Rockfire Regulatory News (ROCK)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE, TRANSMISSION, DISTRIBUTION OR FORWARDING, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE, TRANSMISSION, DISTRIBUTION OR FORWARDING WOULD BE UNLAWFUL (OR TO ANY PERSONS IN ANY OF THOSE JURISDICTIONS).

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO PURCHASE AND/OR SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN ROCKFIRE RESOURCES PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION, SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF ROCKFIRE RESOURCES PLC.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE UK VERSION OF THE MARKET ABUSE REGULATION (EU) NO.596/2014, WHICH FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED WITHIN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION (AS DEFINED UNDER UK MAR). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, ANY PERSONS WHO RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING ARE NO LONGER IN POSSESSION OF SUCH INSIDE INFORMATION, WHICH IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

15 September 2023

Rockfire Resources plc

("Rockfire" or the "Company")

Proposed Acquisitions of Emirates Gold DMCC & Emperesse Bullion LLC

Suspension of Trading in the Company's Shares

and

Proposed Subscription to raise £3.5 million

Proposed Acquisition

Rockfire Resources plc (LON: ROCK), the gold, base metal and critical mineral exploration company, is pleased to announce the execution of a conditional share purchase agreement (the "Agreement") with Paloma Precious DMCC ("Paloma") for the acquisition of 100% of Emirates Gold DMCC ("Emirates") and 99% of Emperesse Bullion LLC ("Emperesse") (Emirates and Emperesse are together the "Targets") (the "Transaction"). The Transaction is subject to, inter alia, shareholder and regulatory approvals.

The Directors of Rockfire are embarking on an ambitious growth strategy through the acquisition of two cash-generating and profitable companies. The Directors consider the Transaction to represent a potentially transformational, value enhancing transaction for shareholders, which is expected to accelerate the Company's growth strategy.

Suspension of Trading in the Company's Shares on AIM

The Transaction will constitute a reverse takeover ("RTO") under the AIM Rules for Companies (the "AIM Rules") and therefore, in accordance with rule 14 of the AIM Rules, will require application to be made for the enlarged share capital to be readmitted to AIM ("Admission") the publication of an AIM admission document ("Admission Document") and approval of shareholders of the Company at a general meeting. Also, in accordance with rule 14 of the AIM Rules, trading in the Company's ordinary shares of 0.1 pence each ("Ordinary Shares") will be suspended on AIM from 7.30 a.m. this morning, 15 September 2023, until the publication of the Admission Document or an announcement that the proposed Transaction is not proceeding. While the Company will seek to publish the Admission Document as soon as possible, the timing of this cannot yet be accurately forecast.

Information on Emirates and Emperesse

Paloma is the largest shareholder in Rockfire, with an interest of 21.7% in the Company's issued share capital, and owns two operating subsidiaries, Emirates (100%) and Emperesse (99%).

Emirates' principal activities are operating a gold and silver refinery and trading of non-manufactured precious metals and jewellery in Dubai's DMCC multi commodities centre free-trade zone. During 2022, Emirates processed approx. 119.6 million grams (approx. 3.85m ounces) of gold and sold approx. 82.7 million grams (approx. 2.66m ounces) of gold. Emirates also processed approx. 39.1 million grams (approx. 1.26m ounces) of silver and sold approx. 100.2 million grams (approx. 3.22m ounces) of silver. In the year ended 31 December 2022, Emirates made a profit before interest and depreciation (EBITDA) of approx. 11.1 million UAE Dirham ("AED") (approx. £2.4 million) on revenue of AED17.8 billion (approx. £3.9 billion) and at the same date had audited net assets of approx. AED £192.3 million (approx. £41.8 million).

Emperesse is engaged in precious metal trading and operates a gold, silver and platinum trading shop in the 'Dubai Gold Souk' market. The trading shop is leased by Emperesse. In the year ended 31 December 2022, Emperesse made a profit for the year of approx. USD$0.081 million (approx. £0.065 million) on revenue of approx. USD$0.77 million (approx. £0.616 million) and at the same date had audited net assets of approx. USD$4.5 million (approx. £3.6 million).

In July 2023, Emirates was removed from the United Arab Emirates' good delivery list of approved refineries and certification scheme (the "UAE Delivery List"), thereby preventing Emirates from delivering into Dubai's bullion market. As a result, the London Bullion Market Association ("LBMA") also revoked Emirates' affiliate membership. The Transaction is conditional, amongst other things, on Emirates being restored to the UAE Delivery List.

Summary Transaction Terms

Rockfire has signed the Agreement to acquire the Targets for a total consideration of USD$20 million. The Transaction will be structured as follows:

On signing of the Agreement, Rockfire will acquire 10% of Emirates and 10% of Emperesse (the "Initial Shares"). Rockfire has also conditionally agreed to acquire the remaining shares in the Targets currently owned by Paloma (the "Final Shares"), which will be transferred to Rockfire on completion of the Transaction. The consideration for the Initial Shares will be USD$2 million in cash (the "Initial Consideration"). Rockfire will satisfy the Initial Consideration with its existing cash resources and the proceeds of the Subscription (described below). The consideration for the Final Shares will be USD$18 million (the "Final Consideration") to be satisfied in cash.

