Namibia Rare Earths set to acquire 95 per cent of Gecko Namibia’s exploration portfolio
Namibia Rare Earths has entered into an agreement with Gecko Namibia to acquire its 95% interest in a portfolio of exploration properties consisting of 14 exploration prospecting licenses four of which are pending, one mineral deposit retention license and Gecko Namibia's rights under an option agreement to acquire a 60% interest in a further exploration prospecting license which interest may, subject to the terms of the option agreement, be increased to 80%.
The transaction now provides Namibia Rare Earths with a high quality, diversified portfolio of critical metals and at the same time has secured a highly experienced strategic partner.
Gecko Namibia and its subsidiaries are substantial participants in the Namibian resource sector with 327 employees and a proven track record in the mining industry.
The Gecko Namibia portfolio of properties will expand the Company's commodity base from solely rare earths to a variety of highly critical commodities including cobalt, copper, zinc, lithium, graphite, tantalum, niobium, nickel, and gold. Ground holdings in Namibia will increase from 221 km2 (Lofdal) to over 6,850 km2.
In conjunction with the Property Acquisition, Gecko Namibia and Gerald J. McConnell, Chair of the Board of Namibia Rare Earths, have each agreed to complete a private placement with the Company in the amount of $275,000 at $0.05 per share for total gross proceeds to the Company of $550,000. A total of 11,000,000 common shares of Namibia Rare Earths will be issued pursuant to the Private Placement.
The Property Acquisition and Private Placement are expected to close on or before January 31, 2018 and are subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the final approval and acceptance by the TSXV.
Upon completion of the Property Acquisition and Private Placement, Gecko Namibia will own 69,500,000 common shares of the Company representing 43.80% of the outstanding common shares of the Company. The Property Acquisition is conditional upon receipt of the approval of shareholders as required by the TSXV which has been obtained.
The proceeds of the Private Placement will be used to carry out work on the properties acquired from Gecko Namibia with an initial focus on advancing the Kunene cobalt-copper project and to fund general corporate requirements. The common shares of the Company issued pursuant to the Private Placement will be subject to a four-month hold period.
Namibia Rare Earths and its insiders are at arm's length with Gecko Namibia and there are no finder's fees payable in connection with the Property Acquisition or the Private Placement.
Following the closing of the Acquisition, Gecko Namibia will nominate two members to the five-member board of Namibia Rare Earths with Gerald McConnell remaining as Chair. Pine van Wyk will be appointed Chief Executive Officer of Namibia Rare Earths based in Namibia and Donald Burton will remain as President.
The transaction dramatically increases the Company's exposure to a wide variety of critical metals and minerals at various stages of development, providing a pipeline of projects spanning the spectrum from near-term discovery to preliminary economic assessment. All the projects are located in Namibia, a stable mining jurisdiction in which the Company has operated for the past seven years and where in-coming senior management have worked for over 20 years.
This diversification will provide the Company with considerable flexibility in targeting those commodities which can provide immediate shareholder value. Total expenditures of $84,000 in year one and $422,000 in year two are required to keep the entire portfolio of properties in good standing.
Operations in Namibia for all projects will continue under Namibia Rare Earths (Pty) Ltd., the Namibian operating company of Namibia Rare Earths. Project management will be streamlined through utilization of Gecko Namibia's in-country administrative and service and the appointment of Pine van Wyk as Chief Executive Officer.
Pienaar-Schalk (Pine) van Wyk, Managing Director of Gecko Namibia will be appointed Chief Executive Officer of Namibia Rare Earths based out of Namibia. Pine joined Gecko in 2008 bringing over 25 years of extensive process and project management experience to the Gecko Group.
Prior to joining Gecko Namibia he worked for Rossing Uranium as Engineering Manager and later with Paladin Energy at the Langer Heinrich uranium mine where he held the positions of Operations Manager and Business Development Manager.
As Managing Director for Gecko Namibia, Pine has developed a strong network of contacts throughout the mining sector and with government agencies in Namibia. In addition to his professional qualifications as a Metallurgical Engineer from Tshwane University of Technology (Pretoria), Pine holds a Bachelor of Commerce from the University of South Africa and Masters of Business Administration from University of Bloemfontein with a focus on project management.