TIDMGUN
RNS Number : 7601I
Gunsynd PLC
15 December 2020
Gunsynd Plc
Quarterly Investor Update
Gunsynd Plc ("Gunsynd" or the "Company"; AIM: GUN, AQSE: GUN) is
pleased to announce the following investor update for the quarter
ending 31 October 2020 regarding its current holdings in investee
companies.
Rincon Resources Pty Ltd ("Rincon")
During the quarter Rincon made significant steps forward
corporately. It issued a convertible loan note ("CLN") to raise
A$400,000 to assist it in executing its proposed IPO on the
Australian Securities Exchange ("ASX") (subject to admission, its
ticker will be ASX:RCR) intended for later this month. As announced
on 5 November 2020, Gunsynd participated in the CLN through a
further investment of A$100,000 (GBP54,700) which will convert at a
30% discount to the IPO price of Rincon.
As announced on 9 December 2020, Gunsynd understands that the
expected listing date for Rincon's IPO on the ASX (which was
targeted for 10 December 2020) is expected to be subject to a short
delay while final ASX administrative matters are completed. The
Company understands that Rincon and its advisers are working
closely with ASX and confirms that a further update will be made in
due course.
Eagle Mountain Mining Limited ("Eagle Mountain")
During the quarter, Gunsynd invested an additional A$256,000
(approximately GBP145,000) in Eagle Mountain, an ASX listed
copper-gold exploration and development company (ASX: EM2).
During November 2020, Eagle Mountain announced an update
detailing a new broad zone of copper mineralisation identified at
Oracle Ridge. The copper mineralisation was encountered in partly
assayed drill hole WT-20-05. Significant assay results included:
15.1m @ 1.72% Cu, 16.87g/t Ag, 0.38g/t Au from 313.9m
including:
- 3.45m @ 1.89% Cu, 15.97g/t Ag, 0.35g/t Au from 313.9m; and
- 8.41m @ 2.46% Cu, 25.09g/t Ag, 0.56g/t Au from 321.29m
This newly identified zone of broad copper mineralisation is
more than 100m from the nearest significant assay in a sparsely
drilled area. Copper sulphide mineralisation was observed in the
recently drilled adjacent hole WT-20-10, with detailed logging and
assays pending.
Turnaround times at the assay laboratories in Arizona are still
lengthy due to COVID-19 restrictions and the large number of
samples being submitted by other parties. Five to six weeks is the
new "normal" for assay turnaround time, so only selected logged
drill hole intervals have been submitted for assay at this time. In
time, other zones within each drill hole will be assayed which may
identify additional unrecognised mineralisation. It is anticipated
that further assay results from priority zones will be released to
the market in the coming weeks.
We understand Eagle Mountain has undertaken oriented core as
part of an exploration programme at Oracle Ridge. We hope this will
provide valuable information on the orientation of structures which
are the typical pathways of hydrothermal fluids responsible for the
high-grade skarn mineralisation. Eagle Mountain will use this
information, along with other supportive data, to assist with
locating the potential source of the mineralisation.
Angold Resources Limited ("Angold")
Gunsynd has been informed that the listing of Angold on the
TSX-V operated by the Toronto Stock Exchange is expected to take
place shortly.
On 1 October 2020 the Company announced that it had invested
C$100,000 (approximately GBP58,000) into gold exploration company
Federal Gold Corp (to be renamed Angold Resources Limited subject
to completion of a reverse takeover). Gunsynd had an existing
holding in ZTR Acquisition Corp (ZTR.H:APH) which is the subject of
the reverse takeover by Federal Gold Corp.
Empress Royalty Corp ("Empress")
Empress is a precious metals royalty and streaming company
focussed on the creation of financing solutions for mining
companies. Empress has an existing portfolio of 13 gold royalties
and is in the process of conducting due diligence for the
acquisition of three near-term cash producing gold and silver
investments.
Empress successfully raised C$8,000,000 in October 2020.
Proceeds of the financing are funding the three new investments
mentioned above, all of which are expected to be revenue generating
within 12 months.
