Ortac Resources Limited Placing and further investment in Casa Mining (7990D)

TIDMOTC

RNS Number : 7990D

Ortac Resources Limited

02 May 2017

2 May 2017

Ortac Resources Ltd / Epic: OTC / Market: AIM / Sector: Mining & Exploration

ORTAC RESOURCES LTD

("ORTAC" OR THE "COMPANY")

Placing of GBP2 million and further investment in Casa Mining Limited

Ortac Resources Ltd, the AIM listed mineral exploration company operating in Europe and Africa today announces that it has raised GBP2 million before expenses from a placing of 66,666,667 new ordinary shares of no par value of Ortac ("Ordinary Shares") at 3 pence per share ("Placing") to fund the acquisition of a US$2 million convertible loan note ("CLN") issued by Casa Mining Limited ("Casa").

The Placing was supported by both new and existing investors and a number of the Directors of Ortac who have also participated in the placing, further details of which are set out below.

Vassilios Carellas, Ortac's CEO, commented: "Ortac has steadily been building up its stake in Casa, where this significant and new investment, following conversion, would make Ortac, Casa's largest shareholder with an approximate 45% stake in the company.

I am delighted with the support we received for this Placing from both existing and new shareholders, which is testament to the improving market sentiment we are now seeing across the metal and mineral exploration sector. With this funding in place, Casa will commence a new drill programme on their flagship Akyanga deposit where a revised geological model is in place and where this new drilling will help Casa work towards unlocking, what is potentially a significant gold resource in excess of 2Moz".

About Casa Mining Limited

CASA is a private Mauritian-registered company that is the 71.25% owner and operator of the Misisi Gold Project located in South Kivu, Eastern Democratic Republic of the Congo ("DRC"), approximately 350km south of Bukavu and 180km north of Kalemie. MMG Limited, headquartered in Melbourne, Australia and listed on the Hong Kong Stock Exchange and Australian Securities Exchange, hold 23.75% of the Missisi Gold Project, while the government of the DRC holding the remaining 5%.

The CASA licence holdings consist of three contiguous mining licenses (total of 133km(2) ), issued in March 2015 and valid for 30 years. These licenses, which encompass a 50km strike length of the Tanganyika graben within the Rusizian belt ("Misisi Corridor"), include the Akyanga Deposit along with the Lubitchako, Tulongwe, Kilombwe and Mutshobwe prospects (targets).

Over the last six years over US$30 million was spent developing these licenses. In addition to the regional geophysical surveys completed over these license areas in 2011, CASA has carried out 19,522m of diamond drilling, 2,720m of reverse circulation drilling and excavated 6,274 line metres of trenches on their respective licenses.

At CASA's most advanced project, the Akyanga Deposit, SRK has reported a Mineral Resource within a $1,200/oz gold selling price and 0.5 g/t Au cut-off grade optimised pit shell. This comprises an Inferred oxide gold Mineral Resource of 5.5 Mt at a grade of 1.5 g/t Au for approximately 272 koz of contained metal. SRK has further reported an Inferred transition gold Mineral Resource of 16.2 Mt at a grade of 1.8 g/t Au for approximately 927 koz of contained metal.

MDM, in conjunction with SRK, completed a scoping feasibility study for the Akyanga deposit resulting in an ungeared NPV (8%) and IRR of $171m and 35% respectively at a $1,300/oz gold price. This assumes a contract mining scenario with an initial capital cost estimate of $87.4m and a total operating cost of $628/oz.

CASA is currently reviewing its strategy and options for the development of the Misisi Project. This follows internal workshops by CASA's independent experts who have identified resource potential at the Akyanga Deposit of over 2Moz due to the orebody being open along strike to the north and south and to the east.

Investment in Casa

The Company entered into an agreement with Casa pursuant to which Ortac has agreed to acquire CLNs for US$2 million in cash ("Agreement"), subject to the satisfaction of certain conditions, including that Casa's title to licences are in good standing.

The proceeds raised from the CLN will be used to conduct an exploration programme at Casa's Misisi gold project in the Eastern DRC and for working capital purposes.

The Agreement contains the following terms and conditions:

The CLN is repayable by 30 April 2020 and Ortac is entitled to convert the CLN into 3,076,924 ordinary shares of Casa at a deemed price of US$0.65 per share up until 27 February 2018. If the CLN is converted after 27 February 2018, the CLN will convert into ordinary shares of Casa at a deemed price of US$1.20 per share and the conversion price will subsequently increase by 10% per quarter year.

Ortac will have pre-emption rights in the share capital of Casa for a period of 12 months, from the date of acquiring the CLN, and will be entitled to nominate two directors to the Board of Casa out of a total of five Board members. Ortac intends to nominate Vassilios Carellas (CEO of Ortac) and Nick von Schirnding (Non-executive Director of Ortac) to the Board of Casa.

The CLNS do not bear interest and are unsecured.

Ortac currently holds 1,691,889 ordinary shares of Casa, representing 22.8% of the entire issued share capital of Casa.

