26 October 2022
Bezant Resources Plc
("Bezant" or the "Company")
Mankayan Project Update
Bezant (AIM: BZT), the copper-gold exploration and development company, further to its announcement dated 18 March 2022 announces that on 26 October 2022 it entered into;
· a conditional share purchase agreement (the "SPA") to exchange its 27.5% shareholding in IDM Mankayan Pty Ltd ("IDM Mankayan") for a 27.5% shareholding in IDM International Limited (ACN 108029198) ("IDM International"). Upon completion of the SPA and a similar SPA between IDM International and the other shareholder of IDM Mankayan (the "Other IDM Mankayan Shareholder") IDM International will own 100% of IDM Mankayan; and
· a convertible loan note agreement with IDM International to invest A$137,500 (approx. GBP77K) in IDM International (the "Convertible Loan Note"). IDM International has also entered into convertible loan notes with entities associated with two of its directors to raise A$362,500 (approx. GBP203K) on the same terms as the Convertible Loan Note (together the "Convertible Notes")
Colin Bird, Executive Chairman of Bezant, commented: "We are very pleased with the progress made in advancing the Mankayan Project since IDM International's involvement not least the renewal of the MPSA for 25 years which is a catalyst for the development of this world class copper gold porphyry project. We are very confident that management in the Philippines supported by IDM International have the experience and expertise to take the project forward through the next stages of evaluation and development which will significantly enhance the value of the project."
IDM International, through Crescent Mining Development Corporation's ("Crescent"), have made very good progress on initial Pre-Feasibility Studies on the Mankayan copper gold project in the Philippines since IDM Mankayan acquired its interest in the Mankayan project in October 2021. This has included:
· Renewal by the Mines and Geosciences Bureau of the Department of Environment and Natural Resources of the Philippines government ("MGB") of Crescent's Mineral Production Sharing Agreement No. 057-96-CAR (the "MPSA") for a second 25-year term with effect from 12 November 2021 (the "MPSA Renewal");
· Meetings with the MGB who have expressed their support and encouragement for local projects such as the Mankayan Project and working closely with various Government departments for approvals required for the development of the Mankayan Project;
· Working closely with the local communities including direct investment into those areas;
· The completion of 2 Pre-feasibility holes to depths of ~1,000m each focusing on metallurgy, geotechnical and hydrogeological studies and the collection and management of all data produced from the 2 holes for analysis by Crescent's in country team and its advisors;
· Commencement of the process of appointing key consultants who will be undertaking Pre-Feasibility Studies work, including mine designs and engineering studies, infrastructure and tailings facilities, environmental studies and indigenous peoples' consent; and
· Discussions with private equity and mining finance houses for the funding of the Pre-Feasibility Studies work program.
Going forward, IDM International and Crescent, along with their various consultants and advisors, intend to complete a full Pre-Feasibility Studies during 2023 and 2024 that will present the Mankayan Project as a globally significant copper-gold project at a time when the supply-demand gap for copper is expected to be large as the world transitions to electrification.
Summary of the key terms of the SPA dated 26 October 2022
| Parties | Bezant Resources Plc and IDM International Limited
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| Sale Shares | The 44 fully paid ordinary shares in the capital of IDM Mankayan held by Bezant and representing 27.5% of the shares issued by IDM Mankayan
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| Consideration Shares | 19,381,054 fully paid ordinary shares in the capital of IDM International representing 27.5% of the shares in issue by IDM International as enlarged by its acquisition of the Sale Shares and the 10% of IDM Mankayan that it is acquiring from the Other IDM Mankayan Shareholder.
