Auplata strengthens its position in precious metals by purchasing a 4.82% stake in Osead Maroc Mining with an option, as from when Auplata will hold 5% of the share capital, to gradually purchase 100% of Osead Maroc Mining, which holds a 38.28% stake in Touissit Mining Company, a company listed on the Casablanca Stock Exchange
Through Osead Maroc Mining (OMM), Auplata will have the opportunity to become the largest shareholder in Touissit Mining Company after fully exercising the five-year purchase option, provided that OMM maintains its 38.28% stake in Touissit Mining Company
Auplata will diversify its activities in precious metals (silver) and other metals (lead, zinc) and, through OMM, will benefit from the dividend distribution policy of Touissit Mining Company, a highly profitable company whose net income for 2016 amounts to €14.6 million, corresponding to a net profit margin of 37%
The total acquisition price of the stake in OMM, if the five-year purchase option is fully exercised, is €82.9 million:
of which €4 million for 4.82% of OMM
of which €78.75 million for 95.18% of OMM
of which 75% is to be paid in cash and the balance in cash or new Auplata shares, at Auplata's option.
Auplata (Euronext Growth - FR0010397760 - ALAUP), the largest-French gold production company listed on the stock exchange, has announced that it has purchased from OSEAD, for a price of € 4 million, a 4.82% stake in the share capital of the holding company OSEAD Maroc Mining (OMM), whose sole asset is a 38.28% interest in Touissit Mining Company (Compagnie Minière de Touissit – "CMT”).
Indirect purchase of an interest in CMT
The purchase of 4.82% of the share capital of OMM for an acquisition price of €4 million was financed by the issuance of part of the OCABSA bonds (convertible bonds with warrants attached) subscribed by the investment fund Bracknor Fund Ltd on April 13, 2017 under the agreement signed with this fund. The terms and conditions of the OCABSA bond issue and the drawdown of six tranches of OCABSA bonds were detailed in press releases published on April 13, 2017, May 16, 2017, May 30, 2017, June 20, 2017, July 18, 2017 and September 5, 2017. Auplata and Bracknor Fund Ltd mutually agreed to terminate the OCABSA bond issuance agreement with effect on the date of full conversion of the sixth tranche of convertible bonds (OCA) with warrants (BSA) attached issued on August 31, 2017, detailed in a press release published on September 29, 2017.
Further to this acquisition, and if Auplata purchases more than 5% of the share capital of OMM, Auplata will benefit from an option granted by OSEAD to gradually purchase 100% of the share capital of OMM. This purchase option, of a term of five years as from the date of purchase by Auplata of more than 5% of the share capital of OMM, will therefore allow Auplata to gradually and indirectly purchase (through OMM) up to 38.28% of the share capital of CMT for a total acquisition price of €78.75 million (excluding the acquisition price for the 4.82% interest initially purchased in the share capital of OMM), of which 75% is to be paid in cash and the balance in cash or through the issuance of new Auplata shares, at Auplata' discretion.
As from when Auplata holds more than 10% of OMM, it will become a member of the Board of Directors of OMM and, if possible, the Board of Directors of CMT.
This acquisition of all or part of OMM's shares will be fully or partially financed by an issue of ODIRNANE bonds (perpetual bonds redeemable in cash and/or in new and/or existing shares) with warrants (BSA) attached, to be subscribed by the Luxembourg fund European High Growth Opportunities Securitization Fund. The terms and conditions of the ODIRNANE bond issue will be published in a simultaneous press release on October 30, 2017.
At its meeting on June 26, 2017, the Auplata Board of Directors approved the gradual purchase of all or part of OMM's shares and gave full powers to the Chief Executive Officer to complete and sign the legal documentation for this acquisition. Jean-François Fourt, as Chairman of the Board of Directors and one of the directors of 4T Commodities & Emerging Markets Fund (Auplata's largest shareholder (11.41% of the share capital) and an indirect shareholder of OSEAD), abstained from the vote.
CMT, Morocco's largest lead and silver production company
CMT is a Moroccan mining company, listed on the Casablanca Stock Exchange, specializing in the exploration, extraction and processing of base metal, precious metal and industrial metal ores. Morocco's largest producer of high-quality argentiferous lead concentrate, CMT also produces argentiferous zinc concentrate.
Originally based in Eastern Morocco and the Middle Atlas Mountains, it has a large portfolio of prospecting permits for base metals and precious metals in several regions of Morocco, consisting of 13 concessions, 18 mining permits and 35 prospecting permits spread across Morocco. The Tighza mine, the largest lead deposit with approximately 50% of the country's production of lead concentrate, and largest silver deposit with approximately 25% of Morocco's domestic production of silver (representing 1 million ounces of silver a year), make up CMT's mining assets.
