TIDMEEE
RNS Number : 8834K
Empire Metals Limited
27 April 2020
Empire Metals Limited / AIM: EEE / Sector: Natural Resources
27 April 2020
Empire Metals Limited ('Empire' or the 'Company')
Acquisition of Controlling Interest in Australia's Largest
Undeveloped Palladium Deposit
Empire Metals Limited, the AIM-quoted resource exploration and
development company, announces that it has entered into a Binding
Heads of Agreement (the 'Agreement') with ASX listed Artemis
Resources Limited ('Artemis') to acquire a 41% interest in the
Munni Munni Palladium Project in the West Pilbara, Western
Australia ('Munni Munni' or the 'Project') and has first right of
refusal on a further 29% interest in the project.
To view the announcement with illustrative maps and diagrams
please use the following link:
http://www.rns-pdf.londonstockexchange.com/rns/8834K_1-2020-4-26.pdf
Overview:
-- Munni Munni hosts the largest intrusion in the globally
recognised resource destination of West Pilbara and is the largest
undeveloped primary Platinum Group Elements Resource in
Australia:
-- JORC 2004 Resource of 24Mt @ 2.9 g/t Platinum Group Element
(PGE) and gold (12.4Mt Measured, 9.8Mt Indicated, and 1.4Mt
Inferred), containing 1.14Moz palladium, 0.83Moz platinum, 152Koz
gold and 76Koz rhodium)
-- Four granted mining leases covering a total of 64km(2)
-- Layered mafic/ultramafic intrusion with mineralisation hosted
in the Ferguson Reef with all likely extensions contained within
Munni Munni exploration tenements
-- PGEs are a group of six precious metals clustered together on
the periodic table: platinum (Pt), palladium (Pd), iridium (Ir),
osmium (Os), rhodium (Rh) and ruthenium (Ru).
-- Palladium is extremely rare and is now one of the most
valuable precious metals, with a supply shortage driving current
prices to circa US$2,000/oz; Rhodium prices are currently circa
US$7,500/oz
-- Agreement advances Empire's strategy to diversify project
portfolio and expand geographic focus:
-- The Pilbara in Western Australia is one of the most highly
mineralised regions globally and hosts numerous world class mines
within a stable mining jurisdiction
-- Munni Munni represents a low-cost entry point to an
attractive and mature investment environment with significant
upside potential
-- Total cost of acquisition of GBP975,000, to be settled via
the issue of 95 million new ordinary shares at a price of 1 pence
per share and a cash option payment of GBP25,000
-- Completion subject to satisfaction of certain conditions
including transfer of licences and regulatory approvals
-- Initial work programme to consist of reinterpretation of
existing data with a view to undertaking an initial drill programme
in the second half of the year.
Mike Struthers, CEO, said: "This acquisition represents the
start of a new chapter for Empire. Over the past 18 months the
Company has been actively reviewing a number of exciting
opportunities to fulfil the objective of de-risking our growth
strategy by diversifying away from a single jurisdiction
investment. We believe the opportunity presented with the Munni
Munni Project in Australia satisfies this goal by combining an
exceptional project with an attractive and mature investment
environment.
"Having recently received confirmation on the tenure of two of
our primary projects in Georgia and with an appeal process
commenced on a third key asset, the Company has achieved some major
steps towards the recommencement of fieldwork at Kvemo Bolnisi and
other key assets. But as is the case with most countries,
government agencies in Georgia are focussed on those activities
considered a priority for dealing with the COVID-19 pandemic and a
result, we are waiting for clarity on how our development schedule
will advance.
"We are very excited about this new opportunity and look forward
to updating shareholders on completion and our plans for Munni
Munni in due course."
Transaction Terms
Empire Metals has entered into a Binding Term Sheet with Artemis
Resources Limited and Almeera Ventures Limited ("Almeera") (the
"Agreement") to acquire an effective 41% interest in four mining
licences and an exploration licence, covering a 64km(2) tenement
area, located in the in the West Pilbara, Western Australia, known
as Munni Munni.
Artemis currently hold a 70% interest in Munni Munni and the
remaining 30% is held by ASX listed Platina Resources Limited.
