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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Lexington Gold Ltd | LSE:LEX | London | Ordinary Share | BMG5479L1072 | COM SHS USD0.003 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.10 | -1.87% | 5.25 | 5.20 | 5.30 | 5.35 | 5.25 | 5.35 | 168,840 | 13:16:17 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Dimension Stone | 0 | -924k | -0.0025 | -21.00 | 19.59M |
From Apr 2023 to Apr 2024
TIDMLEX
RNS Number : 3346Z
Lexington Gold Limited
15 May 2023
15 May 2023
Lexington Gold Ltd
("Lexington Gold" or the "Company")
Proposed Acquisition of White Rivers Exploration (Pty) Ltd
Lexington Gold (AIM: LEX), the gold exploration and development company with projects in North and South Carolina, USA, is pleased to announce that, on 13 May 2023, it entered into, via its wholly owned recently incorporated subsidiary, conditional share subscription and loan agreements to acquire 76 per cent. of White Rivers Exploration Proprietary Limited (" WRE ") an exploration and development company with significant gold assets in South Africa.
Highlights :
Summary information on WRE
-- WRE is a major tenement holder in the Witwatersrand gold fields of South Africa, with tenement interests covering approximately 89,499 hectares.
-- WRE's current tenement interests have been estimated by WRE's management to contain potential resources of over 37 million ounces of gold (non-JORC/non-SAMREC nor other international standard compliant estimate). WRE has focussed its exploration efforts in particular on shallow (200 to 1,200m depth) deposits close to well established infrastructure (refer to Table 1 below for further details).
-- WRE's tenement interests comprise 10 prospecting rights (six granted licences and four renewal applications) which are grouped into five projects.
-- WRE has an incorporated Joint Venture ("JV") arrangement with Avgold Limited a subsidiary of Harmony Gold Mining Company Limited (JSE:HMY) ("Harmony Gold"), the largest gold producer by volume in South Africa. Such JV project, referred to as the Jelani Resources JV, has a non-code compliant independently estimated resource of 6.02 million ounces of gold at an average grade of 6.47 g/t.
-- The Witwatersrand gold fields area was historically the largest single gold producing district in the world. Total historical gold production over a century of mining activity was 2 billion ounces. It is estimated that a further 1.2 billion ounces of gold resource still remains in the Witwatersrand.
-- WRE's Kroonstad project, has an independently estimated non-code compliant gold exploration resource target of between 6.06 million ounces and 62.41 million ounces with a gold grade of between 4.96 g/t and 11.54 g/t and potentially constitutes a new Witwatersrand goldfield.
-- WRE is believed to own the world's largest Witwatersrand drillhole data base compiled over a ten-year period and consisting of some 2,500 mother holes with their associated assays.
-- WRE was established by well-known Australian explorer, Mark Creasy, in 2002, with whom the Company has on 12 May 2023 entered into a one-year unsecured loan agreement for a principal amount of GBP0.3m (the "Mark Creasy Loan Agreement"). Mr Creasy will become a significant shareholder of Lexington Gold on completion of the proposed acquisition.
Edward Nealon, Lexington Gold's Chairman, commented :
"The Board is very pleased to announce this proposed acquisition, which the Directors consider to be a substantial development for the Company. WRE's assets are located in a world-renowned gold producing area known both to me personally and our South African based CEO, Bernard Olivier. The Witwatersrand gold fields have been the source of almost a third of the world's gold production since 1886 and are estimated to still hold over one billion ounces . The results of exploration activities across these tenements have so far been extremely encouraging, with early stage assessments indicating sizeable non-code compliant gold resources across the five projects.
" The Board believes that this transaction has significant potential for creating shareholder value, as we seek to progress WRE's assets into an independently verified multi-million ounce JORC-compliant resource base . The Company will also continue with its current exploration work across its highly promising Carolina projects ."
Bernard Olivier, Lexington Gold's CEO, commented :
"This proposed acquisition of WRE, with its substantial portfolio of gold assets, represents a tremendous opportunity for Lexington Gold. The projects are all considered shallow level in terms of gold mining in South Africa and the portfolio comprises, in our view, one of the best gold asset packages in the world. We also look forward to working closely with Mark Creasy who will become a significant shareholder of Lexington Gold on completion. Mr Creasy is considered to be one of Australia's most successful mining entrepreneurs and we are delighted to welcome him as a supportive partner in our enlarged business."
