:
(a) during the option periods, Denarius will, as operator,
prepare work programmes and budgets for approval by the Management
Committee. Europa Metals will initially have one representative on
the Management Committee. A participant may elect not to
participate in the work programme and budget, in which event their
interest in the joint venture would be diluted in accordance with
an agreed formula;
(b) subject to typical exceptions, in the event that a party
wished to transfer its interest in the JV Agreement, there is a
right of first refusal to the other party; and
(c) disputes under the JV Agreement are to be resolved by arbitration.
The JV Agreement and Shareholders' Agreement otherwise contain
terms considered customary for a transaction of this nature.
1.5 Directors' recommendation
In unanimously recommending that Shareholders vote in favour of
the Resolution, the Directors have identified and considered the
following principal advantages:
(a) prior to entering into the Option Agreement, the Company
undertook a lengthy due diligence and sale/joint venture process,
and is satisfied that as a result of this process the consideration
receivable under the Option Agreement is superior to competing
potential proposals received and is at least equal to the value of
the interest in the Toral Project being disposed;
(b) the Option Agreement enables the Toral Project to be advanced by Denarius to a completed pre-feasibility study stage without the Company having to raise further capital for Toral;
(c) as a condition to exercising the Second Option, Denarius
must pay the Company US$2 million in cash. As a result of such
potential future cash payment, the Directors believe that the
Company would be in an optimal position to invest in other resource
opportunities/projects;
(d) Denarius' management team is experienced in operating in
Spain and is currently advancing Denarius' Lomero Project towards
an economic study following completion of its Phase 2 exploration
programme; and
(e) the Company will, in the event that Denarius at any time
elects not to proceed with the Option Agreement, have the benefit
of the work undertaken by Denarius, at no cost to the Company, to
that point.
In unanimously recommending that Shareholders vote in favour of
the Resolution, the Directors have also had regard to the following
disadvantages:
(a) the Company will no longer manage the Toral Project and,
following exercise of the First Option and potentially the Second
Option, will be a minority shareholder in EMI; and
(b) the Company could potentially suffer further dilution should
fundraising activity be required if it cannot meet future cash
calls in respect of the Toral Project.
GLOSSARY IN RESPECT OF THE EXPLANATORY STATEMENT AND
SUPPLEMENTARY EXPLANATORY STATEMENT
A$ means Australian dollars.
AIM means the market of that name operated
by the London Stock Exchange plc.
AIM Rules for Companies means the AIM Rules for Companies
published by London Stock Exchange
plc (as amended from time to time).
Board means the current board of directors
of the Company.
Chairman or Chair means the person appointed to chair
the General Meeting.
Company or Europa Metals means Europa Metals Ltd ACN 097 532
137.
Corporations Act means the Corporations Act 2001 (Cth).
Corporations Regulations means the Corporations Regulations
2001 (Cth).
DI Holders means holders of depositary interests
in the Company.
Directors means the directors of the Company,
being Myles Campion, Evan Kirby and
Daniel Smith.
Explanatory Statement means the explanatory statement accompanying
the Notice of Meeting.
Form of Instruction means, for DI Holders, the form of
instruction enclosed with the Notice
of Meeting.
General Meeting or Meeting means the General Meeting of Shareholders
convened by the Notice.
Group means the Company and a related body
corporate of the Company as defined
in section 50 of the Corporations
Act and any company in respect of
which the Company has voting power
of not less than 20%.
Notice of Meeting or Notice means the notice of General Meeting
including the Explanatory Statement.
Ordinary Resolution means a Resolution to be passed by
a simple majority of Shareholders
(entitled to vote) that vote on the
Resolution (in person, by proxy, by
attorney or, in the case of a corporate
Shareholder, by a corporate representative).
Proxy Form means, for Shareholders, the proxy
form enclosed with the Notice of Meeting.
Resolution means the resolution set out in the
Notice of Meeting.
Share means an ordinary share in the Company.
Shareholder means a holder of Shares in the Company.
US$ means US dollars.
All references to "GBP", "pence" or "p" are to the lawful
currency of the United Kingdom.
All references to "A$", "$", "c" or "cents" are to the lawful
currency of Australia.
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END
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December 21, 2022 02:00 ET (07:00 GMT)
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