CMT held shares and bonds in Auplata from February 1, 2014 to August 10, 2016. Since the latter date, CMT no longer has any capital or FINANCIAL ties with Auplata.
Concerning Auplata's governance, several of CMT's directors are also Board members of Auplata, namely Jean-François Fourt, Didier Tamagno, Manuel Lagny and Pierre Croharé.
At fiscal year-end 2016, CMT reported revenues of 424.09 million Moroccan Dirhams (MAD) (€38.2 M). Operating income amounted to MAD185.99 million (€16.75 M) and consolidated net profit amounted to MAD162.19 million (€14.6 M).
As at June 30, 2017, CMT reported revenues of MAD184 million (€16.57 M), up by 10.8% compared to 2016. Operating income amounted to MAD70 million (€6.3 M), up by 6% compared to 2016, and consolidated net profit amounted to MAD59.5 million (€5.36 M).
CMT has for many years operated a policy of significant dividend payments to its shareholders, with an average historical yield of more than 10%, and the dividends paid for fiscal year 2016 amounted to MAD80.70 million (€7.26 M). Over the last three fiscal years, the average annual dividend paid by CMT to its shareholders amounted to MAD177.6 million (€15.99 M), i.e. MAD67.98 million (€6.12 M) in respect of OMM.
CMT's capital consists of 1,681,233 shares, listed on the Casablanca Stock Exchange (MA0000011793 - CMT).
CMT: an ambitious €28 million investment plan at the Tighza site financed by the European Bank for Reconstruction and Development (EBRD)
CMT recently obtained, in late 2016, a long-term €28 million loan from the European Bank for Reconstruction and Development (EBRD) to finance the Tighza site investment plan to improve its underground mining operations infrastructure. These funds will be allocated to the construction of a new shaft in the mine's main vein (Ighraem Aoussar), producing major improvements in health, safety, environmental management and productivity, thus allowing the company to operate to the highest international standards. The construction of the new shaft has started and will be completed in 2020.
At the same time, CMT is diversifying into other metals, particularly gold. The certification work on the gold resources at Tighza, where CMT holds 7 gold mining exploration permits has been completed. Assays of representative samples from the deposit have revealed content between 4g/t and 7g/t, with good gold recovery and normal cyanide consumption.
Major synergies between Auplata and CMT
CMT intends to launch a gold production plant in 2017. Auplata will bring to CMT its geological expertise in gold exploration and its expertise in implementing cyanide-based extraction techniques. In return, with its expertise in industrial chemical processes gained through operating a floating plant at the Tighza mine, CMT will be able to support the deployment of Auplata's future industrial plants.
As an illustration of these synergies, CMT's engineers took part in the launch of Auplata's Pilot Facility on its site in the town of Rémire Montjoly, offering their complementary industrial expertise to Auplata's process engineers in 2015. The expertise acquired by the two companies will be enhanced by further collaboration during the launch of Auplata's future facilities in Dieu Merci and Yaou. Furthermore, Auplata's geologists specialized in gold exploration took part in prospection work in Morocco in 2016 and 2017 to allow mining to start on the Tighza site in 2017. This cooperation will be continued to secure the sustained operating of this site.
Financially, Auplata will benefit from the long-term dividend distribution policy historically implemented by CMT, allowing it, as and when it is able to take further stakes in OMM, to finance its future investments in French Guiana. For fiscal year 2016, the dividend paid by CMT to OMM for its 38.28% interest amounted to MAD30.9 million (€2.78 M).
Didier Tamagno, Auplata's CEO, says:
"The purchase of an indirect equity interest in Touissit Mining Company, in the scope of the gradual purchase of 100% of the share capital of its holding company, will give Auplata the possibility to acquire an asset that is historically very profitable and operates a policy of regular and generous dividends for its shareholders.
This transaction should also allow Auplata to substantially strengthen its position in precious metals through the production of 1 million ounces of silver, which currently represents more than half of CMT's revenues, and the start-up of the Tighza gold mine in the very near future.”
Based in French Guiana, Auplata is the largest French, stock-market listed gold producer. The Company has more than 700 sq km of mining permits and titles in French Guyana. Auplata operates an innovative industrial and financial strategy, aimed at developing and exploiting Guianese gold resources with the strong involvement of local players. The Company's objective is to offer sustainable exploitation for the Guianese mining industry.
Since June 2015, Auplata is a shareholder in the Côte d'Ivoire mining company OMCI, which owns two mining projects in Côte d'Ivoire.
Auplata's share capital consists of 82,800,723 shares listed on the Euronext Growth market in Paris (Euronext). ISIN: FR0010397760 – ALAUP; ICB: 1777 – Gold Mining.
For more information about Auplata, go to www.auplata.fr.