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(Sharecast News) - Alba Mineral Resources has agreed to acquire the remaining 10% interest in Gold Mines of Wales (GMOW), it announced on Tuesday, to take full ownership of the Clogau Gold Project.
The AIM-traded firm said the project, in the Dolgellau Gold Belt in Wales, comprises the Clogau Gold Mine, where it identified a number of highly-prospective gold targets through extensive exploratory drilling in 2020 and 2021, as well as a large number of gold targets and former gold workings outside of the mine within a total option area of 106.94 square kilometres.
Alba said it would also buy back a 3% net smelter return royalty owned by the vendor, reducing the royalty to 1%, as well as a residual £72,000 of loans held by the vendor.
Total consideration for the acquisition would be £0.4m, payable by the issue of 200 million Alba shares at a price of 0.2p each, plus 81,930,830 two-year share warrants with an exercise price of 0.4p per share.
The consideration shares would be subject to a 12-month lock-up, the board confirmed.
Operationally, Alba said "good progress" had been made in further ecological surveying and data generation, in support of the plan to dewater the Llechfraith Shaft at Clogau.
It said it was expecting to submit updated ecological and technical reports and renewed permit applications in the first half of September.
Alba's Limerick Base Metals Project licence, meanwhile, was recently renewed for a further two years.
"It is a measure of our confidence in the long-term prospects for the Clogau Gold Project that we have taken the opportunity to move to 100% ownership of the project," said executive chairman George Frangeskides.
"The 10% minority stake was free carried to commercial production and the vendors also held a 4% net smelter return royalty over the project, so acquiring both the free carried interest as well as 75% of the royalty greatly improves the economic viability of the project for Alba.
"At the same time, any concerns regarding the market impact of the issue of Alba shares has been addressed by a lock-up of the consideration shares for six months plus a further six-month orderly marketing restriction."
Frangeskides said the company also negotiated to issue the consideration shares at a "significant premium" to the last closing price, reducing the dilutive effect of the transaction.
"On the matter of the dewatering of the Llechfraith Shaft, over the past few months we have carried out supplementary ecological surveying to generate further supporting data as well as adding to our proposed mitigation scheme for the dewatering, all of which elements are being incorporated within a revised ecological and technical report for submission to NRW in the first half of September.
"We remain confident that our application for dewatering will ultimately be successful.
"Finally, we have renewed the licence to our Limerick Base Metals Project in advance of the drilling which we intend to undertake there this year, as soon as we have the permits in hand."
At 1111 BST, shares in Alba Mineral Resources were up 10.97% at 0.18p.
Reporting by Josh White at Sharecast.com.
