TIDMPERE
RNS Number : 9848X
Pembridge Resources plc
02 May 2023
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER
ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS AMED BY
REGULATION 11 OF THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS
2019/310.
2 May 2023
Minto Metals Announces New Funding Facilities and Deferral of
Consideration Under the Share Purchase Agreement, and Pembridge
Receives Indemnities and Defers Minto Repayments
London, United Kingdom - Pembridge Resources plc (LSE: PERE)
("Pembridge" or the "Company") is pleased to announce that Minto
Metals Corp. ("Minto") has received funding facilities and,
together with Pembridge, has agreed to amend the share purchase
agreement dated 3 June 2019 for the purchase of Minto (the "SPA") .
Linked to this, Pembridge and Minto have signed an Indemnity
Agreement and a Postponement Agreement.
Highlights
-- Pembridge, Minto and Capstone Mining Corp. ("Capstone") have
agreed to amend the share purchase agreement dated 3 June 2019 for
the purchase of Minto (the "SPA") to defer payment of remaining $5
million purchase price and to release and discharge Pembridge from
the liabilities and obligations owing to Capstone under the
SPA.
-- Minto has received CAD 1 million advance from Lion Point
Capital, LP ("Lion Point") pursuant to a loan agreement dated 14
April 2023 (the "Loan Agreement") that may be increased to CAD 2
million subject to further commitments to being obtained from the
Lenders to fund any additional amount.
-- Minto has drawn down a further US$1.5 million under its
existing prepayment facility with Sumitomo Canada Limited
("Sumitomo"), bringing the total amount of funds advanced by
Sumitomo under the facility to US $12.5 million, and extend the
term of the offtake agreement with Sumitomo by a further 12 months
or until an additional 40,000 dmt of copper concentrate are
produced.
-- Minto has agreed to indemnify and hold Pembridge harmless
from and against any claims, actions, causes of action,
proceedings, judgements, debts, damages, costs, obligations,
liabilities and/or losses that it may incur directly or indirectly
as a result of or arising from any claim made:
(a) by the General Indemnitees or any of them against Pembridge
in relation to each and all of Pembridge's obligations pursuant to
the General Indemnity Agreement dated June 3, 2019 (the "General
Indemnity Agreement") in favour of Zurich American Insurance
Company, Fidelity and Deposit Company of Maryland, Zurich American
Insurance Company, Colonial American Casualty and Surety Company,
American Guarantee and Liability Insurance Company and Zurich
Insurance Group Ltd.);
(b) by the Zurich Indemnitees or any of them against Pembridge
in relation to each and all of Pembridge's obligations pursuant to
the Deed of Indemnity; and
(c) by Capstone against Pembridge in relation to each and all of
Pembridge's obligations pursuant to the Share Purchase
Agreement.
-- Minto and Pembridge have signed a Postponement Agreement with
respect to its remaining receivable of CAD 1 million and
accumulated interest, with payment of CAD 250,000 by the end of Q3
2023 and the remaining amounts due after the full settlement with
Capstone of the remaining purchase price.
Amendment to Share Purchase Agreement
Pembridge, Minto and Capstone have agreed to amend the SPA, as
previously amended, to extend the due date for payment of the US$5
million deferred balance of the purchase price owing to Capstone
under the SPA to be payable as follows: (a) $250,000 on each of
September 1, 2023, December 1, 2023, March 1, 2024 and June 3, 2024
and (b) $1,000,000 on each of September 3, 2024, December 3, 2024,
March 3, 2025 and June 3, 2025. In addition, the terms of the
amendment provide that Pembridge has assigned to Minto all of its
obligations under the SPA and Capstone has released Pembridge from
all such obligations.
New Term Facility for Minto
Under the Loan Agreement, the Lion Point have agreed to provide
a secured non-revolving term facility (the "Facility") in a
principal amount up of CAD 1 million, which may be increased to CAD
2 million subject to further commitments being obtained from the
Lenders to fund any additional amount. The Facility bears interest
at the rate of 10% per annuum, payable semi-annually. Repayment of
the Facility is due on the earlier of 14 April 2026 or the final
repayment date under secured notes previously issued by the Company
on 3 June 2019.
