Arc Minerals Regulatory News (ARCM)

Ortac Resources Ltd / Epic: OTC / Market: AIM / Sector: Mining & Exploration

6 November 2017

ORTAC RESOURCES LTD 

("ORTAC" or the "COMPANY")

Proposed Acquisition of Casa Mining Ltd.

Ortac Resources Ltd ("Ortac") is pleased to announce that it entered into a binding agreement on 4 November 2017 to acquire an additional 33.82% of the issued share capital of Casa Mining Ltd ("Casa") (the "Acquisition") and will be making an offer for the balance of the issued share capital of Casa. 

Ortac has also agreed, subject to closing of the Acquisition and simultaneous with closing of the Acquisition, to convert the US$2mn convertible loan note previously issued to the Company by Casa at an amended reduced share conversion price of US$0.5586 (the "Loan Note").

Following the Acquisition and conversion of the Loan Note, Ortac will hold 7,848,594 shares of Casa, representing 70.09% of the issued share capital in Casa, before an offer to acquire the remaining issued share capital from the minority shareholders of Casa.

The Acquisition represents a major step forward in the delivery of the Company's revamped strategy, announced on 11 September 2017, to focus on its high potential African exploration mining assets. The board believes the acquisition of Casa presents a valuable near term opportunity for Ortac and its shareholders with recent drilling results indicating a potential gold resource in excess of 2 million ounces. 

Details of the Acquisition

Ortac has contractually committed to acquire 33.82% of the issued share capital of Casa ("Sale Shares"). The consideration for the Sale Shares is to be satisfied by the issue of 38,277,354 new ordinary shares of no par value in Ortac ("Ordinary Shares") at a deemed price of 2.875 pence per share, being the closing mid-market price of Ordinary Shares on 3 November 2017 and is to be settled once the acquisition of the Sale Shares has occured ("Closing"). Closing is conditional, inter alia, upon Ortac making an offer ("Offer") to purchase the remaining shares in Casa (not currently held by Ortac)on the same terms as the acquisition of Sale Shares.

On Closing the following will occur:

· the terms of the Loan Note will be varied to amend the conversion price to be the same as the share purchase price for the Sale Shares which is US$0.5586 per Casa share;

· the amended Loan Note will be converted into 3,580,450 shares of Casa, representing 29.83% of issued share capital of Casa;

· a further US$250,000 convertible loan note will be issued to Ortac by Casa conditional upon the advance of $250,000 from Ortac, such loan notes having a conversion price of US$0.5586.

The Offer will remain open for the period of 6 months following the offer date.

If the Offer is fully accepted the total number of new Ordinary shares which will be issued to Casa shareholders pursuant to the Acquisition and the Offer will be 100,000,000.

Each seller of Sale Shares will undertake to Ortac that they shall not transfer or dispose of any Ordinary Shares held by them during the period of six months after admission of the new Ordinary Shares to be issued to them pursuant to the Acquisition ("Lock-in Period") without the Company's express written consent and that all transfers or disposals by a seller during the period of six months after the Lock-in Period will be effected through Ortac's brokers (from time to time) in accordance with such broker's reasonable requirements so as to ensure an orderly market for the Ordinary Shares of the Company. These lock-ins will be subject to the usual market carve-outs.

It is the intention of the board to appoint Mike Foster and Jonathan de Thierry who are shareholders and directors of Casa to the Board of Ortac, subject to approval by the nominated adviser.

Nick von Schirnding, Ortac's Chairman, commented:

"The proposed acquisition of Casa is a turning point in the Company's recent history. We are delivering on our strategy to focus on our portfolio of valuable African exploration assets and Casa is a very exciting and valuable part of our future. With a new board and a clear strategy in delivering shareholder value we look forward to a new chapter for Ortac and its shareholders. "

A further announcement regarding the level of acceptances of the offer by Ortac to shareholders of Casa will be made in due course.

About Casa Mining Ltd.

CASA is a private Mauritian registered company that is the 71.25% owner and operator of the Misisi Gold Project located in South Kivu, eastern DRC, approximately 350km south of Bukavu and 180km north of Kalemie.

The CASA licence holdings consist of three contiguous mining licenses (133km2), issued in March 2015 and valid for 30 years. These licenses, which encompass a 60km strike length of the Tanganyika graben within the Rusizian belt ("Misisi Corridor"), include the Akyanga deposit along with the Lubitchako, Tulongwe, Kilombwe and Mutshobwe prospects (targets).

Over the last six years over $30m was spent developing these licenses. In addition to the regional geophysical surveys completed over these license areas in 2011, CASA have carried out 19,522m of diamond drilling, 2,720m of reverse circulation drilling and excavated 6,274 line metres of trenches on their respective licenses.

At CASA's most advanced project, the Akyanga deposit, SRK has reported a Mineral Resource within a $1,200/oz gold selling price and 0.5 g/t Au cut-off grade optimised pit shell. This comprises an Inferred oxide gold Mineral Resource of 5.5 Mt at a grade of 1.5 g/t Au for approximately 272 koz of contained metal. SRK has further reported an Inferred transition gold Mineral Resource of 16.2 Mt at a grade of 1.8 g/t Au for approximately 927 koz of contained metal.

MDM, in conjunction with SRK, completed a scoping feasibility study for the Akyanga deposit resulting in an ungeared NPV (8%) and IRR of $171m and 35% respectively at a $1,300/oz gold price. This assumes a contract mining scenario with an initial capital cost estimate of $87.4m and a total operating cost of $628/oz.

Following the internal workshop and the non-code compliant updated resource estimate of over 2.3 Moz of gold produced by CASA's independent experts, it is currently reviewing its strategy and weighing up its options in developing its Missisi project.

The Company will make further announcements as appropriate.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

Contacts

For additional information please visit - www.ortacresources.com

**ENDS**

The information in this press release is based on information provided by Casa Mining Limited and compiled on behalf of Ortac by Mr Vassilios Carellas. The SRK JORC Mineral Resource estimate, the MDM-SRK Scoping Study and the updated resource estimate by CASA's independent experts have not been independently verified by Ortac Resources Ltd.  Mr Vassilios Carellas (BSc (Hons), MAusIMM) is the Chief Executive Officer for Ortac Resources Limited and has sufficient experience 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 under the JORC Code (2012). Mr Carellas consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.