- The company has reached an agreement to sell the investment in Kings of the North Corp to St George’s
- The COVID-19 pandemic had made the scenario difficult for the company to manage and effectively develop the investment in KOTN from the United Kingdom
- As per the agreed deal, St George’s will issue 1,500,000 new shares to company and would transfer 2,500,000 warrants exercisable at Canadian $0.185 until 28 February 2021
- The company will now be focussing on its two exploration licences of Nkoteng and Dehane in Cameroon
BWA Group Plc will now be focusing fully upon the development of its exploration licenses in Cameroon in rutile sands and related minerals as the company has reached a conditional agreement with St George’s Eco-Mining Corp to sell the investment in Kings of the North Corp (KOTN) to St George’s.
BWA Group, which was incorporated way back in 1932 as a textile company in Lancashire has evolved to a mining investment company, which seeks to develop its mining exploration permits for rutile sands in Cameroon through its wholly-owned subsidiary BWA Resources (UK) Limited. The company which is focused on enhancing its mineral exploration licences split between Canada and Cameroon at various stages is listed on London’s AQSE Growth Market and trades with a ticker symbol BWAP. The group has developed a robust portfolio of exploration permits in the last five years, which was in line with its primary motive to generate value for its shareholders.
Disposal of investment in Kings of the North Corp
The COVID-19 pandemic had an immediate effect on the global economy and across all the industries, including mining. The initial impact was on the day-to-day operations. BWA Group also had to face the brunt as due to the pandemic and the different restrictions imposed, it became impossible for the company to manage and effectively develop the investment in KOTN from the United Kingdom.
In view of this, BWA has reached a conditional agreement with St George’s that it, along with the other original KOTN shareholders, will acquire the whole of the Company’s stake in KOTN. The agreement between BWA and St George’s will be implemented by means of a cancellation of the unconverted element of the Convertible Unsecured Loan Notes amounting to £4.3 million issued to the original vendors.
It has also been agreed that St George’s will issue 1,500,000 new shares to company and would transfer 2,500,000 warrants exercisable at Canadian $0.185 until 28 February 2021. While BWA expects the deal to be completed by 31 August 2020, St George’s will retain its equity interest in BWA amounting to some 21 per cent.
Background of the Acquisition of Kings of the North Corp
BWA Group Plc acquired the Canadian company the Kings of North Group (KOTN) in 2019. According to an independent report by SRK Exploration Services, the five KOTN Canadian properties were valued at £4.66 million. Winterhouse, Helmo North, Nova Gold, Isouskostoc and Villebon are the company's five mineral explorations license in Canada.
SRK reportedly indicated high levels of prospectivity in several of the claim areas before purchase, which has been fully supported in recent months by announcements of successful strikes on immediately adjacent claims by other companies. Current work has also indicated the possibility of other, higher-value metals.
Company to Focus on Exploration Licence at Cameroon
BWA Group PLC was granted two exploration licences in Cameroon in December 2019 (Nkoteng permit 637) and March 2020 (Dehane permit 636), which covered a total of 620 square kilometres approximately. The cost of Cameroon rutile operations is low, both in terms of exploration and capex costs. Most importantly, here the license of the company enables it to prospect for gold, zircon, ilmenite, kyanite and other commodity minerals, apart from rutile sands.
The company will be evaluating the viability of commercial exploitation of rutile sands, and other related minerals like ilmenite, kyanite and zircon with the help of the Nkoteng exploration licence. It is spread across an area of 497 sq.km and includes a financial commitment of around £0.65 million. As expected by the company, the licence value would more than adequately support the valuation of the expenditure to date in the company's accounts.
The exploration licence at Dehane spread across an area of 132 sq.km, has widened the company's scope of research for rutile sand; a mineral used mainly in the production of titanium metal. Besides this, the site is also expected to have a presence of the precious metal gold and other minerals like ilmenite and kyanite, for which the company is planning to research, to find out the feasibility of their commercial exploitations.
The impact of the Covid-19 pandemic has been devastating and none of the industries was spared from its adverse impact, including mining. The lockdowns imposed in different parts of the globe made the operations of different companies difficult. Apart from adopting the social distancing measures, closure of sites was also seen, and the companies tried maintaining their operations with minimal staff. Cameroon had also been affected by the Covid-19 pandemic, but the highly qualified staffs of the company have been able to keep the operations going under remote guidance from the United Kingdom. BWA Group Plc’s decision to sell the investment in Kings of the North Corp can be called a most viable and prudent approach in the present scenario, as the disposal of the KOTN assets would give greater visibility, and the company will be able to fully concentrate on the development of its Cameroon exploration licenses, under the well experienced and versatile management team.
The stock of the BWA Group Plc (AQSE: BWAP) last reported at GBX 0.70 on the AQSE Growth Market on 26 August 2020, its 52-weeks high price, while the 52-weeks low price stood at GBX 0.10.