Keras Resources PLC (LON:KRS) Corporate Update

Togo Update, Corporate Restructuring,

Issue of New Shares and Options to Management

Keras Resources plc, the AIM listed mineral resource company is pleased to provide an update on activities in Togo and the restructuring of its 85% interest in Société Générale de Mines SARL (‘SGM’) required to comply with the permitting process at the Nayega Manganese (‘Mn’) Project (‘Nayega’, or the ‘Project’) and in the drive to streamline the Keras corporate structure. In addition, the Company has updated its management incentive scheme.

Highlights

· CEO Russell Lamming is currently in Togo meeting with government officials, interested and affected parties and the SGM management team to close the permitting process at Nayega and ensure that production commences in the first quarter of 2020 as previously announced;

o Corporate restructuring of SGM, which is a requirement of the draft Mining Convention agreed between SGM and the Republic of Togo (‘RoT’) and part of the documentation required in the permitting process

o Finalising contracts with third party service providers and securing key management in Togo – post the ramp-up phase a 100% Togolese workforce is planned

o As part of the drive to streamline the corporate structure and reduce overhead costs, Keras’s interest in SGM to be directly held by Keras

o Relinquishing rights to the Kamina Cobalt & Nickel Project and wind down subsidiary, Kamnico SARL

· Proposed 1 for 10 share consolidation of Keras to reduce the number of shares in issue and to attract institutional investors looking at cashflow positive mining companies

· Cancellation of Share Appreciation Rights (‘SAR’) Scheme, the Introduction of an Enterprise Management Incentive (‘EMI’) option scheme and the issue of an additional 90,000,000 EMI share options to executive management

Russell Lamming, CEO of Keras Resources, commented, “The past six months have been transformational for Keras. With the notification in October 2019 of a decree authorised by the Togo Council of Ministers permitting SGM to undertake large scale mining at the Nayega, the successful demerger of the Company’s interest in Calidus in November 2019 and the completion of the restructuring process, we are now positioned to transition into a manganese producer.

“We remain on track to commence commercial production in the first quarter of 2020. The underlying fundamentals of the business remain strong as we have an excellent standalone asset, which has installed capacity to produce 6,500 tonnes per month without any further capital. Furthermore, the Project has the unusual status of already being proved up through what was essentially a trial mining, processing and logistics exercise in the first half of 2019.

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“I look forward to providing shareholders a steady stream of news flow on key contracts and activities on the ground as we move towards commercial production later this quarter.”

Togo Update

To finalise the documentation associated with the award of the Exploitation Permit at Nayega, SGM needs to be converted from a Private Limited company (‘Société à responsabilité limitée’, ‘SARL’) to a Public Limited company (‘Société Anonyme’, ‘S.A’). A SA company has a higher degree of corporate governance and is a requirement of the draft Mining Convention agreed between SGM and the RoT last year that needs to be implemented before mining can commence. The conversion has involved detailed legal, accounting and auditor input to meet all regulatory requirements. Following the issue of the mining permit, the Republic of Togo will be entitled to a 10% carried interest in SGM. As a result, the Company’s interest in SGM will be reduced to 76.5% on issue of the mining permit.

In addition to the ongoing interaction with the Togolese authorities, management is currently finalising contracts with third party service providers and securing key management in Togo as it transitions to a mining operation. The employment plan for Nayega includes, post the ramp-up phase, a 100% Togolese workforce.

Corporate Restructuring

In line with the restructuring process, which started with the demerger of the Company’s interest in Calidus Resources Limited (‘Calidus’) (‘the Demerger’), the following changes are being made to further streamline the corporate structure and reduce unnecessary overhead costs.

· The Company’s interest in SGM is being transferred from its 100% owned Guernsey incorporated subsidiary, Southern Iron Limited (‘SIL’) directly into Keras.

· SGM is being converted from a Private Limited Company (‘Société à responsabilité limitée’, ‘SARL’) to a Public Limited Company (‘Société Anonyme’, ‘S.A.’).

· In line with the strategic move to a focused cash flow generative company, the Keras is relinquishing its rights to the Kamina Cobalt & Nickel Project and winding down its 100% owned subsidiary, Kamnico SARL.

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On the conclusion of the restructuring, Keras will have a direct interest in SGM with a balance sheet suited for a cashflow generative mining company.

Share Consolidation

As Keras transitions from developer to producer, the Company will, at the upcoming Annual General Meeting (‘AGM’) propose a 1 for 10 share consolidation to reduce the number of shares in issue and to attract institutional investors looking at cashflow positive mining companies. The AGM is expected to be held on the 19th March 2020 at the offices of Memery Crystal LLP, 165 Fleet Street, London EC4A 2DY. Notice of AGM is expected to be sent to shareholders on 25 February 2020, with the Annual Report for the year ended 30 September 2019.

SAR Scheme Cancellation, Adoption & Award of EMI Scheme

The Demerger resulted in a fundamental change to the business and its underlying value, which rendered awards under the Company’s existing share appreciation scheme (“SAR Scheme”) inappropriate. The Company will be cancelling the SAR Scheme and replacing it with an EMI option scheme, which has a more favourable tax treatment. The 30,000,000 unvested SAR’s will be cancelled and reissued under the EMI option scheme, with the exercise price of such EMI options being reduced to a level that appropriately reflects the effect of the Demerger on the underlying value of the Company. Please see below for details of the basis used for calculating the option pricing applied to those EMI options that replace awards under the SAR Scheme.

EMI options over 90,000,000 new ordinary shares of the Company (“New Ordinary Shares”) have been granted to executive management, in addition to the EMI options over 30,000,000 New Ordinary Shares (together the “EMI Options”), as follows:-

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