During November 2020, Empress announced that it had completed
the acquisition of a combined 1% Net Smelter Return ("NSR") royalty
on production from the Pinos gold and silver project in Mexico
("Pinos") for an aggregate consideration of US$1,500,000. The
acquisition was a combination of a newly created 0.5% NSR royalty
on the Pinos project from Candelaria Mining Corp ("Candelaria")
(TSXV:CAND) for consideration of US$750,000 and the purchase of an
additional 0.5% NSR royalty on the Project from an existing royalty
holder on the same terms and conditions. Empress' royalties create
a direct real property interest in the project that shall continue
in perpetuity and registered against title.
Historical records indicate over 800,000 ounces of gold have
been produced from the Pinos district. Candelaria currently has
Indicated resource of 175,697 tonnes at a grade of 4.7 grams per
tonne of gold equivalent estimated to contain 26,358 ounces of gold
equivalent and the Inferred resource a further 529,267 tonnes at a
grade of 4.6 grams per tonne gold equivalent estimated to contain
56,146 ounces of gold equivalent. The 2018 Preliminary Economic
Assessment ("PEA") plans for average yearly production of 12,700
ounces gold equivalent for a life of mine of seven years with
potential for growth, at both depth and along strike, and it is
estimated that 80% of the district has yet to be explored.
The Board of Empress has indicated it is actively working with
the Toronto Stock Exchange regarding the listing of Empress on the
TSX-V which is well progressed and is expected shortly.
Rogue Baron Limited ("Rogue Baron")
In spite of the many challenges COVID-19 has presented in 2020,
Rogue Baron's flagship brand, Shinju Japanese Whisky ("Shinju"),
continues to grow at a rapid pace despite the unprecedented
headwinds facing the hospitality sector in particular.
Shinju, which was launched at the end of 2018, sold circa 1,000
cases in 2019. In the first half of 2020, even with customer
accounts shut down for nearly two months, sales of Shinju were up
57% on the same period in the prior year. Shortly after customer
accounts began reopening, Rogue Baron sold through its entire
remaining stock of circa 250 cases in a matter of weeks. Even with
COVID-19 related lockdowns, Rogue Baron had, by the end of
September, sold the same number of cases as in the whole of 2019.
This was despite on-premises sales being decimated across the USA
and not being totally offset by a rise in off-premises sales.
Industry issues were not just limited to sales: bottlers and
distillers also shut in many cases causing supply issues. These
issues also affected Shinju. After completely selling out of Shinju
by September, Rogue Baron's latest production run of one container
(circa 1,000 cases of six bottles) was completed on 6 December
2020. We have been informed that pre-orders for this entire
container have been made in the USA prior to the container arriving
on American soil. Rogue Baron is now in the process of ordering
additional bottles and placing another order with its distillery.
This growth is happening despite many key states in the USA, such
as California, being in a strict lockdown.
Shinju had previously received a large boost in publicity by
being mentioned in the industry magazine www.liquor.com article
"The 10 best Japanese Whiskies to drink in 2020". To be mentioned
alongside such well known and highly regarded brands as Yamazaki
12-year-old and Hakushu 12-year is a considerable achievement for a
new brand with comparatively small sales to such behemoths from
Suntory.
https://www.liquor.com/best-japanese-whiskies-5078590
In November 2020, Rogue Baron hired Speakeasy Wine & Spirits
("Speakeasy"), which is a brand consultancy company with a
speciality in helping specifically chosen brands expand
distribution across the USA. Shinju was sold in six USA states in
2020; Washington DC, Maryland, New York, New Jersey, Florida, and
California. Starting in Q1 2021, Shinju is expected to be selling
into an additional six: Connecticut, Arizona, Texas, Illinois,
Colorado, and Nevada, including some of the larger accounts in Las
Vegas. These twelve states account for over 47% of the USA
population.
Rogue Baron has already had indicative interest via the
Speakeasy distribution network (and not including its current
distribution network) in between 400 and 600 cases of the
subsequent container to be delivered in early 2021.
Shinju has also just been added to two of the largest
Direct-to-Consumer outlets in the USA, ReserveBar and Drizly, which
will make Shinju available to consumers in 35 USA States. The
relaxing of liquor regulations due to COVID-19 has now made
Direct-to-Consumer liquor sales more popular than ever. Rabobank
estimates that USA online alcohol sales reached USD 2.6bn in 2019,
growing by 22% year on year. Shinju plans to take advantage of this
growth.
With respect to the tequila market, American basketball player
Lebron James has become the latest star to join the agave spirits
sector through an investment in Lobos 1707 Tequila and mezcal.
Lobos 1707 Tequila Extra Añejo is priced at US$149.99 per 750ml.