Minto Sumitomo Prepayment Facility and Offtake Agreement
Minto also announces that it has drawn down a further US $1.5
million under its existing prepayment facility with Sumitomo,
bringing the total amount of funds advanced by Sumitomo under the
facility to US $12.5 million. Pursuant to an Amended and Restated
Prepayment Facility Agreement dated May 16, 2022, Sumitomo
established a secured prepayment non-revolving credit facility in
favour of Minto in the amount of US $17.5 million, repayable over
48 months, in connection with an offtake agreement between the
parties. Under the offtake agreement, Sumitomo agreed to purchase
100% of the copper concentrate produced at the Minto Mine for a
four-year term, based on 50,000 dmt/year of concentrate production.
In conjunction with this new drawdown, Sumitomo and Minto will
amend the offtake agreement to extend the term by a further 12
months or until an additional 40,000 dmt of copper concentrate are
produced. Minto intends to use the proceeds of the drawdown for
general corporate purposes.
Minto Indemnity Agreement with Pembridge
As part of the acquisition of Minto in June 2019, Minto and
Pembridge are parties as indemnitors to a General Indemnity
Agreement dated 3 June 2019 (the "General Indemnity Agreement") in
favour of Zurich American Insurance Company, Fidelity and Deposit
Company of Maryland, Zurich American Insurance Company, Colonial
American Casualty and Surety Company, American Guarantee and
Liability Insurance Company and Zurich Insurance Group Ltd.)
(collectively, the "General Indemnitees"). In addition, Pembridge
is a party as indemnitor to a Deed of Indemnity dated 24 May 2019
(the "Deed of Indemnity") in favour of Zurich Insurance Public
Limited Company (Zurich Insurance Public Limited Company, together
with each other party indemnified pursuant to the Deed of
Indemnity, collectively, the "Zurich Indemnitees") and Pembridge,
Minto and Capstone Mining Corp ("Capstone") are the parties to the
SPA.
Minto has agreed to indemnify and hold Pembridge harmless from
and against any claims, actions, causes of action, proceedings,
judgements, debts, damages, costs, obligations, liabilities and/or
losses (including costs and expenses incurred in investigating or
defending any claim or threatened claim, whether or not any amounts
are paid by Pembridge on such claim) (together, "Losses") that it
may incur directly or indirectly as a result of or arising from any
claim made:
(a) by the General Indemnitees or any of them against Pembridge
in relation to each and all of Pembridge's obligations pursuant to
the General Indemnity Agreement;
(b) by the Zurich Indemnitees or any of them against Pembridge
in relation to each and all of Pembridge's obligations pursuant to
the Deed of Indemnity; and
(c) by Capstone against Pembridge in relation to each and all of
Pembridge's obligations pursuant to the Share Purchase
Agreement.
Postponement Agreement
Pembridge lent a total of CAD 4 million to Minto, to fund
Minto's surety account, during 2019 and 2020. The loan carries
interest at 8% and was due to be repaid in full via quarterly
instalments each of CAD 1 million during 2022, with the final
interest payment in early 2023. The first two instalments were
repaid in March and June 2022 and the third instalment, which was
due originally at the end of September, has now been repaid fully
with the last CAD 250,000 received in December 2022. The third
instalment was partly deferred under an agreement between Minto and
Pembridge, announced by Pembridge on 13 October 2022, to aid Minto
in funding increased reclamation security payments, and Minto has
made its payments in accordance with that agreement. Minto and
Pembridge had agreed to spread the fourth instalment of CAD 1
million and accumulated interest due until the end of September
2023.
To support Minto and ensure the deferral of the payment to
Capstone of the remaining purchase price, Pembridge and Minto have
agreed to defer the repayment of the amounts due from Minto to
Pembridge and receive CAD $250,000 in approximately equal monthly
payments ending in September 2023, the remaining amounts becoming
due after the full settlement with Capstone of the remaining
purchase price under the SPA.
