WEST AFRICAN MINERALS CORP West African Minerals Corporation
("WAFM" or the "Company")
Corporate Update
2015 Budget and Issue of Equity
Following the release of the Maiden Inferred Mineral Resource Estimate for its Sanaga iron ore project in Cameroon, the Board announces that the Company has now implemented a new stream-lined budget for the Company for 2015 (the "2015 Budget") to reduce expenditure at the operational and corporate level. In particular, the 2015 Budget adopts the following operational adjustments and cash savings:
- Technical and operating expenditure in Cameroon US$350,000 for 2015 (2014: US$2,915,362)
- Land area in Cameroon reduced to 332km2 from 4,200km2 as the Company relinquishes licence area in accordance with local regulatory requirements (annual licence fees payable in Cameroon reduced pro rata)
- The Company retains licence area over all primary targets in Cameroon including resources identified by Mineral Resource Estimates at Binga, Djadom and Sanaga, and exploration targets identified at Lélé and Djadom North
- Licences in Sierra Leone relinquished thereby reducing costs in Sierra Leone to US$50,000 in the 2015 Budget for rehabilitation and wind-up
- Plinian Capital Limited appointed as operator of the Cameroon projects at a total annual cost of US$160,000 (including the services of Brad Mills, Anton Mauve and the exploration manager)
- Reduction of direct annual director fees for executive and non-executive directors of the Company from US$382,854 (in aggregate) to US$33,400
- Reduction in direct annual personnel and consultant costs in Cameroon from US$552,100 to US$236,800
- Reduced annual finance, administrative, and office management costs from US$911,670 to US$336,340
As previously announced, to reduce further the Company's cash burn-rate, the Directors of the Company will continue to receive 50 per cent. of their fees in shares of the Company, issued at the volume weighted average price of shares of the Company on AIM for the month in question.
The Company has already implemented a number of the steps agreed in the 2015 Budget and a number of the cost savings have retroactive effect and took effect from 1 January 2015.
Mr Bradford Mills and Mr Anton Mauve, directors of the Company, are interested in Plinian Capital Limited, the new operator of the Company's Cameroon based projects.
Brad Mills, President of the Company said:
"The Company is very pleased with the technical work it completed in 2014, and in particular the Maiden Inferred Mineral Resource Estimate for its Sanaga project which was completed on time and on budget. Sanaga represents a high quality iron ore resource in coastal Cameroon, close to existing rail, power and port infrastructure.
The Directors are however mindful of current market conditions, and the importance at this time of preserving cash. Our current cash position is approximately US$7 million and the 2015 Budget seeks to maintain this cash position by reducing expenses at the operational and corporate level to the absolute minimum. Each of the Directors, and the Company's service providers, have contributed to the significant cost-savings of the Company, and I take this opportunity to thank each of them for their co-operation and assistance implementing the 2015 Budget."
Upward Re-pricing of Director Options
Concurrent with the adoption of the 2015 Budget, despite the current depressed market price of the Company's shares on AIM, the Board has today resolved that all options granted to the Directors in May 2014 as set out below, representing in aggregate 3.1 per cent. of the issued share capital, shall have an increased exercise price of ten pence (the previous exercise price for the options held by directors was seven pence). This aligns the option price with the exercise price of the warrants issued to placees in January last year. All other terms of the options shall remain unchanged.
Director | Number of Options | Term (from May 2014) | Exercise Price (pence) |
Brad Mills, Director, President | 4,700,000 | 10 yrs | 10 pence |
Anton Mauve, Director, Managing Director (Note 1) | 4,700,000 | 10 yrs | 10 pence |
Gerard Holden, Non-Executive Director | 2,350,000 | 10 yrs | 10 pence |
Total | 11,750,000 |
Note 1 | The options were granted to Metallogenic Mining Limited ("MML"), a company in which Anton Mauve is beneficially interested and which provides services to the Company. |
In the Financial Report for the year ended 31 March 2014, as announced on 29 September 2014 ("Annual Results"), the Company reported that as part of cash-saving exercise implemented across the Group, the directors of the Company shall be paid 50% of their salary (and 20% in the case of Anton Mauve) by the issue of new ordinary shares ("New Shares") in arrears at an implied monthly price equivalent to the volume weighted average price ("VWAP") of the Company's shares at the end of each relevant month. The arrangements were to be with effect from 1 January 2014 and in respect of Gerard Holden from 1 May 2014.
In addition, Burnbrae Limited (which as reported in the Financial Report provides accounting, administrative and general office services to the Company) also agreed that the payment of accounting and administration fees due for the period 1 January 2014 to 31 December 2014 shall also be satisfied by the issue of New Shares, the issue price of which was to be calculated on the same basis as the Directors.
