19th Aug 2019 11:30
(Alliance News) - Path Investments PLC on Monday said it has agreed to acquire FineGems Extraction Corp in an all share deal which would give the FineGems vendors a 50% stake in Path.
FineGems owns 75% of Jagoda Tourmaline Extraction Ltd - which owns the Jagoda licence in Zambia. Jagoda has "two long-life assets", a manganese ore deposit with a purity averaging 52% and a tourmaline deposit.
Manganese at the purity found at Jagoda can be used in battery storage and electric vehicle batteries.
Tourmaline, meanwhile, is a gemstone. Path expects that "Jagoda will supply and market over 30 million carats per annum into a global market estimated at 300 million carats per annum, immediately making Jagoda a significant global player, if not the largest player, in the tourmaline market".
The binding share purchase agreement signed by Path for FineGems has a number of conditions, including a fundraise in order to finance the Jagoda redevelopment project. The project aims to generate manganese ore sales revenue within 6 months and tourmaline revenue by month 17.
The proposed deal would see Path allot and issue shares in Path to FineGems' vendors, giving the vendors a 50% Path shareholding at completion. No cash will be paid by Path to FineGems shareholders.
Path's current market capitalisation is GBP1.5 million, which would put the value of a 50% stake at around GBP750,000.
If completed, the acquisition will constitute a reverse takeover and Path's shares remain suspended.
In November last year Path announced that it had decided to withdraw from conditional farm-in agreement with 5P Energy GmbH. Then, in January 2019, the company announced the signing of a heads of agreement for the proposed acquisition of ARC Marlborough Pty Ltd. However, Path withdrew from those negotiations in March.
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