TIDMPPHP
RNS Number : 7405F
Papillon Holdings PLC
20 July 2021
20 July 2021
Papillon Holdings plc ('Papillon' or the 'Company')
Proposed Acquisition of a 100% interest in the Kilimapesa Gold
Mine in the Republic of Kenya
Placing of 638,951,276 Ordinary Shares
Conversion of GBP1,588,038.03 of debt in Papillon Holdings plc
into equity
Admission of 1,448,425,658 Ordinary Shares of GBP0.001 each to
the Official List
(by way of Standard Listing under Chapter 14 of the Listing
Rules)
and to trading on the London Stock Exchange's Main Market for
listed securities
Notice of General Meeting including a resolution to
change the name of the Company to Caracal Gold plc
Papillon Holdings plc is pleased to confirm that its Prospectus
(the 'Prospectus') has been approved by the Financial Conduct
Authority (the 'FCA') and published today by the Company. The
Prospectus relates to the readmission of the Company's ordinary
shares to the standard listing segment of the Official List of the
FCA and to trading on the Main Market for listed securities of the
London Stock Exchange plc ('Readmission'), expected 23 August 2021
and contemporaneous dual listing on the Frankfurt Stock
Exchange.
A copy of the Prospectus is available on the Company's website
at www.papillonholdings.com or at www.caracalgold.com.
OVERVIEW
New Corporate Strategy - to solidify position as an emerging
East African focused gold producer
-- The Company aims to rapidly increase production to +50,000ozs
per annum ('p.a.') and build a JORC compliant resource base of
+3Moz within 12-18 months from readmission.
o Advance a well-defined mine optimisation strategy at the
Kilimapesa Gold Mine, where there is significant expansion
potential and ability to increase gold production to 25,000oz p.a.
and the resource to +2Moz.
o Utilise experienced management team to acquire other
complementary and strategically located gold mine and development
projects in East Africa.
Compelling investment opportunity - revenue generative; robust
sector; and strong team
-- Raising GBP2.8 million (before expenses) by way of a Placing
to build production at the Kilimapesa Gold Mine, support future
growth including the acquisition of strategic assets, working
capital and other general corporate purposes.
-- The Company will trade under the name of Caracal Gold plc and
its new ticker symbol will be GCAT
-- Market cap on readmission circa GBP14.5 million
-- Board changes to support new strategy
o Simon Games-Thomas, Gerard Kisbey-Green and Robert McCrae to
join the board whilst Lord Nicholas Monson and Anthony Eastman to
step down
-- General Meeting to approve the Resolutions in relation to,
inter alia, the Acquisition, will be held on 13 August 2021
Charles Tatnall, Papillon CEO, said, "Today marks another
momentous step towards achieving our mission of establishing a
strategic portfolio of African gold producing assets focussing on
known and geologically proven gold projects and listing on the
London Stock Exchange. Gold equities continue to perform, driven by
several factors including financial and geopolitical uncertainties
and low interest rates. We believe this trend will continue and
that our timing to welcome new shareholders to our company is
opportune. With a strong growth strategy and significant
value-uplift potential, our team is excited to further advance
current operations and look to acquire robust new assets to
strengthen the portfolio in the months ahead."
Background & Transaction Summary
On 3 September 2020, the Company announced that it had signed a
binding Heads of Agreement to acquire certain contractual
production and exploration rights held by Mayflower Capital
Investments Pty Limited ("Mayflower") in gold assets located in
Kenya and Congo Brazzaville. These rights are held by Mayflower
through a special purpose vehicle, Mayflower Gold Investments
Limited ("MGIL"), incorporated by Mayflower in the United Kingdom
on 9 December 2020.
The Company will acquire 100% of the share capital of MGIL and
the options that MGIL holds to acquire: (a) 100% of the share
capital of KPGL, which holds a 100% interest in Kilimapesa and (b)
a 70% joint venture interest in Congo Gold SARL ("CGL") which holds
a 100% interest in the Kakamoeka Gold Project ("Kakamoeka"), as
follows:
1. Kilimapesa. Kilimapesa, which uses the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves (JORC), is an established gold mine and gold processing
operation that offers immediate value to Papillon. Kilimapesa is
located in Kenya approximately 230 kilometers west of Nairobi in
the historically productive Migori Archaean Greenstone Belt.
Contemporaneously with Readmission, the Company will exercise
its newly acquired option to acquire a 100% interest in Kilimapesa
and, immediately thereafter, the Company intends to devote
substantially all of its resources to the exploration and
development of gold in Kilimapesa.
2. Kakamoeka. Kakamoeka, which includes four exploration
licences covering over 3,000 square kilometres of the Mayombe
Greenstone Belt located in Congo Brazzaville, provides the Company
with further gold exploration and development opportunities.
On 6 January 2021 the parties amended their heads of agreement
and on 25 March 2021, the Company and Mayflower supplemented their
heads of agreement with a formal purchase agreement (the "Purchase
Agreement").
Papillon's directors believe that securing a near-term gold
asset, with significant upside from resource expansion and mine
optimisation activities, represents a significant opportunity for
Papillon's stakeholders to gain exposure to the junior gold mining
industry.
