Power Metal Regulatory News (POW)

African Battery Metals plc / EPIC: ABM / Market: AIM

8 August 2018

African Battery Metals plc ("ABM" or the "Company")

Proposed acquisition of Cobalt Blue Holdings Inc.

Proposed acquisition of Regent Resources Interests Corporation

Conditional Placing of 6,666,666 New Ordinary Shares at 3 pence per New Ordinary Share

(as adjusted for the proposed Capital Reorganisation)

Proposed issue of Settlement Shares,

Proposed Capital Reorganisation

and

Notice of General Meeting

AIM quoted African Battery Metals plc, the African focused exploration company developing projects in strategic battery metals, is pleased to announce that it has conditionally agreed to make two separate acquisitions, being the entire issued share capital of each of Cobalt Blue Holdings ("CBH") and Regent Resources Interests Corp. ("RRIC") (together the "Acquisitions"), which hold highly prospective cobalt-nickel exploration assets in Cameroon and Cote d'Ivoire respectively in two all-share deals.

Highlights

· Portfolio diversified and strengthened through proposed acquisition of two highly synergistic and prospective cobalt-nickel assets:

o CBH - holds four prospecting licences in Cameroon close to one of the largest undeveloped cobalt reserves in the world and two prospecting licence applications

o RRIC - has the irrevocable right earn in to up to 70% of the 380 sq km Lizetta II cobalt, chrome and nickel project in Cote d'Ivoire

· Transaction strengthens shareholder base with established mining professionals with track records of building high value resource companies, including Stephen Dattels and Ian Stalker

· Transaction diversifies the geo-political and commodity exposure within the battery metals space providing additional re-rating potential

· Attractive long-term market fundamentals for technology metals underpin ABM's development strategy of rapidly building the Company both organically and through acquisition

· Conditional placing to raise £200,000 to support portfolio development and execute rapid growth strategy 

· Two non-executive directors to be appointed to the Board, one of whom is expected to be nominated by Regent Resources Capital Corporation ("RRCC") the seller of RRIC

· Proposed capital reorganisation to reduce the number of ordinary shares in issue by a factor of 100 to attract new institutional investors and increase market liquidity by reducing volatility

ABM CEO, Roger Murphy, said, "We are delighted to announce these proposed acquisitions, which are intended to fast track our strategy to become a significant explorer, developer and ultimately producer of battery metals. The proposed acquisitions of two highly prospective nickel and cobalt assets in new jurisdictions complement our existing DRC cobalt projects and give us what the ABM board believes to be an extremely exciting portfolio. In Cameroon, we will have land adjacent to the Nkamouna/Mada project which has the benefit of an undeveloped NI 43-101 compliant cobalt-nickel resource and reserve.

"With rapid development plans in place to advance the projects up the development curve and build value, we look forward to strengthening the board with experienced specialists in the sector and to gaining key new shareholder support from several recognised and successful mining entrepreneurs with strong international track records including Stephen Dattels and Ian Stalker.

"With the proposed new team, high profile backing and a defined development path for both our existing portfolio and identifying additional opportunities, we believe we have the right platform to build shareholder value and deliver a leading battery metals-focussed resource company."

Capitalised terms used in this announcement shall have the meanings given to them in the circular referred to below. An Expected Timetable of Key Events can be found below.

A Circular containing the Notice of General Meeting and further information on the proposals is available via the Company's website at www.abmplc.com and copies will be posted today to Shareholders.

Details of the Acquisitions

Each of the Acquisitions is conditional on passing of all resolutions at the General Meeting and on admission to trading on AIM of the shares to be issued as consideration.

Cobalt Blue Holdings

The Company has entered into a conditional acquisition agreement with each of Cobalt Blue Associates Inc. ("CBA") and Two Shields Investments PLC ("TSI") pursuant to which the Company has agreed to acquire the entire issued share capital of CBH (the "CBH Acquisition Agreement"). The consideration for the acquisition of CBH is to be satisfied by the issue of 31,011,890 Consideration Shares to CBA and TSI on completion, which are subject to lock-in agreement for a period of 12 months from Admission.

CBH holds four Cameroon-based nickel-cobalt exploration licences through two 100% owned subsidiaries, LC Exploration Ltd (licences located at Ngoila Nord, Ngoila Est and Ekok) and LC Minerals Ltd (licence located at N'Dja). CBH, through its subsidiary LC Exploration Ltd, has also applied for two further Cameroon-based nickel-cobalt exploration licences at Ntam Est and Ngaoundéré. These licences expire on various dates the first quarter of 2021 unless renewed. The licences may be renewed three times for periods of two years provided that the obligations of the licensee under the licences have been met in the prior periods.

