62b00dcd-81bf-4c28-83d5-75bab59b7755.pdf
ASX Code: AOU
Securities on Issue as at 30 October 2015:
63,894,684 fully paid ordinary shares (quoted)
21,800,000 partly paid shares (unquoted)
1,024,956 convertible note
securities maturing 30 June 20161
4,000,000 options exercisable at
$0.15 expiring 18/7/2016
1,000,000 options exercisable at
$0.10 expiring 23/10/2018
1,675,361 options exercisable at
$0.08 expiring 31/12/2018
Directors
Glenn Whiddon (Executive Chairman)
Nicholas Ong
(Non-executive Director)
Matthew Foy
(Non-executive Director)
Company Secretary
Matthew Foy
Contact
Office J, Level 2 1139 Hay Street West Perth WA 6005
Tel: +61 8 9486 4036
Fax: +61 8 9486 4799
1 Convertible Notes have a face value of $1, convertible into shares at a 20% discount to the 5-day VWAP prior to receipt of a conversion notice together with a 1-for-2 attaching option exercisable at $0.08 on or before 31 December 2018 per share issued on conversion.
Quarterly Activities Report as at 30 September 2015
Auroch Minerals NL (ASX:AOU) (Auroch or the Company) is pleased to provide shareholders with the following summary of its activities during the September quarter.
OPERATIONS
During the quarter, the Company provided a metallurgical studies update for the Fair Bride gold project (Fair Bride). Flotation test work was undertaken on concentrate samples from Fair Bride, with the encouraging results confirming earlier work, which had resulted in over 90% gold recovery to flotation concentrate in a low percentage mass. Additionally, gravity test work was carried out at a coarser grind size than used for the previous testwork on flotation and ultrafine grinding, which formed as the basis of the previously released Fair Bride Preliminary Economic Assessment. The findings of the flotation and gravity test work highlighted that the ore at Fair Bride is amendable to flotation, and that an alternative lower cost flow sheet is available.
Subsequent to the quarter, Xtract commenced a 6 hole diamond drilling program, which is directed towards the acquisition of new geotechnical data and ground water testing. Importantly, several of the geotechnical holes are designed to intersect the central parts of the Fair Bride orebody where there is only sparse drilling. Xtract have also designed a shallow sterilisation drilling program over the site of the proposed tailings dam to sterilise this area.
Update on the Sale of the Manica Gold Project
On September 14, the Company provided an update on the 100% sale of the Manica Gold project to Xtract Resources plc (Xtract). Under the revised binding sale terms, the total consideration payable is US$10 million, and is attributable to the sale of the Company's 100% owned subsidiary, Mistral Resource Development Corporation (Mistral). In addition, Auroch is to transfer the Company's direct 2% shareholding in Explorator Limitada (Explorator) to Xtract.
The revision to the consideration payable was borne out of Xtract's need to provide certainty to its shareholders around dilution relating to the issue of Consideration Shares, and to reflect changing and volatile market conditions. The original share sale agreement determined the number of consideration shares by a formula with no floor price. This new arrangement provides certainty to all parties.
About Xtract
Xtract Resources plc is a gold and copper exploration development company with projects in Chile and South Africa with a current market capitalisation of approximately A$45 million (£22 million) and is well funded. Xtract aims to become a mid-tier gold and copper producer with a focus on low cost, high margin shallow/surface deposits. Xtract's Chairman Mr Colin Bird and CEO Mr Jan Nelson have a long history of involvement in the Manica Mining Concession having initially acquired the Manica Gold Project whilst at Pan African Resources plc in 2006. Mr Nelson is also a former Director of the Company.
Material Terms of revised Share Sale and Purchase Agreement
During the previous quarter Auroch had entered into a binding share sale and purchase agreement for the sale of the Manica Mining Concession 3990C to Xtract. Under the revised binding sale terms, the total consideration payable is US$10.0 million and is attributable to the sale of the Company's 100% owned subsidiary, Mistral Resource Development Corporation (Mistral) and the transfer of the Company's direct 2% shareholding in Explorator Limitada (Explorator) to Xtract (Revised Agreement).
Breakdown and Timing of Transaction Payments
In respect of the sale of 100% of Mistral:
-
US$500,000 upon executing the revised agreement; (received by AOU on 17/09/15)
-
US$3.5 million in cash payable at completion;
-
US$1.8 million in cash three months post completion;
-
Issue of 1,032,258,065 new XTR ordinary shares at Completion representing approximately 11% of the issued capital of XTR (Consideration Shares). The Consideration Shares will be issued at a deemed price of 0.25 pence per Share (being equivalent to US$0.003875 per ordinary share at an exchange rate of £1.00 = US$1.55) and escrowed for 3 months from issue; and
In respect of the transfer of the 2% shareholding in Explorator:
- US$200,000 in cash.
