Wednesday, August 4, 2021

Papillon Holdings plc: Proposed Acquisition of a 100% interest in the Kilimapesa Gold Mine in the Republic of Kenya

         Placing of 638,951,276 Ordinary Shares

 

         Conversion of £1,588,038.03 of debt in Papillon Holdings plc into equity

 

         Admission of 1,448,425,658 Ordinary Shares of £0.001 each to the Official List (by way of Standard Listing under Chapter 14 of the Listing Rules) and to trading on the London Stock Exchange’s Main Market for listed securities

 

         Notice of General Meeting including a resolution to change the name of the Company to Caracal Gold plc

 

Papillon Holdings plc, 20 July 2021 is pleased to confirm that its Prospectus (the ‘Prospectus’) has been approved by the Financial Conduct Authority (the ‘FCA’) and published today by the Company.  The Prospectus relates to the readmission of the Company’s ordinary shares to the standard listing segment of the Official List of the FCA and to trading on the Main Market for listed securities of the London Stock Exchange plc (‘Readmission’), expected 23 August 2021 and contemporaneous dual listing on the Frankfurt Stock Exchange.

 

A copy of the Prospectus is available on the Company’s website at www.papillonholdings.com or at www.caracalgold.com.

 

OVERVIEW

 

New Corporate Strategy to solidify position as an emerging East African focused gold producer

 

         The Company aims to rapidly increase production to +50,000ozs per annum (‘p.a.’) and build a JORC compliant resource base of +3Moz within 12-18 months from readmission.

 

  • Advance a well-defined mine optimisation strategy at the Kilimapesa Gold Mine, where there is significant expansion potential and ability to increase gold production to 25,000oz p.a. and the resource to +2Moz.

 

  • Utilise experienced management team to acquire other complementary and strategically located gold mine and development projects in East Africa.

 

Compelling investment opportunityrevenue generative; robust sector; and strong team

 

         Raising £2.8 million (before expenses) by way of a Placing to build production at the Kilimapesa Gold Mine, support future growth including the acquisition of strategic assets, working capital and other general corporate purposes.

 

         The Company will trade under the name of Caracal Gold plc and its new ticker symbol will be GCAT

 

         Market cap on readmission circa £14.5 million

 

         Board changes to support new strategy

 

  • Simon Games-Thomas, Gerard Kisbey-Green and Robert McCrae to join the board whilst Lord Nicholas Monson and Anthony Eastman to step down

 

         General Meeting to approve the Resolutions in relation to, inter alia, the Acquisition, will be held on 13 August 2021

 

Charles Tatnall, Papillon CEO, said, Today marks another momentous step towards achieving our mission of establishing a strategic portfolio of African gold producing assets focussing on known and geologically proven gold projects and listing on the London Stock Exchange.  Gold equities continue to perform, driven by several factors including financial and geopolitical uncertainties and low interest rates.  We believe this trend will continue and that our timing to welcome new shareholders to our company is opportune. With a strong growth strategy and significant value-uplift potential, our team is excited to further advance current operations and look to acquire robust new assets to strengthen the portfolio in the months ahead.”

 

Background & Transaction Summary

 

On 3 September 2020, the Company announced that it had signed a binding Heads of Agreement to acquire certain contractual production and exploration rights held by Mayflower Capital Investments Pty Limited (“Mayflower”) in gold assets located in Kenya and Congo Brazzaville. These rights are held by Mayflower through a special purpose vehicle, Mayflower Gold Investments Limited (“MGIL”), incorporated by Mayflower in the United Kingdom on 9 December 2020.

 

The Company will acquire 100% of the share capital of MGIL and the options that MGIL holds to acquire: (a) 100% of the share capital of KPGL, which holds a 100% interest in Kilimapesa and (b) a 70% joint venture interest in Congo Gold SARL (“CGL”) which holds a 100% interest in the Kakamoeka Gold Project (“Kakamoeka”), as follows:

 

  1. Kilimapesa. Kilimapesa, which uses the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC), is an established gold mine and gold processing operation that offers immediate value to Papillon. Kilimapesa is located in Kenya approximately 230 kilometers west of Nairobi in the historically productive Migori Archaean Greenstone Belt.