The Placing

Application has today been made for 66,666,667 new Ordinary Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will become effective on or around 8 May 2017. The new Ordinary Shares will rank pari passu with the existing issued Ordinary Shares.

Related party transaction

Anthony Balme, Vassilios Carellas and Nick von Schirnding are related parties to Ortac, as defined in the AIM Rules for Companies and, due to their participation in the Placing, the transaction is a related party transaction as specified in Rule 13 of the AIM Rules ("Related Party Transaction").

Anthony Balme, Vassilios Carellas and Nick von Schirnding are therefore not considered independent for the purposes of Rule 13 of the AIM Rules. Accordingly, Paul Heber, being the independent director of Ortac for the purposes of the Related Party Transaction considers, having consulted with the Company's nominated adviser, SP Angel Corporate Finance LLP, that the terms and conditions of the Placing are fair and reasonable insofar as the shareholders of the Company are concerned.

Holdings in Company

Following the completion of the Placing, the Company expects the following shareholders of the Company and persons discharging managerial responsibilities ("PDMRs"), as defined in EU Regulation 596/2014 (the "Market Abuse Regulation" or "MAR"), to have a notifiable interest in the issued Ordinary Share capital, as follows:

 
                                                                           % interest 
                    Existing        Number of            Interest          in the total 
   Shareholder      interest         Placing         in the Ordinary     issued Ordinary 
                     in the      Shares acquired     Shares following    Shares following 
                    Ordinary                           the Placing         the Placing 
                     Shares 
---------------  -----------  ------------------  -------------------  ------------------ 
 Anthony Balme     8,588,902           1,000,000            9,588,902               6.44% 
---------------  -----------  ------------------  -------------------  ------------------ 
 Vassilios 
  Carellas           770,000             166,667              936,667               0.63% 
---------------  -----------  ------------------  -------------------  ------------------ 
 Nick von 
  Schirnding         260,000             333,333              593,333               0.40% 
---------------  -----------  ------------------  -------------------  ------------------ 
 

Voting Rights

Following admission of the new Ordinary Shares issued pursuant to the Placing, the total issued share capital of the Company will consist of 148,801,654 Ordinary Shares each with voting rights. The Company does not hold any Ordinary Shares in treasury. Therefore, the total number of voting rights in the Company will be 148,801,654 and this figure may be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company.

Competent Person

The information in this press release is based on information provided by Casa Mining Limited and compiled on behalf of Ortac by Mr Vassilios Carellas. The SRK JORC Mineral Resource estimate, the MDM-SRK Scoping Study and the updated resource estimate by CASA's independent experts have not been independently verified by Ortac Resources Ltd. Mr Vassilios Carellas (BSc (Hons), MAusIMM) is the Chief Executive Officer for Ortac Resources Limited and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined under the JORC Code (2012). Mr Carellas consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

The notifications below, made in accordance with the requirements of the EU Market Abuse Regulation, provide further detail on the director's share dealing.

NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY ASSOCIATED WITH THEM

 
 1.    Details of the person discharging managerial 
        responsibilities/person closely associated 
----  -------------------------------------------------------------------------- 
 a)    Name:                             Anthony Balme 
----  --------------------------------  ---------------------------------------- 
 2.    Reason for the notification 
----  -------------------------------------------------------------------------- 
 a)    Position/status:                  Executive Chairman 
----  --------------------------------  ---------------------------------------- 
 b)    Initial notification/Amendment:   Initial notification 
----  --------------------------------  ---------------------------------------- 
 3.    Details of the issuer, emission allowance 
        market participant, auction platform, auctioneer 
        or auction monitor 
----  -------------------------------------------------------------------------- 
 a)    Name:                             Ortac Resources 
                                          Limited 
----  --------------------------------  ---------------------------------------- 
 b)    LEI:                              213800XHFJVCC9GP2G75 
----  --------------------------------  ---------------------------------------- 
 4a.   Details of the transaction(s): section 
        to be repeated for (i) each type of instrument; 
        (ii) each type of transaction; (iii) each 
        date; and (iv) each place where transactions 
        have been conducted 
----  -------------------------------------------------------------------------- 
 a)    Description of the financial      Ordinary shares 
        instrument, type of               of no par value 
        instrument:                       VGG6829M1187 
        Identification code: 
----  --------------------------------  ---------------------------------------- 
 b)    Nature of the transaction:        Purchase of new 
                                          ordinary shares 
----  --------------------------------  ---------------------------------------- 
 c)    Price(s) and volume(s):             Price(s)    Volume(s) 
                                           ----------  ---------- 
                                            3 pence     1,000,000 
                                           ----------  ---------- 
----  --------------------------------  ---------------------------------------- 
 d)    Aggregated information:           Single transaction 
        Aggregated volume:                as in 4 c) above Price(s)    Volume(s) 
        Price:                            ----------  ---------- 
                                           3 pence     1,000,000 
                                          ----------  ---------- 
----  --------------------------------  ---------------------------------------- 
 e)    Date of the transaction:          2017-05-02 
----  --------------------------------  ---------------------------------------- 
 f)    Place of the transaction:         Outside a trading 
                                          venue 
----  --------------------------------  ---------------------------------------- 
 
