28th Oct 2019 17:32
(Alliance News) - Blencowe Resources PLC on Monday said it has agreed to buy the Orom graphite project in Uganda for GBP2 million in shares.
Blencoew has signed a share purchase agreement with Consolidated Africa Ltd and New Energy Minerals Africa Pty Ltd to buy Consolidated African Resources (Uganda) Ltd in a reverse takeover. CRA and New Energy have given their binding consent to the acquisition.
CARU is a Ugandan registered company which owns the Orom graphite project in northern Uganda.
Blencowe will, subject to a successful placing, acquire the entire share capital of CARU for GBP2.0 million pound, to be satisfied via the issue of 33.3 million new shares at an implied price of 6 pence each. Of this, GBP500,000 will be payable to New Energy and GBP1.5 million will be payable to CRA.
In addition, there is cash consideration payable to CRA of AUD50,000 which will be payable whether completion occurs or not.
Completion of the deal will be conditional on Blencowe raising working capital for the enlarged group to further develop the Orom project.
"Blencowe was formed for the purposes of acquiring a natural resources asset and the Board is fortunate, having reviewed several projects, to now be in a position to have reached an investment decision," said Chair Cameron Pearce.
"We look forward to publishing a prospectus in the near future outlining what we believe is a very exciting transaction highlighted by the recent granting by the Ugandan Government of a 21 year mining licence," he added.
Shares in Blencowe are currently suspended.
By Lucy Heming; [email protected]
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