Conditions Precedent to Completion
The Agreement is conditional upon Auroch obtaining prior consent of the Government of Mozambique through the Ministry of Mineral Resources and Energy to the extent required under the Mozambique Mining Act and other applicable laws relating to the change of control of the Company's subsidiary and communicating such change of control to the Mozambican mining authorities. Completion of the Agreement is also subject to Auroch obtaining shareholder approval under ASX Listing Rule 11.2 for the sale of the Manica Mining Concession and Xtract obtaining approval for the admission of the Consideration Shares to trading on AIM.
Subsequent events
Subsequent to the end of quarter, the Company announced that all resolutions put to shareholders at the extraordinary general meeting, including a resolution relating to the sale of the Manica Project, had been passed by shareholders. The shareholder approval amounted to a key condition precedent to completion of the transaction with Xtract.
CORPORATE
During the quarter the Company announced the receipt of the first tranche of US$500,000 in funding from Xtract, which was used to settle various project creditors directly by Xtract. Further, on 17 September 2015 the Company announced the receipt of a further US$500,000 from Xtract, which was paid upon execution of the Revised Agreement.
Subsequent to the quarter on 15 October 2015 the Company sought and obtained shareholder approval for, amongst other things, the issue of up to 1,139,956 convertible note securities (Convertible Notes). On 23 October 2015, Convertible Notes representing a face value of $250,000 were converted into 3,350,723 ordinary shares and 1,675,361 attaching options exercisable at $0.08 on or before 31 December 2018. In addition the Company issued 1,850,000 ordinary shares and 1,000,000 options exercisable at $0.10 on or before 23 October 2018 in settlement of outstanding creditors and deferred payments.
On 7 October 2015, the Company announced that it had terminated the sale agreement with Big Un Limited (previously Republic Gold Limited) (Big) (Big Agreement). The Big Agreement was subject to completion of certain conditions precedent, including Ministerial consent and regulatory approval as required by Big and the Company. The Big Agreement originally had an End Date of 1 October 2014 which was extended to 30 June 2015. The End Date was subsequently extended to 30 September 2015.
Given the significant amount of time that transpired from the execution of the Big Agreement, and noting that the conditions to completion were not satisfied by 30 September 2015, the Company provided notice of termination to Big. Big has made a claim against the Company relating to the Big Agreement and shares that were proposed to be issued to Big on completion, with a maximum liability of the value of the consideration (being 6,538,462 Auroch shares with a value of approximately
$614,615 based on the market price of Auroch shares). The Company has engaged counsel to assist with the claim, and will update shareholders when possible.
For further information please visit www.aurochminerals.com or contact:
Auroch Minerals NL Glenn Whiddon Chairman
T: +61 8 9486 4036
Interest in Mining Tenements
Mozambique Mining Concession
|
Tenement
|
Tenement ID
|
Status
|
Interest at beginning of quarter
|
Interest acquired or disposed
|
Interest at end of quarter
|
|
Manica Gold Project
|
3990C
|
Granted
|
100%
|
-
|
100%
|
Western Australia
|
Tenement
|
Tenement ID
|
Status
|
Interest at beginning of quarter
|
Interest acquired or disposed
|
Interest at end of quarter
|
|
Beete
|
P63/1646
|
Granted
|
100%
|
-
|
100%
|
|
Peninsula
|
P63/1694
|
Granted
|
100%
|
-
|
100%
|
The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled by Mr Gordon Koll who is a registered professional natural scientist (Pr.Sci.Nat.) under the South African Council for Natural Scientific Professions (SACNASP) and is a Fellow of the Geological Society of South Africa, which is a recognised professional organisation by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code). Mr Koll is a full‐time employee of the Company. Mr Koll has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of The JORC Code. Mr Koll consents to the inclusion in this presentation of the matters based on the information in the form and context in which it appears.
The information in this report that relates to Mineral Resources and their estimation is based on information compiled by Mr Malcolm Titley of CSA Global (UK) Ltd. He is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person in terms of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (JORC Code 2012 Edition). Malcolm Titley consents to the inclusion in this release of information relating to the estimation of Mineral Resources, in the form and context in which it appears.
The information in this report that relates to the Metallurgical Test Work was compiled by Mr. Noel O'Brien, B.Met.Eng, MBA, FAusIMM, who is a consultant to the Company and who has sufficient experience which is relevant to the recovery of gold from the style of mineralisation contained in Fair Bride, and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the JORC Code. Mr. O'Brien consents to the inclusion, in this announcement, of the matters based on the information in the form and context in which it appears.