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| Conditions | (a) IDM International obtaining the approval of its shareholders for the issue of the Consideration Shares to Bezant (b) completion of the transaction whereby IDM International will acquire 10% of IDM Mankayan from the Other IDM Mankayan Shareholder so that at Completion IDM International will own 100% of IDM Mankayan; and (c) the Other IDM Mankayan Shareholder and Bezant waiving their pre-emption rights in relation to IDM International acquiring all the shares of IDM Mankayan which they do not already own
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| Deadline for completion | 31 March 2023 or such other date as may be agreed to by the parties in writing
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| Restrictions on IDM International pending completion | (a) (a) IDM International will not, until the earlier of Completion or termination of the SPA:(i) (i) subject to (b) below, issue any securities (including convertible loan notes or other instruments convertible into IDM International ordinary shares) other than for cash consideration and provided that Bezant has first been given the opportunity, on 14 days written notice, to subscribe for 27.5% of the securities offered on the same terms as those offered to participants in the proposed new issue;(ii) (ii) create any new class of shares; or(iii) (iii) make any material changes to the conduct of its Business which is the supporting and development of the Mankayan Project, and anything related thereto.(iv)(b) (b) (a) (i) above does not apply to an issue by IDM International of:(i) securities pursuant to a capital raising of at least A$2 million (before costs) from an investor (or group of investors); the Convertible Notes (and their subsequent exercise into IDM International ordinary shares);(i) (ii) any shares or options issued in connection with the exercise of the Convertible Notes;(ii) (iii) securities in response to the exercise of options or performance rights on issue (or approved for issue) as at the date of the SPA; or(iii) (iv) incentive securities to directors, employees and/or personnel of IDM International or IDM Mankayan, or to others engaged in the Mankayan Project, as approved by the directors of IDM International. |
| Warranties | The parties have given warranties customary in an agreement of this nature.
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Summary of the Key terms of the Convertible Loan Note dated 26 October 2022
| Parties | Bezant Resources Plc and IDM International Limited
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| Amount being invested | A$137,500 (approx. GBP 77K) to acquire 137,500 Notes
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| Payment Terms & Issue Date | Payment is within 21 Days from date of agreement (the "Issue Date")
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| Maturity Date | 4 years from Issue Date
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| Interest | 4% per annum which is repayable at the Maturity Date unless the Notes have been converted prior to the Maturity Date
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| Conversion Terms | The Company has the right to convert the whole but not part of the Face Value of each Note into Shares at A$0.20 at any time (and as many times) prior to the Maturity Date (the "Conversion Terms")
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| Early Conversion by IDM International | Subject to (a) and (b) below the IDM International may elect to redeem the Notes from the Company before the Maturity Date to the extent they have not then been converted under the Conversion Terms by paying to the Company an amount equal to 110% of the Principal Amount owing under the Notes ("Early Redemption") provided that Early Redemption is only permitted;
(a) from 2 years after the Issue Date; and (b) on IDM International giving 30 days notice to the Company during which period the Company can elect to convert the Notes under the Conversion Terms
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| Options to be issued to the Company at Conversion | For each 2 shares in IDM International issued to the Company under the Conversion Terms the Company will also be issued one free new option to acquire an IDM International share (an "IDM Option") with an exercise price A$0.40 within the 4 years from the date of issue of the IDM Option.
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| Warranties | The parties have given warranties customary in an agreement of this nature.
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Further information on IDM International
IDM International Limited is incorporated in Australia. For the year ended 30 June 2021 IDM International made an audited loss of A$12,319 (approx. GBP6,900) and as at that date had net assets of A$3,484 (approx. GBP1,956) . Post 30 June 2021 IDM International established IDM Mankayan Pty Ltd which was incorporated in Australia on 6 August 2021 as a special purpose vehicle to enter into the IDM Agreement in relation to the Mankayan Project with Bezant Resources Plc (see announcement dated 13 September 2021) which completed in October 2021. For the period from incorporation to 31 December 2021 IDM Mankayan Pty Ltd made an unaudited profit of A$NIL and as at that date had net assets of A$160 (approx. GBP90). As at the date of this announcement IDM International owns 62.5% of IDM Mankayan Pty Ltd which is its sole subsidiary.
For further information, please contact:
| Bezant Resources Plc Colin Bird, Executive Chairman |
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| Beaumont Cornish (Nominated Adviser)
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+44 (0) 20 7628 3396 | |
| Novum Securities Limited (Broker) Jon Belliss
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+44 (0) 20 7399 9400
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or visit http://www.bezantresources.com
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law pursuant to the Market Abuse (Amendment) (EU Exit) regulations (SI 2019/310).
Technical Glossary
| "Pre-Feasibility Study" | A Preliminary Feasibility Study (Pre-Feasibility Study) is a comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, is established and an effective method of mineral processing is determined. It includes a financial analysis based on reasonable assumptions on the Modifying Factors and the evaluation of any other relevant factors which are sufficient for a Competent Person, acting reasonably, to determine if all or part of the Mineral Resources may be converted to an Ore Reserve at the time of reporting. A Pre-Feasibility Study is at a lower confidence level than a Feasibility Study.
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