18 December 2015
LITHIUM PROJECT TRANSACTION
Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company, has pursued a complementary strategy in Turkey and in Western Australia for the exploration of lithium, which occurs in conjunction with gold in many geological environments. Through its 86%-owned Australian subsidiary, Asgard Metals Pty. Ltd. (“Asgard”), Ariana has completed a joint agreement to vend a package of tenements in the Pilbara region of Western Australia to Dakota Minerals Limited (ASX:DKO) (“Dakota”) as part of a broader deal involving Slipstream Resources Group (“Slipstream”). This package of tenements contains part of an extensive lithium-tantalum bearing pegmatitic dyke swarm, which was recognised recently as containing the second-largest hard-rock (spodumene) lithium resource in the world.
- Asgard completes joint agreement with Slipstream to vend a total package of six tenements, in the Pilgangoora area of Western Australia, to Dakota.
- Consideration for the deal involves an initial cash payment to Asgard of A$147,000 and 22,500,000 fully paid ordinary shares in Dakota, at which point Ariana will own approximately 8% of Dakota.
- Asgard will also benefit from up to 29,400,000 performance shares which will be issued on the achievement of certain project milestones.
- Asgard exploration model for lithium is being applied to identify new project opportunities across other geological provinces including those in Turkey and, in recognition of this, Dakota agrees to pay a fixed consulting fee of $98,000 to Asgard over the course of 12 months.
- Exploration Manager for Ariana, Dr. Francis Wedin, to be appointed as Executive Technical Director of Dakota.
- Dakota to commit to A$700,000 towards exploration on the tenements within the first six months following tenement grants.
- Dakota to complete a fundraising of up to A$3.6 million in two tranches to be underwritten by Argonaut Securities Pty. Ltd., to fund exploration on the tenements.
- Argonaut has received irrevocable commitments for the full amount of A$3.6 million to be split in to a first tranche of approximately A$525,000, which is due to settle on 24 December 2015 and a second tranche of approximately A$3,075,000 which is due to settle in February 2016 after Dakota shareholders approve the issue and the transaction.
- Completion of the transaction is subject to various conditions, including grant of the core tenement, Dakota shareholder approval for the transaction and capital raising.
Dr. Kerim Sener, Managing Director, commented:
“We are delighted to be able to announce this transaction today, which crystallises significant value on a project that has been incubated within our technology-metals subsidiary, Asgard Metals. We see significant, long-term value in lithium as a technology metal with numerous and increasing commercial applications, which is found coincidentally within several gold provinces world-wide. As part of this strategy, Asgard secured the rights to a premier exploration area for lithium in Western Australia and has been looking to commercialise this opportunity within the short-term. To have been able to successfully vend this project in to Dakota with the support of Slipstream, in such a short time frame is an excellent outcome for our shareholders.
We also wish to congratulate our Exploration Manager, Dr. Francis Wedin in his appointment as Executive Technical Director of Dakota as a part of this transaction. He has been instrumental in developing the Asgard strategy for Ariana and will make an excellent addition to the Dakota team to drive its lithium focus.”
Asgard has been pursuing a strategy of commodity diversification on behalf of Ariana, with a special focus on technology-commodities, particularly those that may be used in renewable energy applications. Commodities of particular interest to Asgard currently include lithium and antimony, which are found in association with certain gold mineralisation systems in both Turkey and Western Australia, among other gold-provinces worldwide. The Pilgangoora project was identified by the Ariana Special Projects Team in 2014 and, since then, Asgard has been seeking to commercialise the project independently from Ariana. Asgard is also interested in the potential for lithium and antimony mineralisation in Turkey and has undertaken initial work to confirm this view. Asgard has developed an exploration model specifically for lithium, which it is applying to other regions with the aim of identifying new exploration areas for future licence acquisition.
The Pilgangoora project is located on and in the vicinity of an extensive lithium-tantalum bearing pegmatitic dyke swarm. Competitor activity in the immediate area includes Pilbara Minerals Limited and Altura Mining Limited, which have both discovered significant lithium and tantalum resources in recent times. Pilbara Minerals has identified a total Indicated and Inferred resource of 52.2Mt @ 1.28% Li2O and 32.9Mt @ 0.022% Ta2O5. On a neighbouring property, Altura Mining has identified an Indicated and Inferred resource of 26.1Mt @ 1.20% Li2O. Following recent exploration activity, the Pilgangoora area has been confirmed to contain the world’s second-largest hard-rock lithium deposit, mostly in the form of the mineral spodumene.
Asgard currently holds 100% rights to three tenements (including an application for what is considered the core tenement) in the vicinity of Pilgangoora and Slipstream hold 100% rights to three tenements. Rock-chips taken from outcropping pegmatites in the area have demonstrated grades in the range of 0.3-5% lithium from previous sampling. Grades in the range of 1% Li2O are considered economic for many hard-rock lithium resources.
