Few bits from original Aquisition FireFinch purchased 100% of...

Few bits from original Aquisition

FireFinch purchased  100% of Morila Limited
Morila Limited owns 80% of  Société des Mines de Morila SA (Morila SA)
Morila SA owns the mine
Morila SA is responsible for Closure and Rehabilitation costs.

Few layers between FFX and Morila SA

From the original Morila Aquisition Announcement on 31 August 2020;

Transaction Overview

Société des Mines de Morila SA (Morila SA), a Malian registered company is effectively owned 40% by Barrick, 40% by AngloGold and 20% by the State of Mali and Morila SA owns the mine which lies within the 211km2 Morila Exploitation Licence (Original Decree number 99 217/PM-RM dated 4 August 1999 and subsequent amendments).

The original Establishment Convention for the Licence came into force on 28 April 1992 and has a 30-year term. The Convention will be required to be extended to match the Exploitation licence expiry. For reference, Resolute Mining’s Syama mine in Mali had a similar Establishment Convention (originally BHP) extended last year.

The Company has executed a binding agreement to acquire 100% of the shares of Morila Limited, a Jersey registered company (Jersey Co), from Barrick and AngloGold. Jersey Co holds the AngloGold and Barrick 80% interest in Morila SA (Barrick and AngloGold each hold 50% interst in Jersey Co).

The consideration payable is estimated to be between US$22 and US$27 million (A$31 to A$38 million). The final consideration will be determined with reference to the closing balance of tax credits in Morila SA. It is anticipated that these tax credits will be available to offset future VAT and corporate tax payments. Morila SA has not been subject to a tax audit for 3 years and there is a risk there may be some liability arising to Morila SA after completion and when that audit is undertaken.

The Company is required to pay a non-refundable deposit of US$1 million prior to 20th September, this will be offset against the final consideration payable.

A condition precedent to closing the transaction is securing acquisition finance. A further condition precedent is that the transaction will be acknowledged without objection by the Government of Mali. The Transaction has been notified to, and discussed with, mining authorities prior to the current instability in Mali. The Vendors can waive this condition at their discretion, but only if, after the Company meeting other conditions precedent, the Government has not advised that it opposes or otherwise objects to the Transaction. No such advice has been received to date.

The parties are targeting closing of the transaction before the end of October 2020.

After completion, Morila SA will have liability for the cost of eventual closure of the mine and rehabilitation of the site. These costs are estimated at approximately US$6-8 million if the mine was closed today, however, if mine life is materially increased those potential liabilities may be larger whenever the mine is eventually closed.

Company management and consultants have visited the mine and the Company has completed technical, legal and commercial due diligence and its own Mineral Resource Estimate for Morila. Information in this release is from the Company’s examination of Morila SA records or public information. Please refer to the Competent Person statement for attribution and the footnote on page 1.

Barrick isthe operator and has agreed to work with the Company on a handover plan to ensure continuity of key mine management personnel and operations