TIDMNEO
RNS Number : 8630S
Neo Energy Metals PLC
09 November 2023
Neo Energy Metals plc / EPIC: NEO / Market: Main Market of the
London Stock Exchange
9 November 2023
Neo Energy Metals plc
('Neo Energy' or 'the Company')
First Day of Dealings
Accelerating an advanced, low-cost uranium project towards near
term production
Neo Energy Metals plc (previously Stranger Holdings plc), the
near term, low-cost uranium developer, is pleased to announce that
at 08.00 today its ordinary shares will commence trading on the
Main Market for listed securities of the London Stock Exchange plc
('LSE') under the ticker NEO.
As part of a Reverse Take-Over ('RTO') process, the Company
raised GBP4.9 million gross of fees and costs through a
Subscription for Shares and a Placing of Shares at 1.25 pence per
Ordinary Share. The Enlarged Share Capital following Admission will
be 1,216,371,468 ordinary shares giving the Company a market
capitalisation of c.GBP15m.
OVERVIEW
New strategy - to become an important supplier to the
fast-growing uranium sector
-- Initial focus on Henkries, an advanced, low-cost uranium
project in the Northern Cape Province of South Africa with a clear
pathway to production.
-- Current estimated mineral resource of 4.7 million pounds of
uranium, but wide open for potential new uranium discoveries given
less than 10% of prospective ground has been fully tested.
-- +US$30m of historical exploration, drilling, test-pitting and
mining, metallurgical testwork and pilot plant work and feasibility
study completed.
Robust market dynamics - one of the most significant and
strategic modern commodities
-- A clean, safe, reliable, and economic energy source expected
to play an increasingly significant role in the generation of green
energy.
-- Fragile supply chain with significant increases in uranium price forecast.
-- The industry needs to at least double its development
pipeline of new projects by 2040 to avoid potential supply
disruptions.
Corporate - positioned for growth
-- Raised GBP4.9 million gross of fees, with funds to be used to
complete an updated feasibility study and target an increase in
Mineral Resources at Henkries.
-- Board and team strengthened to support new strategy.
Neo Energy CEO Sean Heathcote said, "Neo Energy commencing
trading on the LSE as its first uranium explorer is the culmination
of a great deal of work by many people. With this milestone
reached, we have an extremely exciting opportunity to fast-track
our low-cost, near-term Henkries Uranium Project located in the
Northern Cape Province of South Africa towards a development
decision within two years. In line with this, our next steps
include increasing the Project's Mineral Resources, which is highly
probable as less than 10% of prospective ground is fully tested,
and updating the initial, positive feasibility study.
"We have joined the market at an opportune time. As the
cleanest, cheapest, and safest form of mass power generation,
interest in uranium is building momentum. With circa 10% of the
world's power generation coming from nuclear, rising to almost 20%
in advanced economies, current inventories are being depleted and
no new deposits are being put into production. More uranium must be
mined to feed existing and new nuclear power plants, particularly
in Asia where 60% of the new global reactors are under
construction. The upside for uranium companies such as Neo Energy
is therefore clear.
"Given the high volume of workstreams already underway and
planned, we look forward to updating the market regularly and are
confident that Neo Energy will deliver significant value to all
stakeholders."
DETAILS
Neo Energy holds up to a 70% interest in the Henkries Uranium
Project ('Henkries' or 'the Project') in the Northern Cape of the
Republic of South Africa. This 742km(2) uranium project with an
estimated mineral resource of 4.7 million pounds of uranium has
been subject to extensive historical exploration activities as well
as a feasibility study, which the Directors believe represents a
significant opportunity for the Company's stakeholders to gain
exposure to the uranium exploration and mining sector.
The other 30% interest is owned by Wavecrest Proprietary Capital
Limited, a company registered in the Republic of South Africa, and
which holds its interest in accordance with South Africa's Broad
Based Black Economic Empowerment legislation.
Neo Energy's strategy is layered on a two-year development
approach to generate cashflow from Henkries with a view towards
building a longer term (8-year) exploration and portfolio growth
strategy to develop the highly prospective Northern Cape Region of
South Africa and, potentially, broader regional expansion into
energy metal property holdings globally.
