Emmerson PLC Publication of Prospectus and Notice of GM (5742N)

TIDMEML

RNS Number : 5742N

Emmerson PLC

09 May 2018

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD VIOLATE THE RELEVANT SECURITIES LAWS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN EMMERSON PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON, IN CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF EMMERSON PLC.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (596/2014/EU) ("MAR"). IN ADDITION, MARKET SOUNDINGS, AS DEFINED IN MAR, WERE TAKEN IN RESPECT OF THE PROPOSED PLACING WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION, AS PERMITTED BY MAR. THAT INSIDE INFORMATION IS SET OUT IN THIS ANNOUNCEMENT AND HAS BEEN DISCLOSED AS SOON AS POSSIBLE IN ACCORDANCE WITH PARAGRAPH 7 OF ARTICLE 17 OF MAR. THEREFORE, THOSE PERSONS THAT RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING ARE NO LONGER IN POSSESSION OF INSIDE INFORMATION RELATING TO THE COMPANY AND ITS SECURITIES.

Note: Capitalised terms in this announcement are defined in the Company's Prospectus dated 9 May 2018 unless the context otherwise requires.

For immediate release 9 May 2018

Emmerson Plc

("Emmerson" or the "Company")

Publication of Prospectus, Placing and Notice of General Meeting

Further to the announcements of 17 October 2017 and 4 April 2018 the Company is pleased to announce that the Financial Conduct Authority has today approved its Prospectus issued in connection with the Acquisition of the Moroccan Salts Limited ("MSL"), the Placing of 200,000,000 Ordinary Shares at GBP0.03 per Ordinary Share and, following Shareholders' approval at the Company's General Meeting, the Re-Admission of 626,132,385 Ordinary Shares to the Official List (by way of Standard Listing under Chapter 14 of the Listing Rules) and to trading on the London Stock Exchange's main market for listed securities. The Prospectus has been published in electronic form and will shortly be available on the Company's website at: www.emmersonplc.com. The Prospectus containing the Notice of General Meeting will be sent to Shareholders today and is available on the Company's website.

A copy of the Prospectus has also been submitted to the National Storage Mechanism and will shortly be available for inspection at http://www.morningstar.co.uk/uk/NSM

As set out above the Company has completed a conditional Placing via Optiva Securities of 200,000,000 new Ordinary Shares at GBP0.03 per Ordinary Share (the "Placing Price") thereby raising gross proceeds of GBP6 million to fund development of the Enlarged Group following Re-Admission. The Placing is conditional on Re-Admission.

The General Meeting of the Company is to be held at the offices of Hill Dickinson LLP, The Broadgate Tower, 20 Primrose Street, London EC2A 2EW at 10.00 a.m. BST on 1 June 2018, for the purpose of considering, and if thought fit, passing the Resolutions as follows:

-- Resolution 1 will be proposed as an ordinary resolution and seeks to approve the Acquisition;

-- Resolution 2 is an ordinary resolution and authorises the Directors to issue the Consideration Shares, Placing Shares, Consideration Shares, the CLN Shares and the Fee Shares free from pre-emption;

-- Resolution 3 is an ordinary resolution to authorise the issue by Directors of up to 500,000,000 (five hundred million) new Ordinary Shares following Re-Admission; and

-- Resolution 4 is a special resolution and seeks to (a) dis-apply pre-emption rights in the Articles in connection with the issue of the Consideration Shares, Placing Shares, the CLN Shares and the Fee Director Shares; and (b) authorise the issue up to a further 500,000,000 (five hundred million) Ordinary Shares following Re-Admission free of any right of pre-emption, representing 93.2 per cent. of the Enlarged Issued Share Capital.

Trading in the Company's Ordinary Shares will remain suspended pending completion of the General Meeting (as set out in the Timetable below).

DETAILS ON MSL

MSL is the beneficial owner of 100 per cent. of the Khemisset Potash Project ("Khemisset" or "the Project") located in northern Morocco. Khemisset is a development stage potash project with a significant Inferred JORC Resource. Upon Re-Admission and following completion of the Acquisition of MSL, the Company will be the holding company of a group which is developing the Project. Khemisset comprises 1 mining licence and 39 research permits (the "Khemisset Licences") in the Rabat/Salé/Zemmour region, Morocco, which are held by MSL's Moroccan incorporated subsidiaries, MSL Minerals SARL and Mine de Centre SARL.

The Project is located some 80 km east of Rabat and covers an area of approximately 60 km by 20 km. No potash mining has taken place to date. The Directors believe Khemisset has the potential to be a significant producer of muriate of potash ("MOP"), considered the most globally important source of potash. Three previous drilling campaigns have been performed in the Khemisset Basin, targeting potash; two historical exploration campaigns and one recent verification program. The first, carried out by the association Bureau de Recherches et de Participations Minieres ("BRPM") and Mines Domaniales des Potasses d'Alsace ("MDPA") between 1955 and 1958, consisted of 9 drillholes, totalling 7,518 drilled metres. The second one was performed by BRPM between 1962 and 1969 and included 124 new drillholes. The drilled metres in both historical campaigns totalled 85,315 m. The most recent drilling was conducted by MSL in 2016 and consisted of a three-hole verification program, for a total of 1,543 m.

