IMC Exploration Group Plc (IMC.L) Proposed acquisition of Karaberd Mine

IMC is pleased to announce that it has conditionally agreed to purchase the Karaberd Mine, a gold mine located in Lori Marz, northern Armenia.

If the proposed acquisition proceeds, it will take effect via the acquisition by IMC of the entire issued share capital of MVI Ireland s.r.o. (“MVI”) from Mineral Ventures Invest spol. s r.o. (the “Seller”), (the “Acquisition”), a transaction which is classified as a reverse takeover pursuant to the Listing Rules made by the Financial Conduct Authority of the United Kingdom (“FCA”) (the “Listing Rules”), and the Irish Takeover Panel Act 1997, Takeover Rules 2013 (the “TakeoverRules”), which means that is it subject to and conditional upon the granting of a waiver of the requirements of Rule 9 of the Takeover Rules by the Irish Takeover Panel and the approval of IMC’s shareholders.

MVI holds the entire issued share capital in Assat, LLC (“Assat”). Assat holds the operating licence in respect of the Karaberd Mine, together with an ore-crushing production facility located near the site of the Karaberd Mine.

Application will be made to the FCA and the London Stock Exchange plc (“LSE”), respectively, for that number of new ordinary shares in IMC (“New Ordinary Shares”) that will equate to 51% of the issued shares in IMC following the Acquisition to be allotted and issued by IMC to the Seller as the initial consideration pursuant to the Acquisition (the “InitialConsideration Shares”) to be admitted to the standard segment of the Official List maintained by the FCA (“Official List”) and to trading on the LSE’s Main Market for listed securities (“Main Market”) (together, the “Admission”) on completion of the Acquisition.

Further New Ordinary Shares may be allotted and issued by IMC to the Seller as deferred consideration for the Acquisition on the achievement of certain milestones specified in the framework agreement entered into on 14 April 2021 between IMC and the Seller in connection with the Acquisition (the “Framework Agreement”).

The closing date of the Acquisition will be on or as soon as practicable after the date on which IMC and the Seller notify each other of the satisfaction or waiver of the Conditions (as set out below), and in any event by the fifth business day following such notification.

Highlights

The Directors consider that the acquisition of the Karaberd Mine and the development of the Karaberd ore-crushing facility would serve the existing strategic direction of IMC while expanding the geographic scope of its operations.

The Directors believe the Acquisition will deliver the following strategic and financial benefits to the IMC Group:

· It will be transformational for the Group, taking it from being a purely junior mining exploration company to being both a mining exploration company and a mining company.

· It enlarges the geographical base of the Group and will give the Group access to other potential exploration and mining opportunities, thus facilitating accelerated growth of the Group.

· It will greatly enhance the expertise within the Group, with the addition of personnel with vast experience in exploration and mining.

· It will give the Group the benefit of access to a polymetal eco-production facility provider which in turn may be of value when seeking to engage an eco-production processor for the Groups spoils and tailings polymetal project in Avoca.

· Following initial and successful production of crushed ore from the Karaberd mine, the Group would then have a source of cash-flow.

· Having a source of cash-flow should markedly improve the Group’s ratings in the financial markets and accordingly enhance the Groups growth prospects through greater access to capital.

· An immediate financial benefit to the Groups working capital will be the provision by the Seller of €20,000 per month over 24 months totalling €480,000 over the two-year period.

· The Group will have the further benefit of a Deposit of $650,000 paid to China National Geological and Mining Corporation (“CGM”) by the Seller should the Group wish either to complete or vary a proposed provision of an Eco-Production Facility at Karaberd by CGM.

Consideration for the Acquisition

In summary, the Acquisition involves the issue of several tranches of shares to the Seller, each tranche being conditional on the occurrence of certain milestones. The issue of the Initial Consideration Shares to the Seller will result in the Seller holding 51% of the enlarged issued share capital of IMC. Subject to meeting successive milestones, further tranches may be issued which could result in the Seller holding up to 59.17% of the issued share capital of IMC (the Initial Consideration Shares together with any additional shares issued as consideration following meeting the relevant milestones set out in the Framework Agreement only as the “Consideration Shares”).

The Acquisition

· The Acquisition is classified as a reverse takeover under the Listing Rules and the Takeover Rules. Accordingly, the Acquisition is conditional upon, among other matters, the approval of the IMC shareholders at a general meeting of IMC proposed to be held on [projected date] (the “General Meeting”) and the granting of a waiver of the requirement on the Seller to make a general offer under to Rule 9 of the Takeover Rules by the Irish Takeover Panel.

· IMC expects to publish a combined circular and prospectus, including the notice of General Meeting (the “Combined Circular and Prospectus”) – such publication will take place as soon as possible.

· The Board intends unanimously to recommend in the Combined Circular and Prospectus that IMC shareholders vote in favour of the requisite shareholder resolutions for the reasons mentioned above (the “Resolutions”). The directors of IMC intend to vote in favour of the Resolutions in respect of their own beneficial holdings, which amount to approximately 4.62% of IMC’s issued share capital.

IMC current projects

To date, and based on the knowledge and experience of its existing directors with strong geological backgrounds, IMC has focused on acquiring what it considered highly prospective exploration licences in Ireland. This has resulted in IMC concentrating on two major projects, namely its spoils and tailings polymetal project in Avoca, Wicklow, and its gold exploration project in North Wexford. IMC is also collaborating with the Raw Materials Group, Trinity College, Dublin, in relation to characterising the gold-rich Kilmacoo zone at IMC’s Avoca Mine property in Co. Wicklow.

Commenting on the Acquisition, Eamon O’Brien, IMC Chairman, said:

I am very pleased, following comprehensive negotiations over the past year, to be in a position to present to IMC’s shareholders a proposed Acquisition that I believe will be transformational for IMC.

On becoming Chairman in May 2018, I saw my first task as that of working to achieve a full listing for IMC on the Standard segment of the London Stock Exchange’s Main Market. That was achieved on 8 July 2019. This gave IMC a higher profile and the ability to attract projects that would catalyse its growth.

The proposed Acquisition will transform IMC by adding a mining project and will generate cash-flow for IMC from both the monthly contribution to working capital and future mining operations. Furthermore, the geographical reach of IMC will be extended outside of Ireland which may lead to further opportunities for growth of IMC.

A prospectus and circular will be issued in due course to IMC’s shareholders setting out in detail all the aspects associated with this proposed Acquisition.

https://www.investegate.co.uk/imc-exploration-group-plc–imc-/prn/proposed-acquisition-of-karaberd-mine/20210415070000P4D11/


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