Almeera has claim to an option over Artemis's holding in Munni
Munni. Almeera has agreed to withdraw its claim to allow Empire to
enter into the Agreement. In consideration for the withdrawal of
this claim, Empire will make a loan to Almeera of GBP100,000 (which
will be made in the form of an issue to Artemis of 10,000,000 new
ordinary shares of Empire) to satisfy the consideration due to
Artemis for the acquisition of a 10% stake in the Munni Munni
licence (the "Almeera Shares") by Almeera. The loan is repayable by
Almeera three years from the date of Completion and will attract an
interest rate of 2% per annum. The total consideration payable to
Artemis of GBP600,000 is to be satisfied via the issue of
60,000,000 new ordinary shares (including the Almeera Shares) at a
price of 1 pence per share. An introduction and advisory fee of
GBP350,000 will also be paid to a third party on Completion and
will be satisfied by the issue of 35,000,000 new ordinary shares at
a price of 1 pence per share. The total new ordinary shares
expected to be issued pursuant to the Agreement is 95,000,000,
which will represent 32.9% of the enlarged share capital of the
Company.
On Completion, Empire will hold an effective interest of 41% in
the Munni Munni Project, Platina Resources Limited will hold 30%,
Artemis will hold 19% and Almeera will hold 10% (together the
"Parties"). Empire will be the operator of the Project and will
have also a right of first refusal for the acquisition of the
remaining interest held by Artemis and Almeera in the Munni Munni
Project, allowing Empire to move to 70%.
Completion is subject to a number of conditions precedent
including completion of due diligence, execution of a formal joint
venture agreement between the Parties, obtaining necessary
regulatory approvals and obtaining all necessary third-party
consents and approvals to give effect to the proposed acquisition.
A significant amount of work has already taken place between the
Parties and it is expected that the Conditions Precedent will be
completed in a timely manner.
The Munni Munni Project
The Munni Munni Project is located in the world-class Pilbara
mining region of northern Western Australia, approximately 55km
south of the port and rail hub of Karratha. The project comprises
four granted mining leases and an exploration licence covering the
Munni Munni Resource and peripheral intrusion.
The Munni Munni Project contains the largest intrusion in the
West Pilbara and hosts a JORC-compliant 2004 Resource of 24Mt @ 2.9
g/t Platinum Group Element (PGE) and gold (12.4Mt Measured, 9.8Mt
Indicated, and 1.4Mt Inferred), containing 1,140,000 ounces
palladium, 830,000 ounces platinum, 152,000 ounces gold and 76,000
ounces rhodium. Munni Munni is the largest unexploited primary PGE
Resource in Australia.
The PGE potential was first recognised by world renowned expert
Dr. John Ferguson (former Division Head/Acting Director at the BMR,
now Geoscience Australia, and ex-Platina Non-Executive Director) in
the 1980s, and accordingly, the identified mineralised horizon is
referred to as the "Ferguson Reef". Exploration activities since
the initial discovery have defined a significant PGE and gold
resource, all within the four granted mining leases and all likely
extensions of the Ferguson Reef are also within the exploration
tenements.
Geology
The Munni Munni Project area is situated within the Archaean
Pilbara Block of the Pilbara Craton, which consists of an elongate
east-west trending granite greenstone terrain. The late Archaean
Munni Munni Igneous Complex (MMIC) is a layered mafic-ultramafic
intrusion emplaced into granitic rocks of the West Pilbara Block.
The MMIC is the largest (25km x 9km) and one of the best preserved
of a number of complexes, which occur throughout the Pilbara and
has been dated at 2.92 billion years.
The MMIC is a 'boat-shaped' intrusive complex composed of an
alternating sequence of ultramafic rocks overlain by a thick mafic
package of predominantly gabbroic rock (Figure 2). The mineralised
Ferguson Reef occurs at the contact between the lower ultramafic
rocks and the upper gabbroic rock types. The intrusion is likely in
excess of 5km thick with the keel of ultramafic material 1800m
thick and the upper gabbroic package 3600m thick.
The uppermost unit of the ultramafic zone is a medium to coarse
grained porphyritic websterite. The upper portion of this unit is
the host to the PGE mineralised Ferguson Reef. The most obvious
alteration in the ultramafic series is the serpentinisation of
olivine although pervasive talc alteration is also apparent.