Details of the Proposed WRE Transaction
As indicated above, Lexington Gold, via its subsidiary, has entered into conditional share subscription and loan agreements to acquire 76 per cent. of WRE, an exploration and development company with significant gold assets in South Africa (the "WRE Share Subscription and Loan Agreements"), as well as directly into conditional loan assignment agreements with each of Mark Creasy and Sunswell Holdings Pty Ltd. ("Sunswell") to acquire all of the outstanding loans they have historically made to WRE (the "WRE Loan Assignments") (together, the "WRE Acquisition and Loan Agreements"). The aggregate amount payable by the Company under the WRE Acquisition and Loan Agreements is GBP0.3m, by way of the provision of a subordinated loan to WRE, and up to GBP6.4m to be settled by way of the issue of new common shares in Lexington Gold based on certain pre-determined milestones being satisfied with any such shares being subject to a 12-month lock-up arrangement followed by a 12-month orderly market arrangement from the date of their issue (the "Proposed WRE Transaction").
For so long as Mr Creasy is interested in 10 per cent. or more of Lexington Gold's issued common shares post completion of the Proposed WRE Transaction, he shall be entitled to nominate a director to the Company's Board. Mr Creasy has no existing shareholding or other interest in the Company.
The WRE Acquisition and Loan Agreements are conditional, inter alia, on approval from Lexington Gold's shareholders. The Company will make a further announcement when the formal notice of the requisite general meeting is published in respect of seeking such shareholder approval.
WRE was established by well-known Australian explorer, Mark Creasy, in 2002, with whom the Company has on 12 May 2023 entered into a one-year unsecured loan agreement for a principal amount of GBP0.3m (the "Mark Creasy Loan Agreement").
WRE Share Subscription and Loan Agreements :
As part of the transaction, Lexington Gold is required to advance a GBP0.3m subordinated loan to WRE (the "WRE Loan") and will be issued 76 per cent. of WRE's voting shares with the remaining 24 per cent. to be issued to Lexington Gold's Broad-Based Black Economic Empowerment ("BBBEE") partners.
The WRE Loan will be used to settle all existing WRE creditors other than Mark Creasy and Sunswell and the costs associated with WRE's current South African business rescue process.
The WRE Share Subscription and Loan Agreements are conditional, inter alia, on the receipt of approval from Lexington Gold's shareholders at a duly convened general meeting, formal notification of which will be announced and sent to shareholders in due course.
WRE Loan Assignments :
The GBP6.4m aggregate amounts payable in respect of the assignment of Mark Creasy's loans with a face value of ZAR197m (approximately GBP8.5m) and Sunswell's loans with a face value of US$2m (approximately GBP1.59m) advanced historically to WRE are to be settled by the issue of new common shares in Lexington Gold (the " Consideration Shares ").
The Consideration Shares will be issued based on certain pre-determined milestones being achieved, as described in the Appendix to this announcement, and will be subject to a 12-month lock-up arrangement and thereafter a 12-month orderly market arrangement from the date of their issue.
The WRE Loan Assignments are subject to Lexington Gold shareholders' approval.
Mark Creasy Loan Agreement :
Mr Mark Creasy, who is cited by Forbes ( www.forbes.com ) as being "one of Australia's most successful prospectors", is the founder, controlling majority shareholder and the main financier and creditor of WRE.
Mr Creasy has, on 12 May 2023, entered into a GBP0.3m, one-year unsecured, loan agreement with Lexington Gold, at an interest rate of 7.5 per cent. per annum which will accrue until the scheduled maturity date.
Additional Information on WRE's assets
1. Technical summary of WRE's projects
WRE is a major tenement holder in the Witwatersrand gold fields, with tenement interests covering approximately 89,499 ha. Such tenements comprise 10 prospecting rights (six granted licences and four renewal applications), which are grouped into five projects, including the Jelani Resources JV which is an incorporated joint venture arrangement with Avgold Limited, a subsidiary of Harmony Gold . The areas of interest represent brownfield and greenfield targets predominantly located in the Free State Province and one project situated in the North West Province. The main commodity to be explored for is gold, with uranium as a possible by-product.