Notably, the Company plans to explore additional minerals of
significant intrinsic value to the global de-carbonisation drive
such as lithium, graphite, copper, lead, and zinc, should they
occur on properties under investigation. The Competent Persons
Report ('CPR') annexed to the Company's Prospectus highlights that
Henkries' basement gneisses are mostly of the Aggeneys Subgroup,
and the Marula Mining Blesberg Spodumene (lithium) deposit is less
than 30km from Henkries, suggesting the potential for further
discoveries of this nature in the region. In addition, data
obtained in May 2022 from detailed historical airborne surveys
identified what could be a significant base metal anomaly within
the Henkries property. Any discoveries worthy of investigation have
the potential to be spun out with the proceeds being used to
further fund the Company's uranium growth strategy.
Current exploration and development plans
The Directors' short-term development programme for Henkries
will be to update the feasibility study ('FS') for the existing
deposit at Henkries, which was proven to be economically
exploitable by Anglo American Corporation in 1979. The Directors'
short-term development programme will comprise the detailed set of
quarterly activities encompassed in the Working Capital Expense
plan, which will take between 18 months and two years to complete
and include to the following activities:
-- completion of geophysical traverses to prove up resistivity
method of identifying most promising ground for drilling;
-- infill drilling to upgrade the deposits at Henkries Central
and North to an appropriate amount of indicated and measured
resources for a FS;
-- exploration drilling to increase the size of the resource to
over 10Mlbs contained uranium looking at the highly prospective
anomalous targets in Henkries South and Kabib;
-- update of MRE to incorporate the first two years Measured Resources for production;
-- completion of initial phases of metallurgical test-work to
update the recovery projections using modern technology;
-- completion of an Environmental Impact Assessment ('EIA') and
consultation with interested and affected parties;
-- development of options for potential acquisition of
surrounding prospecting rights also found to have highly
prospective ground;
-- completion of the Preliminary Economic Assessment ('PEA') for
the Project to determine the optimum design and cost estimations
for the Company's capital expenditure, operating expenditure, and
net present value, and internal rate of return internal
projections; and
-- provision of development schedule for a front-end engineering
design ('FEED') phase that will determine the financing requirement
for shareholder/financial institutional review.
Once the FS has been updated, the Company will move into the
development phase, where various financing options will be
explored. It is envisaged that a small modular plant will be
constructed initially to exploit the deposit at Henkries, which can
either be expanded on once more deposits have been developed or
utilised to extend the life of mine/plant operations beyond that
envisaged for Henkries.
The future mining of the Henkries orebody is seen as being
relatively straightforward and would not require any drilling and
blasting. The initial thoughts on mining the ore, the majority of
which sits between 5-8m below surface, would be a very low cost
bulldozer based, strip mine and rehabilitate on a rolling horizon
basis. During the updating of the FS, additional metallurgical
testwork will be undertaken. Uranium extraction technology has
significantly advanced since 1979 and resulting efficiencies may
improve process recoveries.
The Directors believe these gains along with additional
infrastructure, and market considerations, will support further
improvement of the PEA and future development phase outcomes. Once
in production, it is intended to transfer mined yellowcake to
licensed storage facilities known as 'converters'; there are only a
few locations worldwide licensed to store and further process
yellowcake. At the converter facility, the yellowcake is quality
tested for impurity levels and any penalties are applied to
valuation. Afterwards, further physical movement is limited to
selected enrichment and fuel manufacturing facilities since
downstream sales of further products are generally made as book
transfers between the various conversion sites.
Present demand and outlook
Nuclear power is seen by the global energy markets as a key
component in the overall transition towards a low or net-zero
carbon, lower cost, sustainable energy economy. Furthermore, during
the transitional phase, governments around the globe are
increasingly keen to promote investment into new technologies to
facilitate more prevalent and flexible deployment of nuclear power,
such as smaller, modular reactors. In the Directors' view, these
concerns will encourage a greater demand for enriched uranium and,
as a result, triuranium octoxide ('U3O8'), one of the more popular
forms of yellowcake .
This demand will likely be further propelled by increased
electricity needs. The decarbonisation of the world's energy
ecosystem will go hand-in-hand with the anticipated electrification
of heating and transport. The Directors expect that electric-based
heating solutions (like heat pumps and infrared) will increase,
whilst gas-based central heating will decline and there will be a
projected 1.6bn electric cars in use by 2050, as governments
regulate production of petrol-powered vehicles. As the world seeks
to shift to the net-zero economy, the Directors anticipate that
nuclear energy will play a key role, alongside renewables, in
ensuring adequate supply is sustained.