Strategy and Objectives following Readmission
The Company aims to build a position as an emerging East African
focused gold producer with a clear path to grow production and
resources both organically and through strategic acquisitions.
Following Readmission, it aims to rapidly increase production to
+50,000ozs per annum ('p.a.') and build a JORC compliant resource
base of +3Moz within 12-18 months from listing.
To this end, the Company's initial focus is on the Kilimapesa
Gold Mine where there is the potential to increase gold production
to 25,000oz p.a. and the resource to +2Moz. Accordingly, having
started mining operations (extraction and processing) in early
2021, a three-phase optimisation programme is underway to reach the
full economic potential of Kilimapesa and the region granted by the
mineral tenements:
-- Phase 1 - reach a production rate of 5,000oz of gold p.a. and
increase the resource statement reported in accordance with the
JORC (2012) Code and estimated (or based on documentation prepared)
by a Competent Person as defined by the JORC (2012) Code to
1,000,000oz.
-- Phase 2 - increase production rate to over 10,000oz p.a. and
utilise cash flow to undertake further exploration. Upgrading the
current plant facilities during this phase will also enable steady
and consistent production at higher levels. This phase is expected
to be completed in a 6- to 12-month timeframe.
-- Phase 3 - explore new resources within the PL/2018/0189 remit
as the established Kilimapesa site bears fruit and increase
resource to +2Moz; the Directors believe this is achievable given
the demonstrable history of the tenement. A feasibility study will
also be undertaken to develop a larger mine to support production
rates surpassing 25,000oz per annum. The construction and
commissioning of a new (third) processing plant is also planned to
commence, as well as further underground expansion of the existing
mines. Phase 3 is expected to be completed in an 18- to 24-month
timeframe.
Additionally, the Company aims to utilise its experience team to
acquire other complementary and strategically located gold mine and
development projects in East Africa.
Placing
The Company has raised gross proceeds of approximately
GBP5,493,885 through the issue of 638,951,276 Placing Shares. The
placing price has been completed in two rounds, comprising first
round commitments of GBP2,686,885 and second round commitments of
GBP2,807,000 that was completed at a placing price of GBP0.01 per
share.
Admission & Dealings
As the Acquisition constitutes a Reverse Takeover under the
Listing Rules, the London Stock Exchange will cancel trading in the
Existing Ordinary Shares on the Main Market for listed securities,
and the FCA will cancel the listing of the Existing Ordinary Shares
on the standard listing segment of the Official List by 7.30 a.m.
on 23 August 2021.
An application will be made to the FCA and to the London Stock
Exchange for the Enlarged Share Capital to be admitted, to trading
on the Main Market for listed securities and to listing on the
standard listing segment of the Official List. It is expected that
Readmission will become effective and that dealings in the Ordinary
Shares will commence on the London Stock Exchange at 8.00 a.m. on
23 August 2021.
Directors
On Readmission, the Board will consist of the following
directors:
Simon Games-Thomas, Non-Executive Chairman
Simon has over 30 years' experience in the global financial and
commodity markets. His career has involved extended periods in
running trading operations in precious metals, base metals and
agricultural products as well as having set up and run his own
futures brokerage.
Simon also has significant experience in the financing of
advanced exploration and development projects and mining operations
in Africa, Asia and Europe using debt and commodity linked debt
instruments. Simon held senior management roles in London, Sydney
and Singapore for banks such as UBS, JP Morgan, Merrill Lynch,
Rothschild and Lehman Brothers.
Simon is the founder and director of Pegasus. Since leaving
banking he has founded a firm offering financing and risk
management advice and re-structuring advice to corporates in
Africa, South America and Australia. He is also a shareholder in a
renewable energy start-up and establishing a commodity lending and
trade finance fund.
Gerard-Anthony Kisbey-Green, Executive Director
Gerard has over 34 years of experience in the mining and related
financial industry. After graduating as a Mining Engineer in South
Africa, Gerard gained experience on South African mines, eventually
working in various management positions for several large South
African mining companies. During that time, he worked on gold,
platinum and coal mines primarily in South Africa but also in
Germany and Australia. Gerard then moved into the financial markets
where he spent 17 years, the first 5 of which as a mining equity
analyst on the Johannesburg Stock Exchange where he was rated
amongst the top analysts in the Financial Times; annual rankings.
He then moved into mining corporate finance and worked in South
Africa for 5 years and England for 7 years for banks including
JPMorganChase, Investec and Standard Bank.
Gerard has significant experience in IPO's, including in capital
raisings, M&A transactions, and has worked with industry
participants such Nomads, broker, and other advisors on deals that
cover a diversity of commodities and geographic locations. On
leaving the banking industry, Gerard became CEO of Peterstow
Aquapower (SA), which is a mining technology company, and Director
of Peterstow Holdings. Gerard then held the positions of President
and CEO of Aurigin Resources, a Toronto-based private company
focused on gold exploration in East Africa, between December 2012
and September 2018. He joined the Board of Goldplat plc in August
2014 as a Non-Executive Director and assumed the role of Chief
Executive Officer of Goldplat Plc in February 2015-a position he
held until April 2019. Gerard re-joined the Board of Goldplat plc
in May 2020 as a non-executive Director. He is currently working as
a private consultant and is the Mining Lead for Sutton
International Limited, a private company developing mining projects
- primarily in Africa.