Recent exploration work by MSL has advanced the Project to the stage where it has declared a maiden Mineral Resource Estimate in compliance with the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves published by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia, as amended (the "JORC Code").

Resources in accordance with the JORC Code.

The SRK classified Mineral Resource Statement is shown below. The Mineral Resource Estimate is contained entirely within the Khemisset Licences.

SRK Mineral Resource Statement for the Khemisset Potash Deposit, effective date February 2018

 
 Classification    Deposit         Tonnage   % K(2)   Thickness 
                                      (Mt)        O 
 Inferred          East Central      253.2     10.3         2.3 
  Southwest                           58.2      9.5         2.6 
                                  --------  -------  ---------- 
 Total                               311.4     10.2         2.4 
 

* Reported above a cut-off grade of 8.5 per cent. K(2) O and a minimum thickness of 1.5m

Following Re-Admission the Enlarged Group has approved a work programme for 2018/2019 (the "2018/2019 Work Programme and Budget"), which includes:

-- Geology desktop work;

-- Topographical and seismic survey;

-- Drilling works;

-- Scoping study (including baseline environmental studies and permitting work); and

-- Metallurgical testing.

The principal aims of the 2018/2019 Work Programme and Budget are to

- gain further geological information to understand the full extent of the Khemisset potash basin, potential faulting, verify the potash grade and continuity, and further understand the mineralogy within the most prospective parts of the Khemisset deposit. The programme also aims to understand the presence of rinneite within the north-eastern part of the Khemisset deposit;

- Produce a Scoping Study thereby providing a high-level technical and economic assessment of the Project; and

- The drilling will also aim to infill the initial mining area to a denser sample grid which may enable parts of the Mineral Resource to have sufficient confidence to be reported as Indicated (as defined by the JORC Code).

SRK Consulting (UK) Limited ("SRK") has prepared a Competent Persons Report ("CPR") on the Project and has confirmed that it considers the 2018/2019 Work Programme and Budget warranted. SRK believes that the information gained from this programme will address faulting and mineralogy risks associated with the Project. The metallurgical testwork will not have been completed prior to the scoping study and therefore will not be available to benefit the scoping study. SRK has confirmed that the 2018/2019 Work Programme and Budget, and accompanying budget presented for the required work, is reasonable and achievable over the 12 months following Re-Admission.

The Placing and Use of Proceeds

The Company was originally formed in 2016 to undertake one or more acquisitions of target companies, businesses or assets initially focussing on exploration and/or production companies in the natural resources sector in South East Asia, Africa, and the Middle East.

The Acquisition represents the execution of this strategy by the Directors and the Net Proceeds of the Placing, being GBP5,275,000, being the gross proceeds of GBP6 million raised through the Placing less Costs (GBP725,000), will be used to develop and advance the Project with a view to generating value for Shareholders. None of the Costs will be charged to the Placees or to any Shareholders. The only condition to completion of the Placing is Re-Admission. All funds in relation to the Placing have been raised by the Company and are either being held in escrow by Optiva pending Re-Admission or will be received in conjunction with Re-Admission.

The maximum funding requirement of the Enlarged Group over the next 12 to 18 months, excluding any funding which may be required for potential corporate acquisitions, will be available from the net proceeds of the Placing. A summary of the 2018/2019 Work Programme and Budget is set out below:

 
 Budget Expenditure                              US$'000 
 Payment of EUR600,000 deferred consideration 
  in relation to the acquisition of JMS          752,700 
 Payment of US$200,000 deferred consideration 
  in relation to the acquisition of Unisalts     200,000 
 Geology desktop work                            25,000 
 Topographical and seismic survey                343,000 
 Drilling works                                  1,600,000 
 Scoping study (including conduct baseline 
  studies in connection with the                 200,000 
 environmental and social impact assessment 
  (the "ESIA") and, in 2019, 
 commence the permitting process) 
 Metallurgical testing                           250,000 
 Transaction Costs                               980,000 
 Enlarged Group corporate costs                  415,000 
 Enlarged Group operational costs                950,000 
 Contingency                                     250,000 
                                                ---------- 
 TOTAL                                           5,965,700 
 

Directors immediately on and following Re-Admission

On Re-Admission, Mr Pearce and Mr Quinn will stand down as Directors of the Company. Mr McDermott will be appointed as Non-Executive Chairman of the Company. Mr Hayden Locke will be appointed as Chief Executive Officer and Mr Robert Wrixon will be appointed as Executive Director - Chief Operating Officer (with responsibility for the Group's finance function).

