Namibia

On 19 June 2020 Bezant announced the conditional acquisition of 100% of Virgo Resources Ltd and its interests in the Hope Copper-Gold Project in Namibia.

Hope Copper-Gold Project Acquisition: The Company has entered into an exclusive and legally binding Heads of Agreement dated 18 June 2020 to acquire 100% of Virgo Resources Ltd, incorporated in Australia (ACN 626 148 347) (“Virgo”) (the “Acquisition”). Virgo through its 100% owned Australian subsidiary Hepburn Resources Pty Ltd (ACN 624 189 162) owns i) 70% of Hope and Gorab Mining Pty Ltd incorporated in Namibia which owns EPL5796, ii) 80% of Hope Namibia Mineral Exploration Pty Ltd Incorporated in Namibia which owns EPL6605 and iii) has the option to acquire a 80% interest in EPL7170 (under application). The share and cash consideration payable by Bezant at completion of the Acquisition (“Completion”) is i) the issue of 422,062,525 new ordinary shares of 0.002 pence each in the capital of the Company (“Bezant Shares”) at a deemed issue price of 0.2 pence per Bezant Share (“Ordinary Shares Consideration”), ii) £135,000 to be settled by the issue of new Bezant Shares based on the share price on the day of settlement (“Asset Sellers Consideration”); and iii) cash of £85,600 (the “Consideration”). The Acquisition is subject to various Conditions Precedent detailed below including a 30 day due diligence period and Bezant and Virgo obtaining all necessary regulatory approvals or waivers and shareholder approvals pursuant to the AIM Rules or any other laws or statute. Highlights of the Acquisition are:

  • Hope Copper-Gold Project is in the Matchless Copper Belt in Namibia and has a 10.2 million tonnes JORC category grade of about 1.9% copper and 0.3 g/t of gold (approx. 30% resource tonnage classified in the “indicated” Mineral Resource category with the balance in the “inferred” Mineral Resource category).
  • Namibia is a safe country with good copper and zinc potential. The area under license is 92,310 ha with an application pending for a further 30,960 ha with the application pending being contiguous with EPL5796 and EPL6605. The project area has good infrastructure and a history of successful mines owned by major mining companies.
  • Ordinary Shares Consideration to be issued at Completion is at a premium to the current Bezant share price. At Completion the Company will issue i) 422,062,525 new Bezant Shares, at a deemed issue price of 0.2 pence per Ordinary Share being a premium of 67% per cent. to the closing middle market price of 0.12 pence on 18 June 2020, being the latest practicable date prior to the announcement of the Acquisition; and iii) £135,000 to be settled by the issue of new Bezant Shares of 0.002 pence each based on the Company’s share price at the date of settlement. This would for illustration be approximately 112,500,000 based on an issue price of 0.12 pence being the closing middle market price on 18 June 2020.
  • The Acquisition is subject to a 30 day due diligence period.

Hope Copper-Gold Project further information

The information on the Hope Copper-Gold Project has been sourced from the geology and resource estimate competent persons report prepared by Measured Group Pty Ltd for Virgo Resources Limited on 18 October 2019.

Project Area: The Hope Cooper-Gold project (EPL5796) and adjacent tenures EPL6605 and EPL7170 (under application), are located in central Namibia approximately 100 km to the south west of Windhoek, the capital of Namibia, and about 120 km to the south east of the major African port of Walvis Bay. EPL 5796 covers an area of 345 km2 , whilst EPL 6605 and EPL 7170 cover an area of 579 km2 and 310 km2 respectively.

JORC Resource: The Hope Copper-Gold cover approximately 1,200 km2 of the highly prospective Matchless Copper Belt. The project contains a combined gross mineral resource of 10.18Mt at 1.89% Cu and 0.3 g/t Au at 0.7% cu cut-off reported in accordance with the JORC code (2012) with 192kt of contained Cu and 3,190kg of contained Au. Approximately 30% of the Mineral Resource tonnage is classified in the “indicated” Mineral Resource category with the balance in the “inferred” Mineral Resource category and was based on 339 drill holes for a total of 63,855 metres.

Ownership and location: The tenures are located in the Namib Desert of Namibia within the Swakopmund District, Erongo Region accessible by well-maintained gravel roads. EPL5796 is held by Hope and Gorob Mining (Pty) Ltd which is 70% owned by Hepburn Resources Pty Ltd (100% owned subsidiary of Virgo) and 30% owned by a local partner.. EPL6605 is held by Hope Namibian Mineral Exploration (Pty) Ltd, which is owned 80% by Hepburn Resources Pty Ltd and 20% by a local partner.

Regional Geology: The area covered by the Hope Copper-Gold Project is characterised by superficial quaternary sand and gravel overlying the Swakop Group of the Damara Supergroup. The area is dominated by massive mica schists of the Kuiseb Formation of the Pan-African Damara Orogen.

