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LONDON (Alliance News) - Jangada Mines PLC has decided to sell the Pedra Branca project in Brazil following difficulties in attracting investor interest, it said Tuesday.
Pedra Branca, a platinum group metals and nickel project, is being bought by Canada's ValOre Metals Corp for GBP4.1 million.
ValOre is to give Jangada 25 million shares, around 33% of its share capital following the issue, as well as CAD3.0 million in cash, in various portions. ValOre will carry out a CAD3.0 million equity raise to pay for the deal.
Shares were 29% lower on Tuesday morning at a price of 1.50 pence each.
"The board of directors of Jangada are aware this announcement may come as a surprise to some shareholders and seem to be conflicting with the company's promoted views of the technical and economic prospects of Pedra Branca," said Jangada.
"This is not the case. The board continues to believe very strongly in Pedra Branca and its prospects, which is evidenced by Jangada remaining a substantial shareholder of ValOre going forward, and the appointment of two Jangada nominees to ValOre's board."
Jangada said there has been "limited" support in UK financial markets for financing a platinum group metal project and believes ValOre will fare better in Canada.
Jangada will now focus on the Ptombeiras vanadium project, also in Brazil.
"The board believes there is a strong appetite amongst UK and international investors for vanadium as an asset class, primarily driven by its importance as an input to battery metals, and assuming completion of the proposed transaction, the board considers it in the best interests of shareholders to focus the company's resources on pursuing the development of Ptombeiras," the company said.
"In the near term, this would involve further drilling and metallurgical work, the results of which would then dictate the path forward for development. A competent persons report is already underway, which is expected to be completed by the company during the third quarter of 2019. The proposed transaction includes a cash consideration component allowing Jangada to substantially progress the development of Ptombeiras."