The locations of the four licences held and the Ntam Est licence applied for are either adjacent to, or within 50km of the Nkamouna/Mada Cobalt Project ("Nkamouna/Mada") in Cameroon, formerly owned by ex-TSX-listed Geovic Mining Corp ("Geovic"). According to a report prepared for Geovic by SRK Consulting (US) Inc. in 2011, Nkamouna/Mada has total NI 43-101 compliant resource of 323Mt (18.5% measured, 18.8% indicated and 62.7% inferred) at average grades of 0.21% cobalt, 0.61% nickel and 1.25% manganese. According to the Nkamouna/Mada feasibility study prepared by Lycopodium Minerals Pty Ltd for Geovic in 2011, production of around 6,100 tpa of cobalt and around 3,400 tpa of nickel is envisaged, and there are proven and probable reserves of 68.1mt at 0.26% cobalt, 0.66% nickel and 1.48% manganese.

The sixth licence area, Ngaoundéré, is in the north of the country.

The CBH Acquisition Agreement and related documents contain certain undertakings and warranties given by CBA and TSI, which are customary for a transaction of this nature.

The CBH Acquisition Agreement is capable of termination by the Company prior to Completion if the Company becomes aware of any fact which would constitute a breach of the warranties in respect of which the Company would have been entitled to claim for losses of not less than £15,000 or CBA or TSI is in material breach of any provision of the CBH Acquisition Agreement.

Regent Resources Interests Corporation

The Company has entered into a conditional acquisition agreement with RRCC pursuant to which the Company has agreed to acquire the entire issued share capital of RRIC. The consideration for the acquisition is to be satisfied by the issue of the 32,678,557 Consideration Shares to RRCC on Completion which are subject to lock-in agreement for a period of 12 months from Admission. RRCC has undertaken to pay the sum of USD 100,000 to Lagune Exploration Afrique S.A. ("Lagune") being the balance of payments due to Lagune under the agreement detailed in the following paragraph. RRCC has warranted that RRIC will, on completion of the acquisition, have cash resources of at least £50,000.

RRIC has entered into an agreement with RRCC, Lagune and Lizetta Holding S.A.R.L. to earn into 70% of the Lizetta II chrome, nickel, cobalt exploration licence ("Lizetta-II") in Côte d'Ivoire by expending a total of USD 850,000 on the project over the period to June 2021. Lizetta-II is located 77 km NW of Bouake, which is 342 km north of Abidjan, the commercial capital of Côte d'Ivoire, and covers approximately 380 sq. km. Local infrastructure includes road access, the proximity of major river creeks and electric networks sufficient for any industrial operations on the property. Historical data shows anomalous concentrations of nickel, cobalt and chromite mineralisation in the ultramafic rocks of the Marabadiassa-Alekro area. An independent assessment commissioned by RRCC confirmed the potential to host cobalt, nickel and chrome mineralisation of economic potential and proposed an initial field programme consisting of historical data compilation, geological mapping, geophysical surveys, trenching and RC drilling. The proposed follow-up phase would be extensive drilling to allow the definition of a JORC/NI 43-101 code compliant resource.

The existing exploration licence underlying the earn-in agreement that is the principal asset of RRIC, which falls due for renewal on 22 March 2019, requires expenditure of approximately £600,000 prior to 22 December 2018 in order to maintain its good standing plus expenditure to be agreed on the cobalt-nickel extension to the licence.

The ABM management team and its newly acquired subsidiaries will be engaging with the government of Côte d'Ivoire very shortly after Admission in order to re-assess the work programme to be delivered, especially with the cobalt exploration licence extension having only recently been granted. The Directors believe that the Company will be able to raise any required funding.

The RRIC Acquisition Agreement and related documents contain certain undertakings and warranties given by RRCC, which are customary for a transaction of this nature including a warranty that at Completion RRIC will have unencumbered cash in its bank account of not less than £50,000. This cash will be available to ABM for its exploration activities and can be seen by shareholders effectively as an additional investment in the shares of ABM by RRCC.

The RRIC Acquisition Agreement is capable of termination by the Company prior to Completion if the Company becomes aware of any fact which would constitute a breach of the warranties in respect of which the Company would have been entitled to claim for losses of not less than £25,000 or RRCC is in material breach of any provision of the RRIC Acquisition Agreement.

Further details on the proposed Acquisitions can be found in the shareholder circular available via the Company's website at www.abmplc.com and the copy of the document which will be posted today to Shareholders.

Issue of Settlement Shares to directors

In March 2018, the Directors agreed to defer some of their salary until such time as the Company made an acquisition or raised further funds. Consequently, upon completion of the proposed Acquisitions and the proposed raising of further capital through the issue of the Placing Shares, that deferred salary now falls due and the Company will issue to the Directors, in settlement of the payment of deferred salary, New Ordinary Shares as follows:

*As adjusted by the proposed issue of Consideration Shares, Settlement Shares, Placing Shares and the proposed Capital Reorganisation.

The proposed issue of the Settlement Shares described above is a related party transaction for the purposes of AIM Rule 13 by virtue of the Settlement Shares being issued to Roger Murphy and Matt Wood. Ian Macpherson, the independent Director for the purposes of the issue of the Settlement Shares considers, having consulted with the Company's nominated adviser, SP Angel, that the issue of the Settlement Shares to such related parties is fair and reasonable insofar as the Shareholders are concerned.