The Witwatersrand gold fields have accounted for more than a third of the world's total gold production since 1886 and, collectively, represent the world's largest single gold producing district. It is estimated that the Witwatersrand gold fields have produced over 2 billion ounces of gold during over a century of mining activity and that approximately 1.2 billion ounces of gold still remains in situ.
WRE has a database with a vast number of borehole logs (approximately 2,500 mother holes) and associated assays from historically drilled holes in the Witwatersrand Basin. Such borehole database was assembled from 25 different sources and is considered by WRE to be the most comprehensive collection of surface Witwatersrand exploration drilling data within South Africa.
WRE's existing licences and renewal applications are divided into five projects (see Figure 1 below) namely:
1. Jelani Resources JV (JV with Harmony Gold); 2. Kroonstad; 3. Bothaville NE; 4. Klerksdorp South; and 5. Ventersburg.
Jelani Resources JV :
The Jelani Resources JV is located adjacent to Harmony Gold's Target Mine lease area in the north-western portion of the Welkom Goldfield. It comprises one Prospecting Right and is currently jointly held by WRE (65%) and Avgold Limited (35%). The Jelani Resources Prospecting Right covers an area of 956 ha (see Table 2 below).
In 2018, WRE established an independently estimated gold resource attributable to the Jelani Resources JV but such estimation has not yet been formally verified or accepted by the partners. A lthough not audited/code compliant, the resource estimate comprised 6.02Moz of gold, of which approximately 2.95Moz would potentially be attributable to WRE if all hurdles in respect of the JV are ultimately achieved, including successful feasibility studies, a decision to mine being made by the JV partners and if WRE choses to participate in the funding of future development costs to retain a 49 per cent. interest in the JV. The Mineral Resources within the one kilometre Buffer Zone are attributable solely to Harmony Gold (100%). Harmony Gold has previously indicated that the Jelani Resources JV, subject to the successful completion of a bankable feasibility study, will be afforded the opportunity to mine the resources in the Buffer Zone on tribute once a commercially acceptable future agreement has been negotiated between the parties.
Non-JORC/Non-SAMREC compliant resource estimates
WRE's internally estimated non-JORC/non-SAMREC compliant resources for all five of its projects are set out in Table 1 below.
Table 1 : WRE's non-code compliant Resource estimates derived utilising WRE's internal historical database
Hot Features
Premium
Project Mt Grade Grade Au Moz
cmg/t Au g/t
------------------ ------ ------ ------- -------
Jelani Resources
JV* 14.18 717 6.47 2. 95
Kroonstad 31 .00
Bothaville NE 6.8 330 3.33 0.73
Ventersburg 10.55 521 6.91 2.34
Klerksdorp South 0.52
------------------ ------ ------ ------- -------
Total : 37.54
Notes:
* - WRE's attributable resource post a potential future decision to mine (WRE assumed retained JV interest of 49%; Harmony Gold 51%).
WRE's Kroonstad project, has an independently estimated non-code compliant gold exploration target of between 6.06 million ounces and 62.41 million ounces with a gold grade of between 4.96 g/t and 11.54 g/t and potentially constitutes a new Witwatersrand goldfield.
Table 2 : WRE's Prospecting Licences and Prospecting Right Renewal Applications
Project Tenement Area Status Expiry date
(hectares)
----------------- -------------------- ----------- ----------------- -----------
Jelani Resources FS 30/5/1/1/2/10350 956 Renewal Submitted *
PR
Kroonstad FS 30/5/1/1/2/889 13,845 Renewal Submitted *
PR
Kroonstad FS 30/5/1/1/2/10520 12,429 Renewal Submitted *
PR
Kroonstad FS 30/5/1/1/2/10519 22,193 Executed 28-May-24
PR
Bothaville FS 30/5/1/1/2/10578 9,510 Executed 03-Mar-24
PR
Bothaville FS 30/5/1/1/2/10579 9,119 Executed 17-Mar-24
PR
Ventersburg FS 30/5/1/1/2/888 8,418 Executed 09-Dec-23
PR
Ventersburg FS 30/5/1/1/2/10489 8,965 Executed 09-Dec-23
PR
Ventersburg FS 30/5/1/1/2/10528 2,248 Executed 21-Aug-24
PR
Klerksdorp NW 30/5/1/1/2/11335 1,816 Renewal Submitted *
PR
----------------- -------------------- ----------- ----------------- -----------
Total 89,499
--------------------------------------- ----------- ----------------- -----------
* - renewals of prospecting rights are for 3 years from the grant
date of the renewal.
