Conditional Acquisition,Fundraise,Change of Nomad

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR"). Market Soundings, as defined in MAR, were taken in respect of the Placing with the result that certain persons became aware of this inside information, as permitted by MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

19 June 2020

Bezant Resources Plc

("Bezant" or the "Company") 

Heads of Agreement re Acquisition of 100% of Virgo Resources Ltd's interest

in the Hope Copper-Gold Project, Namibia, £350,000 Fundraise, Total Voting Rigts

and appointment of Nominated Adviser

Bezant (AIM: BZT), the copper-gold exploration and development company, is pleased to announce the conditional acquisition of 100% of Virgo Resources Ltd and its interests in the Hope Copper-Gold Project in Namibia, a £350,000 fundraising and the appointment of Beaumont Cornish Limited as its Nominated Adviser.

Hope Copper-Gold Project Acquisition:  The Company has entered into an exclusive and legally binding Heads of Agreement dated 18 June 2020 to acquire 100% of Virgo Resources Ltd, incorporated in Australia (ACN 626 148 347) ("Virgo") (the "Acquisition"). Virgo through its 100% owned Australian subsidiary Hepburn Resources Pty Ltd (ACN 624 189 162) owns i) 70% of Hope and Gorab Mining Pty Ltd incorporated in Namibia  which owns EPL5796, ii) 80% of Hope Namibia Mineral Exploration Pty Ltd Incorporated in Namibia which owns EPL6605 and iii) has the option to acquire a 80% interest in EPL7170 (under application). The share and cash consideration payable by Bezant at completion of the Acquisition ("Completion") is i) the issue of 422,062,525 new ordinary shares of 0.002 pence each in the capital of the Company ("Bezant Shares") at a deemed issue price of 0.2 pence per Bezant Share  ("Ordinary Shares Consideration"), ii) £135,000 to be settled by the issue of new Bezant Shares based on the share price on the day of settlement ("Asset Sellers Consideration"); and iii) cash of £85,600 (the "Consideration"). The Acquisition is subject to various Conditions Precedent detailed below including a 30 day due diligence period and Bezant and Virgo obtaining all necessary regulatory approvals or waivers and shareholder approvals pursuant to the AIM Rules or any other laws or statute.  Highlights of the Acquisition are:

·    Hope Copper-Gold Project is in the Matchless Copper Belt in Namibia and has a 10.2 million tonnes JORC category grade of about 1.9% copper and 0.3 g/t of gold (approx. 30% resource tonnage classified in the "indicated" Mineral Resource category with the balance in the "inferred" Mineral Resource category).

·    Namibia is a safe country with good copper and zinc potential. The area under license is 92,310 ha with an application pending for a further 30,960 ha with the application pending being contiguous with EPL5796 and EPL6605. The project area has good infrastructure and a history of successful mines owned by major mining companies.

·    Ordinary Shares Consideration to be issued at Completion is at a premium to the current Bezant share price.  At Completion the Company will issue i) 422,062,525 new Bezant Shares, at a deemed issue price of 0.2 pence per Ordinary Share being a premium of 67% per cent. to the closing middle market price of 0.12 pence on 18 June 2020, being the latest practicable date prior to this announcement; and iii) £135,000 to be settled by the issue of new Bezant Shares of 0.002 pence each based on the Company's share price at the date of settlement. This would for illustration be approximately 112,500,000 based on an issue price of 0.12 pence being the  closing middle market price on 18 June 2020.

·    The Acquisition is subject to a 30 day due diligence period.

Fundraising: The Company has raised £350,000 before expenses. The Fundraising comprises a conditional placing of 406,250,000 new Ordinary Shares (the "Placing Shares") for £325,000 at a price of 0.08 pence per Ordinary Share (the "Placing Price") (the "Placing"), via the Company's broker, Novum Securities Limited, and a subscription by Colin Bird, Bezant's Executive Chairman, who has invested £25,000 to subscribe for 31,250,000 new Ordinary Shares at the Placing Price (the "Subscription Shares") (the "Subscription"), representing 7.14 per cent. of the total Fundraising amount.  Accordingly, following completion of the Fundraising, Mr. Bird will be interested in 56,250,000 Ordinary Shares, representing approximately 3.29 per cent. of the Company's enlarged share capital.

