Guardian Metal Resources Plc press release
Proposed Fundraising to Accelerate Growth
OTC - OTC Markets · United Kingdom
Reykjavík, Dec. 03, 2024 (GLOBE NEWSWIRE) -- THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, ICELAND, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE IMPORTANT NOTICES SECTION WITHIN THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY, AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES OF AMAROQ MINERALS LTD.
THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. IN PARTICULAR, IF YOU WISH TO PARTICIPATE IN THE UK PLACING, YOU SHOULD READ AND UNDERSTAND THE INFORMATION PROVIDED IN APPENDIX 1 TO THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION NO 596/2014, WHICH IS PART OF ICELANDIC LAW BY VIRTUE OF THE ACT NO 60/2021 ON MEASURES AGAINST MARKET ABUSE AND ASSIMILATED REGULATION NO 596/2014, AS IT FORMS PART OF THE LAW OF THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Amaroq Minerals Ltd.
( “ Amaroq ” or the “ Company ” )
TORONTO, ONTARIO – 3 December 2024 - Amaroq Minerals Ltd. (AIM, TSX-V, NASDAQ Iceland: AMRQ), an independent mining company with a substantial land package of gold and strategic mineral assets in Southern Greenland, announces its intention to conduct a placing and subscription of new common shares (“ Common Shares ”) to raise gross proceeds of approximately £20.0 million (equivalent to approximately C$35.6 million or ISK 3.5 billion) (the “ Fundraising ”) at a price of 86 pence (C$1.53, ISK151) per new Common Share (the “Placing Price” ), with the net proceeds being used to further strengthen the Company’s working capital position whilst Nalunaq is in the commissioning phase and accelerate growth opportunities across the Company’s portfolio of assets in Greenland.
Highlights
The approximately £20.0 million Fundraising will consist of: a proposed placing of new Common Shares (the “ UK Placing Shares ”) with new and existing institutional investors (the “ UK Placing ”), at the Placing Price; a proposed placing of new depositary receipts representing new Common Shares (the " Icelandic Placing Shares ") with new and existing qualified investors, as defined in Article 2(e) of the EU Prospectus Regulation (“ EEA Qualified Investors ”), at the Placing Price (the “ Icelandic Placing ”). Landsbankinn hf. (“ Landsbankinn ”) has agreed to underwrite up to £10 million (equivalent to ISK 1.8 billion and C$17.8 million) as part of the Fundraising; and a proposed private placement of new Common Shares (the “ Canadian Subscription Shares ”, together with the UK Placing Shares and the Icelandic Placing Shares, the “ Fundraising Shares ”) with certain institutional investors and Directors at the Placing Price (the “ Canadian Subscription ”). Those Directors have indicated their intention to subscribe for, in aggregate, approximately £2.1 million (equivalent to C$3.7 million or ISK 369.6 million) in the Canadian Subscription.
The Fundraising will be affected pursuant to the Company’s existing authorities to allot equity securities and therefore no General Meeting will be required.
Net proceeds from the Fundraising will be used for: working capital flexibility to progress growth investment opportunities while Nalunaq goes through ramp-up; further resource drilling at Nalunaq with the intention to expand the resource and provide mining flexibility; further exploration drilling at Nanoq to define resource potential and the development opportunity; investments in mining equipment, other facilities and green energy production to further optimise operations at Nalunaq; advancing the Company’s strategic minerals business, alongside JV partners, with further targeted exploration; and additional working capital.
Details of the Fundraising
Panmure Liberum Limited (“ Panmure Liberum ”) is acting as nominated adviser, joint bookrunner and joint broker, alongside Canaccord Genuity Limited (“ Canaccord ”) who is also acting as joint bookrunner and joint broker (together the “ UK Joint Bookrunners ”), on the UK Placing; Landsbankinn, Acro verðbréf hf (“ Acro ”) and Fossar fjárfestingarbanki hf. (“ Fossar ”) (together the “ Icelandic Banks ”) are acting as joint bookrunners on the Icelandic Placing and Landsbankinn is acting as underwriter; In relation to the UK Placing: the UK Placing will be conducted through an accelerated bookbuild process (the “ Bookbuild ”) to be conducted by the UK Joint Bookrunners, which will launch immediately following the release of this Announcement and will be made available to eligible institutional investors subject to the terms and conditions set out in Appendix 1 to this Announcement. The Bookbuild is expected to close no later than 7:00 a.m. on 4 December 2024, however the UK Joint Bookrunners and the Company reserve the right to close the Bookbuild earlier or later, without further notice; the UK Placing is subject to the terms and conditions set out in Appendix 1 to this “Announcement; and the UK Placing is conditional, amongst other things, upon the Icelandic Placing not having been terminated prior to admission of the Fundraising Shares to trading on the AIM market of London Stock Exchange plc (“ AIM ”) and the receipt of conditional approval from the TSX Venture Exchange (the “ TSX-V ”) for the listing of the Fundraising Shares.
