Keras Resources Regulatory News (KRS)

Keras Resources plc / Index: AIM / Epic: KRS / Sector: Mining

2 July 2019

Keras Resources plc ('Keras' or the 'Company')

Calidus Shareholding Distribution

Keras Resources plc, the AIM listed mineral resource company, is pleased to provide an update regarding its shareholding and the proposed distribution of those shares in Australian Securities Exchange ('ASX') listed gold exploration company Calidus Resources Limited ('Calidus'), which is currently developing the 1.25 million-ounce JORC compliant Warrawoona Gold Project ('Warrawoona') in the Pilbara of Western Australia.

Save where otherwise defined, defined terms will have the meaning given in the main body of this announcement.

Highlights:

· Escrow period for Keras' shares in Calidus has expired with Ordinary Shares now trading without restriction on the ASX

· Tranche 3 of the Performance Shares (265m shares) convert to fully paid ordinary shares in Calidus when Calidus publishes a Pre-Feasibility Study ('PFS') demonstrating the commercial viability of Warrawoona - due for publication during July 2019

· Keras' total Calidus shareholding post publishing of the PFS of 724m shares currently valued at approximately £11.6 million, circa 35% more than Keras's current market capitalisation of £8.6 million

· The Company intends to distribute its Calidus shareholding pro-rata to Keras shareholders, subject to available reserves, through a capital reduction and demerger process, which requires the approval of shareholders in a special resolution at a general meeting to be held and subsequent approval by the Court

· Keras has the ability to distribute up to £15 million of reserves, which provides for an additional circa 29% increase in the current Calidus share price

· Proposed Distribution of shares expected by the end of 2019

Russell Lamming, Chief Executive Officer of Keras, said, "The proposed distribution of Calidus shares unlocks significant shareholder value in a somewhat unusual circumstance where we plan to distribute approximately £11.6m worth of Calidus shares to our shareholders from Keras, which has a market capitalisation of circa £8.6m. In addition, each shareholder will still retain their current shareholding in Keras with direct exposure to the Nayega manganese project that post Exploitation Permit approval has installed production capacity to produce 75,000 tonnes of beneficiated manganese ore per year.

"Calidus' Warrawoona Project is progressing well and following a recent wider drilling programme, which yielded results including 8m @ 8.06g/t Au from 56m, expects to build on its current 1.25 million-ounce gold resource. With the PFS fast approaching, we expect the true potential in Warrawoona to be recognised, which we believe will see a re-rating in the Calidus share price. 

"Our current proposal to distribute the Calidus shares will reward shareholders and allow us to be recognised and valued as a pure manganese play, which is unique on the London markets. The long-term demand fundamentals for manganese are strong and we believe that Nayega is an excellent platform from which to execute our growth strategy. I look forward to updating the market on developments in due course."

The escrow period for Keras' shares in Calidus has now expired, and its holding of fully paid ordinary shares in the company (the 'Ordinary Shares') is now free trading on the ASX. Keras currently holds 458,375,000 Ordinary Shares and 265,375,000 Calidus performance shares (the 'Performance Shares'). The Performance Shares are expected to convert to Ordinary Shares by the end of July 2019 (as announced by Calidus on 15 May 2019) on the publishing of Calidus' PFS for its Warrawoona Project, at which time Keras will hold 723,750,000 Ordinary Shares. Based on the closing mid-market price of Calidus shares on 01 July 2019 being AUS$ 0.029 per Ordinary Share, the entire holding is currently worth AUS$ 20,988,750 (approximately £11.6 million). Keras has the ability to distribute up to £15 million of reserves, which provides for an additional circa 29% increase in the current Calidus share price.

Keras currently intends to demerge the Ordinary Shares to its shareholders in proportion to their holdings in the Company. The distribution is likely to be carried out through a capital reduction in Keras.

The proposed capital reduction in Keras will require the approval of shareholders in a special resolution at a general meeting to be held and subsequent approval by the Court. Memery Crystal LLP, Keras' solicitors, has been retained to advise on all legal aspects of this process. In addition, tax clearances are required in both the UK and Australia where advisers have been retained and have commenced the clearance application process.

Keras is seeking to complete all these formalities, including the demerger of the Ordinary Shares, by the end of 2019. Following the proposed capital reduction, Keras will continue to be listed on AIM and will continue to focus on its manganese operations in Togo and elsewhere where it has identified several exciting opportunities. In this vein, it continues to make progress at its 85% owned Nayega Manganese Project in northern Togo, which hosts a current JORC compliant Mineral Resource of 13.97Mt @ 12.4% Mn. As part of a bulk sampling metallurgical testwork programme at the project, the Company recently produced 10,000 tonnes of manganese ore, which is now being smelter tested by a third-party producer of manganese-based alloys. A further announcement on the results from these tests is expected imminently.

*An exchange rate of 1.81 AUD to 1 GBP has been used for figures contained in this RNS.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of Russell Lamming, Chief Executive Officer. This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

**ENDS**

For further information please visit www.kerasplc.com, follow us on Twitter @kerasplc or contact the following:

Notes

Keras Resources plc is focused on building a strategic portfolio of resource assets. The Company provides investors with exposure to a portfolio of development assets, including manganese, cobalt and nickel in Togo, West Africa. It also has a significant interest in Calidus Resources Limited ('Calidus'), a highly prospective gold exploration and development company in Australia, which is currently undertaking a Pre-Feasibility Study at its Warrawoona gold project. Keras benefits from a highly skilled management team, which has extensive operational experience in Africa and Australia and proven success in advancing assets up the value curve.