Use of Proceeds: The net proceeds from the Placing and the Subscription will be used in relation to progressing the Company's evaluation of the Kalengwa project in Zambia and geophysics and geochemistry in relation to the Hope Copper-Gold project, vendor consideration for the Aquisition and for the group's general working capital purposes.

Related Party Transaction: As Mr. Bird is a director of the Company and in light of the size of his subscription, his participation in the Fundraising is being treated as a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. Accordingly, the independent directors, being Mr. Ronnie Siapno, Dr. Evan Kirby and Mr. Laurence Read, having consulted with the Company's Nominated Adviser, Beaumont Cornish Limited, consider Mr. Bird's participation in the Fundraising to be fair and reasonable insofar as the Company's shareholders are concerned.

Further Details on the Fundraising: Pursuant to the Placing and the Subscription, in aggregate, 437,500,000 new Ordinary Shares (the "Fundraising Shares") will be issued at the Placing Price to certain new investors and Colin Bird conditional upon admission of the Fundraising Shares to trading on AIM ("Admission").  The Placing Price represents a discount of 33 per cent. to the closing middle market price of an Ordinary Share of 0.12 pence on 18 June 2020, being the latest practicable date prior to this announcement.  Each of the participants in the Fundraising  will also receive a warrant exercisable at a 100% premium to the Placing Price for each Fundraing Share which they have subscribed valid for 2 years from Admission. The Company is also issuing a warrant to Novum to subscribe for 21,875,000 new Ordinary Shares exercisable at the Placing Price for a period of 2 years from Admission.

The Fundraising Shares represent, in aggregate, approximately 26 per cent. of the Company's enlarged issued share capital (as enlarged by the issue of the Fundraising Shares). The Fundraising Shares will be fully paid and rank pari passu in all respects with the Company's existing Ordinary Shares.

Application to trading on AIM: The Fundrainsg is conditional on admission of the Fundraising Shares to trading on AIM ("Admission").  Application will be made to the London Stock Exchange for the total of 437,500,000 Fundraising Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Fundraising Shares will commence at 8.00 a.m. on 26 June 2020.

Total Voting Rights after Fundraising: Following the issue of the Fundraising Shares, the Company's total issued share capital will consist of 1,707,255,181 Ordinary Shares with voting rights.  The Company does not hold any Ordinary Shares in treasury and accordingly there are no voting rights in respect of any treasury shares. 

On Admission, the abovementioned figure of 1,707,255,181 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Bezant under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

Issue of shares related to the Acquisition: a further announcement will be made in due course regarding the timing of the issue of the new ordinary shares pursuant to the Acquisition (the Ordinary Shares Consideration and Sellers Consideration). 

Appointment of Nomad: The Company has appointed Beaumont Cornish Limited as nominated adviser to the Company to replace Strand Hanson Limited with immediate effect.  

Colin Bird, Executive Chairman of Bezant, commented:

"This acquisition represents a major additional contribution to Bezant's copper gold portfolio. The acquisition represents an excellent opportunity to acquire a position in a significant JORC resource with good grades and a gold contribution. Namibia is an excellent jurisdiction with a long history of mining in the country and the project is in an area with good infrastructure. There exists considerable potential for discovering more copper and gold within the sizeable licence area and we look forward to advancing this exciting project in the short term."

Hope Copper-Gold Project further information

Background information

Project Area: The Hope Cooper-Gold project (EPL5796) and adjacent tenures EPL6605 and EPL7170 (under application), are located in central Namibia approximately 100 km to the south west of Windhoek, the capital of Namibia, and about 120 km to the south east of the major African port of Walvis Bay. EPL 5796 covers an area of 345 km2 , whilst EPL 6605 and EPL 7170 cover an area of 579 km2  and 310 km2  respectively.