Figure 1 : WRE's tenement interests located in the Witwatersrand Goldfields (including major estimated historic gold production .
Figure 2 : Location of Jelani Resources JV relative to Harmony Gold's existing Target Mine operations . Historically mined out areas, shaft positions and underground developments are indicated .
2. Proposed Work Programme
The Company's Directors believe that a multi-million ounce JORC 2012/SAMREC compliant Mineral Resource Estimate (" MRE ") can be established in respect of WRE's asset portfolio and intends, subject to funding, for the Company to:
-- Undertake detailed analysis and modelling of the existing geological database and extensive drilling data set; and
-- Establish and implement the requisite work required to convert the current non-JORC/non-SAMREC complaint Mineral Resources into a code compliant MRE including verification and duplication drilling, as appropriate, as well as the re-sampling and assaying of historical drill core, where possible.
Furthermore, the Directors plan to unlock value from the Jelani Resources JV by engaging and working closely with Harmony Gold with the aim of progressing the project into potential future gold production.
Whilst WRE has internally estimated that it potentially has over 37 million ounces of non-code compliant gold resources across its projects (see Table 1 above) there can be no guarantee that the planned exploration and technical work by the Company, subject to funding, will be sufficient to establish JORC (2012) compliant Mineral Resources.
3. Shareholder Approval
Although the Company currently has sufficient share capital authorities in place to proceed with the Proposed WRE Transaction, the Board has elected to make the proposed acquisition subject to shareholder approval and will also be seeking approval for the issue of shares on the potential future exercise of the Mark Creasy Milestone Option (defined below) (which would potentially increase Mr Creasy's interest in the Company to over 30 per cent.) without triggering the requirement in the Company's Bye-laws for him to then make an offer for the Company.
4. Further information on WRE
WRE was incorporated and registered in South Africa as a private company in 2002 and its principal activity is that of mineral exploration and development. It was founded and funded by Mr Creasy to seek to explore the Witwatersrand basin's significant gold potential.
In 2014, WRE entered into a joint venture arrangement with subsidiaries of Harmony Gold via a vehicle now known as Jelani Resources Proprietary Limited (formerly called Friedshelf 1541 Proprietary Limited) based on the potential for identifying a JORC compliant gold resource. WRE, through Jelani Resources, commissioned independent scoping studies to assess and determine potential mining rates from different shafts, potential annual gold production rates and an overall mine plan for the joint venture partners.
On 12 January 2023, WRE was placed in business rescue proceedings in South Africa and the Proposed WRE Transaction has subsequently been approved by its creditors and shareholders as part of the business rescue process overseen by the appointed business rescue practitioners. On completion of the Proposed WRE Transaction, WRE will exit business rescue with no creditors other than Lexington Gold.
The last audited financial statements prepared in respect of WRE are for its financial year ended 30 June 2021 which showed a net loss of ZAR33.2m (approximately GBP1.44m), total assets of ZAR61.5m (approximately GBP2.67m) and total liabilities of ZAR406m (approximately GBP17.6m).
Mr Creasy is entitled to a gross production royalty at a rate of 2.5 per cent. in respect of WRE's existing projects. Such royalty obligation will remain in place post completion of the Proposed WRE Transaction in respect of any future production from the existing project areas.
Competent Person's Statement
The technical information contained in this announcement that relates to WRE and its existing projects is based upon information compiled by Edward Nealon, Chairman of Lexington Gold. Mr Nealon is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr Nealon consents to the inclusion in this announcement of the matters based upon the information in the form and context in which it appears.