Issue of Capital Reorganisation Shares

The Company intends to issue a total of 85 new ordinary shares to be issued to the Company Secretary in connection with the Capital Reorganisation, (the "Capital Reorganisation Shares") prior to the Record Date, so as to ensure that the total number of Existing Ordinary Shares in issue prior to the completion of the Capital Reorganisation is exactly divisible by 100. The Capital Reorganisation Shares will be issued to the Company Secretary at a subscription price which reflects the closing middle market price of an Ordinary Share on the latest practicable date prior to the subscription.

Admission of Consideration Shares, Settlement Shares and Placing Shares

The Company has conditionally raised £200,000, before expenses, through the Placing of 6,666,666 Placing Shares at 3 pence per Placing Share (following the proposed Capital Reorganisation) with certain existing Shareholders and new investors. The Placing Price of 3 pence per Placing Share represents a 7.8 per cent. discount to the deemed closing middle market price (as adjusted to take account of the proposed Capital Reorganisation) of 3.25 pence per Ordinary Share on 07 August 2018, being the last Business Day before the announcement of the Placing. The Placing has been conducted in order to provide additional working capital for the Enlarged Group.

The issue of the Consideration Shares, Settlement Shares and the Placing Shares is conditional on the passing of the relevant resolutions at the General Meeting to be held by the Company and the admission of the shares to trading on AIM. Subject to the passing of the relevant resolutions at the General Meeting to be held by the Company, application will be made for the Consideration Shares, Settlement Shares and the Placing Shares to be admitted to trading on AIM and it is expected that Admission will become effective and dealing in the Placing Shares will commence on 29 August 2018. The Consideration Shares, Settlement Shares and the Placing Shares will rank pari passu with the New Ordinary Shares (following the Capital Reorganisation).

Following Admission, the Enlarged Share Capital of the Company will be 136,579,143 New Ordinary Shares. The above figure of 136,579,143 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in ABM under the FCA's Disclosure and Transparency Rule.

Capital Reorganisation

As of today's date, the Company has 6,455,536,315 existing ordinary shares in issue, which are admitted to trading on AIM. This is a significant number for a company with a £2 million market capitalisation. The Company therefore proposes a capital reorganisation ("Capital Reorganisation") to reduce the number of ordinary shares in issue by a factor of 100, which will have the effect of increasing the trading price of the Company's new ordinary shares. The Board believes that the Capital Reorganisation will result in a capital structure more conducive to attracting new institutional investors based both overseas and in the UK. The Board also believes that the Capital Reorganisation will increase market liquidity in the Company's shares by reducing volatility and bid-offer spread of the price of the Company's shares.

Further details on the Capital Reorganisation can be found in the shareholder circular available via the Company's website at www.abmplc.com and the copy of the document which will be posted today to Shareholders.

Relationship Agreements

CBH

In connection with the CBH Acquisition, the Company, SP Angel and the CBH Concert Party consisting of each of the sole shareholder of CBA, CBA and TSI have entered into a relationship agreement which, from Admission, will regulate the on-going relationship between the CBH Concert Party and the Company. On Admission the CBH Concert Party will hold approximately 22.7% in aggregate of the enlarged issued share capital of the Company.

RRIC

In connection with the RRIC Acquisition, the Company, SP Angel and RRCC have entered into a relationship agreement which, from Admission, will regulate the on-going relationship between the RRCC and the Company. On Admission the RRCC will hold approximately 23.9% in aggregate of the enlarged issued share capital of the Company.

Further details of the Relationship Agreements can be found in the shareholder circular available via the Company's website at www.abmplc.com and the copy of the document which will be posted today to Shareholders.

Additional Board Appointments

It is proposed that a non-executive director will be appointed to the Board as a representative of RRCC as a shareholder in the Company. Additionally, the Company intends to appoint a further non-executive director to the Board. Further announcements regarding such proposed appointments will be made in due course.

General Meeting

A General Meeting will be held at the offices of Michelmores LLP, 6 New Street Square, London EC4A 3BF on 28 August 2018 at 10.00 a.m. at which resolutions for the increase in share capital required for the Acquisitions, the Placing, the Settlement Shares and the Capital Reorganisation will be proposed.

Expected Timetable of Key Events

Note:

1. Each of the times and dates in the above timetable is subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement on a Regulatory Information Service.

2. Temporary documents of title will not be issued.

A Circular containing the Notice of General Meeting and further information on the proposals is available via the Company's website at www.abmplc.com and copies will be posted today to Shareholders.

The procedures and timings for the appointment of a proxy are set out in the notes to the notice of the general meeting at the back of the Circular.

**Ends**

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

For further information please visit https://www.abmplc.com/ or contact:

Notes to Editors:

ABM is an AIM listed, Africa focused, resource company exploring for the key metals used in next generation batteries that fuel the new electric vehicle revolution. The Board and team of advisors, who have proven expertise in African exploration, mining and project generation, have identified an opportunity to utilise the Company's position to become a leader in the London market for investors to gain exposure to the battery metal commodity suite, particularly cobalt, lithium, copper and nickel.