Summary of Agreement
Asgard and Slipstream have jointly vended their interests in their tenements in the Pilgangoora area to Dakota Minerals Limited (ASX:DKO). In consideration for this, Asgard and Slipstream will share an initial cash payment of A$300,000 on the basis of a 49:51 split respectively. Of this, A$125,000 will be paid to Asgard and Slipstream within 5 business days of completion of the first tranche of the Dakota share placement and A$175,000 to be paid at the later of completion or within 10 business days after the grant of the core tenement. Asgard and Slipstream will also be issued with 22,500,000 and 27,500,000 in fully-paid ordinary shares respectively at the later of completion or within 10 business days after the grant of the core tenement. Asgard and Slipstream will also benefit from the following performance share payments on the basis of a 49:51 split respectively:
- 30,000,000 shares upon an Inferred Mineral Resource of 5 Mt at 1.2% Li2O being identified on any or all of the Asgard and Slipstream tenements and announced to the ASX by Dakota in accordance with the requirements of the JORC Code; and
- 30,000,000 shares upon an Inferred Mineral Resource of 15 Mt at 1.2% Li2O being identified on any or all of the Asgard and Slipstream tenements and announced to the ASX by Dakota in accordance with the requirements of the JORC Code.
Asgard and Slipstream will also enter in to a consultancy services agreement with Dakota for a fixed term of 12 months to provide geological and exploration consultancy services for the introduction of new projects to Dakota. Consideration for the consultancy services agreement will be A$200,000 payable per annum in monthly instalments to Asgard and Slipstream on the basis of a 49:51 split respectively.
As part of this transaction, Ariana is assigning its Exploration Manager, Dr. Francis Wedin to Dakota where he will take up the position of Executive Technical Director. Dr. Wedin is very well placed to develop the lithium strategy for Dakota both within Western Australia and, in the future, potentially in Turkey having gained specific exploration experience in both environments over the course of the past eight years.
Dakota will complete a placement of up to A$3.6 million in two tranches to be underwritten by Argonaut Capital Limited, to fund exploration on the tenements. Tranche 1 for A$524,490 before expenses will be raised without the requirement for shareholder approval and will commence immediately. Tranche 2 will require shareholder approval and will aim to raise A$3,075,510 before expenses. The funds raised from this placement will be applied in part to fund the acquisition of the tenements and their exploration.
Ariana Resources plc
Tel: +44 (0) 20 7407 3616
Michael de Villiers, Chairman
Kerim Sener, Managing Director
Beaumont Cornish Limited (NOMAD)
Tel: +44 (0) 20 7628 3396
Roland Cornish / Felicity Geidt
Beaufort Securities Limited (Joint Broker)
Tel: +44 (0) 20 7382 8300
Loeb Aron & Company Ltd. (Joint Broker)
Tel: +44 (0) 20 7628 1128
IFC Advisory (Financial PR)
Tel: +44 (0) 20 3053 8671
About Ariana Resources:
Ariana is an exploration and development company focused on epithermal gold-silver and porphyry copper-gold deposits in Turkey. The Company is developing a portfolio of prospective licences selected on the basis of its in-house geological and remote-sensing database, on its own in western Turkey and in Joint Venture with Eldorado Gold Corporation in north-eastern Turkey. Eldorado owns 51% of this joint venture and are fully funding all exploration work on the JV properties, while Ariana owns 49%. The total resource inventory within this JV is 1.09 million ounces of gold.
The Company's flagship assets are its Kiziltepe and Tavsan gold projects which form the Red Rabbit Gold Project. Both contain a series of prospects, within two prolific mineralised districts in the Western Anatolian Volcanic and Extensional (WAVE) Province in western Turkey. This Province hosts the largest operating gold mines in Turkey and remains highly prospective for new porphyry and epithermal deposits. These core projects, which are separated by a distance of 75km, are presently being assessed as to their economic merits and now form part of a Joint Venture with Proccea Construction Co. The total resource inventory at the Red Rabbit Project stands at 475,000 ounces of gold equivalent.
Beaufort Securities Limited and Loeb Aron & Company Ltd. are joint brokers to the Company and Beaumont Cornish Limited is the Company's Nominated Adviser.
For further information on Ariana you are invited to visit the Company's website at www.arianaresources.com.
The principals of Slipstream, Geoff Stewart and Dale Ferguson, have a successful track record of building businesses in the resources sector. Slipstream has a global network developed over more than 30 years, and is building a strong pipeline of exploration stage investment opportunities.
Slipstream provides wholesale investors with access to specially selected exploration stage resource assets. The assets may be located anywhere in the world. A core focus is on Australasia and other regions are considered provided Slipstream has strong local partners in such regions.
For further information on Slipstream you are invited to visit the company's website at www.slipstreamresources.com.
Dakota is a minerals exploration company, with gold and copper tenements in Victoria and New South Wales. This transaction will transform the company into a strategic metals exploration company focused on discovering and developing high-grade lithium deposits in Australia.
For further information on Dakota you are invited to visit the company's website at www.dakotaminerals.com.au.