For further information, please contact :
Lexington Gold Ltd www.lexingtongold.co.uk Bernard Olivier (Chief Executive Officer) via Yellow Jersey Edward Nealon (Chairman) Mike Allardice (Group Company Secretary) Strand Hanson Limited (Nominated Adviser) www.strandhanson.co.uk Matthew Chandler / James Bellman / Abigail T: +44 207 409 3494 Wennington WH Ireland Limited (Joint Broker) www.whirelandplc.com Katy Mitchell / Ben Good / Enzo Aliaj T: +44 207 220 1666 Peterhouse Capital Limited (Joint Broker) www.peterhousecap.com Duncan Vasey / Lucy Williams (Broking) T: +44 207 469 0930 Eran Zucker (Corporate Finance) Yellow Jersey PR Limited (Financial Public www.yellowjerseypr.com Relations) T: +44 7948 758 681 Charles Goodwin / Annabelle Wills / Soraya Jackson
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended by virtue of the Market Abuse (Amendment) (EU Exit) Regulations 2019.
APPIX
1. WRE Share Subscription and Loan Agreements : summary of principal commercial terms
Date 13 May 2023
------------------------------ -------------------------------------------------
Parties Lexington Gold South Africa Proprietary
Limited (a recently incorporated wholly
owned subsidiary of Lexington Gold Ltd)
and WRE
------------------------------ -------------------------------------------------
Issue of new shares Lexington Gold or its nominee will be
in WRE and cancellation issued 76 ordinary shares in the capital
of old shares of WRE and Lexington Gold's BBBEE partner
will be issued 24 ordinary shares in
the capital of WRE which are to be subscribed
for and allotted/issued for an aggregate
subscription price of ZAR100 (approximately
GBP5) following which all of the existing
issued shares of WRE as held by the current
WRE shareholders are to be cancelled.
Accordingly, Lexington Gold will have
a 76 per cent. shareholding in WRE
------------------------------ -------------------------------------------------
Conditions Precedent 1) the change of control of WRE being
formally communicated in writing to Avgold
Limited the co-shareholder in the Jelani
Resources JV;
2) Confirmation that the Proposed WRE
Transaction does not constitute a reverse
takeover under the AIM Rules for Companies
("AIM Rules"); (This condition has already
been satisfied)
3) Lexington Gold receiving a valid title
opinion confirming the validity and status
of all licences and renewal applications
held by WRE and Jelani Resources in respect
of their Prospecting Rights;
4) Lexington Gold shareholders' approval
of these agreements and the WRE Loan
Assignments including but not limited
to the issue of new Lexington Gold common
shares;
5) all other approvals required by applicable
law in respect of the Proposed WRE Transaction
being obtained including the consent
required from the South African Minister
of Mineral Resources and Energy to the
change of control of WRE in terms of
section 11 of the Mineral and Petroleum
Resources Development Act 28 of 2002
("MPRDA") (" Ministerial Consent ");
------------------------------ -------------------------------------------------
Long Stop Date The long stop date by which the remaining
Conditions Precedent above must be satisfied
is 30 November 2023 or such later date
as may be agreed between the parties.
------------------------------ -------------------------------------------------
GBP300k loan to WRE The GBP300k five year loan to WRE (the
"WRE Loan") will be subordinated to the
extent necessary to render WRE factually
solvent, and will be subordinated in
favour of all other creditors whose liabilities
are incurred after 6 January 2023 being
the date the WRE business rescue commenced,
until such time as, in the opinion of
WRE's auditors, the assets of the Company,
fairly valued, exceed the liabilities
of WRE.
The WRE Loan will be drawn down in stages
with GBP50k due within three business
days of the signing of this agreement,
GBP50k due within five business days
of the signing of this agreement and
the balance of GBP200k within five business
days of this agreement becoming unconditional
save for Ministerial Consent.
Interest is payable at the prime overdraft
rate quoted by the South African Reserve
Bank plus 2.5 per cent. compounded monthly.
------------------------------ -------------------------------------------------
Representations, indemnities, The agreement also contains certain commercial
warranties and rule and other representations, warranties
of law and indemnities customary for a transaction
of this nature and is governed by South
African law.