In relation to the Icelandic Placing: Landsbankinn has agreed to underwrite the Fundraising by up to £10 million, guaranteeing to the Company participation in the Fundraising, in the maximum amount of £20 million, with the commitment to procure subscribers or itself subscribe for new Common Shares to be delivered as depositary receipts amounting to an amount equal to the difference between £10 million and £20 million, or its equivalent in ISK. The Icelandic Placing Shares were offered to a limited number of specifically invited persons only, all of them being EEA Qualified Investors, and were not offered in such a way as to require any prospectus or other offering document to be published pursuant to (the EU Prospectus Regulation). The Company published a Supplementary Prospectus on 21 February 2024, consisting of a Supplement to the Registration Document dated 12 September 2023 and a Securities Note, along with a Summary. Application will be made to Nasdaq Iceland hf. for admission to trading of the Company’s depositary receipts representing the Fundraising Shares. Pursuant to Article 1(5)(a) of the EU Prospectus Regulation the admission to trading of the depository receipts by Nasdaq Iceland hf. does not require publication of prospectus or supplementary prospectus. Placees’ commitments were made solely on the basis of publicly available information and any Exchange Information previously published by or on behalf of the Company simultaneously with or prior to the date of this Announcement and subject to any further terms set forth in the contract note sent to individual Placees.
Allocations in the UK Placing are at the absolute discretion of the UK Joint Bookrunners, in consultation with the Company. The number of Fundraising Shares will be determined following completion of the Bookbuild by agreement between the Company and the UK Joint Bookrunners. Allocations in the Icelandic Placing are at the absolute discretion of the Company. Details of the number of Fundraising Shares will be announced as soon as practicable after the close of the Bookbuild.
Eldur Olafsson, CEO of Amaroq, commented:
“This fundraising will enable us to accelerate our growth plans across our exciting gold and strategic minerals targets, alongside progressing the ramp-up at Nalunaq to commercial production. Following first gold pour at Nalunaq, and with key offtake agreements in place, we look to 2025 with optimism. Across the wider portfolio, we plan to complete further drilling at the Nanoq gold target following recent assay results which demonstrated exceptional gold potential, alongside evaluating the results from our recent copper and nickel exploration campaign.
We are also considering a potential step-up to listing on the Main Market of the London Stock Exchange and will provide an update in due course. Amaroq remains well positioned to unlock the significant resource potential of our portfolio in South Greenland, delivering long-term value for all stakeholders."
Enquiries:
Amaroq Minerals Ltd.
Eldur Olafsson, Executive Director and CEO +354 665 2003 eo@amaroqminerals.com
Eddie Wyvill, Investor Relations +44 (0)7713 126727
ew@amaroqminerals.com
Panmure Liberum Limited (Nominated Adviser, Joint Bookrunner and Corporate Broker)
Scott Mathieson Nikhil Varghese Kieron Hodgson Josh Moss +44 (0) 20 7886 2500
Canaccord Genuity Limited (Joint Bookrunner and Corporate Broker) James Asensio Harry Rees George Grainger +44 (0) 20 7523 8000
Landsbankinn hf. (Joint Bookrunner and Underwriter) Björn Hákonarson Sigurður Kári Tryggvason +354 410 4000
Acro verðbréf hf. (Joint Bookrunner) Hannes Árdal Þorbjörn Atli Sveinsson +354 532 8000
Fossar Investment Bank hf. (Joint Bookrunner)
Steingrímur Arnar Finnsson
Kristín Alexandra Gísladóttir
+354 522 4000
Camarco (Financial PR)
Billy Clegg Elfie Kent Fergus Young +44 (0) 20 3757 4980
Background to and Reasons for the Fundraising
The Company’s strategy is to leverage its first mover advantage in Greenland, underpinned by the Nalunaq project, to build a full-cycle mining company, delivering long term shareholder value and providing significant upside potential through its land bank of high-impact gold and strategic minerals exploration assets. Amaroq has been listed on the TSX-V since July 2017, AIM since July 2020, First North between November 2022 to September 2023 and the Icelandic Exchange since September 2023.
