China Natural Resources has completed its due diligence investigation with satisfactory results, and will proceed with the acquisition of Williams Minerals (Pvt) Ltd (“Williams Minerals”) by paying a deposit of US$35 million by way of promissory notes to Feishang Group Limited and Top Pacific (China) Limited (the “Sellers”) on or about April 21, 2023, pursuant to the definitive sale and purchase agreement that the Company entered into with the Sellers on February 27, 2023 (the “Sale and Purchase Agreement”).
Williams Minerals owns the mining permit for a Zimbabwean lithium mine. Under the Sale and Purchase Agreement, it is expected that the Company will indirectly acquire all interests in Williams Minerals and pay an aggregate of US$140 million by way of promissory notes and/or cash to the Sellers as an initial installment. Consideration for the Company’s “ownership” (as defined in the Sale and Purchase Agreement) of various regions of the Zimbabwean lithium mine will thereafter be calculated and paid, and such “ownership” will vest, cumulatively, region by region and over time, based on the issuance and results of subsequent independent technical reports, with the maximum consideration contemplated to be US$1.75 billion.
The subject of each independent technical report will be the quantity of qualified measured, indicated and inferred sources of lithium oxide (grade 1.06% or above in accordance with the standard under the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves) proven to be in a discrete region of the mining area. For each region of the lithium mine, until the consideration due for each region based upon the independent technical report has been paid and the Company’s “ownership” has vested, the Sellers will maintain legal possession and control, including the right to exploration, sales of lithium, and the revenue derived therefrom, as well as liability for operational costs and third-party claims.
Completion of the transaction as contemplated by the Sale and Purchase Agreement is contingent upon the satisfaction of a number of conditions, including, among other things, the issuance of independent technical reports, the actual quantity of qualified lithium oxide metal resources proven or estimated to exist in each mining area covered by the relevant independent technical report, and the Company’s full settlement of the purchase consideration in cash and restricted shares. There is no guarantee that the transaction will be completed at the anticipated valuation and terms, or at all.
Mr. Wong Wah On Edward, Chairman of the Company, commented, “We are pleased with the favorable outcome of our due diligence investigation of this potentially high value lithium mine. This payment of deposit is a necessary step towards acquiring the exploration rights to the lithium mine, as all parties remain highly motivated to complete the transaction. We are excited to be moving forward and continue to see significant opportunities to leverage our mining expertise as we continue to execute on our long-term business strategy.”
For more information about the acquisition of Williams Minerals, please see the Report on Form 6-K furnished by CHNR with the U.S. Securities and Exchange Commission (the “SEC”) on February 28, 2023.
This press release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and will contain detailed information about the company and management, as well as financial statements.
