TIDMSTGR
RNS Number : 8027X
Stratmin Global Resources PLC
02 September 2015
2 September 2015
StratMin Global Resources Plc
("StratMin" or the "Company")
GBP2 Million Investment from ASX listed Bass Metals Ltd
StratMin Global Resources Plc (AIM: STGR), London's only listed
graphite production and exploration company, announces that it has
negotiated a farm in agreement with Bass Metals Ltd ("Bass"), an
Australian Stock Exchange ("ASX") listed resources company, for
Bass to acquire up to a 35 per cent interest in the existing
Loharano mine and processing operations of StratMin via an initial
investment into Graphmada Mauritius ("Graphmada Mauritius"), the
Company's wholly owned subsidiary, of GBP2 million in two tranches,
for an initial interest of 25 per cent in Graphmada Mauritius (the
"Initial Investment").
The agreement also allows for Bass, subject to the successful
completion of the Initial Investment by 30 November 2015, to
acquire, at its sole discretion, a further 10 per cent interest in
Graphmada Mauritius prior to 31 December 2015, for a consideration
to be determined by reference to the share price of StratMin at the
time of the election to exercise the option.
The collaboration with Bass provides StratMin with a cost
effective mechanism to access the sophisticated graphite investor
base in Australia. The ASX currently has a number of listed
graphite project developers and producers with a combined market
cap in excess of A$1 billion. The ASX has active graphite stock
trading, major institutional investor participation and equity
research coverage on the sector from a number of international
banks and broking houses. By partnering with Bass, StratMin is
gaining exposure to this market and an efficient source of
development capital. As the only successful new greenfield graphite
mine developer, StratMin, and its Graphmada Mauritius subsidiary,
are a differentiated opportunity in the Australian market.
StratMin will use the GBP2 million received from Bass to fund
further optimisation work at its Loharano facility, to complete the
Detailed Feasibility Study for the expansion of the Mahefadok
project via a new mine and 12,000+ ton per annum plant as well as
to initially capitalise the joint venture with Tirupati Carbons
& Chemicals Group (P) Ltd. ("Tirupati") at the Vatomaina
project, as announced on 18 June 2015. Together these projects are
expected to re-position StratMin as a mid-tier international
graphite concentrate producer.
Brett Boynton, CEO, commented:
"We are very pleased with the opportunity to partner with Bass
in building Graphmada Mauritius and StratMin. This transaction
enables the Company to fund the group with investment at a
substantial implied premium to the current share price and
demonstrates a strong endorsement of our strategy.
"Rick Anthon, Bass Chairman, has an exceptional depth of
expertise in international resources and his current position in
the leadership team at Orocobre Limited provides great exposure for
StratMin. Orocobre Limited is the outstanding story at the moment
in the Lithium Ion battery materials market, so this is a great
opportunity to shine a light on what StratMin is doing in graphite.
Working with Bass is a cost effective entry to the very
sophisticated graphite and renewable energy investor base in
Australia without the cost of a dual listing.
"This transaction reduces the funding risk going forward for
StratMin by giving it access to a large and active graphite
investor pool and gives the Company the confidence to look at more
significant transactions going forward. We have an opportunity now
to capitalise on the early mover status StratMin has gained and
whilst most of our peers are focused on completing feasibility
studies and cost cutting, together with Bass, we can work on
expanding production from Loharano and developing new
opportunities."
Transaction details:
1. Bass to invest GBP2 million in Graphmada Mauritius, the 100
per cent owned subsidiary of StratMin, which in turn is the 100 per
cent owner of Graphmada S.A.R.L. the license holder and mine
operator of the Madagascan assets. Following the GBP2 million
investment, Bass will become a 25 per cent shareholder in Graphmada
Mauritius with StratMin holding the balance.
