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African Battery Metals steps up activity with acquisition and placing plans (ABM)

08 Aug 2018 | by: Richard Mason

Shares in African Battery Metals (LSE:ABM) rose 0.6pc to 0.03p this morning following a bumper news release that saw the business announce two proposed acquisitions, a conditional placing, and a capital reorganisation. The firm, which focuses on developing projects in strategic battery metals, has conditionally agreed to purchase the entire issued share capital of Cobalt Blue Holdings and Regent Resources Interests.

Cobalt Blue holds four prospecting licences in Cameroon close to one of the largest undeveloped cobalt reserves in the world, as well as two prospecting licence applications. Meanwhile, Regent Resources has a right to earn-in to up to 70pc of the 380km2 Lizetta II cobalt, chrome and nickel project in Cote d’Ivoire.

The business said the purchases will strengthen its shareholder base by adding mining professionals, while also providing diversified geo-political and commodity exposure ‘providing additional re-rating potential’. African Battery will purchase Cobalt Blue and Regent Resources by issuing c.31m and c.32m consideration shares to the firms respectively. These will be subject to a 12-month lock-in agreement.

Today also saw African Battery announce a capital reorganisation to better attract new institutional investors and improve liquidity. As it stands, the business has more than 6m shares in issue, which it believes to be too many for its £2m market cap. As a result, it has decided to reduce the number of shares in issue by a factor of 100, effective today.

Finally, the business has conditionally raised £200,000 by placing shares at 3p each with shareholders and new investors. This value represents a 7.8pc discount to yesterday’s market price once the capital reorganisation has been considered. The firm said the money will be used to support portfolio development and execute a ‘rapid growth strategy’.

African Battery’s chief executive Roger Murphy said, ‘We are delighted to announce these proposed acquisitions, which are intended to fast-track our strategy to become a significant explorer, developer and ultimately producer of battery metals. The proposed acquisitions of two highly prospective nickel and cobalt assets in new jurisdictions complement our existing DRC cobalt projects and give us what the ABM board believes to be an extremely exciting portfolio. In Cameroon, we will have land adjacent to the Nkamouna/Mada project which has the benefit of an undeveloped NI 43-101 compliant cobalt-nickel resource and reserve.

‘With rapid development plans in place to advance the projects up the development curve and build value, we look forward to strengthening the board with experienced specialists in the sector and to gaining key new shareholder support from several recognised and successful mining entrepreneurs with strong international track records including Stephen Dattels and Ian Stalker. With the proposed new team, high profile backing and a defined development path for both our existing portfolio and identifying additional opportunities, we believe we have the right platform to build shareholder value and deliver a leading battery metals-focussed resource company.’

Author: Daniel Flynn

Disclosure: The author does own shares in the company mentioned in this article

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