Metalnrg Plc Regulatory News (MNRG)

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

 20 October 2020

MetalNRG plc

(The "Company" or "MetalNRG")

LAKE VICTORIA GOLD PLANNED ACQUISITION AND PLACING

MetalNRG plc (LON:MNRG) the natural resource investing and exploration company is pleased to inform the market that it has entered into a bid implementation agreement for the acquisition of Lake Victoria Gold Ltd ("LVG") and to acquire 100% of its shares in issue. The Board of Directors of LVG are recommending that the takeover bid made be accepted by its investors (subject to any superior proposal that may emerge).

LVG currently has more than 50 shareholders therefore the takeover bid will have to be made formally by MetalNRG, once the draft prospectus prepared for the enlarged group, which has been submitted to the FCA for review, is approved, and remain open for a minimum of 1 month and a maximum of 12 months.

In conjunction with the takeover offer and to provide for additional working capital for the enlarged group, the Company intends to conduct a placing to raise up to £4.5m in due course. LVG is an unlisted Pubic Company incorporated in Australia. The company was formed in November 2011 and following its formation an all share transaction was completed with Tanzoz Minerals Ltd (TML) a private Tanzanian Company that holds Gold Prospecting Licences (PLs) in Tanzania. TML is now a wholly owned subsidiary of LVG.

TML now owns mining licence 538, (ML538) which has a Resource of approximately 300,000 oz including a Reserve of approximately 90,000 oz. A pre-feasibility study completed in 2017 confirms that this is sufficient to commence economic mining operations at Imwelo in Tanzania. A competent persons report produced by Gary Benson of Measured Group Pty Ltd, covering the Resource and the Reserve has today been posted to the Company's website at www.metalnrg.com.

The objective is for LVG to commence mining and processing at a rate of approximately 12,000 oz per annum. It is anticipated that it will take roughly 12 months from the transaction completion date to producing Dore Gold. LVG/TML will continue to drill the ore zones at Imwelo to expand the Resource and Reserve using cashflow generated from the operations. The project will require US$ 5.8 million to bring it into production and at a gold price of US$ 1500/oz has an NPV of US$ 23.5 million at 10% discount rate and an IRR of 93%.

MetalNRG's takeover bid is to acquire 100% of LVG's shares in issue via a share swap transaction. MetalNRG, post transaction, will have ownership of all LGV's assets, including the local Tanzania company Tanzoz Minerals Ltd.

MetalNRG currently does not have sufficient headroom to issue shares to complete the transaction therefore, MetalNRG will seek authority from its shareholders to issue the required shares and issue a new prospectus which is currently being prepared. Concurrently, MetalNRG will seek a combination of equity and non-dilutive project finance for the project to be funded and bring the asset into production within the timeframes mentioned.

For the purposes of the bid, LVG is valued at just over £6 million, and LVG shareholders will receive a total of 750,037,391 MetalNRG shares at £0.008p per share.

If the bid is successful, Seth Dickinson, CEO for LVG, will join the MetalNRG Board and will take responsibility for driving forward all MetalNRG's gold projects including Goldridge in Arizona for which detailed plans will be finetuned and implemented as soon as is practicable. Seth brings with him a local management team in Tanzania that will continue to work closely with him on the LVG project. Additionally, the plan calls for Bjorn Zikarsky, currently a Non-Executive Director with LVG to join the MetalNRG Board as a NED.

Rolf Gerritsen, CEO of MetalNRG commented "We are delighted to have reached agreement with LVG's Board and Management. We now look forward to formal approval from the shareholders of LVG and together building a significant gold portfolio. The Imwelo project ticks all our investment criteria, near term production, substantial exploration and development upside and a strong management team to deliver the project. Additionally, it allows MetalNRG to set up a second special purpose vehicle within the group, this one focused and totally dedicated to the development of gold projects, which I believe is a compelling proposition."

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