2. The Initial Investment is binding, subject to satisfactory
completion of due diligence by Bass and the parties agreeing to the
terms of a shareholders agreement to govern the management and
operations of Graphmada Mauritius by no later than 15 September
2015. The Initial Investment is to be made in two tranches,
GBP500,000 to be received by StratMin by 30 September 2015 and
GBP1.5 million to be received by StratMin by 30 November 2015 or a
mutually agreed alternative date. StratMin's 25 per cent interest
in Graphmada Mauritius will be transferred to Bass on a pro rata
basis on receipt of funds.
3. Subject to the successful completion of point 2 above (the
Initial Investment), Bass will be granted an option to acquire a
further 10 per cent of Graphmada Mauritius.
The exercise price of this option will be set by reference to
the 5 day volume weighted average price ("VWAP") of StratMin
Ordinary Shares prior to Bass giving notice to StratMin of its
intention to exercise the option according to the following
formula:
10% interest in Graphmada Mauritius = (x/4.03) multiplied by
GBP1.23 million
where x = the 5 day VWAP in pence per share.
4. StratMin will use the GBP2 million received for its interest
in Graphmada Mauritius to fund further optimisation work at its
Lohorano facility, to complete the Definitive Feasibility Study for
the expansion of the Mahefedok project and to initially capitalise
the joint venture with Tirupati to develop the Vatomaina
project.
5. Any future funding requirements at Graphmada Mauritius will
be met pro rata by the two parties according to their respective
equity positions.
6. The parties will each have a mutual right of first refusal to
meet any shortfall by the other in any future funding of Graphmada
Mauritius.
7. The parties will also have a mutual right of first refusal to
fund any new graphite investments outside of Graphmada Mauritius on
a pro rata basis according to the respective equity positions in
Graphmada Mauritius.
8. Any future profits from Graphmada Mauritius will be shared pro rata by the parties.
9. The common directors of StratMin and Bass, David Premraj and
Jeffrey Marvin, have abstained from the StratMin Board vote on the
transaction with Bass and under the terms of the agreement with
Bass will not participate in any future StratMin Board decisions on
matters concerning Bass, or exercise their respective voting rights
in respect of any resolutions relating to Bass or any of its
affiliates. It should also be noted that under Australian corporate
law both David and Jeffrey were prohibited from participation in
the decision by Bass to make this offer and similarly are
prohibited in future participation in decision making at Bass
regarding any involvement with the StratMin group of companies.
About Bass Metals Ltd:
Bass is an ASX listed resource investment and operations company
led by veteran Australian corporate developer Rick Anthon. Rick is
currently also a member of the leadership team at Orocobre Limited,
a successful Lithium project developer with a circa A$275m market
capitalisation. Orocobre Limited is positioned to take advantage of
the increasing demand for lithium by the renewable energy and
lithium ion battery industry. As such Rick is also intimately
familiar with the growing demand for graphite in these
industries.
The opportunity to invest in Graphmada Mauritius was introduced
to Bass by two of StratMin's non- executive Directors, David
Premraj and Jeffrey Marvin, who are also independent non-executive
directors of Bass. Together, they bring considerable knowledge of
StratMin's Madagascan operations to Bass and have enabled Bass to
complete initial due diligence and formulate a proposal for
investment and partnership. For the avoidance of doubt, David and
Jeffrey both abstained from the StratMin Board vote on the
transaction with Bass and have committed to abstaining from all
future StratMin Board votes on matters concerning Bass.
For further information please visit www.stratminglobal.com or
contact:
StratMin Global Resources Plc +44 (0) 20
Brett Boynton, CEO 3691 6160
Strand Hanson (Nominated & Financial
Adviser)
Rory Murphy / James Spinney / +44 (0) 20
Ritchie Balmer 7409 3494
Beaufort Securities (Broker) +44 (0) 20
Jon Belliss 7382 8300
Blytheweigh (Financial PR) +44 (0) 20
Halimah Hussain / Megan Ray 7138 3204
This information is provided by RNS
The company news service from the London Stock Exchange
END
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