Robert Andrew McCrae, Executive Director
Robert has over 25 years' experience in the mining and
exploration industry in Africa. Robert qualified with a BCom
Economics and Financing from the University of Witwatersrand. He
has been involved in the exploration, development and financing of
projects in over 15 African countries across a broad range of
commodities including precious metals, gemstones, base metal, bulk
commodities and industrial minerals. He has managed both the
development of these projects for both private and listed companies
and has acted in roles of project owner as well as
project/construction contractor. Mr MCrae was the founding
shareholder of Mining Project Development Ltd, which owned the
Zanaga Iron Ore Project in the Republic of Congo prior to its
acquisition by Glencore.
Robert has held senior executive management positions with a
number of Australian Securities Exchange listed mining and
exploration companies, including CEO of Minbos Resources, which had
several high-grade phosphate projects in Angola and the Democratic
Republic of Congo and COO of Black Mountain Resources which
operated a high-grade vermiculite mine and phosphate exploration
project located in Uganda. He was also a founder of Luiri Gold
Limited, which explored and developed gold projects in Zambia and
where he was also involved on the listing onto the Toronto Stock
Exchange. Between 1994 and 2006, Mr McCrae was Director, Business
Development of MDM Engineering (Pty) Ltd, an African focused
natural resource contracting and process engineering companies in
Africa, which was responsible for the construction of processing
plants for a number of major gold and copper operations throughout
Africa.
James Timothy Chapman Longley, Non-Executive Director
James is a chartered accountant whose career has been focussed
on venture capital, private equity and building growth companies.
His earlier career was with Arthur Andersen,
Creditanstalt-Bankverein Merchant Banking and Touche Ross Corporate
Finance. In 1990 he co-led the GBP10.5m management buy-in of The
Wilcox Group, one of the UK's leading aluminium alloy tipping
trailer manufacturers. He was also co-founder, director and chief
financial officer of BioProgress Technology International, Inc., a
VMS and drug delivery system developer using proprietary films,
processes and formulations. It was a NASD quoted and regulated
company from 1997 to 2002 and was subsequently listed on AIM. Mr
Longley was also a co-founder, director and chief financial officer
of PhotoBox Limited from 2000 to 2006, a company that then merged
with its French counterparts, Photoways to create Europe's leading
online photofinishing business. The group acquired Moonpig.com in
2011 which was recently separately listed on the LSE with a
valuation in excess of GBP1.2 billion.
Mr Longley is currently a co-founder, director, chief financial
officer and interim CEO of Plutus PowerGen plc, a company listed on
AIM. He is also a director of Stranger Holdings plc, a standard
listed company on the London Stock Exchange.
Charles Ronald Spencer Tatnall, Non-Executive Director
Charles is primarily involved in advising and raising funds for
small and medium sized enterprises with varying business activities
ranging from advising investment and family wealth companies to
reviewing investments and business opportunities together with the
management of personal investments. Until 2005, he was consultant
to Bolton Group plc, a UK-listed investment company, identifying
and conducting due diligence on potential investment and
acquisition opportunities from a broad range of industry sectors.
These included natural resources, both exploration and production,
electronic hardware and software, and biotechnology.
General Meeting
The General Meeting is to be held at the offices of MSP
Secretaries Limited, Eastcastle House, 27/28 Eastcastle Street,
London W1W 8DH on 13 August 2021 at 1.00 p.m. (or any adjournment
thereof) for the purpose of considering and, if thought fit,
passing the resolutions contained therein.
Expected Timetable of Principal Events 2021
Publication of Admission Document 19 July
Latest time and date for receipt of votes
by Proxy 11 August
General Meeting 13 August
Admission effective and dealings in the
Ordinary Shares commence* 23 August
Expected date for CREST accounts to be
credited in respect of new Ordinary Shares 23 August
Dispatch of definitive share certificates, within 10 business days
where applicable of Admission
* Assuming the Resolutions are passed at the General Meeting
Defined terms within this announcement shall have the meaning
ascribed to them as set out in the Company's Prospectus dated 19
July 2021.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310 ("MAR"). With the publication of this
announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.
ENDS
For further information visit www.papillonholdings.com or
contact the following:
Papillon Holdings plc info@papillonholdingsplc.com
Charles Tatnall / James Longley
Mayflower Capital Investments Pty info@mayflowercapinvest.com
Limited
Gerard Kisbey-Green / Jason Brewer
-----------------------------
Novum Securities Ltd (Broker) crowbury@novumsecurities.com
Colin Rowbury
-----------------------------
St Brides Partners Ltd (Financial info@stbridespartners.co.uk
PR)
Isabel de Salis / Susie Geliher
-----------------------------
DGWA, the German Institute for Asset info@dgwa.org
and
Equity Allocation and Valuation
(European Investor and Corporate
Relations Advisor)
Stefan Müller / Katharina Löckinger
-----------------------------
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END
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