 

Contemporaneously with Readmission, the Company will exercise its newly acquired option to acquire a 100% interest in Kilimapesa and, immediately thereafter, the Company intends to devote substantially all of its resources to the exploration and development of gold in Kilimapesa.

 

  1. Kakamoeka. Kakamoeka, which includes four exploration licences covering over 3,000 square kilometres of the Mayombe Greenstone Belt located in Congo Brazzaville, provides the Company with further gold exploration and development opportunities.

 

On 6 January 2021 the parties amended their heads of agreement and on 25 March 2021, the Company and Mayflower supplemented their heads of agreement with a formal purchase agreement (the “Purchase Agreement”).

 

Papillon’s directors believe that securing a near-term gold asset, with significant upside from resource expansion and mine optimisation activities, represents a significant opportunity for Papillon’s stakeholders to gain exposure to the junior gold mining industry.

 

Strategy and Objectives following Readmission

 

The Company aims to build a position as an emerging East African focused gold producer with a clear path to grow production and resources both organically and through strategic acquisitions.  Following Readmission, it aims to rapidly increase production to +50,000ozs per annum (‘p.a.’) and build a JORC compliant resource base of +3Moz within 12-18 months from listing. 

 

To this end, the Company’s initial focus is on the Kilimapesa Gold Mine where there is the potential to increase gold production to 25,000oz p.a. and the resource to +2Moz.  Accordingly, having started mining operations (extraction and processing) in early 2021, a three-phase optimisation programme is underway to reach the full economic potential of Kilimapesa and the region granted by the mineral tenements:

 

         Phase 1 reach a production rate of 5,000oz of gold p.a. and increase the resource statement reported in accordance with the JORC (2012) Code and estimated (or based on documentation prepared) by a Competent Person as defined by the JORC (2012) Code to 1,000,000oz.

 

         Phase 2 increase production rate to over 10,000oz p.a. and utilise cash flow to undertake further exploration. Upgrading the current plant facilities during this phase will also enable steady and consistent production at higher levels.   This phase is expected to be completed in a 6- to 12-month timeframe.

 

         Phase 3 explore new resources within the PL/2018/0189 remit as the established Kilimapesa site bears fruit and increase resource to +2Moz; the Directors believe this is achievable given the demonstrable history of the tenement. A feasibility study will also be undertaken to develop a larger mine to support production rates surpassing 25,000oz per annum. The construction and commissioning of a new (third) processing plant is also planned to commence, as well as further underground expansion of the existing mines.  Phase 3 is expected to be completed in an 18- to 24-month timeframe.

 

Additionally, the Company aims to utilise its experience team to acquire other complementary and strategically located gold mine and development projects in East Africa.

 

Placing

 

The Company has raised gross proceeds of approximately £5,493,885 through the issue of 638,951,276 Placing Shares. The placing price has been completed in two rounds, comprising first round commitments of £2,686,885 and second round commitments of £2,807,000 that was completed at a placing price of £0.01 per share.

 

Please find the original full-length press release here: https://www.londonstockexchange.com/news-article/PPHP/prospectus-published/15064965

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (“MAR”). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

 

ENDS

 

For further information visit www.papillonholdings.com or contact the following:

 

Papillon Holdings plc

Charles Tatnall / James Longley

info@papillonholdingsplc.com

 

Mayflower Capital Investments Pty Limited

Gerard Kisbey-Green / Jason Brewer

info@mayflowercapinvest.com

 

Novum Securities Ltd (Broker)

Colin Rowbury

crowbury@novumsecurities.com

 

St Brides Partners Ltd (Financial PR)

Isabel de Salis / Susie Geliher

info@stbridespartners.co.uk

 

DGWA, the German Institute for Asset and

Equity Allocation and Valuation

(European Investor and Corporate

Relations Advisor)

Stefan Müller / Katharina Löckinger

info@dgwa.org

 

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