Announcement
GENERAL: AOR: Aorere's Asian Minerals announces proposed acquisition
11:23am
AOR
21/11/2019 11:23
GENERAL
PRICE SENSITIVE
REL: 1123 HRS Aorere Resources Limited
GENERAL: AOR: Aorere's Asian Minerals announces proposed acquisition
New Zealand Exchange Limited
P.O. Box 2959
Wellington
21 November 2019
Dear Sir,
Aorere's Asian Minerals announces proposed acquisition
Asian Mineral Resources ("ASN") is Aorere's second largest investment. This
shareholding represents 28% of Aorere's total assets at ASN's closing market
price of 38 cents in Canada prior to the release of the following significant
announcement.
For and on behalf of the Board,
Chris D Castle
Managing Director
Aorere Resources Limited
TORONTO, Nov. 20, 2019 (GLOBE NEWSWIRE) -- Asian Mineral Resources Limited
(the "Company") (ASN-TSX Venture) is pleased to announce that it has entered
into an agreement to acquire (the "Acquisition") all the issued and
outstanding shares of Nigerian-based Decklar Petroleum Limited ("Decklar").
Decklar's sole asset is a Risk Service Agreement ("RSA") with Millenium Oil
and Gas Company Limited ("Millenium"). Millenium is the owner of the Oza
Field located onshore in the northern part of Oil Mining License 11 in the
Eastern Niger Delta of Nigeria. The RSA entitles Decklar to cost recovery
and a share of distributable funds from the Oza Field in exchange for
technical and financial support. Closing of the proposed acquisition is
subject to certain customary conditions, including the exercise of at least
10,000,000 of the 13,333,333 outstanding common share purchase warrants of
the Company ("Warrants") and approval by the TSX Venture Exchange (the
"TSXV"). Closing of the Acquisition is expected to occur in December 2019.
The Acquisition
The aggregate purchase price (the "Purchase Price") is CDN$8,550,000, payable
through the issuance of 30,000,000 common shares of the Company ("Shares")
based on a deemed value of CDN$0.285 per share. Of the aggregate Purchase
Price, 22,000,000 Shares are payable upon closing of the Acquisition with the
balance of 8,000,000 Shares being payable only if the Oza Field achieves a
minimum production rate within 12 months of closing as more fully described
below.
The 22,000,000 Shares payable upon closing of the transaction will be
allocated as to: (i) 14,000,000 Shares to the shareholders of Decklar; and
(ii) 8,000,000 Shares to extinguish outstanding debt owed by Decklar to
certain arm's length third parties.
The Purchase Price is equivalent to approximately 68.5% of the Company's
issued share capital including the assumed exercise of 10,000,000 Warrants
(based on 32,079,770 Shares issued and outstanding). Post-closing, the
Purchase Price is equivalent to approximately 40.7% of the Company's issued
share capital including the assumed exercise of 10,000,000 Warrants (based on
54,079,770 Shares issued and outstanding). None of the Decklar shareholders
nor third party debt providers are related to the Company and the Acquisition
is not a Non-Arm's Length transaction within the meaning of the policies of
the TSXV. Additionally, none of the existing shareholders of Decklar are
joint actors with one another or with any of the third party debt providers
and no new "control person" will be created as a result of the Acquisition.
In the event the Oza Field achieves production net to Millenium of 1,000
bbls/d for a period of ten (10) consecutive days in any thirty (30) day
period within twelve (12) months of the date of closing, a bonus payment (the
"Bonus Payment") of a further 8,000,000 Shares is payable to the shareholders
of Decklar.
The Oza Field
The Oza Field was formerly operated by Shell Petroleum Development Company of
Nigeria Ltd. ("Shell"). The field has three wells and one side track drilled
by Shell between 1959 and 1974. During the period when Shell was the
operator, there were two periods of extended production testing from the
Oza-1, -2 & -4 wells. The field was never tied into an export facility nor
was it fully developed by Shell and put into commercial production.
