6 Apr 2021 14:43
This announcement contains inside information
6 April 2021
Ormonde Mining plc
("Ormonde" or "the Company")
Business development update
On 16 September 2020, the Company announced that it had entered into an exclusivity agreement in relation to the proposed acquisition of a majority stake in certain copper mining licenses (the "Licenses") in the Republic of the Congo ("Proposed Transaction"), and the Company gave further details in relation to the Proposed Transaction and the Licenses in an announcement on 14 January 2021. Since that time, the Company has been working to advance negotiations against the backdrop of a global pandemic and a presidential election in the Republic of the Congo, both of which resulted in delays to the process.
However, following the most recent AGM of the Company, Ormonde is no longer authorised to issue shares for a transaction of this nature without a further shareholder approval process (see announcement of 18 February 2021), which introduced an increased level of uncertainty and execution risk for the counterparties. Ultimately the counterparties demanded more onerous terms for the Proposed Transaction, which significantly impacted the accretive potential of the Proposed Transaction for all Ormonde shareholders. This was unacceptable to the Company and a suitable compromise could not be agreed. As a result, all discussions have been terminated.
The Board of the Company believed that the Proposed Transaction represented a transformative acquisition for Ormonde, focused on minimising share dilution and execution risk for Ormonde shareholders. The Board of the Company will continue to adopt this approach in its review of other suitable opportunities. However, the Company also recognises the future requirement to gain shareholder authorisation to issue shares, the uncertainty of which may limit the ability to engage in discussions requiring a share-based transaction. The Board will also now explore alternative strategies for the business in the interest of all shareholders. The Company will keep the market appraised as work continues towards sourcing a value accretive transaction or an alternative course for the Company.
Commenting on these developments, Jonathan Henry, Executive Chair, stated:
"The proposed transaction, which Ormonde has spent considerable time and effort in trying to complete, was an exceptional opportunity for the Company. Regrettably, the Company has been unable to finalise binding terms agreeable to all parties and we therefore have had no choice but to concentrate our resources elsewhere. Management is now working with the Board to review a number of other transactions for the business or alternative strategies, which could deliver shareholder value and reward our shareholders for the patience shown to date."
Enquiries to:
Ormonde Mining plc
Jonathan Henry, Executive Chair
Paul Carroll, Chief Financial Officer
Fraser Gardiner, Chief Operating Officer
Tel: +353 (0)1 8014184
Buchanan
Bobby Morse / Ariadna Peretz / James Husband
Tel: +44 (0)20 7466 5000
Email: ormonde@buchanan.uk.com
Davy (Nomad, Euronext Growth Advisor and Joint Broker)
John Frain / Barry Murphy
Tel: +353 (0)1 679 6363
SP Angel Corporate Finance LLP (Joint Broker)
Ewan Leggat
Tel: +44 (0)20 3 470 0470