In accordance with this previously stated practice of Directors receiving New Shares of the Company as payment in lieu of fees, and as the Company is no longer in a close period following release of recent drilling and resource updates, the Board has now calculated and allotted today the New Shares due to the Directors and Burnbrae in respect of the 12 months ended 31 December 2014. The total amount owing to be settled in New Shares is £238,533, which has been satisfied by the issue of 4,420,715 New Shares (in aggregate representing 1.17% of the current issued share capital), further details of which are set out in the table below:
Director | Accrued fees to be settled in New Shares | Issue price of New Shares | No. of New Shares issued | Total Shareholding following the issue of the New Shares | % Shareholding in the enlarged issued share capital |
Bradford Mills | £51,757 | 5.4p | 958,377 (Note 4) | 43,655,233 (Note 4) | 11.45% |
Anton Mauve | £30,250 (Note 1) | 5.4p | 559,848 (Note 5) | 43,056,704 (Note 5) | 11.30% |
Jim Mellon | £149,443 (Note 2) | 5.4p | 2,759,621 (Note 6) | 26,015,591 (Note 6) | 6.83% |
Gerard Holden | £7,083 (Note 3) | 5.0p (Note 3) | 142,869 (Note 7) | 142,869 (Note 7) | 0.04% |
Notes:
Note 1 | The amount due comprises £4,250 owed direct to Anton Mauve and a further £26,000 owed toMetallogenic Mining Limited ("MML"), a company in which Anton Mauve is beneficially interested and which provides services to the Company. |
Note 2 | The amount due comprises £10,625 owed direct to Jim Mellon, £38,818 to Galloway Limited ("Galloway") and a further £100,000 owed to Burnbrae Limited ("Burnbrae") and its staff, which provides accounting, administration and office services to the Company. Galloway and Burnbraeare indirectly wholly-owned by the trustee of a settlement under which James Mellon has a life interest. |
Note 3 | The arrangements commenced on 1 May 2014. The average VWAP is therefore calculated over a different period to the other Directors. |
Note 4 | Brad Mills' interest following the issue of the New Shares comprises 1,158,377 Shares that he owns directly; and a further 42,496,856 Shares that are owned by Plinian Guernsey Limited ("Plinian"), of which Brad Mills is the controlling shareholder, and includes 10,142,858 Shares that are owned by CE Mining, which is 50 per cent. owned by Plinian. |
Note 5 | 78,405 New Shares have been issued to Anton Mauve and 481,443 New Shares to MML. Anton Mauve's interest following the issue of the New Shares comprises 78,405 Shares that he owns directly; 481,443 Shares that are owned by MML; and a further 42,496,856 Shares that are owned by Plinian, of which Anton Mauve is a shareholder, and includes 10,142,858 Shares that are owned by CE Mining, which is 50 per cent. owned by Plinian. |
Note 6 | 196,013 New Shares have been issued to Jim Mellon, 718,783 New shares to Galloway and 1,844,825 New Shares have been issued to Burnbrae. Following the issue of the New Shares, Galloway will own 23,291,082 Shares; Burnbrae will own 1,844,825 Shares; and in addition, James Mellon will be interested in a further 879,684 Shares of the Company held in his own name. |
Note 7 | Gerard Holden will hold his New Shares directly. |
The New Shares will rank pari passu with the existing ordinary shares of the Company, each of no par value. Application will made for admission of the 4,420,715 New Shares to trading on AIM, and it is expected that admission will become effective and that dealings in the New Shares will commence on or around 6 March 2015.
Following the issue of these shares, the Company's issued share capital will consist of 381,157,838 Ordinary Shares, with voting rights. This figure may be used by shareholders in the Company as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules and pursuant to Regulation 23 of the Company's Articles of Association. The Company does not hold any Ordinary Shares in Treasury.
Plinian Operator Agreement
Under the 2015 Budget, the Company has agreed to appoint Plinian Capital Limited as operator of the Company's Cameroon projects at a total annual cost of US$160,000 (equivalent to approximately £103,000). Under the operator agreement Plinian is responsible for operational management of the Company's exploration licence interests, and will account for its own executives' costs including providing the services of Brad Mills, Anton Mauve and the exploration manager (the annual salary costs of which previously were paid by the Company and amounted to US$540,000). The appointment is for an initial term of 12 months.
Brad Mills, a director of the Company, is the controlling shareholder of Plinian. Mr Anton Mauve, a director of the Company, is also a shareholder of Plinian.
For further information contact:
West African Minerals Corporation | Anton Mauve Managing Director | +44 (0) 1624 639396 |
Beaumont Cornish Limited (Nominated Adviser) | Roland Cornish Michael Cornish | +44 (0)20 7628 3396 |
SP Angel Corporate Finance LLP(Broker) | Ewan Leggat/Katy Birkin | +44 (0) 20 3470 0500 |
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