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.
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