------------------------------ -------------------------------------------------
2 . WRE Loan Assignment Agreement : Mark Creasy
Summary of principal commercial terms
Date 12 May 2023
-------------------------- --------------------------------------------------------------------------------
Parties Lexington Gold Ltd, Mark Creasy, Yandal
Investments Pty Limited (a company wholly
owned by Mr Creasy) and WRE
-------------------------- --------------------------------------------------------------------------------
Assignment of Loans Lexington Gold or its nominee will be
assigned Mark Creasy's loans with a face
value of approximately ZAR197m (approximately
GBP8.5m) and Sunswell's loans with a
face value of US$2m (approximately GBP1.59m)
-------------------------- --------------------------------------------------------------------------------
Mark Creasey Portion " Lexington Gold Equity " means an amount
of the Lexington Gold of new common shares in Lexington Gold
Equity consideration which equates to GBP6.4m to be issued
payable for the Loan by Lexington Gold to Mark Creasy or his
Assignment nominee(s) and Sunswell in accordance
with the WRE Loan Assignments in the
following proportions:
1) US$2m (approximately GBP1.59m) worth
of Lexington Gold common shares are to
be issued to Sunswell or its shareholders
based on the GBP/US$ foreign exchange
rate two business days prior to the first
portion of the equity settlement falling
due to be issued to Mark Creasy or his
nominee(s) (the " Sunswell Portion ");
and
2) The balance of the GBP6.4m to be issued
to Mark Creasy or his nominee(s) (the
"Mark Creasey Portion")
-------------------------- --------------------------------------------------------------------------------
Conditions Precedent 1) the change of control of WRE being
formally communicated in writing to Avgold
Limited the co-shareholder in the Jelani
Resources JV;
2) Confirmation that the Proposed WRE
Transaction does not constitute a reverse
takeover under the AIM Rules; (This condition
has already been satisfied)
3) Lexington Gold receiving a valid title
opinion confirming the validity and status
of all licences and applications held
by WRE and Jelani Resources in respect
of their Prospecting Rights;
4) Lexington Gold shareholders' approval
of the WRE Loan Assignments and the WRE
Share Subscription and Loan Agreements
including but not limited to the issue
of Lexington Gold shares;
5) all other approvals required by applicable
law in respect of the Proposed WRE Transaction
being obtained including the consent
required from the South African Minister
of Mineral Resources and Energy to the
change of control of WRE in terms of
section 11 of the Mineral and Petroleum
Resources Development Act 28 of 2002
("MPRDA") (" Ministerial Consent ").
-------------------------- --------------------------------------------------------------------------------
Condition Fulfilment The date by which the remaining Conditions
Date Precedent must be satisfied which is
30 November 2023 or such later date as
may be agreed between the parties.
-------------------------- --------------------------------------------------------------------------------
Transaction related The Mark Creasy Portion of the equity
milestones in respect settlement shall be issued based on the
of the issue of the 30-day volume weighted average price
Mark Creasy Portion ("VWAP") for Lexington Gold's common
of the equity settlement shares two days prior to the date of
issue of the first tranche of the equity
settlement in 1) below:
1) 35% of the equity settlement on the
Condition Fulfilment Date, even if Ministerial
Consent remains outstanding;
2) 20% of the equity settlement on the
later of the Condition Fulfilment Date
and the date that Ministerial Consent
is granted; and
3) 45% of the equity settlement on the
later of the Condition Fulfilment Date
and the date of renewal of four of the
Prospecting Rights split, 25%, 10%, 8%
and 2% respectively between the four
Prospecting Rights concerned.
-------------------------- --------------------------------------------------------------------------------
Deferred consideration The deferred consideration value accretive
Milestone in respect milestone is the announcement by Lexington
of the issue of the Gold of the establishment of at least
Mark Creasy Milestone 1 million ounces of JORC/SAMREC-compliant
Option gold resource in respect of any of WRE's
existing projects excluding the Jelani
Resources JV (the "Milestone").
Upon the later of 12 months from the
date of this agreement and the Milestone
being achieved, Mark Creasy or his nominee(s)
will be granted an option over 110,000,000
new Lexington Gold common shares (the
"Mark Creasy Option Shares") for a period
of 12 months following the date of the
announcement of the Milestone being achieved
at an exercise price of GBP0.075 (7.5
pence) per Lexington Gold share which
can be exercised in full or in part (the
"Milestone Options").