In 2003, the Oza Field was awarded to Millenium having won the bid during the
Marginal Fields Licensing Round. Since Millenium's acquisition of the Oza
Field in 2003, approximately US$45 million has been spent in production
facilities infrastructure in support of a restart of production including an
export pipeline to tie the field into the Shell Trans Niger Pipeline (TNP)
pipeline to the Bonny Export Terminal, a lease automatic custody transfer
(LACT) unit fiscal metering system, infield flowlines, manifolds and a rental
Early Production Facility. The RSA with Millenium provides Decklar a share of
production and associated cash flow from the Oza Field in exchange for
funding and technical assistance to restart commercial production and full
field development; including a preferential return of its costs plus a share
of cash flow thereafter. More specifically, Decklar intends to undertake a
low cost re-entry and testing of one of the existing wells to assess the
development potential of the Oza Field. In exchange, Decklar is entitled to
priority recovery of its capital from 80% of distributable funds. After
achieving cost recovery, Decklar's profit share is based on a sliding scale
starting at 80% and declining to 40% once cumulative production exceeds 10
million bbls.
Mr. Chris Castle, the Chairman of Asian Mineral commented, "The Company is
very excited by the potential of the Oza Field in Nigeria. The proposed
acquisition is consistent with the Company's ongoing strategy to expand its
portfolio of resource opportunities beyond the mining industry to include the
energy industry."
For further information:
Paula Kember
Chief Financial Officer Telephone: (416) 360-3412
Neither the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Cautionary Language
Certain statements made and information contained herein constitute
"forward-looking information" (within the meaning of applicable Canadian
securities legislation). All statements in this news release, other than
statements of historical facts, including statements with respect to the
planned completion of the Acquisition are forward-looking statements. Such
statements and information (together, "forward looking statements") relate to
future events or the Company's future performance, business prospects or
opportunities. Forward-looking statements include, but are not limited to,
statements with respect to estimates of reserves and or resources, future
production levels, future capital expenditures and their allocation to
exploration and development activities, future drilling and other exploration
and development activities, ultimate recovery of reserves or resources and
dates by which certain areas will be explored, developed or reach expected
operating capacity, that are based on forecasts of future results, estimates
of amounts not yet determinable and assumptions of management.
All statements other than statements of historical fact may be
forward-looking statements. Statements concerning proven, probable and
possible reserves and resource estimates may also be deemed to constitute
forward-looking statements and reflect conclusions that are based on certain
assumptions that the reserves and resources can be economically exploited.
Any statements that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance (often, but not always, using
words or phrases such as "seek", "anticipate", "plan", "continue",
"estimate", "expect, "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe" and similar
expressions) are not statements of historical fact and may be
"forward-looking statements". Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause actual results
or events to differ materially from those anticipated in such forward-looking
statements. The Company believes that the expectations reflected in those
forward-looking statements are reasonable, but no assurance can be given that
these expectations will prove to be correct and such forward-looking
statements should not be unduly relied upon. The Company does not intend, and
does not assume any obligation, to update these forward-looking statements,
except as required by applicable laws. These forward-looking statements
involve risks and uncertainties relating to, among other things, changes in
oil prices, results of exploration and development activities, uninsured
risks, regulatory changes, defects in title, availability of materials and
equipment, timeliness of government or other regulatory approvals, actual
performance of facilities, availability of financing on reasonable terms,
availability of third party service providers, equipment and processes
relative to specifications and expectations and unanticipated environmental
impacts on operations. Actual results may differ materially from those
expressed or implied by such forward-looking statements.
The Company provides no assurance that forward-looking statements will prove
to be accurate, as actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. The Company does not
assume the obligation to revise or update these forward-looking statements
after the date of this document or to revise them to reflect the occurrence
of future unanticipated events, except as may be required under applicable
securities laws.
End CA:00344686 For:AOR Type:GENERAL Time:2019-11-21 11:23:21
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