FinnAust Mining LON:FAM CEO Roderick McIllree said, “This acquisition further consolidates FinnAust’s position in Greenland and sees us add quality acreage to our Greenlandic portfolio, which already includes the unusually pure Pituffik Titanium Project. Having worked in Greenland extensively over the past 10 years, my team and I have an excellent understanding of the resource opportunity in this emerging jurisdiction, the potential of which grows day by day as a result of environmental changes.
“Two of Avannaa’s projects, Disko and Kangerluarsuk appear to have high-tonnage and high-grade base metal potential. These are rare geological characteristics not often seen in the Cu-Ni-PGE & Zn-Pb-Ag mineral spaces. These projects have been of interest for some time, however as with all things, timing was crucial. Prior to Capricorn’s involvement, major mining houses such as Falconbridge and Vismand spent more than US$50 million on these projects over multiple campaigns spanning more than three decades and therefore FinnAust is now ideally positioned in Greenland with multiple, large, high-grade polymetallic targets that are drill ready as well as what we believe to be a revenue stream in the form of Pituffik. There is a long way to go, but the addition of these unique projects further consolidates our dominant position in Greenland’s emerging minerals sector.
“In terms of strategy, FinnAust will maintain its immediate focus on advancing Pituffik, which is shaping up to be a globally significant titanium asset. Before announcing details of our work programme plan for these new assets, our team will first absorb the large datasets available to ensure that all future work delivers the success we have seen at Pituffik and maximises shareholder value.”
FinnAust Mining plc, the AIM and FSE listed company with projects in Greenland, Finland and Austria, is pleased to announce that it has significantly increased its land position in Greenland via the proposed acquisition of 100% of Avannaa Exploration Limited (‘Avannaa’), a mineral exploration company with several advanced projects in the south-west of the country. The Company has agreed to acquire the entire issued and to be issued share capital of Avannaa from Capricorn Oil Limited (‘Capricorn’), a subsidiary of Cairn Energy PLC (the ‘Acquisition’).
Highlights
— Two of the projects, which have been the subject of more than US$50 million of technical work prior to Capricorn’s activities by blue chip mining houses, are of particular interest:
— The 194 sq km Disko-Nuussuaq (‘Disko’) Magmatic Massive Sulphide (‘MMS’) nickel-copper-platinum project (‘Ni-Cu-PGE’)
o Detailed sulphide inclusion analysis from the Disko flood basalts show strong sulphide segregation has taken place
o The existence of a 28 tonne massive sulphide boulder assaying 7% Ni, 3% Cu & 2ppm PGE in a cross cutting dyke interpreted to have sampled an MMS conductor during emplacement, confirms the model
o Seven large scale MMS Ni-Cu-PGE conductor targets confirmed, the two largest are 5.9km long & 1.1km wide and 4.8km long & 800m wide
-- The 107 sq km Kangerluarsuk SedEx lead-zinc-silver project ('Kangerluarsuk')
o Previously drilled by Cominco then RTZ, historical results include 41% Zn, 9.3% Pb and 596 g/t Ag
o 2 large scale drill ready SedEx targets located in favourable topography
— Projects complement FinnAust’s stated strategy of acquiring low cost, high quality assets – both have minimal exploration commitment and low administrative holding cost due to historical expenditure credits
— Primary focus to remain on delivering production at Pituffik Titanium Project in Greenland (‘Pituffik’) – bulk sampling targeted to commence in 2017
— Acquisition price of GBP500,000 to be satisfied through the issue of new ordinary shares in FinnAust
— Acquisition conditional upon, inter alia, change of control approval being received from the Greenland Government
Further Information on the Acquisition
On 2 September 2016, FinnAust entered into an agreement to acquire the entire issued and to be issued sharecapital of Avannaa Exploration Limited (a company incorporated and registered in England and Wales with company number 06012477) from Capricorn Oil Limited, a subsidiary of Cairn Energy PLC for a price of GBP500,000 (the ‘Agreement’).
Under the terms of the Agreement the acquisition consideration of GBP500,000 (‘Consideration’) is to be satisfied by the issue of new ordinary shares of 0.01 pence each in the Company (‘Consideration Shares’). The Consideration Shares shall be issued at a price equal to the volume weighted average price of the Company’s ordinary shares on AIM for the trading days for the period from the date of the Agreement up to and including the date on which the necessary approvals are received from the Greenland Government, less 5 per cent.
In addition, the Company has provided Capricorn with a consideration guarantee in respect of the Consideration. In the event that there is a shortfall in realising the Consideration once Capricorn sells the Consideration Shares, FinnAust has undertaken to indemnify Capricorn by settling any shortfall in cash to Capricorn’s account as soon as reasonably practicable following notification from the Capricorn that there is a shortfall.
Furthermore, for a period of nine months from the date of the admission of the Consideration Shares to trading on AIM, any disposals of the Consideration Shares by Capricorn shall be made through the Company’s broker, with the aim of maintaining an orderly market in the Company’s shares.
Completion of the Acquisition is conditional upon, inter alia, the relevant change of control approvals being received from the Greenland Government and admission of the Consideration Shares to trading on AIM.