If the Milestone Options were to be issued
and exercised in full, their potential
future exercise would provide an GBP8.25m
cash inflow to the Company.
-------------------------- --------------------------------------------------------------------------------
Lock-up re Lexington The Lexington Gold shares to be issued
Equity Consideration in connection with the terms of this
agreement shall not be disposed of for
a period of 12 months after their date
of issue (the "Lock-Up Period"). Following
expiry of the Lock-Up Period, there will
be a 12-month orderly market arrangement
in respect of the potential sale of such
Lexington Gold shares.
-------------------------- --------------------------------------------------------------------------------
Representations and The agreement also contains certain commercial
warranties and rule and other representations and warranties
of law customary for a transaction of this nature
and is governed by South African law.
-------------------------- --------------------------------------------------------------------------------
3 . WRE Loan Assignment Agreement: Sunswell
Summary of principal commercial terms
Date 13 May 2023
--------------------------- --------------------------------------------------------------------------------
Parties Lexington Gold Ltd, Sunswell Holdings
Pty Ltd and WRE
--------------------------- --------------------------------------------------------------------------------
Assignment of Loans Lexington Gold or its nominee will be
assigned Mark Creasy's loans with a face
value of approximately ZAR197m (approximately
GBP8.5m) and Sunswell's loans with a
face value of US$2m (approximately GBP1.59m).
--------------------------- --------------------------------------------------------------------------------
Sunswell Portion of " Lexington Gold Equity " means an amount
the Lexington Gold of new common shares in Lexington Gold
Equity consideration which equates to GBP6.4m to be issued
payable for the Loan by Lexington Gold to Mark Creasy or his
Assignment nominee(s) and Sunswell in accordance
with the WRE Loan Assignments in the
following proportions:
1) US$2m (approximately GBP1.59m) worth
of Lexington Gold common shares are to
be issued to Sunswell or its shareholders
based on the GBP/US$ foreign exchange
rate two business days prior to the first
portion of the equity settlement falling
due to be issued to Mark Creasy or his
nominee(s) (the " Sunswell Portion "
); and
2) The balance of the GBP6.4m to be issued
to Mark Creasy or his nominee(s) (the
"Mark Creasey Portion").
--------------------------- --------------------------------------------------------------------------------
Conditions Precedent 1) the change of control of WRE being
formally communicated in writing to Avgold
Limited the co-shareholder in the Jelani
Resources JV;
2) Confirmation that the Proposed WRE
Transaction does not constitute a reverse
takeover under the AIM Rules; (This condition
has already been satisfied)
3) Lexington Gold receiving a valid title
opinion confirming the validity and status
of all licences and applications held
by WRE and Jelani Resources in respect
of their Prospecting Rights;
4) Lexington Gold shareholders' approval
of the WRE Loan Assignments and the WRE
Subscription and Loan Agreements including
but not limited to the issue of Lexington
Gold shares;
5) all other approvals required by applicable
law in respect of the Proposed WRE Transaction
being obtained including the consent
required from the South African Minister
of Mineral Resources and Energy to the
change of control of WRE in terms of
section 11 of the Mineral and Petroleum
Resources Development Act 28 of 2002
("MPRDA") (" Ministerial Consent ").
--------------------------- --------------------------------------------------------------------------------
Condition Fulfilment The date by which the remaining Conditions
Date Precedent must be satisfied which is
30 November 2023 or such later date as
may be agreed between the parties.
--------------------------- --------------------------------------------------------------------------------
Transaction related The Sunswell Portion of the equity settlement
milestones in respect shall be issued based on the 30-day VWAP
of the issue of the for Lexington Gold's common shares two
Sunswell Portion of days prior to the date of issue of the
the equity settlement first tranche of the equity settlement
in 1) below:
1) 35% of the equity settlement on the
Condition Fulfilment Date, even if Ministerial
Consent remains outstanding;
2) 20% of the equity settlement on the
later of the Condition Fulfilment Date
and the date that Ministerial Consent
is granted; and
3) 45% of the equity settlement on the
later of the Condition Fulfilment Date
and the date of renewal of four of the
Prospecting Rights split, 25%, 10%, 8%
and 2% respectively between the four
Prospecting Rights concerned.
