TIDMKEN
RNS Number : 4291I
Kendrick Resources PLC
07 August 2023
7 August 2023
Kendrick Resources Plc
("Kendrick" or the "Company")
Acquisition of New Nickel - Copper - PGM licences in Sweden.
Kendrick Resources Plc (LSE: KEN), a mineral exploration and
development company with vanadium, nickel and copper projects in
Scandinavia is pleased to announce the signing of a Share Sale and
Purchase Agreement with EMX Royalty Corporation (EMX) to acquire
100% of EV Metals AB a Swedish company that owns the
Njuggtraskliden and Mjovattnet exploration licences (the "Swedish
Nickel Projects") hosting drill-defined magmatic
nickel-copper-cobalt-platinum group metal mineralisation along the
Swedish "Nickel Line".
Swedish Nickel Projects Highlights
Mjovattnet Licence
-- 2 drill-defined zones of mineralisation (Mjovattnet and Brannorna Prospects)
-- 15km of prospective strike
-- PGE value historically overlooked
-- Mjovattnet in-house non-JORC compliant drill-defined resource
of 0.17Mt @ 1.29% Ni, 0.19% Cu & 0.02% Co
-- Open at depth
-- Peak shallow drill intercepts for the Brannora Prospect include:
Hole From To Width Ni
(Brannorna) (m) (m) (m) (%)
-------------- ------ ------- ------ -----
BRA-75015 65.80 77.40 11.60 0.82
BRA-07001 59.00 84.73 25.73 0.58
BRA-77024 40.30 68.00 27.70 0.64
BRA-07002 29.30 105.48 76.18 0.60
Njuggtraskliden Licence
-- Historic non-JORC compliant mineral Resource of 0 575 Mt @ 0.71% Ni, 0.26% Cu & 0.04% Co
-- 10km of prospective strike
-- Mineralised system remains open at depth
-- Drill-defined nickel sulphide mineralisation developed along more than 10km of strike extent
-- Peak shallow drill intercepts at Njuggtraskliden include:
Hole From To Width Ni Cu Pt Pd Au
(m) (m) (m) (%) (%) (ppm) (ppm) (ppm)
----------- ------- ------- ------ ----- ----- ------- ------- -------
NJU07001 63.40 87.75 24.35 1.01 0.51 1.08 0.56 0.14
NJU79016 15.90 21.69 5.79 1.06 0.31 0.11 0.11 0.05
NJU79031 66.55 89.56 23.01 1.04 0.60 0.51 0.23 0.02
NJU82003E 156.75 161.62 4.87 0.65 0.31 0.15 0.88 -
NJU90006 44.00 56.30 12.30 0.90 0.79 0.30 5.34 0.24
-- Swedish Geological Survey report suggests extensions to
mineralisation at depth and along strike at all prospects on both
licences.
-- Both prospects host significant massive sulphide
mineralisation not typical of other nickel deposits in the region
indicating scope for further accumulations of locally massive
sulphide
-- Located in a nickel-rich district, analogous to the Thompson nickel Belt in Manitoba, Canada
-- 100km by sea from Boliden's Kokkola nickel smelter in Finland
Colin Bird, Executive Chairman of Kendrick Resources Plc
commented: "
We are delighted with this acquisition, since there are multi
metal occurrences, alongside the nickel, which in its own right is
very attractive. Particularly because the bodies are sulphide,
which are much sought after.
The deposits are well located relative to smelting and end user
capacity in Northern Europe and as such represent an enticing
strategic acquisition. Alongside our vanadium projects in Sweden
and our nickel projects in Norway, we are positioning Kendrick to
be ready in the rapidly emerging battery and energy storage arena.
We look forward to working on these projects from a geologically
sound archive and open system".
Consideration
Kendrick are acquiring EV Metals AB for SEK110,780 (approx. GBP
8,200) and the issue of 15 Million 5 year options to EMX to acquire
ordinary shares in the Company (Kendrick Shares) at 1.3 pence per
Kendrick Share (EMX Options) which is at a premium of approximately
67% to Kendrick's closing share price on 4 August 2023 of 0.7750
pence the last practical date prior to this announcement. The EMX
Options if exercised will allow EMX to increase its Kendrick
shareholding.
Future commitments
-- On or before 13 January 2024, the Company has to pay an
annual advanced royalty of US$30,000 per project to EMX which
increases by US$5,000 annually per Project ceasing upon the
Commencement of Commercial Production ("Advance Royalty").; and
-- On or before 13 May 2024 the Company has committed to one
thousand meter drilling for each of the Swedish Nickel Projects and
thereafter annually ceasing for a project on the date upon which
the Company commissions a Pre-Feasibility Study on the project
Royalty Agreement: The Parties shall at closing of the
Acquisition enter into a royalty agreement under which a 3% net
smelter royalty is payable to EMX on commercial production from any
of the Swedish Projects. A 1% interest in this royalty may be
bought back in stages for a total cash consideration of
US$1,000,000 on or before the fifth anniversary of the date of the
Royalty Agreement.
