13 September 2021
Bezant Resources Plc
("Bezant" or the "Company")
Mankayan Project Update
Bezant (AIM: BZT), the copper-gold exploration and development company, further to its announcements on 28 April 2021 regarding the termination of its transaction with Mining and Minerals Industries Holding Pte Ltd. ("MMIH") in relation to the Mankayan project ("MMIH Transaction Agreement") , has entered into a conditional agreement with IDM Mankayan Pty Ltd ("IDM"), a company incorporated in Australia, to take the Mankayan Project in the Philippines forward (the "IDM Agreement").
Highlights:
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IDM to acquire Asean Copper Investments |
IDM will acquire 100% ownership of Asean Copper Investments Ltd ("Asean Copper") which holds its interest in the Mankayan project through the Asean Copper Ownership Structure defined below and which was the subject of the previous MMIH Transaction Agreement.
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Bezant ownership |
Bezant will own 27.5% of IDM with the remaining 72.5% owned by established investors in the mining sector (the "Other IDM Shareholders").
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Initial funding |
Bezant will provide A$90,000 (approximately GBP48K) of initial funding and the Other IDM Shareholders will provide A$210,000 (approximately GBP 112K) ("Initial Funding").
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Initial objective |
IDM's initial objective is to assist and support Crescent Mining Development Corporation ("CMDC") in its application to renew the Mineral Production Sharing Agreement No. 057-96-CAR (the "MPSA") in respect of the Mankayan Project which is due for renewal on 11 November 2021. CMDC submitted its renewal application on 16 March 2021 to the Mines and Geosciences Bureau of the Department of Environment and Natural Resources of the Philippines government.
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Bezant anti-dilution protection |
Upon the renewal of the MPSA and the payment of the Conditional Renewal Proceed Payment defined below of up to A$500,000 due by IDM to MMIH is to be funded by the Other IDM Shareholders. Accordingly Bezant's shareholding in IDM will be increased to 27.5% of the then issued share capital of IDM after the payment of the Conditional Renewal Proceed Payment.
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Colin Bird, Executive Chairman of Bezant, commented:
"Bezant are pleased to be working with IDM whose financial and technical team have strong South East Asia experience. The Mankayan project is well placed to benefit from recent projections for the electrical vehicle and copper markets at a time when the Philippine government have announced that they wish to revitalise mining in the Philippines. We share IDM's view that the Mankayan project will be well received by the ASX market and that the proposed listing on the ASX will enhance value for IDM shareholders "
Background information
Asean Copper holds a 40 per cent. shareholding in Crescent Mining and Development Corporation ("CMDC"), which is incorporated in the Philippines and is the sole holder of Mineral Production Sharing Agreement No. 057-96-CAR (the "MPSA") in respect of the Mankayan Project. Asean Copper also holds a 40 per cent. shareholding in Bezant Holdings Inc., which is incorporated in the Philippines and holds the balancing 60 per cent. interest in CMDC, and has a conditional option (scheduled to expire on 30 June 2022) to acquire the balancing 60 per cent. of Bezant Holdings Inc. (together, the "Asean Copper Ownership Structure").
The MPSA was originally issued for a standard 25 year period, which expires on 11 November 2021, and the current exploration period under the MPSA, which is subject to certain work programme commitments, is scheduled to expire on 11 November 2021.
Under their separate agreements with IDM, the Company and MMIH have agreed to the acquisition of Asean Copper by IDM and as noted below the Conditional Renewal Proceed Payment due to MMIH upon MPSA renewal is to be funded by the Other IDM Shareholders not by Bezant.
The Company has previously reported a JORC 2004 resource using a 0.4% Cu cut off of 1.3 Mt of contained copper and 4.3 M oz of gold for the Mankayan Project and it is the intention of IDM to update this to a JORC 2012 compliant resource.
Further details of the IDM Agreement entered into on 10 September 2021
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Parties |
Bezant Resources PLC and IDM Mankayan Pty Ltd
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Acquisition of interest in Asean Copper |
Bezant will assign its 20% shareholding in Asean Copper to IDM. IDM will acquire the 80% shareholding in Asean Copper owned by MMJV Pte. Ltd. ("MMJV"), a wholly-owned subsidiary of MMIH by paying the Conditional Renewal Proceed Payment defined below under the terms of a share sale agreement entered into between IDM and MMIH on 6 September 2021 (the "IDM - MMIH Agreement")
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Initial IDM Funding |
Is the amount of A$300,000 (approximately GBP160K)of which A$90,000 (approximately GBP48K) is to be provided by Bezant of with the Other IDM Shareholders to provide A$210,000 (approximately GBP 112K) (the "IDM Funding Commitment")
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Conditions Precedent |
The IDM Agreement is conditional upon the following conditions being met, not applicable or waived within 21 days of the date of the IDM Agreement;
1. IDM completing due diligence enquiries in relation to the Mankayan Project and related companies to its satisfaction;
2. the IDM Funding Commitment having been paid;
3. Bezant obtaining all, if any, applicable regulatory approvals under the AIM Rules; and
4. Completion occurring under the IDM-MMIH Agreement.
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Conditional Renewal Proceed Payment |
Conditional upon renewal of the MPSA an amount of up to A$500,000 (approx. GBP267K) will be due to be paid to MMIH in two equal instalments 7 days and 3 months after the renewal of the MPSA which is to be funded by the Other IDM Shareholders rather than Bezant (the "Renewal Proceed Payment"). Under the terms of the IDM-MMIH Agreement the Renewal Proceed Payment will be reduced by: 1. the Renewal Expenditure Excess being the amount in excess of $200,000 incurred to renew the MPSA; 2. the Creditors Payment Excess being payments to certain creditors in excess of $100,000; and 3. outstanding fees due to a consultant.
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Bezant anti-dilution |
Upon the renewal of the MPSA and the payment of the Renewal Proceed Payment MMIH Bezant's shareholding in IDM will be increased to 27.5% of the then issued share capital of IDM.
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Proposed Transaction |
It is intended that IDM will be acquired by IDM International Limited (ACN 108029198) which used to be listed on the Australian Stock Exchange ("ASX") and which has a current cash balance of approximately A$200,000 and no other assets with a. view to IDM International Limited applying to relist on the ASX with its interest in the Mankayan Project as its only asset.
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Deferred Consideration |
Under the IDM-MMIH agreement MMJV shall be issued IDM Shares, calculated using the volume weighted average market price in Australian dollars for each IDM Share or, if the IDM Shares are not listed at the time, by a valuation by an independent valuer agreed by IDM and MMJV, as follows:
Tranche 1 - _AUD2,000,000 on completion of a pre-feasibility study by IDM in relation to the Mankayan Project showing a net present value of the Mankayan Project 100% greater than capital expenditure; and
Tranche 2 - AUD2,000,000 on completion of the earlier of a trade sale or a decision to mine in respect of the Mankayan Project. |
Further information on IDM Mankayan
IDM Mankayan Pty Ltd was incorporated in Australia on 6 August 2021 (ACN 652 618 758) as a special purpose vehicle to enter into the IDM Agreement and the IDM-MMIH Agreement. For the period from incorporation to 31 August 2021 IDM Mankayan Pty Ltd made an unaudited loss of A$ NIL and as at that date had net liabilities of A$ Nil.
For further information, please contact:
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Bezant Resources Plc
Colin Bird Executive Chairman |
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Beaumont Cornish (Nominated Adviser)
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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 Regulation (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").
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