REG - Neo Energy Metals - Acquisition of 90Mlb uranium resource project

Neo Energy MetalsAnnouncement

13/08/2024 07:00

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RNS Number : 1823A  Neo Energy Metals PLC  13 August 2024

Neo Energy Metals plc / LSE: NEO, A2X: NEO / Market: Main Market of the London
Stock Exchange

 

13 August 2024

Neo Energy Metals plc

('Neo Energy' or 'the Company')

 

Major Uranium Acquisition Adds 90 Mlbs of Uranium and 4.2 Mozs of Gold
Resources

Neo on Path to Become one of South Africa's Leading Uranium Companies

Neo Energy Metals plc ('Neo Energy' or the 'Company') is pleased to announce
that its newly established and wholly owned South African subsidiary, Neo
Uranium Resources Beisa Mine (Pty) Limited ('NURB'), has signed a binding
agreement ('Agreement') to acquire a 100% interest in the multi-million pound
uranium and multi-million ounce gold resources of the Beisa North and Beisa
South Uranium and Gold Projects (together the 'Beisa Projects').

The Beisa Projects comprise total SAMREC Code compliant resources of 90.24
million pounds ('Mlbs') of U₃O₈ and 4.17 million ounces ('Mozs') of gold.

The Beisa Projects, which comprise two granted Prospecting Rights, extending
over an area of approx. 80km(2) in the Witwatersrand Basin, located in the
Free State Province of South Africa. This region is South Africa's primary
uranium producing region, where uranium has been mined continuously for over
70 years. The Witwatersrand Basin, is historically one of the richest
gold-producing regions in the world, having produced about 2 billion ounces of
gold over more than a century.

The Beisa Projects lie immediately north and south of the previous producing
high-grade Beisa Uranium Mine and adjoins existing multi-million ounce gold
mining operations of Harmony Gold Mining Company Limited and Sibanye
Stillwater Limited.

The acquisition is in line with the Company's strategy to establish itself as
South Africa's leading uranium mining company and one of Africa's major
uranium mine operators and developers. The Beisa Projects is the first of
several potential acquisitions being advanced by the Company to strategically
position and consolidate itself in one of the world's significant uranium
resource regions.

Highlights:

·    Agreement signed with Sunshine Mineral Reserve (Pty) Limited
('Sunshine') to acquire a 100% interest in the Beisa Projects.

·    The Beisa Projects contains one of the largest undeveloped
uranium resources in South Africa.

·    The Beisa Projects are in the Witwatersrand Basin, South Africa's
primary producing uranium region with over 70 years of continuous uranium
production.

·    The Beisa Projects lie on two granted Prospecting Rights, FS
30/5/1/1/2/10575PR and FS 30/5/1/1/2/10603PR, which extend over an area of
approx. 80 km2 and are located immediately north and south of the previous
producing high-grade Beisa Uranium Mine and existing Beatrix 4 Shaft,
processing plant and associated infrastructure.

·    SAMREC Code (South African Code for the Reporting of Exploration
Results, Mineral Resources and Mineral Reserves) compliant Total Inferred
Resources have been reported by Sunshine in August 2023 of 90.24 Mlbs of
U₃O₈ and 4.17 Mozs of gold.

·    The uranium and gold resources are contained primarily in the Beisa
Reef, which extends across both the Beisa Projects and the Beatrix Reef which
only occurs in Beisa South.

·    Total inferred resources in the Beisa Reef comprise 53.57 million
tonnes ('Mt') at an average grade of 780 ppm U₃O₈ for 89.23 Mlb of
contained U₃O₈ and with several large zones of well-mineralised and
high-grade uranium occurring at both Beisa North and Beisa South at grades of
up to 3,400 ppm U₃O₈ and 2,200 ppm U₃O₈ respectively.

·    The Beisa Reef is unique in the sense that besides uranium, it also
contains relatively high concentrations of gold, at an average grade of 2.03
g/t on the Beisa North Uranium Project, with Inferred Resources of 2.05 Mozs
of gold. On the Beisa South Uranium Project, a well-developed channel occurs
over 4 kilometres ('km') wide, with gold grades of up to 5.0 g/t and an
average grade of 0.76 g/t for a further 0.58 Mozs of inferred resources,
giving Total Inferred Resources of 2.63 Mozs of 'by-product' gold.

·    An additional ore body, the Beatrix Reef, is present on the Beisa
South Uranium Project and contains inferred resources of 1.54 Mozs of gold.
This gold-bearing reef is well-known in the area and is currently being
successfully mined by multiple neighbouring mines.

·    The total in situ value of the inferred uranium and gold resources is
over US$17 billion based on the prevailing spot uranium and gold prices.

·    A summary of the total resources across the Beisa Projects is
provided below.