The markets for uranium are therefore global, and production is
projected to ramp at a compound annual growth rate ('CAGR') of 5%
in the mid-term, reaching 65 thousand tonnes by 2025.
A team to deliver
Jason Paul Brewer, Non-Executive Chairman , has over 28 years'
experience in international mining, financial markets, and
investment banking with a particular focus in Africa. This includes
holding senior executive positions with a number of major global
investment banks, including Dresdner Kleinwort Benson, NM
Rothschild & Sons and Investec and with listed funds management
companies focused on the mining and metals sector. He is the
founder and principal of Mayflower Capital Investments Pty Limited,
an active African focused private equity-style mining investment
company, and the Chief Executive Officer of London Listed Marula
Mining plc, which has seen a threefold increase in its share price
on the AQSE exchange over the last 12 months. He is also the
founder of the Mayflower Africa Foundation, an organisation that
aims to improve the education, health, and wellbeing of African
children through a variety of charitable programmes.
Sean Heathcote, Director and Chief Executive Officer , has over
31 years' experience in the mining and exploration industry in
Africa across a broad range of commodities including uranium, bulk
commodities, precious metals, diamonds and base metals. He has
previously held operations management positions at Billiton and
Anglo American in both the UK and Africa. He has 16 years of
executive management and directorships experience in the project
development companies of Fluor, Murray & Roberts Engineering
Solutions, GRD Minproc and Sedgman gained in over 30 countries.
During his career he has participated in the development of over
100 mineral resource projects, including 50 Feasibility Studies.
Whilst at GRD Minproc he played a leading role in securing and
delivering the DFS for the Langer Heinrich and Kayalekera uranium
projects and the subsequent EPCM contract for Phase 1 of Langer
Heinrich. His previous company directorships include positions at
GRD Minproc, Micromine, Group Five, G4S, and Kapsch Africa.
Bongani Raziya, Non-Executive Director , has over 20 years of
experience in the retail sector. He graduated as a lawyer and holds
B.A., B.Proc and LLB degrees and during the course of his career he
has held numerous directorships and board positions in South
African companies. He is currently the director of Petregaz, a
liquefied petroleum gas (LPG) aggregator, and the largest
independent LPG distributor in South Africa. Additionally, he
maintains senior operational roles at a number of other natural
resource enterprises, including a directorship at Camel Fuels Pty
Ltd, a privately owned South African energy trading operation
established in 2001, and board membership (as an alternate) at
Umsimbithi Mining. Umsimbithi Mining was founded to undertake
operations at the Wonderfontein Coal colliery and Mr Raziya was
involved as an adviser during the prospecting stage and through to
the Bankable Feasibility Study, sitting on all operational
committees. Today the mine is managed by Glencore.
Mr Raziya founded Rwenzori Rare Metals, a rare earth mine based
in Uganda. The company established and is continuing to actively
develop a significant ion absorption clay deposit at Makuutu,
Uganda, which is currently thought to rank amongst the largest
ionic clay deposits (key sources of highly prized magnetic, heavy
rare earths) outside China. Rwenzori Rare Metals is majority owned
by Ionic Rare Earths Limited, which is listed on the Australian
Stock Exchange (ASX). Finally, Mr Raziya also founded the largest
independent shareholder of Burgan Cape terminals, a refined
petroleum product storage facility situated in the port of Cape
Town.
Mr Raziya is active in Broad- Based Black Economic Empowerment
(B-BBEE) concerns and acts as an adviser on B-BBEE compliance to a
number of companies involved in natural resource extraction. He has
spent much time encouraging local entrepreneurial activity and
supporting black business leaders. He is also a member of the Young
Presidents Organisation in Cape Town.
Jackline Gathoni Muchai, Non-Executive Director , is a
Kenyan-based businesswoman with an understanding of East African
markets and active involvement in transactions throughout the
region. She is the founder of Gathoni Muchai Investments, a
company, which focuses on mining, natural resources and property
investments in eastern and southern Africa.