The upper gabbroic material is a monotonous sequence of poorly
layered gabbro to gabbro-norite. The southern portion of the MMIC
is unconformably overlain by flat-lying sediments and volcanics of
the Mount Bruce Supergroup and more particularly the Fortescue
Group.
The Munni Munni Resource
Munni Munni has a Measured, Indicated and Inferred Mineral
Resource, reported in accordance with the JORC Code 2004 (Table 1).
The estimation was first completed by SRK Consulting in July 2002,
was then re-estimated and confirmed by Snowden Consulting in 2003,
and Platina Resources also completed their own estimation in 2004.
This resource includes all drilling completed in the Cherratta,
Pinderi, Central, Maitland and Yannery Zones of the Northern
Domain. The resource does not include additional drilling completed
by Platina in 2007.
Empire intends to update the resource to comply with the JORC
2012 standard.
Contained Metal
Moz
JORC Million Pd Pt Au Rh Cu Ni Pd Pt Au
Category g/t g/t g/t g/t
-------- ----- ----- ----- ----- ----- ----- ------ ----- -----
Measured 12.4 1.4 1.1 0.2 0.1 0.09 0.07 0.56 0.44
-------- ----- ----- ----- ----- ----- ----- ------ ----- -----
Indicated 9.8 1.6 1.1 0.3 0.1 0.22 0.11 0.50 0.35
-------- ----- ----- ----- ----- ----- ----- ------ ----- -----
Inferred 1.4 1.6 1.1 0.3 0.1 0.15 0.09 0.07 0.05
-------- ----- ----- ----- ----- ----- ----- ------ ----- -----
Total 23.6 1.5 1.1 0.2 0.1 0.15 0.09 1.14 0.83 0.15
-------- ----- ----- ----- ----- ----- ----- ------ ----- -----
Table 1. Munni Munni undiluted JORC 2004 resource estimate at a
cut-off grade of 1.9g/t PGE + Au (SRK, 2002, subsequently confirmed
by Snowden, 2003, as reported in Platina Annual Report)
Figure 1. Munni Munni drill section Central Area - See PDF
Metallurgical Test Work and Mining Studies
Preliminary metallurgical test work completed in 1988 indicated
that conventional flotation would concentrate the PGE sulphide
mineralisation. Further test work in 2001 (on 12-year old core)
incorporated batch roughing and cleaning flotation tests with
moderate PGE recoveries of the high sulphide and low sulphide ore
of 70% and 66% respectively. This basic flotation test work has not
used modern reagent schemes for PGE recovery, which may be improved
in future test work.
An economic study by AMC Consultants in 2010 produced a mine
plan (combined open pit and underground) and economic model but a
review of this work by Whittle Consulting Pty Ltd in 2011 concluded
that the project was sub-economic at that time, citing the major
factor as being current metal prices. In the 10 years subsequently
palladium prices have increased by approximately 320% from US$500
per oz in 2010 to US$2,100 per oz.
Empire are now preparing a detailed development plan to advance
the project through some important milestones and will provide
further details as and when they become available.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
**ENDS**
For further information please visit www.empiremetals.co.uk or
contact:
Mike Struthers Empire Metals Ltd Company Tel: 020 7907
9327
Ewan Leggat S. P. Angel Corporate Nomad & Broker Tel: 020 3470
Finance LLP 0470
Soltan Tagiev S. P. Angel Corporate Nomad & Broker Tel: 020 3470
Finance LLP 0470
Damon Heath Shard Capital Partners Joint Broker Tel: 020 7186
LLP 9950
Susie Geliher St Brides Partners Ltd PR Tel: 020 7236
1177
Beth Melluish St Brides Partners Ltd PR Tel: 020 7236
1177
About Empire Metals Limited
Empire Metals Limited (formerly Georgian Mining Corporation) has
50% ownership of the Bolnisi Copper and Gold Project in Georgia,
situated on the prolific Tethyan Belt, a well-known geological
region and host to many high-grade copper-gold deposits and
producing mines. The Bolnisi concession covers an area of over 860
sq km and has a 30-year mining licence with a variety of targets
and projects ranging from greenfield exploration / target
definition phase through intermediate target-testing phases to more
advanced projects including Kvemo Bolnisi East which is due to
advance to Feasibility Study.
The Company is assessing the potential for expanding the
Company's portfolio through the addition of new assets, which have
the ability to add value in the short term.
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END
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