 Project         Category  Ore Tonnes at 35% Loss  Uranium                     Gold

                                                   (cut-off at 50cmkg/t)       (By-Product)
                           Mt                      ppm           Mlb           g/t         Moz
 Beisa Reef
   Beisa North   Inferred  31.36                   830           57.23         2.03        2.05
   Beisa South   Inferred  22.21                   720           32.00         0.76        0.58
 TOTAL                     53.57                   780           89.23         1.51        2.63

 Project         Category  Ore Tonnes at 45% Loss  Uranium                     Gold

                                                   (By-Product)                (cut-off 250cmg/t)
                           Mt                      ppm           Mlb           g/t         Moz
 Beatrix Reef
   Beisa South   Inferred  15.21                   30            1.01          3.14        1.54

·    The Beisa Projects have been extensively explored since 1936 with
multiple diamond drilling resource programs having been completed by a number
of major South African mining companies. There have been several National
Instrument 43-101 Compliant and SAMREC Code Compliant resource statements
previously released on the deposits (refer to Schedules).

·    The uranium-bearing Beisa Reef, on both the Beisa North Uranium
Project and Beisa South Uranium Project, is considered the shallowest of all
mineralisation in the well-known Welkom Goldfield in the Witwatersrand Basin.

·    On the Beisa North Uranium Project, the Beisa Reef is present from a
depth of 350 metres ('m') to the north of the Beisa Uranium Mine.

·    The shallow depths and steep configuration of the Beisa Reef favour
the typical narrow underground mining methods of the Witwatersrand Basin,
which are considered the most appropriate for reducing dilution of the
uranium-gold ore.

·    The Beisa North Uranium Project has the potential of being a
standalone mining operation with its SAMREC Code Compliant total resources of
31.36 Mt of ore and 57.23 Mlb of U(3)O(8) at an average grade of 830 ppm and
with a gold by-product at an average grade of 2.03 g/t.

·    The Beisa North Uranium Project could easily be accessed and
developed from existing nearby mine, shaft and underground infrastructure in
the region.

·    At the Beisa South Uranium Project, where a 4km wide,
well-mineralised channel has been identified with very high grades of up to
2200 ppm U(3)O(8) and 5.02 g/t of gold, further infill-drilling is planned to
increase the resource confidence levels across the large 56 km2 project area.

·    The Company has already successfully completed its initial legal and
technical due diligence review, which has confirmed the robust uranium and
by-product gold resources and initial technical merits of the Beisa Projects.

·    Confirmation and finalization of the Company's detailed technical,
financial and legal due diligence on the Beisa Projects is scheduled to be
completed by 31 August 2024.

·    The formal acquisition documentation with Sunshine is scheduled for
completion by 30 September 2024.

·    Under the commercial terms of the Agreement, the Company will
initially pay Sunshine a cash exclusivity fee of ZAR2,500,000 (approx.
£107,500) and issue 20,000,000 new ordinary shares at an issue price of 0.75
pence per share ('Acquisition Shares').

·    On settlement of the acquisition of the 100% interest in the Beisa
Projects, the Company will pay a cash fee of ZAR175,00,0000 (approx.
£7,500,000) and issue new ordinary shares to the value of ZAR200,000,000
(approx. £8,500,000) at an issue price of 1.25 pence per share and on the
basis that Sunshine will not have a shareholding exceeding 29.9% in the
Company and they will further enter into a lock-up agreement with 12 month
trading restrictions on any share sales.

·    The Company will also grant Sunshine a royalty on uranium and gold
produced and sold by the Company from the Beisa Projects, between US$3.00/lb
and US$5.00/lb when the uranium spot price is between US$100/lb and US$150/lb
and a gold royalty of US$7.50/oz.

·    Total up-front cash and share based acquisition costs are
approximately US$0.09 per pound of equivalent uranium resource (when including
the 4.17 Mozs of by-product gold resources as equivalent uranium resources at
prevailing spot prices).  This could be considered one of the lowest advanced
uranium resource acquisition costs currently available globally.

·    The acquisition of the Beisa Projects is supported by the Company's
major shareholder, Dubai based AUO Commercial Brokerage LLC ('AUO'), and
director Mr. Quinton van der Burgh.

·    The Company is pleased to confirm that it is negotiating a
non-dilutive debt facility with AUO and several other parties, that it
proposes to utilise to further fund its working capital requirements,
accelerate the development of its Henkries Uranium Project and further assist
with its growth strategy in South Africa.

·    The acquisition of the Beisa Projects is considered a major step by
the Board in advancing its strategy to position Neo Energy as South Africa's
leading uranium mining company and one of Africa's major uranium mine
operators and developers.

·    The acquisition of the Beisa Projects provides the Company with
additional advanced projects that comprise some of South Africa's largest
undeveloped uranium resources, strategically located in the country's primary
and long-standing uranium producing region, close to existing mining
infrastructure.

·    The Company is also advancing other potential complementary uranium
mine acquisitions in the region and anticipates being able to make further
announcements on this before the end of the current quarter.

Neo Energy Metals Chief Executive Officer Sean Heathcote said,

"This acquisition marks a major milestone for Neo Energy Metals, and
significantly expands our footprint in one of the richest and long-standing
uranium producing regions in the world.

