BMR acquires Star Zinc
StockMarketWire.com - BMR Group has acquired Star Zinc through a joint venture agreement with Galileo Resources.
BMR, on behalf of its newly incorporated wholly owned subsidiary, Enviro Zambia, said it had entered into an agreement with Bushbuck Resources Limited to complete the acquisition of Star Zinc for a cash consideration of $1,000,000, of which a $130,000 payment had already been paid.
BMR said: "The first tranche of the remaining consideration of $400,000, together with VAT of $160,000, was paid on 4 September 2017, with the balance, to be satisfied in cash, as to $300,000 by no later than 28 November 2017 and as to $170,000 by 28 February 2018.
"BMR has also already paid the property transfer tax amounting to 10% of the aggregate consideration.
"As security for the payment of the whole of the remaining consideration, Bushbuck has been granted a charge over (i) the removable assets of BMR's wholly-owned subsidiary, Enviro Processing Limited, which owns all of the assets at Kabwe, BMR's principal operations, bar the property, and (ii) $570,000 of new ordinary shares of BMR at a discount of 25% to the prevailing market price."
The company announced on 31 August that it entered into a binding term sheet concerning a joint venture with Galileo, a UK focused resource company quoted on AIM, whereby Galileo advanced to the company $591,600 (at an interest rate of 12% per annum) primarily to enable the group to finance the initial consideration payable to Bushbuck.
Upon completion of the acquisition of Star Zinc, Galileo subscribed for a 51% equity stake in Enviro Zambia which was satisfied by the cancellation of the loan of $591,600. BMR said: "Galileo will undertake an 18 month work programme at a cost of $250,000 (in respect of which it has placed $100,000 in escrow), using reasonable endeavours to complete a preliminary economic assessment of Star Zinc, following which further new shares in Enviro Zambia will be issued to Galileo to increase its aggregate equity interest therein to 85%.
"BMR shall have the right to reduce the interest of Galileo from 85% to 75% on payment of $150,000 to Galileo, through the repayment of the $100,000 held in escrow plus a $50,000 arrangement fee within 90 days of the date of completion of the joint venture agreement, (failing which the US$100,000 is released to the Company)."
Story provided by StockMarketWire.com