10:13 Fri 27 Mar 2020
Cadence Minerals PLC - EMH – Agreement with CEZ to Invest in Cinovec
("Cadence Minerals" or "Cadence")
European Metals (AIM: EMH) - Final Agreement with CEZ to make
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the update today from European Metals Holdings Limited ("European Metals" "EMH" or "the Company") that it has today reached final agreement ("Final Agreement") with
The Company announced on
The Final Agreement reached today is now a binding commitment from CEZ to subscribe to become a 51% shareholder in Geomet, and is conditional only upon EMH shareholder approval, which will be sought at an EGM to be held in
The amended terms of the Final Agreement (as compared to the Conditional Agreement) include:
· in the context of the binding commitment to invest described above and current market conditions, a reduction of the price payable by CEZ upon completing of the subscription of Geomet shares from
· allowing CEZ to elect to withdraw from funding of the Project at two separate milestones. The first withdrawal milestone is designed to coincide with completion of the front-end engineering design program and semi-industrial pilot testing of the lithium concentrate processing while the second withdrawal milestone is designed to coincide with completion of the definitive feasibility study. If CEZ elects to withdraw, Geomet will return to it an amount equal to its initial investment minus
The directors of EMH believe that the revised terms provide sufficient funding for the next stage of the development of the Project, setting it on sound footing to progress into production thereafter.
Further details of the Final Agreement will be set out in the supplementary circular to be posted to EMH shareholders shortly.
Cadence holds approximately 19.1 percent of the equity in European Metals, which, through its wholly owned Subsidiary, Geomet s.r.o. ("Geomet"), controls the mineral exploration licenses awarded by the Czech State over Cinovec.
Background to the Transaction
In July last year, EMH announced that CEZ was conducting due diligence on the Company and the
In light of very significant changes in global markets and the successful completion of CEZ's due diligence, EMH and CEZ have replaced the Conditional Agreement with the Final Agreement.
The Company considers that
Financial effects of the Transaction
The primary financial objective of the transaction is to secure the funding for the next stage of the development of the
The addition of a partner with the financial strength of CEZ, and the strong significant business relationships that it brings, significantly enhances the status of the
The subscription proceeds from the Final Agreement will be used by Geomet to develop the
On completion of CEZ's investment pursuant to the Final Agreement, EMH's ongoing interest in Geomet will reduce to 49%. Under the Geomet Shareholders' Agreement (to be entered into at the completion of CEZ's investment), Geomet will have a board of five directors. EMH will have the right to nominate two of the five Geomet directors Further, under the Geomet Shareholders' Agreement, EMH will be appointed to provide services managing the
Accordingly, on completion of the Final Agreement, EMH will cease to consolidate Geomet's results within the EMH's consolidated accounts..
AIM Rule 15
The Final Agreement would constitute a fundamental change of business of the Company under Rule 15 of the AIM Rules. The Final Agreement is therefore conditional on, inter alia, Shareholder approval which will be sought at a General Meeting of the Company to be convened in due course. The Company will, however, as previously announced, remain an operating minerals company under the AIM Rules given its remaining material interest and ongoing involvement in the
The completion of the Final Agreement will not result in any changes to the Company's Board or management.
Further information
European Metals expects to publish shortly a supplementary circular to shareholders setting our further details of the amended proposed subscription, the proposed amendments to the Exclusivity and Framework Agreement and Geomet Shareholders' Agreement, together with notice of the General Meeting. A further announcement will be made in due course.
The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/EMH/14479989.html
European Metals Managing Director
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For further information:
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+44 (0) 207 440 0647 |
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+44 (0) 207 220 1666 |
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+44 (0) 207 399 9400 |
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Qualified Person
Forward-Looking Statements:
Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ''believe'' ''could'' "should" ''envisage'' ''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.
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