Exploration and Mining in Sweden
-- Sweden offers a well-established set of mining legislation
which was updated in 2014 and encourages the development of new
mines.
-- The Country offers low energy costs, a competitive corporate
tax rate for mining and a nominal royalty on production.
-- Sweden hosts three world-renowned mining districts in Kiruna,
Skelleftea, immediately adjacent to the Mjovattnet and
Njuggtraskliden Licences and Bergslagen district.
-- There are 8 active smelters in the region and accessible
deep-water terminals for ore shipment.
-- Sweden has a rich mining culture dating back to the 11(th)
Century and as a result a widespread cultural acceptance of
mining.
Mjovattnet and Njuggtraskliden Licences
Mjovattnet Mineralisation: The Mjovattnet Licence hosts
Syn-deformation or Feeder-style-type nickel copper mineralisation.
Graphite inclusions within ultramafic cumulates, low Se/S ratios in
sulphides and trace element composition indicate composition of
parental magma strongly modified during ascent. Country rock
comprises migmatised paragneiss with interbedded graphitic schist.
Intrusive breccia, lack of compositional layering, brecciated
sulphides as offset orebodies result in a complicated intrusive
complex morphology.
Mjovattnet Historic drilling was completed by NSG, Outokumpu,
SGU, and Blackstone Resources. Results were reported to the SGU and
distributed as a part of their national drill database and is shown
in Figure One shows the drill defined mineralisation on the
Mjovattnet licence.
Figure One drill defined mineralisation on the Mjovattnet
licence
The translation of Mjovattnet is "mead water" in English, which
was one of the first nickel sulfide discoveries made along the
Nickel Line. Discovered in 1971, the Mjovattnet nickel sulfide
deposit occurs along a structural corridor of similar mineralised
bodies, including the Lappvattnet, Brannorna, and Lappbacken zones
to the southwest, each of which have drill defined zones of
mineralization, with the latter two also lying within the
Mjovattnet Licence (Lappvattnet is currently held by a third
party).
Mjovattnet drill targets: Two targets identified at Mjovattnet,
at Brannorna and Mjovattnet both drill-defined along with boulder
occurrences where the source of the mineralised boulders is yet to
be discovered. Figure 1: shows the Nickel-mineralisation bearing
boulders form boulder trains due to the glacial transport (grey
arrows), indicating the location of the potential source of the
mineralisation upward of the ice flow direction.
Figure Two: Cross Section through Brannora (Mjovattnet)
Note: Drill intercepts with (*) have a 0.20% cut-off grade, and
intercept without a (*) have a 0.5% cut-off grade. Historic
drilling was complete by NSG, Outokumpu, SGU, and Blackstone
Resources. Results were reported to the SGU and distributed as a
part of their national drill database. EMX has not completed
sufficient work to classify the data as compliant with NI 43-101
standards. The data should not be relied on until there are
confirmed, however EMX believes them to be reliable and
relevant.
Mjovattnet Prospectivity The combination of drill defined nickel
sulfide mineralisation, which remains open in multiple directions,
and the upside potential near the clusters of mineralised boulders
makes the Mjovattnet project particularly attractive for further
exploration (See Figure 1: Nickel-mineralisation bearing boulders
form boulder trains due to the glacial transport (grey arrows),
indicating the location of the potential source of the
mineralisation upward of the ice flow direction).
Njuggtraskliden mineralisation: The Njuggtraskliden Licence is
described as an open dynamic magmatic wedge-shaped conduit
featuring intrusive breccias, multiple magmatic pulses of mafic and
ultramafic composition in a gabbro, pyroxenite, peridotite host
lithology. Mineralisation is made up of massive and disseminated
sulphide mineralisation, veinlets and breccias. As with Mjovattnet,
the country rock is composed of migmatised paragneiss.
Njuggtraskliden Historic drilling: Figure Three shows a drill
section at the Njuggs Project and the drill intercepts in the
highlights above are from the Njuggs project.
Figure Three shows a drill section at the Njuggs Project.
Note: Drill section adapted from Blackstone Ventures Feb 29,2008
news release. Note: EMX has not performed sufficient work to verify
the published drill data reported on this slide, and these data
cannot be verified as being compliant with NI 43-101 standards.
These historically reported data should not be relied upon until
they can be confirmed. However, the drill-delineated mineralization
as reported in various public documents available online and from
the SGU (Swedish Geological Survey) is considered relevant.
Njuggtraskliden Prospectivity: The drill defined zones of
mineralisation at Njuggtraskliden remain open at depth, and the NSG
noted in their summary report that a 10-kilometre corridor of
similar boulder clusters with nickel sulfide mineralisation remains
to be explored at Njuggtraskliden. These occurrences all lie within
the Njuggtraskliden Licence and represent considerable upside
exploration potential.