JORC Resource: The Hope Copper-Gold cover approximately 1,200 km2 of the highly prospective Matchless Copper Belt. The project contains a combined gross mineral resource of 10.18Mt at 1.89% Cu and 0.3 g/t Au at 0.7% cu cut-off reported in accordance with the JORC code (2012) with 192kt of contained Cu and 3,190kg of contained Au. Approximately 30% of the Mineral Resource tonnage is classified in the "indicated" Mineral Resource category with the balance in the "inferred" Mineral Resource category and was based on 339 drill holes for a total of 63,855 metres.

Ownership and location: The tenures are located in the Namib Desert of Namibia within the Swakopmund District, Erongo Region accessible by well-maintained gravel roads. EPL5796 is held by Hope and Gorob Mining (Pty) Ltd  which is 70% owned by Hepburn Resources Pty Ltd (100% owned subsidiary of Virgo) and 30% owned by local partner in MKH Tangible investments CC.  EPL6605 is held by Hope Namibian Mineral Exploration (Pty) Ltd, which is owned 80% by Hepburn Resources Pty Ltd and 20% by Lovisa Mwandingi Haufiku (Namibian Citizen).

Regional Geology: The area covered by the Hope Copper-Gold Project is characterised by superficial quaternary sand and gravel overlying the Swakop Group of the Damara Supergroup. The area is dominated by massive mica schists of the Kuiseb Formation of the Pan-African Damara Orogen.

Previous Exploration: EPL5796: whilst significant expiration has been completed on the area the primary focus has been on the known prospects mainly due to the fact that they outcrop and are still open at depth. This work has led to a sound understanding of these copper gold prospects but has left the vast majority of the area unexplored, especially by modern exploration techniques. EPL6605 and EPL710 contains the Niedersachsen Cluster which includes three previously discovered copper prospects (Niedersachsen, Aros and Kobos) within EPL 6605 and one copper prospect situated in EPL7170 (Schlesien, situated close to the north-eastern border of EPL 6605).

EPL Licences: Exclusive Prospecting Licences such as EPL5796 and EPL6605 allow searching, whether by way of excavations or otherwise, for minerals or group of minerals with a view to delineating or evaluating deposits or concentrations of any such a mineral or group of minerals. EPL 5796 is for base and rare metals and precious metals and EPL 6605 is for base and rare metals: dimension stone, industrial minerals; precious metals. An EPL is issued for 3 (three) years and may be renewed twice for a period of 2 (two) years per renewal and shall not expire during a period when an application for renewal has been lodged no later than 90 days before the expiry date.  EPL 5766 was issued on 18 June 2015 and the expiry date of its first 2 (two) year renewal is 16 September 2020 and an application was submitted for a second 2 (two) year renewal on 16 June 2020. EPL 6605 was issued on 26 September 2018 and its initial 3 (three) year term expires on 25 September 2021.

The information on the Hope Copper-Gold Project has been sourced from the geology and resource estimate competent persons report prepared by Measured Group Pty Ltd for Virgo Resources Limited on 18 October 2019.

Key Terms of the Acquisition

Due Diligence Period: The Heads of Agreement was entered into on 18 June 2020 and is subject to a 30 day due diligence ("Due Diligence Period") during which Bezant is able to complete its due diligence and has the right to withdraw from the Acquisition at its discretion.

Consideration:  The Consideration due to be settled by Bezant on completion of the acquisition is to be settled by;

i)            £85,600 to be paid in cash;

ii)       the issue of 422,062,525 new Ordinary Shares at a deemed issue price of 0.2 pence per Ordinary Share being a premium of 67% per cent. to the closing middle market price of 0.12 pence on 18 June 2020, being the latest practicable date prior to this announcement ("Ordinary Shares Consideration"),

iii)         £135,000 to be settled based on the Bezant share price at the date of settlement. This would for illustration purposes be approximately 112,500,000 based on an issue price of 0.12 pence being the  closing middle market price on 18 June 2020 ("Assets Sellers Consideration")

Bezant will also issue 98,361,250 unlisted Options which vest on 1 August 2021 and expire on 31 August 2023 with an exercise of 0.30 pence which represents a premium of 150 per cent. to of 0.12 pence being the closing middle market price on 18 June 2020. 

