Optimal is pleased to report that an agreement with Burwill Holdings of Hong Kong has been signed. Burwill is a listed mining investment and commodities trading group based in Hong Kong.
The agreement will see Burwill take a 19.67% shareholding in the company with the following terms:
* 47 million shares will be issued to Burwill at A$0.30 per share for a total of A$14.1 million
* A deposit of A$2.1 million will be paid within 5 Days of signing the agreement.
* The remaining A$12 million will be paid once the finalization of the tenement acquisition in the DRC have been completed.
* Burwill will have the right to appoint a Director to the board of Optimal.
* Burwill will have right to offtake of 40% of Cobalt production at 95% of the market price at the time of production.
* Burwill will have the right to participate in further share placements in order to maintain their holding.
The funds from this transaction will be used to fund the purchase of the two mining leases in the DRC that were mentioned in the previous update.
The company has received offers from other groups interested in taking a share placement and is currently evaluating these offers. Any further agreements will be finalized in the next fortnight and further updates will follow.
The Company would like to update shareholders on recent activities.
The Company is currently finalizing an acquisition of mining and exploration projects in the Democratic Republic of Congo (DRC) through its 100% owned DRC subsidiary Olympic Exploration (DRC) SARL.
On the 22nd November 2017, the company entered into a Purchase and Sales Agreement for the acquisition of two contiguous Mining Licenses located near Kolwezi, Lualaba Province, in the Democratic Republic of Congo. These licenses are in the main Copper and Cobalt region of the DRC.
The two tenements have both had previous exploration work and some surficial mining activity. As part of the Agreement, the Company through its subsidiary Olympic DRC had the rights to undertake a due diligence period of four months to investigate legal requirements and confirm the potential of mineralization in the tenements
The terms of the Agreement are as follows:
a. Purchase price of US$20,000,000 plus fees
b. A 10% non-dilutable ownership interest to the vendor of the properties
c. Registration of a Special Purpose Vehicle (SPV) to own the Mining Licenses.
d. Upon signing of the Agreement, a payment of US$4,000,000 was paid to the vendor to confirm the transaction. When the mining rights are transferred to the SPV by the relevant authorities an escrow account for the remainder of the funds will be setup within 30 days
e. The Government of the DRC or its mandated institution can participate in the SPV and hold up to 5% of the company where both companies will be diluted proportionally to allow for the government participation.
The company wishes to inform shareholders that the due-diligence study, including confirmation surveying, drilling and sampling were completed and, together with ongoing geological mapping and planning for future exploration phases, a total expenditure has been incurred of US$1,300,000. The due diligence work indicates that the purchase price is warranted.
Three tranches of funds have been paid to the Vendor to date:
1. a sum of US$116,000 for initial access to the properties for due diligence
2. an initial deposit of US$100,000 which will be deducted from the purchase price
3. a further deposit of US$4,000,000 which will be deducted from the purchase price for the Vendor to commence transfer of the tenure to Olympic DRC SARL
The Company has also assessed several other potential acquisition opportunities over the past nine months. In August 2017 the company assessed a property belonging to a local DRC registered entity. Five diamond drill holes were drilled on this property to test for cobalt potential. The results of this drill campaign were not significant, and the Company withdrew from the transaction.
The Company has met all of its obligations and requirements to date.
