TIDMPPHP
RNS Number : 8778X
Papillon Holdings PLC
03 September 2020
Papillon Holdings plc / Index: LSE / Epic: PPHP / Sector:
Investment
3 September 2020
Papillon Holdings Plc
('Papillon' or the 'Company')
Heads of Agreement Signed to acquire African Gold Assets
Update on Pace Cloud Proposed Investment
Papillon Holdings plc, the London listed investment company, is
pleased to announce that it has signed a binding Heads of Agreement
(the 'Agreement') with Mayflower Capital Investments Pty Limited
('Mayflower') to acquire certain contractual production and
exploration rights held by Mayflower in two gold assets located in
Kenya and Congo Brazzaville.
Overview
-- Proposed acquisition of:
o 100% interest in the Kilimapesa Gold Mine in the Republic of
Kenya, a current producing gold mine with an existing 671,446 oz
JORC resource and with further exploration potential (Kilimapesa');
and
o 70% interest in the Kakamoeka Gold Project, which includes
four exploration licences, covering over 3,000km(2) of the Mayombe
Greenstone Belt located in Congo Brazzaville (Kakamoeka')
(together, the 'Acquisitions')
-- The Acquisitions are expected to provide the Company with
near term gold production and considerable value upside potential
from resource expansion and mine optimisation at Kilimapesa, in
addition to uplift through the delivery of exploration and
development milestones at Kakamoeka
-- The Acquisitions are intended to be the first phase of a
strategy to establish a strategic portfolio of African gold
producing assets focussing on known and geologically proven gold
projects
Papillon CEO Charles Tatnall said, "Securing a near-term gold
asset, which requires limited capex to bring to fruition, and which
is partnered with significant upside from resource expansion and
mine optimisation activities, is a remarkable find for our
investors. When coupled with an additional highly prospective and
potentially equally valuable suite of gold discoveries in Congo
Brazzaville, I believe we have a truly exceptional and largely
de-risked opportunity for shareholders to gain exposure to the
junior gold mining industry.
"As investors will know, now is perhaps the perfect time to be
developing gold mines and projects. The gold price recently hit all
times highs and despite a perceived correction in recent weeks,
many commentators remain bullish about a long-term and sustainable
gold price holding above US$2,000/oz. "
Further Information
The Board of Papillon has signed a binding Heads of Agreement
with Mayflower to assign to the Company certain contractual rights
held by Mayflower to acquire some or all of the interests of two
gold assets located in Kenya and Congo Brazzaville.
Mayflower is a global natural resources investment group. It
originates, structures and provides principal investment and
management services in order to sufficiently de-risk investments
and pave the way for other investors. With offices in Perth,
Johannesburg and London, Mayflower has a truly global reach to good
quality natural resources assets.
Under the Agreement, Papillon has agreed to acquire the
contractual rights from Mayflower to acquire a 100% interest in
Kilimapesa Gold Pty Limited ('KPG'). KPG is a Kenyan incorporated
company which holds a 100% interest in Kilimapesa and the
associated mining and exploration licences.
Kilimapesa is an established gold mine offering immediate value
to the Company. Kilimapesa is located approximately 230km west of
Nairobi in the historically productive Migori Archaean Greenstone
Belt, Kenya. Kilimapesa has a current mineral resource of 8,715,291
tonnes at 2.40 g/t Au for 671,446 oz Au at a cut-off of 1 g/t.
Production commenced in 2012 with the mine having an established
infrastructure including a processing plant commissioned in 2016
with design capacity of 200 tonnes per day. Kilimapesa was put on
care and maintenance in 2019, primarily due to insufficient
funding.
Mayflower's technical management team is currently on site at
Kilimapesa overseeing and implementing plans for the immediate
recommencement of gold production using the established processing
plant. Further mine and process plant optimisation studies are
underway and are to be implemented upon completion of the
Acquisitions to further increase annual gold production to an
initial rate of 25,000 oz.
The Company has further agreed to acquire the contractual rights
from Mayflower to acquire a 70% interest in Congo Gold SARL
('CGS'). CGS is a company incorporated in Congo-Brazzaville which
holds a 100% interest in Kakamoeka which includes four exclusive
exploration permits that cover over 3,000km(2) and extend over 50km
of strike length of the Mayombe Greenstone Gold belt from the
Angolan border in the south-east to the Gabon border in the
north-east.
Gold production on the Kakamoeka license areas dates back to the
1940s and small-scale artisanal mining continues to this day.
Modern exploration and development commenced only in 2011, with
mapping, soil geochemistry, trenching, and multiple RAB and core
drilling completed over multiple gold centres identified at
Kakamoeka.
Kakamoeka is considered by the Company as an advanced and highly
attractive gold exploration project. Previous drilling has already
defined two advanced gold projects, 15km of strike and several
zones of near surface gold mineralisation through laboratory assay.
These results include 3m at 7.19g/t Au from 7m, 3m at 5.54g/t Au
from 1m, 3m at 6.49g/t from 3m, 3m at 4.90g/t from 6m and 3m at
6.95g/t from 4m. In addition, visible gold was recorded in a number
of samples from the drill holes.
The Company will complete further drilling in 2020 to define a
maiden JORC complaint resource at Kakamoeka with seven drill ready
targets already identified and numerous additional targets ready
for the Company's earlier stage exploration work to commence.
Going forward, the Company's strategy is to establish a
strategic portfolio of gold producing and development assets
focussing on existing gold resources and assets in proven and
well-established gold mining regions in Africa. The Company is
actively working with Mayflower in the identification and further
potential acquisition of gold projects which meet these
criteria.
The Acquisitions are subject, inter alia, to the completion of
due diligence, documentation and compliance with all regulatory
requirements, including the Listing and Prospectus Rules and, as
required, the Takeover Code. The Acquisitions, if they proceed,
will constitute a Reverse Takeover under the Listing Rules and
therefore the listing in the Company's ordinary shares will remain
suspended pending the re-admission of the Ordinary Shares to the
Standard Listing Segment of the London Stock Exchange. The Company
is working on the preparation of a prospectus in relation to the
Acquisitions which will, in due course, be submitted to UKLA for
approval and making application for the enlarged Company to have
its Ordinary Shares re-admitted to the Standard Listing Segment of
the London Stock Exchange.
The Company will be renamed Gold Mines of Africa PLC on
re-admission.
Update on Pace Cloud Limited
On 18 May 2018, the Company reached an agreement via a
non-binding head of terms to make an investment in 50% of the
issued share capital of a fintech company, Pace Cloud Limited
('Pace Cloud').
Papillon Holdings PLC had fulfilled the terms of its investment
of GBP550k to achieve a 50% equity interest in Pace Cloud, the
prospectus was approved by UKLA and the company brokers were ready
to proceed with the placing. However, the directors and
shareholders of Pace Cloud informed us they no longer wished to
proceed with the transaction. Papillon is yet to receive a
realistic proposal from Pace Cloud directors and shareholders as to
how they intend to fulfil their legal obligations regarding the
substantial transaction costs and substantial loan advances to them
to date. Further, the Papillon Board of directors has determined
that all assets and benefits arising from the terminated
relationship with Pace Cloud will be spun off into a separate
private entity owned by the existing shareholder base,
contemporaneously with the transaction contemplated above.
** ENDS **
For further information visit http://papillonholdingsplc.com or
contact the following:
Charles Tatnall Papillon Holdings plc info@papillonholdingsplc.com
Susie Geliher St Brides Partners Limited info@stbridespartners.co.uk
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014
(MAR).
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ACQEANNAEEAEEFA
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