22nd Sep 2014 09:42
LONDON (Alliance News) - Paragon Resources PLC Monday said it was abandoning its plans to shift its investment focus to the agricultural sector and said it has identified a potential transaction which will refocus the company on the minerals and resources industry.
Paragon said it has entered into a memorandum of understanding on a potential deal with Tana Minerals Pty Ltd under which Paragon would buy Tana's MRE Mining (Mauritius) Ltd subsidiary. The consideration for the acquisition would be satisfied through the issue of new shares in Paragon and by the company raising new equity capital in order to develop the project.
MRE owns a potentially high-grade rare earth project in central Madagascar.
To back the deal, Paragon has agreed a new convertible loan note financing facility of up to GBP150,000, of which GBP20,000 has been drawn down.
Simon Hunt, Paragon's Executive Chairman, said that "whilst the potential transaction involves the company reverting to its previous operational sector, the board has concluded that this is the best way forward for the company through the acquisition of a potentially very valuable project with follow on projects to look at in the near future."
Paragon Resources shares are currently suspended from trading, they last traded at 0.22 pence per share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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