Alien Metals
Trading Symbols
AIM: UFO
FWB: I3A1
4 December
2019
Alien Metals
Ltd
(“Alien” or “the Company”)
ALIEN TO ACQUIRE HIGH-GRADE
HISTORIC AUSTRALIAN SILVER MINE
This announcement is available in PDF format from
www.alienmetals.uk/assets/docs/nr/nr-2019-12-04-elizabeth-hill.pdf.
Alien Metals Limited (“Alien Metals” or “Company”) is pleased to
announce that it has entered into a conditional agreement (the
“Agreement”) to acquire, a 100% interest in the former producing
Elizabeth Hill Silver Project (“Elizabeth Hill Project” or the
“Project”) from Karratha Metals Group Limited (“KMG”) in
Western Australia (“the
Agreement”). Completion of the acquisition is conditional on,
amongst other matters, satisfactory mutual due diligence on the
Project and Alien by the parties, required regulatory approvals and
approval by KMG’s shareholders for the distribution (as further
detailed below).
Highlights:
- Elizabeth Hill Silver Project
produced over 1,170,000 oz silver between 1998 and 2000
o Exceptionally high mine head grade averaging 2,195
g/t Silver (70.24 oz/t)
o Mined during low silver price environment of
~US$5 an ounce (currently
~US$17)
o Significant historic exploration including a total of
470 holes for over 50,000 m of
drilling
o One of the very few primary (native) silver mines in
Australia
- Elizabeth Hill Silver Project
contains high grade silver mineralisation associated with the Munni
Munni Complex, which is one of Australia’s most significant
Platinum Group Metals occurrences (2.1m oz Pt/Pd/Au)
- Located in the Pilbara region of
Western Australia near major PGM
and nickel mines / deposits and ~45 km from the major regional
centre of Karratha
- Alien’s second low cost (all
share) acquisition, delivering on the strategy to build a portfolio
of precious and base metal high value assets
- Following completion, the
Company anticipates the next steps to include a site visit and the
compilation of historical information ahead of outlining an initial
exploration program
The geographic location of the Elizabeth Hill Project (Pilbara,
Western Australia), is set out in
figure 1: www.alienmetals.uk/assets/img/191204_figure1.jpg
Bill Brodie Good, Technical
Director of Alien, commented:
“The Elizabeth Hill Silver Project is
a great addition to our silver assets in Mexico and it is also complementary to the
Hancock Ranges and Brockman Iron Ore
projects located in the Pilbara Region of Western Australia. The historical information
on the property viewed to date gives us excellent indication that
this project has significant upside potential, especially as silver
prices are now nearly four times the average price when production
ceased in 2002. Of note, some of the largest silver ‘nugget’
specimens in Australia have been
pulled from Elizabeth Hill.”
Elizabeth Hill Silver Project
overview
The Elizabeth Hill Silver Project is situated approximately 45
km south of Karratha in the 61,000 km2 Achaean Pilbara
Block of the Pilbara Craton. The Project is well located, lying 40
km from the deep-water port at Dampier and 8 km from rail
infrastructure. Grid power and groundwater are available on site,
and the area has an abundant skilled workforce nearby.
High-grade silver was discovered during nickel-copper
exploration by AGIP in 1987. Further exploration of the project by
ASX-listed East Coast Minerals (now KMG) and Legend Mining Ltd
(ASX-LEG) discovered a very rich silver deposit. Mineralisation is
related to shear structures that are related to the Munni Munni
Complex lying immediately to the west. Native silver and lesser
amounts of silver sulphide minerals occur as both fine and coarse
grains within a coarse-grained calcite vein stockwork.
Previous Work on the Elizabeth Hill
Project1
The Elizabeth Hill Silver Project was mined between 1998 and
2000 via underground mining, primarily between the 62 m and 102 m
levels. Silver production totalled approximately 16,800 tonnes of
ore grading 2,195 g/t Ag (70.24 oz/t Ag) generating 1,170,000
ounces, including some very large specimens of native silver.
1 Source: KMG Prospectus dated 29 June 2018 and a report prepared for KMG
by an independent mining consultant dated 19
June 2018
Alien will carry out a site visit and data compilation of
historical information ahead of outlining an initial exploration
program on completion of this deal to ascertain the following phase
of work needed to advance this project to the next stage.
ACQUISITION AGREEMENT
As outlined in the Agreement, the Company has the ability to
acquire a 100% interest in tenement M47/342 (covering
3.63km2), which encompasses the Elizabeth Hill Silver
Project for consideration of 200,000,000 Common shares
(“Shares”) and 50,000,000 warrants in Alien Metals, which
KMG will distribute to its shareholders (“Distribution”). The
Shares would be deemed to be issued at a price of £0.0014 each, and
each warrant would entitle the holder to purchase one share at a
price of £0.0025 for 18 months from the date of allotment of the
Shares.
