17th Oct 2024 16:31
(Alliance News) - MetalNRG PLC on Thursday said it has struck a roughly USD30 million deal which will see it acquire a copper producing mine in Morocco.
Shares in the company traded 32% higher at 0.66 pence each in London shortly before the equities close.
MetalNRG said it has agreed to acquire Compagnie Miniere de Oumejrane from Managem SA. The natural resources and energy-focused investor will pay USD30 million up front, and another USD2 million on the first anniversary following the deal's completion. There also will be a final contingent payment based on the average copper price over the 12 months following completion.
"CMO owns the producing and profitable Oumejrane copper mine, located in the Eastern Anti-Atlas of Morocco," MetalNRG said.
Revenue at Oumejrane mine in 2023 totalled USD28.0 million.
"The company expects also to enter into a strategic partnership with Managem to explore additional opportunities to collaborate on mining projects in Morocco and elsewhere," MetalNRG added.
The firm said it has entered into a USD25.0 million convertible loan note agreement with OMF Fund IV SPV K LLC, a fund managed by Orion Resource Partners, to go towards funding the deal. It is "exploring options" for the remaining USD5.0 million for the upfront consideration.
"A new management team will be put in place with Christopher Chadwick being appointed as the company's chief executive officer with immediate effect and other changes to the company's board of directors and senior management team expected at completion, including the appointment of Vinesh Karia as chief financial officer and Neil Gawthorpe as chief operating officer, who will both bring significant skills and experience to the company," MetalNRG said.
The firm is to propose a name change to Atlas Metals Group PLC to "reflect this transformative transaction and the new strategic direction of the company".
CEO Chadwick said: "This will be a transformational transaction for the company, giving us 100% equity ownership of a fully operational, producing and profit generating copper mine. Beyond the immediate gains, this strategic move opens the door to substantial upside potential and a wider relationship with the Managem Group. We are working to expedite completion of the Acquisition as soon as possible and look forward to providing further updates in due course."
The deal will be classed as a reverse takeover.
By Eric Cunha, Alliance News news editor
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