BWA Group: Acquisition of Kings of North Project and its Technical valuation by SRK

AQSE Growth Market Traded Investment Company, BWA Group PLC has successfully extended its gold exploration footprints with the acquisition of the Canadian Miner Kings of the North Corp (KOTN) at a price consideration of £4.66 million. The acquisition is in line with the company’s strategy to forge a sizeable investment in the minerals sector that has the potential to enhance shareholders value.

Formerly a subsidiary of Canadian Securities Exchange-listed St-Georges Eco-Mining Corp (SX), Kings of the North Corp is the owner of five groups of mineral exploration licences in Quebec and Ontario, principally in respect of gold. The cost of acquisition was reportedly satisfied by the BWA Group through the issue of zero-coupon convertible loan notes to vendors which can only be converted to equity at a market price after the first year but have been capped at 29 per cent of total voting rights of BWA.

Directors of BWA believe that the acquisition of Kings of the North Corp represents the material investment that the company had been looking for, to build upon its interests focused on the mining sector in addition to its existing investment in BWA Cameroon.

The consideration paid to Kings of the North Corp was determined on the basis of an independent technical valuation report prepared by SRK Exploration Services Limited on KOTN’s 5 mineral licences that include:

S.No

Name

Province

Commodity

1

Hemlo North Limb

Ontario

Gold

2

Isoukustouc

Quebec

Nickel-Copper-Cobalt

3

Villebon

Quebec

Gold -Nickel-Copper-PGE

4

Nova Gold

Quebec

Gold

5

Winterhouse

Quebec

Gold

Technical Valuation Report

SRK specialises in exploration for all metal and industrial mineral commodities, elevating projects from the earliest stage of exploration to resource drilling. It has offices in 20 countries across 6 continents providing expert services in mining, exploration and engineering fields. BWA reported that consultant SRK had valued each project separately using a combination of the market, cost and geoscience appraisal methodologies before arriving at a consideration of C$7.5 million (£4.66 million) for the acquisition. SRK Technical Valuation for the Kings of the North Corp’s Projects is as follows:

Preferred Value (CAN$)

Hemlo North Limb

Isoukustouc

Villebon

Nova Gold

Winterhouse

Kings of the North Portfolio

Max

2.1M

2.4M

3.0M

0.7M

0.29M

8.5M

SRK Preferred

1.5M

2.2M

2.7M

0.5M

0.26M

7.2M

Min

1.2M

2.1M

2.5M

0.4M

0.25M

6.4M

In addition to the preferred valuation, Kings of North Corp had a cash balance of C$0.3 million on the completion of the acquisition. The primary purpose of the valuation report was to gauge the worth of the projects with respect to the scientific, material and technical details on mineral exploration, production and development activities on the property.

BWA Non-Executive Chairman Richard Battersby told KalkineMedia that prior to the purchase, the report by SRK consultants indicated high levels of potential in many of the claim areas which has further been fully supported in the past recent months by reports of successful strikes on immediately adjacent claims by other companies. In addition, present work has underlined the prospectivity of other, high value, metals which were not fully considered or valued as part of the previous SRK valuation.

Overview of 5 Licence Area Groups

Let’s look at the potential and location of these 5 exploration licences held by BWA Group in Canada through the acquisition of Kings of North Corp.

  1. Hemlo North Licence Group, Ontario: Located in the Wawa Sub-Province of Superior Province, Hemlo North property reportedly have a Strong Prospectivity’ for gold. The property contains the gold-producing mines on the northeast operated by Barrick Gold Corporation and mounts to the extent of the Heron Bay-Hernia greenstone belt on the northernmost end.
  2. Isoukustouc Licence Group, Quebec: Located within the Grenville Geological Province, The Isoukustouc project holds ‘Good Prospectivity’ for PGE and nickel-copper-cobalt mineralisation.
  3. Villebon Project, Quebec: The Villebon project holds ‘Good Prospectivity’ for greenstone hosted gold, nickel, base metal, and PGE mineralisation in the area located in the Vald'Or region of Quebec, near the south-eastern margin of the Abitibi Greenstone Belt.
  4. Nova Gold Project, Quebec: Located in the Superior Province of the underexplored Ashunanipi Sub-Province, Nova Gold project area is rich in gold resource with the number of occurrences. The project is labelled with ‘Good Prospectivity’ for gold and is split into four blocks of claims.
  5. Winterhouse (Maison D’Hiver), Quebec: Winterhouse property is located in the Superior Province, which also hosts underground Eleonore Gold Mine of Goldcorp. The project area reportedly has a ‘Good Prospectivity’ for Archean greenstone hosted precious gold and base metals with a range of high-grade occurrences and historical drill intersections.

Future Strategy of BWA Group

Going forward, BWA Group aims to extend its investment in the mining sector, building on its Canadian investment in Kings of the North and also across the highly mineral-rich areas around the country in Central Africa, Cameroon. The company already holds two exploration licences at Nkoteng and Dehane for researching the feasibility of commercial exploitation of rutile sands, and other related minerals.

Whereas, in Canada, the company had targeted that work would be undertaken on all the KOTN mineral licence groups over 12 to 18 months from the time of the acquisition, i.e. September 2019.

BWA Directors are of the view that the funding of the exploration work in Canada would broadly be achieved by KOTN, raising tax-efficient investment in Canada, thus reducing the requirement for working capital for the company. In addition, St-Georges Eco-Mining Corp has reportedly agreed to continue with the responsibility minimum licence fees payment in order to maintain the retention of the legal licences to the various mining claims.

Listed on the AQSE, London, BWA stock closed at GBX 0.35 on June 3, 2020. The 52-week high/low of the stock price is recorded at GBX 0.425/GBX 0.1, respectively.

Also Read: BWA Growth Story: Cameroon Exploration Licences Exhibit Strong Future Value


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