The acquisition of the Final Shares is subject to, amongst other conditions, the conditions set out below (the "Conditions"):

i. The publication of the Admission Document in respect of the proposed enlarged entity and convening a general meeting (the "General Meeting");

ii. Consent of Rockfire's shareholders being given in the General Meeting for the acquisition of the Final Shares;

iii. Proceeds being received by Rockfire (or as it may direct) from the RTO Fundraise (described below);

iv. Required regulatory approvals being received for the Transaction and the acquisition of the Final Shares by Rockfire;

v. Emirates being added back to the UAE Delivery List; and

vi. Satisfactory due diligence being completed by Rockfire in respect of the Targets and their respective businesses.

If the Conditions are not satisfied, the Agreement will lapse and the acquisition of the Final Shares by Rockfire will not proceed. In that event, Rockfire would still own the Initial Shares.

Additional Features of the Transaction

As part of the Transaction, Rockfire will undertake a fundraise of approximately £14.7 million (the "RTO Fundraise") at a price of 0.5 pence per share (the " Subscription Price"). The investors in the RTO Fundraise (the "RTO Subscribers") have entered into binding but conditional subscription agreements to subscribe for Ordinary Shares pursuant to the RTO Fundraise. The proceeds from the RTO Fundraise will be utilised to satisfy the Final Consideration. The Final Consideration will be paid by Rockfire to Paloma on completion of the Transaction and shortly after Admission.

As part of the Transaction, Gordon Hart (Chairman of Rockfire) and David Price (Chief Executive Officer of Rockfire) have also today joined the management team of the Targets (but not the boards of directors of the Targets) and will provide advice to Paloma on the management of the Targets up until the completion of the Transaction.

Related party transaction

Rockfire entering into the Agreement with Paloma to acquire the Initial Shares is deemed to be a transaction with a related party pursuant to rule 13 of the AIM Rules by virtue of Paloma being a 21.7% shareholder of the Company. The directors of the Company (who are all independent of Paloma) consider, having consulted with the Company's nominated adviser, Allenby Capital Limited, that the terms of the Agreement pertaining to the acquisition of the Initial Shares are fair and reasonable insofar as the Company's shareholders are concerned and as such have approved the Company entering into the Agreement to acquire the Initial Shares.

The acquisition of the Final Shares will constitute a further related party transaction under rule 13 of the AIM Rules, and further disclosures in this regard will be made in the Admission Document when published.

Proposed Subscription

The Company also today announces that it is proposing to raise £3.5 million (before expenses), from two new institutional investors (the "Institutional Investors") subscribing for 700,000,000 new ordinary shares (the "Subscription Shares") at the Subscription Price.

The Subscription Price of 0.5 pence per share represents a premium of approximately 36 per cent. to the closing mid-market price of an Ordinary Share on 14 September 2023, being the latest practicable date prior to the publication of this announcement.

The Subscription Shares are to be issued pursuant to the authorities granted to the Board at the Company's annual general meeting held on 30 June 2023. The Subscription Shares will represent 27.5% of the Company's issued share capital as enlarged by the Subscription. The net proceeds of the Subscription will be used to: (i) satisfy the Initial Consideration; (ii) contribute towards the costs associated with the Transaction; (iii) to continue drilling at the Company's existing Molaoi zinc, silver, lead and germanium project in Greece; and (iv) to fund the working capital requirements within the Company.

A further announcement will be made when the Subscription has been completed.

David Price, Chief Executive of Rockfire, said:

"The Board of Rockfire has identified an exceptional opportunity to acquire two cash-generating businesses, which are entirely in line with the full value-add integration of precious and base metal exploration, development, production, refining and trading.

"The proposed acquisition of Emirates and Emperesse would not only be transformational for our shareholders but would enable Rockfire to continue to grow as a global explorer and refiner of metals, all backed with positive cash flow.

"The board has been successful in identifying supportive investors, with a shared goal to build Rockfire through its ambitious growth strategy. We are delighted to welcome them to our share register and we appreciate their support, vision and belief.

"We will continue to provide updates on progress with our drilling at Molaoi. Molaoi will remain an important part of our mining integration and the Company intends to continue its constant appraisal of new mining projects.

"With the suspension of trading, we would like to reassure our shareholders that we have every intention of restoring the shares to trading on AIM as quickly as possible. However, our due diligence must be completed thoroughly, professionally and in accordance with the AIM Rules. Rockfire's lawyers, Fladgate, our auditor, PKF, our nominated adviser, Allenby Capital and the Company's Dubai advisers have all agreed to complete this due diligence and the Admission Document, so our shareholders can take comfort in a quality and experienced team to complete this very important phase of our growth.

"We look forward to keeping the market informed and we thank our shareholders in advance for their patience and support during this exciting and transformational phase for the Company."

The person responsible for arranging the release of this announcement on behalf of the Company is David Price, Chief Executive Officer of the Company.

For further information on the Company, please visit www.rockfireresources.com or contact the following: 

Notes to Editors

Rockfire Resources plc (LON: ROCK) is a gold, base metal and critical mineral exploration company, with a high-grade zinc/lead/silver/germanium deposit in Greece, and a portfolio of gold/copper/silver projects in Queensland Australia..

§ The Molaoi deposit in Greece has a JORC resource of 210,000 tonnes of zinc, 39,000 tonnes of lead and 3.5 million ounces of silver, using a 4% Zn cut off.

§ The Plateau deposit in Queensland has a JORC resource of 131,000 ounces of gold and 800,000 ounces of silver, using a 0.5g/t Au cut off. 53,000 of these ounces lie within the top 100m from surface.

§ The Copperhead deposit in Queensland has a JORC resource of 80,000 tonnes of copper, 9,400 tonnes of molybdenum and 1.1 million ounces of silver, using a 0.13% CuEq. cut off.