The release from Minto can be found at the following link.
http://www.rns-pdf.londonstockexchange.com/rns/9848X_1-2023-5-1.pdf
Gati Al-Jebouri, Chief Executive Officer and Chairman of the
Board of Pembridge said:
"The ability to support Minto's financial position is of high
importance to the success of our investment in Minto. The
acquisition of Minto in June 2019 came with liabilities and
obligations by Pembridge to Capstone and Zurich Insurance. I am
pleased that we have reached agreement with Minto to receive full
indemnity by Minto to Pembridge for all those obligations and
liabilities and for Capstone's agreement to release and discharge
of Pembridge of the obligations and liabilities of Pembridge
towards Capstone arising from the SPA. To achieve this significant
step in simplifying the potential liabilities of Pembridge has come
at the cost of deferring a large part of our receivable from Minto.
However, this enables us to continue more effectively seeking
partnerships to grow our business and provides the fullest support
to Minto that Pembridge is in a position to undertake. I trust
that, with the additional financing that Minto has received and the
support from Capstone with the deferral of the payment of the
remaining purchase price, Minto will continue
developing the mine and seek to generate the maximum value of
the investment."
Cautionary Statement
This News Release includes certain "forward-looking statements"
which are not comprised of historical facts. Forward-looking
statements include estimates and statements that describe the
Company's future plans, objectives or goals, including words to the
effect that the Company, or management, expects a stated condition
or result to occur. Forward-looking statements may be identified by
such terms as "believes", "anticipates", "expects", "estimates",
"may", "could", "would", "will", or "plan". Since forward-looking
statements are based on assumptions and address future events and
conditions, by their very nature they involve inherent risks and
uncertainties. Although these statements are based on information
currently available to the Company, the Company provides no
assurance that actual results will meet management's expectations.
Risks, uncertainties and other factors involved with
forward-looking information could cause actual events, results,
performance, prospects and opportunities to differ materially from
those expressed or implied by such forward-looking information.
Forward-looking information in this news release includes, but is
not limited to, the Company's intentions regarding its objectives,
goals or future plans and statements. Factors that could cause
actual results to differ materially from such forward-looking
information include, but are not limited to, the Company's ability
to predict or counteract the potential impact of COVID-19
coronavirus on factors relevant to the Company's business, failure
to identify additional mineral resources, failure to convert
estimated mineral resources to reserves with more advanced studies,
the inability to eventually complete a feasibility study which
could support a production decision, the preliminary nature of
metallurgical test results may not be representative of the deposit
as a whole, delays in obtaining or failures to obtain required
governmental, environmental or other project approvals, political
risks, uncertainties relating to the availability and costs of
financing needed in the future, changes in equity markets,
inflation, changes in exchange rates, fluctuations in commodity
prices, delays in the development of projects, capital, operating
and reclamation costs varying significantly from estimates and the
other risks involved in the mineral exploration and development
industry, and those risks set out in the Company's public
documents. Although the Company believes that the assumptions and
factors used in preparing the forward-looking information in this
news release are reasonable, undue reliance should not be placed on
such information, which only applies as of the date of this news
release, and no assurance can be given that such events will occur
in the disclosed time frames or at all. The Company disclaims any
intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, other than as required by law.
ENDS
NOTES TO EDITORS
About Pembridge Resources plc
Pembridge is a mining company that is listed on the standard
segment of the Official List of the FCA and trading on the main
market for listed securities of London Stock Exchange plc.
Pembridge has an investment in Minto Metals Corp, a British
Columbia incorporated business listed on the TSX Venture Exchange
under the symbol "MNTO" that operates the Minto mine in Yukon,
Canada.
About Minto Metals Corp
Minto Metals Corp operates the underground copper-gold-silver
mine located in central Yukon, approximately 240 kilometres north
of the capital Whitehorse along the Klondike Highway. In excess of
US$350 million of capital expenditure has been invested into Minto
operations since site construction began in 2006. The Minto mine
was in continuous production between 2007 and 2018, when the mine
was placed onto temporary care and maintenance. Pembridge acquired
the Minto mine from Capstone Mining Corporation in June 2019 and
restarted operations in October 2019.
Enquiries:
Pembridge Resources plc: +44 (0) 7905 125740
Gati Al-Jebouri, Chief Executive Officer and Chairman of the
Board
David James, Chief Financial Officer
Tavira Financial Ltd: +44 (0)20 7100 5100
Jonathan Evans
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END
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