Location: The Swedish Nickel Projects are located in
east-central Sweden near Skelleftea, the two licences result from
regional nickel exploration undertaken by the Swedish Geological
survey and other state-run enterprises. Mjovattnet and
Njuggtraskliden became known as the "Nickel Line" and the deposits
occur just outside the Skelleftea Mining District, home to Boliden
AB's headquarters and smelting facility. The Mjovattnet and
Njuggtraskliden projects are located in northern Sweden, southwest
of Skellefteå as shown in Figure Four.
Figure Four: Location Map for the Mjovattnet and Njuggtraskliden
Project licences
Regional nickel exploration became a focus of the Swedish
Geological Survey ("SGU") and other state-run mining concerns in
the 1970's and early 1980's, leading to the discoveries of EMX's
Mjovattnet and Njuggtraskliden nickel-copper-cobalt-PGE deposits
along what became known as the "Nickel Line" in north central
Sweden. These deposits and occurrences are located just outside of
the Skellefteå Mining District, where Boliden AB has its regional
headquarters and operates a smelting facility.
In the past few years, the recent emphasis on conversion to
electric vehicles within the European Union and construction of a
vehicle battery factory near Skellefteå has resulted in renewed
interest in the Nickel Line and its nickel-copper sulfide
deposits.
Notes from the Swedish Geological Company ("NSG") in 1987 state
that Mjovattnet has only been partly explored and its depth
potential remains unknown. Likewise, several clusters of nickel
sulfide bearing boulders lie to the northeast and southeast (the
Frangsmyran, Holmsvattnet, Långbacken and Vallen occurrences), the
bedrock sources of which have yet to be identified.
The Njuggtraskliden deposit was discovered in the early 1970's
via boulder tracing, which led to the identification of several
mineralised outcrops. Multiple drill defined zones of nickel
sulfide mineralisation were delineated in the early 1980's, many of
which were recognised as being enriched in PGE's, but only some of
the collected drill core samples were analysed for PGE's.
Since being drilled by the NSG, a few smaller companies have
conducted limited exploration in the area, including twinning of
some of the historic drill holes and re-analysing some of the
historic drill core for PGE's. However, little or no systematic
exploration has taken place.
Further information on EV Metals AB
EV Metals AB is incorporated in Sweden. For the year ended 31
December 2022 EV Metals AB made an audited profit of SEK343,630
(approx.. GBP25,300) due to a one off intra group charge to the EMX
group of SEK646,800 (approx. GBP47.600) and were it not for this
one off intra group charge which will not arise in the future it
would have made a loss of SEK303,170 (approx. GBP 22,300). In the
year ended 31 December 2022 the loss for the year was SEK279,932
(approx. GBP20,600). As at 31 December 2022 EV Metals had net
assets of SEK368,630 (approx. GBP27,116) .
Sigdal and Hosanger Norwegian projects
In light of the Company's exploration commitment in relation to
the Swedish Nickel Projects EMX has agreed that in relation to
Sigdal and Hosanger in lieu of the existing requirement to drill up
to one thousand meters on each project if it incurs Exploration
Expenditures of no less than USD $50,000 on each of these projects
in 2023 the Company will have met its 2023 expenditure requirements
for these two projects. The Company will have until 31 December
2023 to decide whether it continues with these two projects on the
terms of the existing agreements with EMX. If the Company fails to
incur the required USD $50,000 in Exploration Expenditures on these
projects, the shortfall of the exploration expenditures obligation
may be satisfied by a payment to the EMX of the shortfall in
cash.
These arrangements in relation to the Sigdal and Hosanger
projects do not affect the Company's Espedalen Project, which
currently contains the following two nickel deposits:
-- Stormyra deposit comprising 1.16Mt @ 1% Ni, 0.42% Cu &
0.04% Co and classified as Inferred in accordance with JORC
(2012)
-- Dalen deposit comprising 7.8Mt @ 0.3% Ni, 0.12% Cu &
0.02% Co and classified as Inferred in accordance with JORC
(2012)
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
For additional information please contact:
Kendrick Resources Plc: Tel: +44 2039 616 086
Chairman Colin Bird
------------------------ ---------------------------------
Novum Securities Tel: +44 7399 9400
Financial Adviser David Coffman / George Duxberry
Joint Broker Jon Bellis
------------------------ ---------------------------------
Shard Capital Partners Tel: +44 207 186 9952
LLP Damon Heath / Isabella Pierre
Joint Broker
------------------------ ---------------------------------
Qualified Person The technical information contained in this
announcement has been reviewed, verified, and approved by Colin
Bird, CC.ENG, FIMMM, South African and UK Certified Mine Manager
and Director of Kendrick Resources plc, with more than 40 years'
experience mainly in hard rock mining.
About Kendrick Resources Plc
Kendrick Resources Plc is a mineral exploration and development
company with projects primarily based across Scandinavia. The
principle of its business is to explore the opportunities within
the natural resources sector with a focus on battery, base, and
precious metals including but not limited to vanadium, nickel and
copper. In doing so, the Company is looking to build a long-term
energy metals business in Scandinavia which delivers energy metals
to Europe to help enable its renewable energy transformation by
building a top tier energy metals production business.
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