As a director of Mayflower Capital Investment Pty Limited's
Nairobi office, she currently is responsible for identifying new
investment opportunities in East Africa and assisting in the
management of the portfolio of mining investments and projects
across Kenya, Tanzania and Uganda, and liaising with key
representatives in London, Nairobi, and Perth. Ms. Muchai
concurrently project manages the activities of the Mayflower Africa
Foundation, an organisation that aims to improve the education,
health, and wellbeing of African children through a variety of
programs. Her work mostly concentrates on partnerships with donors
around the world and local initiatives like the Makimei Children's
Home in Kikuyu, Kenya. In this way the Mayflower Africa Foundation
seeks to both raise the profile and improve facilities for
charities and groups working for the betterment of the lives of
disadvantaged children.
James Longley, Non-executive Director, is a chartered accountant
whose career has been focused on venture capital, private equity
and building growth companies. His earlier career was with Arthur
Andersen, Creditanstalt-Bankverein Merchant Banking and Touche Ross
Corporate Finance. In 1990 he co-led the GBP10.5m management buy-in
of The Wilcox Group, one of the UK's leading aluminium alloy
tipping trailer manufacturers. He was also co-founder, director,
and chief financial officer of BioProgress Technology
International, Inc., a VMS and drug delivery system developer using
proprietary films, processes, and formulations. It was a NASD
quoted and regulated company from 1997 to 2002 and was subsequently
listed on AIM. He was also a co-founder, director, and chief
financial officer of PhotoBox Limited.
Charles Tatnall, Non-executive Director , is primarily involved
in advising and raising funds for small and medium sized
enterprises with varying business activities ranging from advising
investment and family wealth companies to reviewing investments and
business opportunities together with the management of personal
investments. Until 2005, he was consultant to Bolton Group plc, a
UK-listed investment company, identifying and conducting due
diligence on potential investment and acquisition opportunities
from a broad range of industry sectors. These included natural
resources, both exploration and production, electronic hardware and
software, and biotechnology. Previously he held a number of
positions with public companies in North America and Canada and was
a director and founder of several micro-cap North American listed
companies being responsible for general corporate governance and
all finance areas.
In addition, the Company has assembled a team comprising
geologists, mining engineers and metallurgists with proven track
records in successfully developing and operating mining projects
throughout Africa.
Further information on the Company, including the prospectus
published in conjunction with the RTO, can be found on its website:
www.neoenergymetals.com .
Sean Heathcote CEO sean@neoenergymetals.com
Neo Energy Metals
plc
Isabel de Salis / Paul Financial PR neo@stbridespartners.co.uk
Dulieu / Isabelle Morris St Brides Partners
Ltd
S
Notes
Neo Energy Metals plc aims to become an important supplier to
the fast-growing uranium sector. Its initial focus is on its 70%
owned Henkries Uranium Project, an advanced, low-cost uranium
project in the Northern Cape Province of South Africa with a clear
pathway to production. +US$30m of historical exploration, drilling,
test pitting and mining, metallurgical testwork and pilot plant
work has been undertaken at the Project, culminating in a published
feasibility study.
Headquartered in Nairobi, Kenya, Neo Energy is now focused on
increasing the mineral resources at Henkries from the current
estimated 4.7 million pounds of uranium, which is highly probable
as less than 10% of prospective ground is fully tested, and
completing an updated feasibility study ahead of reaching a
development decision by November 2025.
Led by a proven board and management team with uranium and other
mineral project development experience in Southern Africa, Neo
Energy's strategy is layered on a two-year development approach to
generate cashflow from Henkries with a view towards building a
longer term exploration and portfolio growth strategy to develop
the highly prospective Northern Cape Region of South Africa and,
potentially, broader regional expansion into energy metal property
holdings globally.
The team includes:
-- Jason Brewer, Non-Executive Chairman : c.30 years' experience
in international mining, financial markets, and investment banking
with a particular focus in Africa.
-- Sean Heathcote, CEO : +30 years' experience in the mining and
exploration industry in Africa across a broad range of
commodities.
-- Jackline Muchai, Non-Executive Director : one of the few
Kenyan women serving on a board within London's Main Market on the
London Stock Exchange, and CEO of Gathoni Muchai Investments.
-- Bongani Raziya, Non-Executive Director: +20 years' experience
in oil and gas and mining in Africa with various directorships held
in well-established profitable companies.
-- James Longley, Non-Executive Director: +30 years' experience
in finance, whose career has been focused on venture capital,
private equity and building growth companies.
-- Charles Tatnall, Non-Executive Director: a seasoned advisor
and fundraiser, specialising in small and medium-sized enterprises
across diverse industries.
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