 
 1.    Details of the person discharging managerial 
        responsibilities/person closely associated 
----  --------------------------------------------------------------------------- 
 a)    Name:                              Vassilios Carellas 
----  ---------------------------------  ---------------------------------------- 
 2.    Reason for the notification 
----  --------------------------------------------------------------------------- 
 a)    Position/status:                   Chief Executive Officer 
----  ---------------------------------  ---------------------------------------- 
 b)    Initial notification/Amendment:    Initial notification 
----  ---------------------------------  ---------------------------------------- 
 3.    Details of the issuer, emission allowance 
        market participant, auction platform, auctioneer 
        or auction monitor 
----  --------------------------------------------------------------------------- 
 a)    Name:                              Ortac Resources Limited 
----  ---------------------------------  ---------------------------------------- 
 b)    LEI:                               213800XHFJVCC9GP2G75 
----  ---------------------------------  ---------------------------------------- 
 4a.   Details of the transaction(s): section 
        to be repeated for (i) each type of instrument; 
        (ii) each type of transaction; (iii) each 
        date; and (iv) each place where transactions 
        have been conducted 
----  --------------------------------------------------------------------------- 
 a)    Description of the financial       Ordinary shares of 
        instrument, type of instrument:    no par value 
        Identification code:               VGG6829M1187 
----  ---------------------------------  ---------------------------------------- 
 b)    Nature of the transaction:         Purchase of new ordinary 
                                           shares 
----  ---------------------------------  ---------------------------------------- 
 c)    Price(s) and volume(s):              Price(s)    Volume(s) 
                                            ----------  ---------- 
                                             3 pence     166,667 
                                            ----------  ---------- 
----  ---------------------------------  ---------------------------------------- 
 d)    Aggregated information:            Single transaction 
        Aggregated volume:                 as in 4 c) above Price(s)    Volume(s) 
        Price:                             ----------  ---------- 
                                            3 pence     166,667 
                                           ----------  ---------- 
----  ---------------------------------  ---------------------------------------- 
 e)    Date of the transaction:           2017-05-02 
----  ---------------------------------  ---------------------------------------- 
 f)    Place of the transaction:          Outside a trading 
                                           venue 
----  ---------------------------------  ---------------------------------------- 
 
 
 1.    Details of the person discharging managerial 
        responsibilities/person closely associated 
----  --------------------------------------------------------------------------- 
 a)    Name:                              Nick von Schirnding 
----  ---------------------------------  ---------------------------------------- 
 2.    Reason for the notification 
----  --------------------------------------------------------------------------- 
 a)    Position/status:                   Non-Executive Director 
----  ---------------------------------  ---------------------------------------- 
 b)    Initial notification/Amendment:    Initial notification 
----  ---------------------------------  ---------------------------------------- 
 3.    Details of the issuer, emission allowance 
        market participant, auction platform, auctioneer 
        or auction monitor 
----  --------------------------------------------------------------------------- 
 a)    Name:                              Ortac Resources Limited 
----  ---------------------------------  ---------------------------------------- 
 b)    LEI:                               213800XHFJVCC9GP2G75 
----  ---------------------------------  ---------------------------------------- 
 4a.   Details of the transaction(s): section 
        to be repeated for (i) each type of instrument; 
        (ii) each type of transaction; (iii) each 
        date; and (iv) each place where transactions 
        have been conducted 
----  --------------------------------------------------------------------------- 
 a)    Description of the financial       Ordinary shares of 
        instrument, type of instrument:    no par value 
        Identification code:               VGG6829M1187 
----  ---------------------------------  ---------------------------------------- 
 b)    Nature of the transaction:         Purchase of new ordinary 
                                           shares 
----  ---------------------------------  ---------------------------------------- 
 c)    Price(s) and volume(s):              Price(s)    Volume(s) 
                                            ----------  ---------- 
                                             3 pence     333,333 
                                            ----------  ---------- 
----  ---------------------------------  ---------------------------------------- 
 d)    Aggregated information:            Single transaction 
        Aggregated volume:                 as in 4 c) above Price(s)    Volume(s) 
        Price:                             ----------  ---------- 
                                            3 pence     333,333 
                                           ----------  ---------- 
----  ---------------------------------  ---------------------------------------- 
 e)    Date of the transaction:           2017-05-02 
----  ---------------------------------  ---------------------------------------- 
 f)    Place of the transaction:          Outside a trading 
                                           venue 
----  ---------------------------------  ---------------------------------------- 
 

**S**

For further information please visit www.ortacresources.com or contact:

 
 Ortac Resources Ltd             +44 (0) 20 
  Vassilios Carellas (CEO)        7389 9050 
 SP Angel (Nominated Adviser 
  & Broker)                      +44 (0) 20 
  Ewan Leggat / Lindsay Mair      3470 0470 
 
 Peterhouse Corporate Finance     +44 (0) 20 
  Limited (Joint Broker)           7469 0930 
  Guy Miller / Lucy Williams       www.pcorpfin.com 
 

The company news service from the London Stock Exchange

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