--------------------------- --------------------------------------------------------------------------------
Lock-Up re Lexington The Lexington Gold shares to be issued
Gold equity consideration in connection with the terms of this
agreement shall not be disposed of for
a period of 12 months after their date
of issue (the "Lock-Up Period"). Following
expiry of the Lock-Up Period, there will
be a 12-month orderly market arrangement
in respect of the potential sale of such
Lexington Gold shares.
--------------------------- --------------------------------------------------------------------------------
Representations and The agreement also contains certain commercial
warranties and rule and other representations and warranties
of law customary for a transaction of this nature
and is governed by South African law.
--------------------------- --------------------------------------------------------------------------------
4 . Mark Creasy Loan Agreement: principal commercial terms
Date 12 May 2023
-------------------- ---------------------------------------------------------
Parties Lexington Gold Ltd and Mark Creasy
-------------------- ---------------------------------------------------------
Amount of Loan GBP300,000
-------------------- ---------------------------------------------------------
Drawdown date Three business days after the date of
the agreement.
-------------------- ---------------------------------------------------------
Use of proceeds The Borrower shall utilise all monies
borrowed under the agreement solely for
its general working capital purposes
including settling its liabilities to
third parties or to satisfy operating
costs and/or advancing the same to one
or more of its subsidiaries to settle
their liabilities to third parties or
to satisfy t heir operating costs in
the normal course of business.
-------------------- ---------------------------------------------------------
Interest rate 7.5% p.a.
-------------------- ---------------------------------------------------------
Repayment Date 12 months from t he drawdown date.
-------------------- ---------------------------------------------------------
Representations and The agreement also contains certain commercial
warranties and other representations and warranties
customary for a transaction of this nature.
-------------------- ---------------------------------------------------------
-S -
Glossary of technical terms
"Au" gold;
"g/t" grammes per tonne;
"ha" Hectare;
"Indicated Mineral that part of a Mineral Resource for
Resource" which quantity, grade (or quality),
densities, shape and physical characteristics
are estimated with sufficient confidence
to allow the application of modifying
factors in sufficient detail to support
mine planning and evaluation of the
economic viability of the deposit;
"Inferred Mineral Resource" that part of a Mineral Resource for
which quantity and grade (or quality)
are estimated on the basis of limited
geological evidence and sampling. Geological
evidence is sufficient to imply but
not verify geological and grade (or
quality) continuity. It is based on
exploration, sampling and testing information
gathered through appropriate techniques
from locations such as outcrops, trenches,
pits, workings and drill holes;
"JORC" the Australasian Code for Reporting
of Exploration Results, Mineral Resources
and Ore Reserves, as published by the
Joint Ore Reserves Committee of The
Australasian Institute of Mining and
Metallurgy, Australian Institute of
Geoscientists and Minerals Council
of Australia;
"JORC (2012)" the 2012 edition of the JORC Code;
"km(2) " square kilometres;
"Mineral Resource" a 'Mineral Resource' is a concentration
or occurrence of solid material of
economic interest in or on the Earth's
crust in such form, grade (or quality),
and quantity that there are reasonable
prospects for eventual economic extraction.
The location, quantity, grade (or quality),
continuity and other geological characteristics
of a Mineral Resource are known, estimated
or interpreted from specific geological
evidence and knowledge, including sampling.
Mineral Resources are sub-divided,
in order of increasing geological confidence,
into Inferred, Indicated and Measured
categories;
"Mt" millions of tonnes;
"oz" ounces;
"SAMREC" the South African code for the reporting
of exploration results, mineral resources
and mineral reserves; and
"ZAR" South African Rand.
Note to Editors :
Lexington Gold (AIM: LEX) is a gold exploration and development company currently holding interests in four diverse gold projects, covering a combined area of approximately 1,675 acres in North and South Carolina, USA. The projects are situated in the highly prospective Carolina Super Terrane ("CST"), which has seen significant historic gold production and is host to several multi-million-ounce mines operated by majors. It was also the site of the first US gold rush in the early 1800s, before gold was discovered in California.
Further information is available on the Company's website: www.lexingtongold.co.uk . Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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END
ACQMZGMKGFNGFZZ
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May 15, 2023 02:00 ET (06:00 GMT)
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