Loan Repayment and Investment
29 March 2022
Pembridge Resources plc
Minto Completes the First of its Quarterly Loan Repayments to Pembridge and Pembridge Invests in Vulcan Green Copper Limited
London, United Kingdom - Pembridge Resources plc (LSE: PERE) ("Pembridge" or the "Company") is pleased to announce that Minto Metals Corp. ("Minto") has now completed the first CAD 1 million repayment of its loan from Pembridge with a second payment of CAD 500,000, and that Pembridge has made a £25,000 investment in Vulcan Green Copper Limited ("Vulcan").
Minto loan repayment
The Company lent a total of CAD 4 million to Minto, to fund Minto's surety account, during 2019 and 2020. The loan carries interest at 8% and is due to be repaid in full via quarterly instalments each of CAD 1 million during 2022, with the final interest payment in early 2023.
As announced on 11 March 2022, the first CAD 1 million due was repaid with a first repayment of CAD 500,000 and now the second CAD 500,000 has been received by the Company.
Investment in Vulcan Green Copper Limited
During 2021, Pembridge made an investment of £25,000 in Vulcan as part of Vulcan's capital raise of £500,000, representing just under 1% of Vulcan's share capital. Pembridge has now invested a further £25,000 in a convertible loan note with Vulcan. The loan carries interest at 12% at and will convert automatically to shares on the earlier of the following events:
1. Vulcan does a single funding raising of more than £250,000;
2. Vulcan does an Initial Public Offering ("IPO") on the London Stock Exchange or an equivalent admission to any other recognised investment exchange;
3. On a change of control of Vulcan; or
4. Three years after issuance of the note.
Under the first three scenarios, Pembridge will be able to convert its loan into shares at a discount of 50% to the price set in the triggering transaction. Under the fourth scenario, the conversion price would be 1p per share, which represents a 90% discount to the pricing of the 2021 £500,000 capital raise.
About Vulcan Green Copper
Vulcan's principal asset is the Kitumba Copper project (the "Project") in the Mumbwa District in Central Province, Zambia, approximately 450 km south-west of the traditional Copperbelt (by road). A Project mining licence was issued in Nov 2014 and, under its terms, is valid to 2039. Vulcan has confirmed to the Company that, in aggregate, US$35m was invested into the Project from 2004 to 2018 by BHP, Blackthorn Resources, Glencore and Intrepid Mines Limited. Whilst the mining licence has been subject to some dispute since January 2020, Pembridge has been advised by Vulcan of its expectation that this dispute will be satisfactorily addressed in the near term, enabling the development of the Project. However, there can be no assurance that this will be the case.
An independent JORC-compliant mineral resource by MSA was published in 2015 showing a Total resource of 27.9 Mt @ 2.2 % Cu (610,000 tonnes of contained Cu) using a 1% Cu cut-off grade, including a Measured and Indicated resource of 24.9 Mt @ 2.3 % Cu (580,000 tonnes of contained Cu) using a 1% Cu cut-off grade. Following the completion of a Pre-Feasibility Study (PFS) and subsequent Optimized PFS (OPFS) by Lycopodium, SNC Lavalin & Coffey Mining indicated a possible production profile of 1.5 Mt/a - 2 Mt/a over a 13-year LOM. A further four additional exploration licences are held by Vulcan in the wider project area.
Gati Al-Jebouri, Chief Executive Officer and Chairman of the Board of Pembridge said:
"We are very pleased to have received this second instalment of CAD 500,000 from Minto . These funds, coupled with the remaining expected CAD 3 million to be received before the year end, ensure the Company is in a position to meet all of its expenses for the foreseeable future as well as assist in funding Pembridge's new investments.
Pembridge's investment into Vulcan is the first time the Company has looked to expand its asset base beyond Minto. Whilst this particular investment is small, we believe the opportunity to invest in Vulcan at the current valuation, with a JORC resource of circa 600,000 tonnes of contained copper with additional resource upside, has the potential to offer sizeable returns to Pembridge. With expected further cashflows from Minto's production, beyond the CAD 4 million surety account repayments, Pembridge is continuing to review other projects where it is envisaged it will take a more material stake, either at the asset level or in the operator. Updates will be provided as appropriate.
Cautionary Statement
This News Release includes certain "forward-looking statements" which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company, or management, expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management's expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes, but is not limited to, the Company's intentions regarding its objectives, goals or future plans and statements. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, the Company's ability to predict or counteract the potential impact of COVID-19 coronavirus on factors relevant to the Company's business, failure to identify additional mineral resources, failure to convert estimated mineral resources to reserves with more advanced studies, the inability to eventually complete a feasibility study which could support a production decision, the preliminary nature of metallurgical test results may not be representative of the deposit as a whole, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital, operating and reclamation costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, and those risks set out in the Company's public documents. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
ENDS
NOTES TO EDITORS
Pembridge is a mining company that is listed on the standard segment of the Official List of the FCA and trading on the main market for listed securities of London Stock Exchange plc. Pembridge has an investment in Minto Metals Corp, a British Columbia incorporated business listed on the TSX Venture Exchange under the symbol "MNTO" that operates the Minto mine in Yukon, Canada.
About Minto Metals Corp
Minto Metals Corp operates the underground copper-gold-silver mine located in central Yukon, approximately 240 kilometres north of the capital Whitehorse along the Klondike Highway. In excess of US$350 million of capital expenditure has been invested into Minto operations since site construction began in 2006. The Minto mine was in continuous production between 2007 and 2018, when the mine was placed onto temporary care and maintenance. Pembridge acquired the Minto mine from Capstone Mining Corporation in June 2019 and restarted operations in October 2019.
Enquiries:
Pembridge Resources plc: +44 (0) 7905 125740
Gati Al-Jebouri, Chief Executive Officer and Chairman of the Board
David James, Chief Financial Officer
Tavira Securities - United Kingdom: +44 (0)20 7100 5100
Jonathan Evans
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