Greenland Minerals Finalises Full Ownership of Kvanefjeld Multi-Element Project with Equity-Based Transaction
The information in this report that relates to exploration targets, exploration results, geological interpretations, appropriateness of cut-off grades, and reasonable expectation of potential viability of quoted rare earth element, uranium,and zinc resources is based on information compiled by Mr Jeremy Whybrow.
- Vallejo-Fairfield, CA (1888PressRelease) August 08, 2012 - Greenland Minerals and Energy Ltd ("GMEL" or "the Company") is pleased to announce that it has finalised an agreement with Westrip Holdings ("Westrip") and Rimbal Pty Ltd ("Rimbal") to complete the acquisition for the outstanding 39% of the exploration license (EL 2010/02) that contains the Kvanefjeld, Sørensen and Zone 3 deposits, with an equity-based transaction.
In order to complete the acquisition GMEL was required under the original agreement (August 2011), to pay AUD $39M in cash to Westrip/ Rimbal, in addition to issuing 7,825,000 shares, and 5,000,000 options (ex $1.50).
Under the new equity-based terms, the cash component of the original agreement can be finalised through the payment of $5M AUD to Westrip/Rimbal, in addition to issuing sixty seven million ordinary shares in GMEL, priced at $0.45/share. The equity component of 7,825,000 shares from the original agreement remains, taking the total number of shares issued to complete the acquisition to 74,825,000. The agreement is subject to shareholder approval, with completion scheduled for 5 business days following approval.
Post-finalisation the shares issued in order to complete the acquisition of the outstanding 39% of the company's core asset, the Kvanefjeld multi-element project, will represent 15.4% of the Company's issued capital (not inclusive of the required $5M cash payment).
The board firmly believes that the terms outlined above represent a highly favorable outcome, and one that offers the least-dilutive path to finalizing the acquisition of the outstanding 39% of the Kvanefjeld project. The equity terms agreed upon by all parties reflect continued advances in the Kvanefjeld project including the introduction of a uranium-licensing framework for Kvanefjeld in late-2011, major resource expansions, and strong outcomes of the Kvanefjeld pre-feasibility study, released in May 2012.
The Company is looking to make a decision on the preferred funding option to meet cash requirements in the coming weeks. GMEL is well-advanced in pursuing a number of options. The agreement outlined herein sees the cash required to complete the acquisition reduced from $39M to $5M; a position that places GMEL in a considerably stronger position.
Importantly, the move to 100% of the Kvanfjeld project allows the Company to focus on structuring investment opportunities for potential strategic partners to participate in the development of the Kvanefjeld project.
To read the full ASX announcement go to http://www.ggg.gl/docs/ASX-announcements/Amended-settlement-to-move-to-100-ownership-of-Kvanfjeld.pdf.
ABOUT GREENLAND MINERALS AND ENERGY LTD.
Greenland Minerals and Energy Ltd (ASX - GGG) is an exploration and development company focused on developing high-quality mineral projects in Greenland. The Company's flagship project is the Kvanefjeld multi-element deposit (Rare Earth Elements, Uranium, Zinc), that is rapidly emerging as a premier specialty metals project. An interim report on pre-feasibility studies has demonstrated the potential for a large-scale multi-element mining operation. For further information on Greenland Minerals and Energy visit http://www.ggg.gl or contact:
Roderick Mcillree Christian Olesen (DK)
Managing Director Rostra Kommunikation
+61 8 9382 2322 +45 (0)3336 0429
Greenland Minerals and Energy Ltd will continue to advance the Kvanefjeld project in a manner that is in accord with both Greenlandic Government and local community expectations, and looks forward to being part of continued community discussions on the social and economic benefits associated with the development of the Kvanefjeld Project.
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