Performance shares11 Nov 2018 21:29
During the year under review the Company has successfully capitalised its Australian gold interests, primarily the Klondyke Gold Project (‘Klondyke’) in Western Australia by reversing Klondyke into a company listed on the Australian Stock Exchange (‘ASX’), Calidus Resources Limited (‘Calidus’). Under the rules of the ASX the Company’s ordinary shares in Calidus (‘Calidus Shares’) are held in escrow for a two year period which ends in June 2019, and the intention of the Directors is to distribute those Calidus Shares to Keras shareholders at that time, subject to any Calidus Shares which may be realised to provide working capital.
Calidus acquired the Klondyke assets from Keras in June 2017 for the following consideration:
(i) 225,000,000 Calidus Shares were issued to Keras upon completion of the transaction (‘Completion’); and
(ii) 525,000,000 shares upon Completion, which are to be converted to fully paid Calidus Shares following the achievement of certain milestones (‘Performance Shares’), namely:
a. 250,000,000 Performance Shares to be converted into the same number of Calidus Shares upon the announcement, within 18 months of Completion, of a JORC compliant Indicated or Measured Resource of at least 500,000oz of gold at Klondyke; and
b. 275,000,000 Performance Shares to be converted into the same number of Calidus Shares upon the announcement, within 36 months of Completion, of a positive pre-feasibility study, which demonstrates the Klondyke Project is commercially viable.
3.5% of these shares will be transferred to Keras’ financial advisers in respect of fees relating to the transaction, leaving 96.5% owned by Keras.
The first milestone was met in December 2017 when Calidus announced a 74% increase in the high grade Warrawoona Resource to 712,000 oz, at which time the first tranche of Performance Shares was converted to Calidus Shares, subject to the escrow arrangements set out above. Calidus has stated its intention to announce a pre-feasibility study before the end of 2018, which is expected to trigger the second milestone. By the end of the escrow period, therefore, Keras expects that it will own 723,750,000 Calidus Shares. The Calidus Shares are included in the financial Statements at fair value, as further set out in Note 19.
Aside from our investment in Calidus, we have an 85% interest in the Nayega Manganese Project in Togo, West Africa, which we believe offers significant upside due to its low capex, open pit, near-term production of 250,000 tonnes per annum of export potential manganese. Whilst we remain optimistic about the future development potential of this project, especially given the positive price performance of manganese, we continue to await the award of a mining licence.
As part of our commitment to mining in Togo, during the year we also obtained five exploration licences, covering 854.3 square kilometres of ground in Togo that c
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