Previous Exploration: EPL5796: whilst significant expiration has been completed on the area the primary focus has been on the known prospects mainly due to the fact that they outcrop and are still open at depth. This work has led to a sound understanding of these copper gold prospects but has left the vast majority of the area unexplored, especially by modern exploration techniques. EPL6605 and EPL710 contains the Niedersachsen Cluster which includes three previously discovered copper prospects (Niedersachsen, Aros and Kobos) within EPL 6605 and one copper prospect situated in EPL7170 (Schlesien, situated close to the north-eastern border of EPL 6605).

EPL Licences: Exclusive Prospecting Licences such as EPL5796 and EPL6605 allow searching, whether by way of excavations or otherwise, for minerals or group of minerals with a view to delineating or evaluating deposits or concentrations of any such a mineral or group of minerals. EPL 5796 is for base and rare metals and precious metals and EPL 6605 is for base and rare metals: dimension stone, industrial minerals; precious metals. An EPL is issued for 3 (three) years and may be renewed twice for a period of 2 (two) years per renewal and shall not expire during a period when an application for renewal has been lodged no later than 90 days before the expiry date. EPL 5766 was issued on 18 June 2015 and the expiry date of its first 2 (two) year renewal is 16 September 2020 and an application was submitted for a second 2 (two) year renewal on 16 June 2020. EPL 6605 was issued on 26 September 2018 and its initial 3 (three) year term expires on 25 September 2021.

Key Terms of the Acquisition

Due Diligence Period: The Heads of Agreement was entered into on 18 June 2020 and is subject to a 30 day due diligence (“Due Diligence Period”) during which Bezant is able to complete its due diligence and has the right to withdraw from the Acquisition at its discretion.

Consideration: The Consideration due to be settled by Bezant on completion of the acquisition is to be settled by;

  1. £85,600 to be paid in cash;
  2. the issue of 422,062,525 new Ordinary Shares at a deemed issue price of 0.2 pence per Ordinary Share being a premium of 67% per cent. to the closing middle market price of 0.12 pence on 18 June 2020, being the latest practicable date prior to this announcement (“Ordinary Shares Consideration”),
  3. £135,000 to be settled based on the Bezant share price at the date of settlement. This would for illustration purposes be approximately 112,500,000 based on an issue price of 0.12 pence being the closing middle market price on 18 June 2020 (“Assets Sellers Consideration”)

Bezant will also issue 98,361,250 unlisted Options which vest on 1 August 2021 and expire on 31 August 2023 with an exercise of 0.30 pence which represents a premium of 150 per cent. to of 0.12 pence being the closing middle market price on 18 June 2020.

Deferred Consideration: If within 36 months from completion there is a total Mineral Resource (as defined in the JORC code (2012 addition)) (Mineral Resources) on any of the current or future projects of Virgo of 400,000 tonnes of contained copper, Bezant will issue a further £400,000 worth of Bezant shares based on the 10 day VWAP of the Bezant share price at the time of this milestone being achieved (“Deferred Consideration”).

Conditions Precedent: The Acquisition is subject to the following conditions precedent:

  1. Bezant completing due diligence to its satisfaction during the Due Diligence Period;
  2. Bezant obtaining all necessary regulatory approvals or waivers and shareholder approval pursuant to the AIM listing rules, or any other law or statute (including, but not limited to England and Wales) and all third-party approvals, consents and necessary documentation required to complete the Acquisition;
  3. Virgo obtaining all necessary regulatory approvals or waivers and shareholders’ approval is pursuant to any law or statute (in Australia) and all third-party approvals, consents and necessary documentation required to complete the Acquisition;
  4. Vendors signing the necessary documents to transfer their Virgo shares, Virgo unlisted options and Virgo deferred consideration performance shares to Bezant;

Lock up and Orderly Market: The Ordinary Share Consideration, the Asset Sellers Consideration and the Deferred Consideration (if issued) (the “Shared-based Consideration”) will be subject to orderly market trading and release schedule is as follows;

  1. 25% of the Share-based Consideration will be freely tradable on Completion and Settlement
  2. 25% of the Share-based Consideration will be freely tradable after six (6) months from Completion and Settlement
  3. 50% of the Share-based Consideration will be freely tradable after twelve (12) months from Completion and Settlement

Ongoing Project assistance: At Completion Bezant will enter into a business relationship and general management agreement with Christian Cordier or his nominated business entity for £2,750 per month. Bezant will also negotiate in good faith with the Namibian vendor a management agreement in his role as country representative responsible for managing and maintaining communication and relationships with all relevant government departments including the mines department.

Representations and warranties: The Heads of Agreement also contains certain commercial and other representations and warranties customary for a transaction of this nature.

Further information on Virgo: Virgo Resources Ltd was incorporated in Australia on 23 May 2018 (ACN 626 148 347) and owns 100 per cent of its Australian subsidiary Hepburn Resources Pty Ltd (ACN 624 189 162) which in turn owns i) 70% of Hope and Gorab Mining Pty Ltd incorporated in Namibia which owns EPL5796 , ii) 80% of Hope Namibia Mineral Exploration Pty Ltd Incorporated in Namibia which owns EPL6605 and iii) has the option to acquire a 80% interest in EPL7170. For the period from incorporation to 20 June 2019 Virgo Resources Ltd made an audited consolidated loss of A$432,059 and as at that date had net assets of A$331,618.

19 June 2020