The Company acquired the Nalunaq gold project in 2015 and has made significant progress since this time in expanding the extent of the resource base through drilling, incorporating a new geological model (the Dolerite Dyke model) to better understand the distribution of the high-grade ore, building a new winterized camp to allow full-year activities, and acquiring and otherwise progressing much of the infrastructure required to bring Nalunaq into production. First gold pour at Nalunaq was achieved on 27 November 2024 and the Company intends to ramp-up production throughout 2025 with the aim of reaching nameplate capacity of 260-300 tonnes per day by Q4 2025.
Amaroq has also been able to acquire the largest package of mineral rights in southern Greenland with a number of assets that are highly prospective for gold and strategic minerals. The addition of strategic minerals into the portfolio provides significant growth potential, as these metals and minerals, such as copper, nickel, titanium and graphite, are critical for increased electrification as part of the world’s decarbonisation strategy and as independent supply continues to become an increasing focus for nations globally.
Key developments at Nalunaq since AIM admission in 2020 include:
Production: Amaroq achieved its first gold pour at its cornerstone Nalunaq gold mine in Greenland on 27 November 2024. This signified a major step on Amaroq’s journey towards becoming self-funded and triggering initial cash flow generation. Alongside this announcement, Amaroq also signalled that ramp-up to nameplate plant capacity of 260-300 tonnes per day is expected to take place in Q4 2025. Partnerships and agreements: Amaroq has entered into an offtake agreement with Auramet International, Inc., (“ Auramet ”), whereby Auramet will purchase all of the gold produced from Amaroq’s Nalunaq gold mine. In addition to this, Amaroq secured an agreement with Metalor Technologies SA (“ Metalor ”), which specializes in the evaluation and refining of precious metals at its refinery located in Switzerland. Metalor will process all the doré alloy obtained from Nalunaq. Finally, Amaroq will be partnering with a UK refinery to offer local Greenlandic people the opportunity to buy gold sourced from Nalunaq. Infrastructure: Since admission, Amaroq has completed a significant proportion of Nalunaq’s required infrastructure, with 98% of process plant detail design and engineering complete, and plant pad earthworks and civil construction both 100% complete, an all-weather exploration camp constructed and commissioned, critical surface mobile equipment purchased and supporting infrastructure either purchased or commercially and technically evaluated. Third Party Engineering Study: Halyard Inc. (“ Halyard ”) was engaged to complete a third-party engineering study on Nalunaq’s development costs including the process plant, mobile equipment, surface infrastructure, permanent camp and associated logistics and engineering. The study concluded that the advanced engineering of the overall project is now to Feasibility Study level based on the Canadian requirements of National Instrument 43-101 – _Standards of Disclosure for Mineral Project _(“ NI 43-101 ”). The Dolerite Dyke Model: Amaroq has worked with SRK Consulting to develop a robust Mineral Resource estimation technique for Nalunaq. This included the development of the Dolerite Dyke Model to account for the high-grade variability from core sampling (the ‘nugget effect’) in order to better reflect the full resource potential at Nalunaq. The model allows the geological results to be incorporated into the Halyard engineering study in order to move the project towards independent technical studies to support further development. Resource Growth through Drilling: Amaroq has drilled approximately 22,373 metres at Nalunaq since its admission to AIM and, incorporating learnings from the new Dolerite Dyke model, has identified two new high-grade zones, namely Valley Block and Welcome Block, taking the total number of identified high grade zones at the asset to five. The Valley Block is now expected to be one of the key targets for initial development. As a result of drilling in the 2020 and 2021 field seasons, Amaroq announced on 6 September 2022 that it had increased its total Inferred Mineral Resource by 30% contained gold, with a 50% increase in average grade, since the previous estimate reported in 2020. The resource now sits at 355 Kt @ 28.0 g/t Au for 320 Koz gold, putting the project in the top 2% of projects globally in terms of reported gold resource grade. Amaroq has identified the Mountain Block as a key target for further mine development and optimization. Significant progress at the Mountain Block has been achieved, with the ramp completed to 742 level and ore development continued on 732 level. Amaroq also announced the completion of the 2024 exploration programme, including over 8,600 metres of core drilling across the gold and strategic metals portfolio. Debt Financing : In July 2024, Amaroq agreed heads of terms, subject to final documentation, with Landsbankinn for US$35.0 million in Revolving Credit Facilities, which would secure a substantial increase and extension to its current debt facilities. In October 2024, Amaroq entered into an agreement with the holders of its US$22.4 million convertible notes to convert the notes’ outstanding balance into new Common Shares. That measure serves to simplify Amaroq’s capital structure, reduces cash interest costs and increases future financial flexibility. Mining Contract Awarded: Amaroq has signed a contract mining agreement with Thyssen Schachtbau GmbH and a procurement and supply chain support agreement with Tamarack Mining Services to support the restart of Nalunaq. Delivering on the Company’s ESG mandate: The Government of Greenland approved the Environmental Impact Assessment (“ EIA ”) and Social Impact Assessment (“ SIA ”) for the Nalunaq project in June 2024. The Company is now working with stakeholders on the Impact Benefit Agreement. Further to this, a portion of the net proceeds from the Fundraising is expected to be deployed to accelerate the use of clean energy at Nalunaq and other exploration sites.