Deferred Consideration: If within 36 months from completion there is a total Mineral Resource (as defined in the JORC code (2012 addition)) (Mineral Resources) on any of the current or future projects of Virgo of 400,000 tonnes of contained copper, Bezant will issue a further £400,000 worth of Bezant shares based on the 10 day VWAP of the Bezant share price at the time of this milestone being achieved ("Deferred Consideration").

Conditions Precedent: The Acquisition is subject to the following conditions precedent:

i)          Bezant completing due diligence to its satisfaction during the Due Diligence Period;

ii)        Bezant obtaining all necessary regulatory approvals or waivers and shareholder approval pursuant to the AIM listing rules, or any other law or statute (including, but not limited to England and Wales) and all third-party approvals, consents and necessary documentation required to complete the Acquisition;

iii)       Virgo obtaining all necessary regulatory approvals or waivers and shareholders' approval is pursuant to any law or statute (in Australia) and all third-party approvals, consents and necessary documentation required to complete the Acquisition;

iv)       Vendors signing the necessary documents to transfer their Virgo shares, Virgo unlisted options and Virgo deferred consideration performance shares to Bezant;

Lock up and Orderly Market: The Ordinary Share Consideration, the Asset Sellers Consideration and the Deferred Consideration (if issued) (the "Shared-based Consideration") will be subject to orderly market trading and release schedule is as follows;

i)          25% of the Share-based Consideration will be freely tradable on Completion and Settlement

ii)         25% of the Share-based Consideration will be freely tradable after six (6) months from Completion and Settlement

iii)     50% of the Share-based Consideration will be freely tradable after twelve (12) months from Completion and Settlement

Ongoing Project assistance: At Completion Bezant will enter into a business relationship and general management agreement with Christian Cordier or his nominated business entity for £2,750 per month.  Bezant will also negotiate in good faith with the Namibian vendor a management agreement in his role as country representative responsible for managing and maintaining communication and relationships with all relevant government departments including the mines department.

Representations and warranties: The Heads of Agreement also contains certain commercial and other representations and warranties customary for a transaction of this nature.

Further information on Virgo

Virgo Resources Ltd was incorporated in Australia on 23 May 2018 (ACN 626 148 347) and owns 100 per cent of its Australian subsidiary Hepburn Resources Pty Ltd (ACN 624 189 162) which in turn owns i) 70% of Hope and Gorab Mining Pty Ltd incorporated in Namibia  which owns EPL5796 , ii) 80% of Hope Namibia Mineral Exploration Pty Ltd Incorporated in Namibia which owns EPL6605 and iii) has the option to acquire a 80% interest in EPL7170. For the period from incorporation to 20 June 2019 Virgo Resources Ltd made an audited consolidated loss of A$432,059 and as at that date had net assets of A$331,618.

For further information, please contact:

or visit http://www.bezantresources.com 

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.

Qualified Person's Statements

In accordance with the AIM Note for Mining and Oil & Gas Companies, June 2009, Colin Bird, CEng, FIMMM, a South African and UK Certified Mine Manager and Executive Chairman of Bezant, with more than 40 years' relevant experience, is the qualified person who has reviewed and approved the technical information contained herein.

Glossary

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.

An 'Indicated Mineral Resource' is that part of a Mineral Resource for 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.

An 'Inferred Mineral Resource' is 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.

"Au"      Gold

"Cu"       Copper

"Mt"      million tonnes

"kt"        thousand tonnes

"g/t"      grammes a tonne

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them