Richland Resources Ltd Statement re: sale of tanzanite business (0474Q)
12 Juni 2015 - 1:30PM
UK Regulatory
TIDMRLD
RNS Number : 0474Q
Richland Resources Ltd
12 June 2015
12 June 2015
Richland Resources Ltd
("Richland" or "the Company") (AIM: RLD)
Finalisation of remaining consideration from sale of tanzanite
business
Richland Resources Ltd, the gemstone producer and developer of
the Capricorn Sapphire project, today announces the basis upon
which on 12(th) June 2015 it finalised the consideration from the
sale of its tanzanite business to Sky Associates Group Limited
("Sky Associates") the ("Sale") pursuant to the sale agreement
dated 25(th) November 2014 between Sky Associates and Richland (the
"Sale Agreement").
As previously announced Richland has already received
US$4,590,000 from the Sale:
(a) US$510,000 on the signing of the Sale Agreement recognised
in the Accounts for the year ended 31(st) December 2014; and
(b) US$4,080,000 paid to Richland on closing on 2(nd) March 2015
which was not recognised in the Accounts for the year ended 31(st)
December 2014 and will be recognised in the Accounts for the year
ended 31(st) December 2015.
Richland was, subject to any adjustments and deductions in
accordance with the Sales Agreement due deferred consideration of
up to US$510,000 on 8(th) June 2015 (the "Deferred
Consideration").
In light of such adjustments and deductions due under the Sale
Agreement and the existing and potential creditors claims and other
liabilities of the companies sold by Richland to Sky Associates
(the "Disposed Group") the two parties on 12(th) June 2015 reached
a settlement agreement (the "Settlement Agreement") whereby so as
not to prejudice the on-going negotiations of the Disposed Group
with its creditors in relation to existing and potential creditors
claims and other liabilities both parties are subject to a
confidentiality undertaking which prohibits them disclosing the
details of the Settlement Agreement to any other parties save
that:
(a) the Deferred Consideration will not be paid by Sky
Associates to Richland; and
(b) Richland and Sky have agreed that neither party will make
any further claims of any nature against the other in relation to
the Sale Agreement save for any breach of the Settlement
Agreement.
In addition, Sky Associates and Richland have agreed to amend
the terms of the further deferred consideration such that Sky
Associates will pay to Richland 15%, rather than 30%, of any
deferred consideration received by TML under the STAMICO joint
venture agreement up until 31 December 2019. Such further potential
deferred consideration otherwise remains payable to Richland in
accordance with terms of the Sale Agreement.
Commenting on the Settlement Agreement, Chief Executive Officer,
Bernard Olivier said: "The conclusion of the Settlement Agreement
concludes the sale of our Tanzanian operations and allows the group
to focus 100% on the operation of our Capricorn Sapphire project
and represents a major achievement for Richland in exiting from its
Tanzanian operations which have been loss making in recent years.
Richland now looks forward to building a gemstone sales platform
that can give customers assurance in terms of reliability of supply
and origin and the opportunity for Richland is to become a
cornerstone supplier of gemstones to a jewellery sector
increasingly focused on being able to authenticate source of
stones."
For more information please contact:
Bernard Olivier Mike Allardice
Chief Executive Officer Group Company Secretary
+61 (0) 4089 48182 +852 91 864 854
Nominated Advisor & Laurence Read
Broker (AIM)
RFC Ambrian Limited Corporate Development and
Communications Officer
Samantha Harrison +44 (0) 20 3289 9923
+44 (0) 20 3440 6800
Notes to the Editor:
Capricorn Sapphire Project Summary
The purpose-built alluvial processing plant is one of the
largest of its kind in the southern hemisphere, capable of treating
up to 200 loose cubic metres (LCM) per hour. The Capricorn Sapphire
mine consists of two new mining leases comprising about 490
hectares and associated assets and the project is 100% owned by
Richland. The mining leases contain a JORC (2004) Measured Sapphire
Resource of approximately 21.6 million grams (109 million carats)
of sapphire, based on extensive previous exploration and following
a brief period of mining by the previous owners. 'Fancy' coloured
sapphire has traditionally been recovered from the project but the
Board believes the value from Capricorn Sapphire comes from the
consistent production of standard stone types sought in the
manufacture of mainstream jewellery manufacture.
In 2015, Richland sold or closed all of its operation in
Tanzania relating to gemstone mining. Previously the Company had
operated the worlds largest and most advanced tanzanite mine. The
mine was sold as conditions in Tanzania ceased to permit us to
operate to standards of safety of employees and security of
operations which we deemed essential for an ethical business.
The development of the Capricorn Sapphire project forms part of
the Company's strategy to develop profitable gemstone operations,
utilising its experience in coloured gemstone extraction, through
efficient cost controls. The project offers a significant
opportunity for Richland to develop a low cost, coloured gemstone
operation selling fully certificated gemstones to the global market
place. Queensland, Australia is a long established area for major
mining operations, hosting one of the world's major sources for
coal. With well-established legislation and permitting for mining
in place, Queensland offers significant scope for the creation of a
major coloured gemstone hub to promote ethically mined, natural
Sapphire.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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