This gives an indication of the premium prices which can be charged
for quality tequila. He joins the likes of Justin Timberlake,
George Clooney, Chris North, P Diddy, AC/DC and Carlos Santana to
have invested in or promoted products in the tequila and mezcal
space. We believe this, alongside the strong growth in the tequila
sub category in the last few years, bodes well for the future
growth of the category and confirms that tequila is moving from a
student shot drink to a premium (and even super premium) sipping
drink. This trend is welcome given the intended launch of Rogue
Baron's Copa Imperial extra anejo tequila in the second half of
2021.
Peterhouse Capital has been appointed as corporate adviser and
broker for the proposed admission to trading on the Aquis Stock
Exchange Growth Market of Rogue Baron. The admission document is in
the final stages of drafting and should be submitted by the end of
next week to Aquis with admission to Aquis targeted for Q1
2021.
Sunshine Minerals Limited ("Sunshine")
On 21 August 2020, the Company announced that Malachite
Resources Limited, which is listed on the ASX (renamed Pacific
Nickel Mines Limited; ASX:PNM "Pacific Nickel") , made an
announcement regarding the acquisition of the 85% of Sunshine
Minerals Limited (a private company incorporated in the Solomon
Islands) it did not already own (the "Transaction"). Pacific Nickel
had previously acquired a 15% shareholding in Sunshine.
In the announcement of 21 August 2020, Gunsynd stated it would,
subject to completion of the Transaction, receive 1,262,967 Upfront
Consideration Shares in Pacific Nickel and, subject to further
conditions, 1,641,856 Deferred Consideration Shares. Gunsynd has
now received a holding statement for the Upfront Consideration
Shares. These Upfront Consideration Shares are subject to an escrow
period which applies from completion until the earlier of: (a) the
date 12 months from completion; or (b) the date 10 business days
after the Mines Department grants Sunshine Nickel Limited a mining
lease for PL 01-18.
Kolosori Nickel Limited ("Kolosori")
As announced on 26 October 2020, Gunynd has conditionally sold
its stake in Kolosori to Malachite Resources Limited (renamed
Pacific Nickel) and will subject to completion of the Transaction,
receive 682,790 Upfront Consideration Shares in Pacific Nickel and,
subject to further conditions, 1,137,984 Deferred Consideration
Shares in Pacific Nickel. Conditional on issue, these shares will
be subject to escrow.
Oyster Oil and Gas Limited ("Oyster")
The situation with respect to the Gunsynd investment in Oyster
remains unchanged from that stated in the announcement made on 30
October 2020.
Summary
Not content with the damage foisted upon the private sector at
the beginning of the year governments have decided to double down
on their initial efforts regardless of the damage they will cause
both health wise and economically. Despite the impending economic
malaise caused by repeated lockdowns, markets and liquidity have
both remained healthy in the last few months. Gunsynd has taken
advantage of a period of market liquidity to raise money (at a
substantial premium to where it was raised in June and July),
dispose of assets such as Bunker Hill and Kolosori, increase its
exposure to Rincon, Eagle Mountain and Angold and make a new
investment in Empress whilst still maintaining a healthy cash
reserve to allow the Company to make further investments in current
or new assets as the case may be.
We hope soon to be able to provide updates on the IPOs of four
of our investee companies: Rincon, Angold, Empress and Rogue
Baron.
Forward Looking Statements
This announcement contains forward-looking statements relating
to expected or anticipated future events and anticipated results
that are forward-looking in nature and, as a result, are subject to
certain risks and uncertainties, such as general economic, market
and business conditions, competition for qualified staff, the
regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political
jurisdiction, uncertainties regarding the results of exploration,
uncertainties regarding the timing and granting of prospecting
rights, uncertainties regarding the Company's or any third party's
ability to execute and implement future plans, and the occurrence
of unexpected events. Actual results achieved may vary from the
information provided herein as a result of numerous known and
unknown risks and uncertainties and other factors
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
The Directors of Gunsynd accept responsibility for this
announcement.
For further information please contact:
Gunsynd plc
Hamish Harris/Peter Ruse +44 (0) 78 7958 4153
Cairn Financial Advisers LLP
James Caithie / Liam Murray +44 (0) 20 7213 0880
Peterhouse Capital Limited
Lucy Williams +44 (0) 20 7469 0930
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END
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