Update on the disposal of SDA Mill
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
1 August 2017
Rose Petroleum plc
("Rose", the "Company" or the "Group")
Update on the disposal of SDA Mill
Rose (AIM: ROSE), the AIM quoted natural resources business, is pleased to provide an update on the potential disposal of the Company's mineral processing mill operation in San Dieguito de Arriba, State of Nayarit, Mexico and its associated assets, licenses and agreements (together, the "SDA Mill") to Magellan Gold Corporation (OTCQB:MAGE) ("Magellan"), as initially announced on 6 March 2017.
On 1 June 2017, Rose announced that Magellan had paid Rose US$100,000 for Magellan to secure a 60 day extension of its option to acquire the SDA Mill. During this period, both Rose and Magellan have made good progress working towards closing the transaction.
Under the terms of the Memorandum of Understanding with Magellan ("MOU"), Magellan was required to have deposited a minimum of US$900,000 in an escrow account before the end of the option period in order to retain its exclusive option to acquire the SDA Mill. Given the progress made with Magellan and the short period requested by Magellan to complete the financial obligation, Rose has now agreed a minor extension to the option period to 15 August 2017, to enable Magellan to complete its obligation.
The total purchase price for the SDA Mill is agreed under the MOU as US$1.5 million (including the US$100,000 paid by Magellan to date), payable as US$1.0 million in cash and US$500,000 in restricted common stock (shares) in Magellan. Under the terms of the option extension, Magellan is now required to deliver satisfactory executed irrevocable commitments representing not less than the US$900,000 in cash required to fund the transaction, by 15 August 2017. Also under the terms of the option extension, Magellan will pay Rose the ongoing operational costs, including employee and maintenance costs of the SDA mill (approximately US$25,000 per month) for August and September, with the August payment due by 4 August 2017. Magellan has also agreed to pay certain key employee costs incurred during the June and July option period, which will be paid on completion of the disposal.
Upon Magellan delivering satisfactory irrevocable commitments, the closing of the transaction will still be subject to satisfaction of a number of conditions, including but not limited to, approval by Rose's shareholders, the Group and Magellan entering into a separate asset purchase agreement, an audit by Magellan of the SDA Mill's financial statements at Magellan's cost, and both parties completing their respective due diligence. The parties are targeting closing to occur by the end of September 2017, however there can be no assurance that the purchase of the mill will be completed.
Should the transaction not complete due to it not being approved by the Company's shareholders, Rose will reimburse Magellan the US$100,000 that Magellan paid to Rose to secure its option extension. This payment would be payable in cash or shares at the Company's discretion.
Milling activity at the SDA mill is currently on hold pending the completion of this transaction.
Matthew Idiens, CEO commented; "We are working closely with Magellan towards a successful completion of this transaction, hence agreeing to this minor extension to allow them to complete their financial obligation. We look forward to confirming the receipt of the irrevocable commitments from Magellan in due course. "
Enquiries:
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Matthew Idiens (CEO) Chris Eadie (CFO)
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Rose Petroleum plc |
Tel: +44 (0) 20 7225 4595 Tel: +44 (0) 20 7225 4599 |
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Jeremy Porter / James Reeve / Liz Kirchner
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Allenby Capital Limited
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Tel: +44 (0) 20 3328 5656
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James Pope / Ben Turner
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Turner Pope Investments |
Tel: +44 (0)20 3621 4120 |
This information is provided by RNS
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