Completion of the transaction is conditional upon, amongst other
things, satisfactory mutual due diligence, and obtaining all
required third party approvals (including under the Mining Act (WA)
and from KMG’s shareholders for the Distribution) and is expect to
occur in first quarter 2020. Pursuant to the Agreement, Alien will
enter into a royalty agreement with a third party under which the
third party will be entitled to a royalty of 2% from all net
smelter revenue from the Elizabeth Hill Silver Project.
Under the terms of the Agreement, Alien will as soon as
reasonably practicable and by no later than 6 December 2019, and at its costs obtain a legal
opinion on the Project.
a) Upon obtaining the legal opinion and at
its sole election, Alien will lend KMG up to A$120,000 on the following terms and conditions
(“Loan”):
b) the Loan is
limited recourse and only repayable in the event the Seller
breaches its obligations under the agreement or the Seller’s
shareholders do not approve the Distribution;
c) the Loan accrues
interest at 1% per month;
d) proceeds may only
be used to perform the Seller’s obligations under this agreement
(including using reasonable endeavours to satisfy the
Conditions).
Daniel Smith is the sole director
and shareholder of Kingmaker Metals Pty Ltd (“Kingmaker”).
Kingmaker holds approximately 22% of the issued share capital of
KMG. In the event the transaction completes and KMG undertakes the
Distribution, Kingmaker will hold approximately 2.5% of the issued
share capital of the Company.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information please visit the Company’s website
at www.alienmetals.uk, or
contact:
Alien Metals
Limited
Bill Brodie Good, Technical Director
David Taylor, Company Secretary
Tel: +44 (0)20 7887 6599 |
First Equity Limited
(Joint - Broker)
Jason Robertson
Tel +44 (0)20 7374 2212 |
Beaumont Cornish
Limited (Nomad)
James Biddle/ Roland Cornish
www.beaumontcornish.com
Tel: +44 (0) 207 628 3396 |
Novum Securities
Limited (Joint - Broker)
Jon Belliss
Tel +44 (0)20 7399 9425 |
Blytheweigh (Financial PR)
Megan Ray/Rachael Brooks
Tel: +44 (0) 207 138 3204 |
|
Notes to Editors
Alien Metals Ltd is an AIM quoted mining exploration and
development company. Since the restructure of the company in 2018,
Alien has focused on delivering its strategy of acquiring mining
projects which demonstrate significant development upside, in
jurisdictions with established infrastructure and mining codes, and
where strong operational controls can be assured.
In addition to progressing its acquisition-led strategy,
following the strategic review of its portfolio of projects in
Mexico during 2018-19, the Company
has identified exploration targets across its 12 mining concessions
in Zacatecas, Mexico, which it is
working to advance systematically.
Qualified Person
The information in this report that relates to exploration
targets, exploration results, and other information of a technical
nature has been reviewed by Dr Lex Lambeck Ph.D, a technical
consultant to the Company. Dr Lambeck is a Member of the American
Institute of Professional Geologists and a Certified Professional
Geologist, CPG-11734, with over 15 years of relevant experience in
exploration and assessment of resource projects.
Forward-Looking Information
This press release contains certain “forward-looking
information”. All statements, other than statements of historical
fact that address activities, events or developments that the
Company believes, expects or anticipates will or may occur in the
future are deemed forward-looking information.
This forward-looking information reflects the current
expectations or beliefs of the Company based on information
currently available to the Company as well as certain assumptions,
including the availability of sufficient funds. Forward-looking
information is subject to a number of significant risks and
uncertainties and other factors that may cause the actual results
of the Company to differ materially from those discussed in the
forward-looking information, and even if such actual results are
realised or substantially realised, there can be no assurance that
they will have the expected consequences to, or effects on the
Company.
Any forward-looking information speaks only as of the date on
which it is made and, except as may be required by applicable
securities laws, the Company disclaims any intent or obligation to
update any forward-looking information, whether as a result of new
information, future events or results or otherwise. Although the
Company believes that the assumptions inherent in the
forward-looking information are reasonable, forward-looking
information is not a guarantee of future performance and
accordingly undue reliance should not be put on such information
due to the inherent uncertainty therein.
Glossary:
g/t - Gram per ton
Oz/t – Ounce per ton
Ag – Silver
Munni Munni Complex – A specific geological sequence of specific
rocks that are different to the overall surrounding area and unique
to this region in Western
Australia
Silver sulphide – Mineral containing a mixture of silver and
sulphide minerals such as Pyrite
Calcite – Very common mineral found extensively, with a chemical
formula of CaCO3
Vein stockwork – a series of thin veins clustered in a random
orientation and are common in many ore deposit types