18th Mar 2020 16:33
(Alliance News) - Arc Minerals Ltd on Wednesday said that it has entered into an agreement to sell its entire 99.43% stake in Casa Mining Ltd to Golden Square Equity Partners Ltd for up to USD50 million.
The minerals explorer also said Golden Square will enter into a royalty payment agreement with Arc Minerals of up to USD45 million, based on potential gold production from the projects and interests that are held by Casa.
Casa owns a 74% interest in the three-million-ounce inferred resource Akyanga gold deposit in the Democratic Republic of Congo.
Arc Minerals intends to use the net proceeds from the disposal towards exploration and development activities in Zambia and for general working capital purposes.
Nick von Schirnding, chair of Arc, said: "Following the disposal of our interests in Slovakia and Eritrea, the sale of Casa turns Arc into a pure-play copper company with our exciting Zambian copper development where we intend to recommence our drilling programme in Q2 of this year. Given the extremely challenging market conditions, we are experiencing with Covid-19 this transaction is attractive to Arc with a potential USD5 million cash payment upon the maturity of the loan note in March 2021 and a potential royalty of up to USD45 million going forward, allowing us to share some of the future upsides at Casa."
The company also said Non-Executive Director Jonathan de Thierry intends to resign from the board on March 31, following the disposal of Casa.
Shares in Arc Minerals closed up 7.0% at 1.77 pence each in London on Wednesday afternoon.
By Tapan Panchal; [email protected]
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