"The Beisa North and Beisa South Uranium Projects not only bolster our uranium
resource base but also further strengthens the Company's ability to achieve
its strategic goal of becoming a major player in global uranium market and as
South Africa's leading uranium company.

"Together the Beisa North and Beisa South Uranium Projects add an additional
90Mlbs of uranium resources and a further 4.17Mozs of gold resources - the
project has a potential combined in situ value of over US$17billion,
equivalent to over 210Mlbs of uranium, based on current uranium and gold
prices.

"We are very excited about the potential these projects hold and look forward
to advancing them towards production, leveraging off the existing
infrastructure that surrounds these projects and off our team's expertise.

"In the coming weeks, we will look to finalise the formal documentation and
regulatory approvals for the acquisition with the team at Sunshine Mineral
Reserves and in parallel with that finalise the debt funding arrangements.

"We look forward to completing all of these steps and updating our
shareholders and key stakeholders on our progress in South Africa at both the
Henkries Uranium Project and now the Beisa North and Beisa South Uranium
Projects."

Admission

Application has been made for the Acquisition Shares to be admitted to trading
on the London Stock Exchange on or around 20 August 2024 ('Admission') and
will rank pari passu with the ordinary shares of the Company in issue.

Total voting rights

Following Admission, the Company's issued share capital will comprise
1,450,171,468 ordinary shares of 0.01p each, with each share carrying the
right to one vote, therefore the total number of voting rights in the Company
will be 1,450,171,468.  This figure may be used by shareholders as the
denominator for calculations by which they will determine if they are required
to notify their interest in the Company, or a change to their interest in the
Company, under the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.

This announcement contains inside information for the purposes of the UK
Market Abuse Regulation, and the Directors of the Company are responsible for
the release of this announcement.

END

About NEO Energy Metals Plc

Neo Energy Metals plc is a Uranium developer and mining company listed on the
main market of the London Stock Exchange (LSE: NEO). The Company holds up to a
70% stake in the Henkries Uranium Project, an advanced, low-cost mine located
in South Africa's Northern Cape Province. It has been estimated by some that
the historical investment in the project was over US$30 million in exploration
and feasibility studies, Neo Energy aims to increase the project's mineral
resources and complete an updated feasibility study with the aim of bringing
Henkries into production in the shortest possible timeframe.

The Company is led by a proven board and management team with experience in
uranium and mineral project development in Southern Africa. Neo Energy's
strategy focuses on an accelerated development and production approach to
generate cash flow from Henkries while planning for long-term exploration and
portfolio growth in the highly prospective Uranium district of Africa.

The Company's shares are also listed on the A2X Markets (A2X: NEO), an
independent South African stock exchange, to expand its investor base and
facilitate strategic acquisitions of uranium projects, particularly within
South Africa.

For Enquiries Contact:

 Sean Heathcote              Chief Executive Officer                 sean@neoenergymetals.com
 Jason Brewer                Executive Chairman                      jason@neoenergymetals.com
 Faith Kinyanjui             Investor Relations                      faith@neoenergymetals.com
 Tel: +44 (0) 20 7236 1177
 Michelle Krastanov          Corporate Advisor - AcaciaCap Advisors  michelle@acaciacap.co.za

 Tel: +27 (0) 11 480 8500

 

SCHEDULE 1

Exploration History of the Beisa North and Beisa Uranium Projects in the
Southern Welkom Goldfield

 1. Pre-Sunshine (1936 to 2020)

a.    Between 1936 and 2010, a total of 61 surface boreholes were drilled
by exploration companies on Beisa North and Beisa South, with an additional 43
boreholes within a 1.5 km distance from the two properties.

b.    2D seismic survey on Beisa North and adjacent properties by African
Selection Trust (1979).

c.     3D seismic survey across Beisa North and Beisa Central by Gencor
(1984).

d.    National Instrument 43-101 compliant resource declarations, such as:

·    Beisa Reef uranium and gold resources by ExplorMine on behalf of
Witwatersrand Cons. Gold Resources Ltd. (Wits Gold) on Beisa North (2009).

e.    Non-code compliant resource statements were declared, such as:

·    Wits Gold's in-house uranium and gold resource declaration for Beisa
South (2010).

f.     SAMREC compliant resource declarations, such as:

·    Beisa Reef uranium and gold resources by Minxcon for Beisa North
(2012).

g.    Scoping Study conducted by Rand Gold on several of Sunshine's
properties (2014).

 

2. Activities carried out by Sunshine since 2021

a.    SAMREC Compliant uranium resources for Beisa North and Beisa South as
well as for a contiguous prospecting licence held by Sunshine (CJM Consulting,
July 2021 and updated on 2 December 2021).

b.    SAMREC Compliant uranium resources for Beisa North and Beisa South as
well as for a contiguous prospecting licence held by Sunshine (CJM Consulting,
updated 30 September 2022).

c.     SAMREC Compliant uranium resources for Beisa North and Beisa South
(Protek Consulting, 31 August 2023).

 

 

 

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