Following the Company’s progress outlined above, Nalunaq is transitioning from being a cost centre to a cash generator, with first gold pour achieved on 27 November 2024. During 2025, the Company is expecting Phase 1 Commissioning of the Nalunaq plant to complete in Q1 2025, as well as an updated Mineral Resource Estimate (MRE4) for Nalunaq to be published, and for ramp-up to nameplate plant capacity of 260-300 tonnes per day to take place in Q4 2025.
The Company has identified several new investments in its mining equipment and facilities, as it seeks to upgrade and expand its mining fleet as well as improve maritime services. These investments should further optimise operations at Nalunaq. This also lays the groundwork for the Company’s vision of servicing Greenland’s future mining operations. The Company recognises its unique position as a first-mover in the growing Greenlandic mining industry. By investing into its own operations and supply chains, the Company will be able to support and capitalise on Greenland’s growing mining sector (60 – 70% annual growth) by supplying the industry with assets, services, and supplies.
Outside of Nalunaq development, the Company also plans to accelerate certain advanced exploration activities at its high priority gold targets with the overall objective of evaluating options to integrate them into the Nalunaq processing infrastructure. At Nanoq, Stage 1 scout drilling to confirm mineralisation style and potential grades was completed in 2024. Stage 2 across 2025 is expected to include systematic drilling focused on understanding geometry, grade continuity, metallurgy, and resource potential. In Stage 3 across 2026/27, Nanoq is expected to reach a bulk sampling stage through a trial portal extending from the deep-water entry to the mineralized structure, with sample processing conducted at the Nalunaq process plant. Further exploration opportunities have also been identified in the Company’s Gardaq joint venture. The Company has also identified several areas of increased focus to develop its strategic minerals portfolio including a new copper target development, expanded drilling at Josva & Target North, the Stendalen project development, and further new project generation.
The final major initiative identified involves investments in hydropower-based green energy production to lower diesel expenses and emissions. At Nalunaq, it is currently envisioned that the process plant will be powered through hydroelectric power to reduce diesel usage. Nalunaq’s mining operations are envisioned to implement battery run equipment to reduce ventilation and diesel requirements, and its camp and infrastructure is envisioned to be powered through hydroelectric, wind and solar, with a diesel generator as back-up. At other exploration sites across Amaroq’s portfolio, the camp and infrastructure are envisioned to be powered through small scale wind and solar energy to charge batteries and reduce dependency on diesel power generation.
Sources and Uses of Proceeds
The net use of proceeds from the Fundraising will be to help the Company strengthen its working capital position whilst Nalunaq is in commissioning phase and accelerate growth opportunities within the Company’s portfolio of assets in Greenland in Greenland. More specifically, the net proceeds from the Fundraising will be to fund further resource drilling at Nalunaq to expand resource and provide mining flexibility, further exploration drilling at Nanoq to define resource potential and the development opportunity, investments in mining equipment, other facilities and green energy production to further optimise operations in Nalunaq, and advancement of the Company’s strategic portfolio, alongside JV partners with further target exploration, and to provide additional working capital.