Corcel PLC Sale of Mambare Nickel/Cobalt Interest (2071Q)

TIDMCRCL

RNS Number : 2071Q

Corcel PLC

16 October 2023

Corcel PLC

("Corcel" or the "Company")

Sale of Mambare Nickel/Cobalt Interest

16 October 2023

Corcel Plc (London AIM: CRCL), the Angolan focused exploration and production company, announces that it has received a revised offer from Integrated Battery Metals ("IBM") to purchase the Company's 41% interest in the Mambare nickel/cobalt project.

Proposed Transaction Terms:

IBM has conditionally agreed to purchase Corcel's 41% interest in the Mambare nickel/cobalt project (including the outstanding shareholder loans due to Corcel by Oro Nickel Limited, the operational joint venture entity) for up to US$4.1M, broken out as follows:

o US$1.6M due at completion of the sale and purchase of Corcel's 41% interest in Oro Nickel Vanuatu("ONV"), the project holding company

o Also at completion, a further US$1.4M payable in cash or the issuance of 1.5M shares of IBM at an issue price of USD1 per share at the discretion of Corcel

o 24 months after completion a further payment of US$1.0M either in cash or in IBM shares (at the sole discretion of Corcel); The IBM shares are to be valued as follows:

o If listed, then priced at the 5-day volume weighted average price on the last five days prior to the 2(nd) anniversary or;

o If IBM is not publicly listed then USD1.0 per share

o Separately, and not included in the main transaction, US$0.148M for the sale and purchase of Corcel's gross smelter royalty in respect of the Mambare nickel/cobalt project

Antoine Karam, Executive Chairman of Corcel, commented: "This proposed revised transaction offers a new and enhanced exit of the Mambare asset, at a significantly higher valuation than the original deal, while still providing on-going exposure to the underlying nickel asset in the form of a potential interest in IBM. We strongly recommend that all shareholders of Corcel support the resolutions at the upcoming General Meeting to allow this proposal to be consummated.

More broadly, this agreement demonstrates our clear strategic focus on our oil and gas opportunities as well as providing key near term funding for the Company's operations in Angola. We look forward to results from the initial well there, while allowing the pre-emption process relating to the Mambare exit adequate time to conclude."

Loan Note:

To ensure the Company is properly capitalised for its near term operations in Angola, upon signature of the SPA (i.e. prior to initiating the pre-emption as outlined below and prior to formal completion), IBM will provide Corcel an unsecured loan of US$1.6M which will be interest free and repayable upon either the completion of the sale of Corcel's 41% interest in ONV or in the event that Battery Metal's Australasia's ("BMA") (Corcel's partner on the Mambare project) pre-emption rights are not waived, then the conclusion of the transaction with BMA. If the loan is repaid later than 10 business days via BMA's pre-emption, then the loan will attract an interest rate of 6%.

If the loan is not repaid by the 2(nd) anniversary of the drawdown of the loan, IBM will be released from all its payment obligations from the sale of the Company's Wowo Gap project, as previously announced on 12 June 2023, and the loan will be deemed to have been repaid in full.

The Company's interest in Mambare was most recently held in the interim balance sheet at GBP3.27M and the attributable losses for the year ended 30 June 2022 were approximately GBP7,075.

Completion Process:

In view of the size of the disposal relative to the existing size of the Company, the disposal constitutes a fundamental disposal in accordance with rule 15 of the AIM Rules for Companies. The sale of the Wo Wo Gap Nickel Project announced on 12 June 2023 was to the same vendor and within the last 12 months, it thus needs to be aggregated with the current disposal in accordance with rule 16 of the AIM Rules for Companies. As such, it is a requirement of the AIM Rules for Companies that the disposal be approved by Shareholders at a general meeting of the Company. The Company will convene a General Meeting in due course.

Following Corcel shareholder approval, the Company will formally notify BMA of a bonafide offer for its interest, starting a 45-day period in which BMA can legally pre-empt the transaction. Additional announcements on the completion of the sale will be made as appropriate.

Consequently the disposal is conditional on shareholder approval and the non exercise of the pre-emption right by BMA.

Initial Mambare Offer Termination:

The Company has mutually agreed with IBM to terminate the original offer for the Mambare asset as announced on 1 March 2023. As such, BMA has been formally notified that the Company has rejected its claim to have accepted pre-emption of the original transaction, as the proposal put forth by BMA did not fully match the various elements included in the original transaction, and included elements, such as the Company's gross smelter Royalty (the "Royalty"), that did not fall under any pre-emption rights available to BMA under the original 2011 Shareholder and Funding Agreement between the parties.

Sale of Royalty Interest:

Corcel has further agreed with IBM to sell its 1% Gross Smelter Royalty over the Mambare Nickel/Cobalt project for US$0.148M. As this interest is not subject to BMA's pre-emption rights, the sale of the royalty will conclude immediately.

Further announcements regarding a general meeting will be made in due course.

For further information, please contact:

Antoine Karam Corcel Plc Executive Chairman

[e-mail]

   James Joyce / James Bavister /Andrew de Andrade             WH Ireland Ltd NOMAD & Broker 

0207 220 1666

Patrick d'Ancona Vigo Communications IR

0207 3900 230

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October 16, 2023 02:00 ET (06:00 GMT)