Hayden Thomas Locke, age 36, Chief Executive Officer

Mr Locke has nearly 15 years' commercial experience in investment banking, private equity and junior resource company management. He initially studied engineering and commerce before completing a graduate degree in mineral exploration geosciences at the Western Australian School of Mines. He commenced his career in investment banking in London, initially with Deutsche Bank and then J.P. Morgan before returning to Australia in 2009. On his return to Australia, Mr Locke helped to set up and run the Australasian operations of Barclays Natural Resource Investment, a private equity investment vehicle focused on energy, renewables and metals and mining, with over US$2 billion in committed capital. In 2011, Mr Locke was recruited as Head of Corporate for Australian gold explorer Papillon Resources (ASX:PIR). Papillon discovered and fully permitted 5 million ounce Fekola Gold Project in Mali, West Africa, completing a number of technical studies and capital raisings, before eventually selling the company to Canada listed gold producer B2Gold for over $600 million in 2014. In 2014, Mr Locke joined ASX listed Spanish potash developer Highfield Resources as Head of Corporate and Sales & Marketing. As of mid-2017, he also assumed responsibility for Technical Services Department including geology (resource and reserve estimation), mining and metallurgy and processing.

Dr Robert Christopher Wrixon, age 46, Executive Director - Chief Operating Officer

Dr Wrixon has 18 years' commercial experience in corporate strategy, mining M&A and exploration management. He began his career in mining as head of strategy for Xstrata Coal in Sydney and later moved to a corporate strategy role for Xstrata plc in London. After leaving Xstrata, Dr Wrixon ran two ASX listed exploration companies, Manhattan Corporation Limited and Haranga Resources Limited. Dr Wrixon has been the Managing Director of Moroccan Salts Limited since its inception in 2013 and brings a wealth of knowledge on the project and the region. He is also currently a director of Starboard Global Ltd, a natural resource venture capital group based in Hong Kong. He holds an honours degree in chemical engineering and a Ph.D in mineral engineering from the University of California, Berkeley.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
 Publication of the Prospectus                 9 May 2018 
------------------------------------------  ------------- 
 General Meeting of the Company                10.00 a.m. 
                                                on 1 June 
                                                     2018 
------------------------------------------  ------------- 
 Results of General Meeting                    10.30 a.m. 
                                                on 1 June 
                                                     2018 
------------------------------------------  ------------- 
 Completion of Acquisition                    4 June 2018 
------------------------------------------  ------------- 
 Re-Admission and commencement of dealings      8.00 a.m. 
  in the Enlarged Ordinary Share Capital        on 4 June 
                                                     2018 
------------------------------------------  ------------- 
 Crediting of New Ordinary Shares to          4 June 2018 
  CREST Accounts 
------------------------------------------  ------------- 
 Share certificates for New Ordinary         11 June 2018 
  Shares dispatched Week commencing 
------------------------------------------  ------------- 
 

STATISTICS

 
 Total number of Ordinary Shares in 
  issue as at the date of this Document                48,183,344 
-----------------------------------------------  ---------------- 
 Total Consideration Shares to be issued 
  pursuant to the Acquisition                         333,333,333 
-----------------------------------------------  ---------------- 
 Total CLN Shares to be issued on Re-admission         30,115,708 
-----------------------------------------------  ---------------- 
 Total number of Placing Shares to 
  be issued on Re-Admission                           200,000,000 
-----------------------------------------------  ---------------- 
 Gross Proceeds of the Placing                       GBP6 million 
-----------------------------------------------  ---------------- 
 Total Fee Shares to be issued on Re-Admission         14,500,000 
-----------------------------------------------  ---------------- 
 The Enlarged Share Capital in issue 
  on Re-Admission                                     626,132,385 
-----------------------------------------------  ---------------- 
 Number of Ordinary Shares to be issued            92.3 per cent. 
  on Re-Admission pursuant to the Placing, 
  Acquisition, Fee Shares and satisfaction 
  of the MSL Notes as a percentage of 
  the Enlarged Share Capital 
-----------------------------------------------  ---------------- 
 Number of Options and Warrants to 
  be in issue on Re-Admission                          53,888,332 
-----------------------------------------------  ---------------- 
 Estimated costs in relation to the                    GBP725,000 
  Acquisition (including due diligence), 
  Placing and Re-Admission 
-----------------------------------------------  ---------------- 
 Placing Price                                            3 pence 
-----------------------------------------------  ---------------- 
 Market capitalisation of the Company             GBP18.8 million 
  at the Placing Price 
-----------------------------------------------  ---------------- 
 
 

For more information please visit the Company's website at www.emmersonplc.com or contact:

 
 Emmerson Plc                 www.emmersonplc.com 
---------------------------  --------------------------------------- 
 Graham Smith                 T: 01624 681250 
                               [e-mail] 
  Ed McDermott                 T: 07879475334 
---------------------------  --------------------------------------- 
 
 Optiva Securities Limited    www.optivasecurities.com 
---------------------------  --------------------------------------- 
 Jeremy King/Tejas Padalkar   T: 020 3137 1904 
                               [e-mail] 
---------------------------  --------------------------------------- 
 
 Beaumont Cornish Limited 
---------------------------  --------------------------------------- 
 James Biddle/ Roland         T: 0207 628 3396 
  Cornish 
---------------------------  --------------------------------------- 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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May 09, 2018 12:22 ET (16:22 GMT)