Firering Strategic Minerals plc (LON:FRG), a producer of quicklime and explorer of critical minerals, has confirmed that it has today exercised the second tranche of the Option* to acquire a further 3.8% shareholding in Limeco Resources Limited, taking its shareholding in Limeco to 30.7%.
Yuval Cohen, Chief Executive Officer of Firering, commented: “We are pleased to increase our stake in Limeco at a time when its operational performance continues to strengthen. Sales from the first kiln are now being realised, while the second kiln remains on track to come online before year-end, with two additional kilns to follow shortly thereafter. This momentum, coupled with the exploration of further product streams, underscores our confidence in Limeco’s ability to deliver on its growth strategy as the project advances toward unlocking its full potential.”
Background
On 28 May 2024, Firering announced that it had entered into a share purchase agreement, together with Clearglass Investments Limited (“Clearglass”) and Kai Group Ltd, the then sole shareholder of Limeco (“Vendor”), to acquire an initial 20.5% of Limeco, the owner of an advanced limestone project (“the Project”) located 22km west of Lusaka in Zambia. Additionally, Firering was granted an option (as set out below) to acquire a further 24.5% interest in Limeco for an aggregate consideration of US$4,650,000 (“Option”) to potentially take its interest in Limeco to 45%.
Having completed the acquisition of the initial 20.5% of Limeco, Firering’s Option is exercisable in five tranches between July 2025 and July 2026 as follows:
· an option to acquire a 6.4% interest no later than 31 July 2025 for a payment of US$1,033,333;
· an option to acquire a 3.8% interest no later than 30 October 2025 for a payment of US$620,000;
· an option to acquire a 5.5% interest no later than 30 January 2026 for a payment of US$981,667;
· an option to acquire a 5.5% interest no later than 30 April 2026 for a payment of US$981,667; and
· an option to acquire a 3.3% interest no later than 31 July 2026 for a payment of US$1,033,333.
Exercise of second tranche of the Option
Firering has exercised the second tranche of the Option to acquire a further 3.8% interest in Limeco, taking its shareholding in Limeco to 30.7%. In accordance with the terms of the Option, the Company has made a payment of US$620,000 in consideration for this tranche.
Limeco
In its most recent published accounts (financial year ended 31 December 2024), Limeco posted a loss before tax of ZMW 222,443,499 (US$8,496,696†) on turnover of ZMW 26,296,833 (US$1,004,463†). As at 31 December 2024, Limeco had net liabilities of ZMW 2,867,291,084 (US$102,844,013‡). Liabilities include ZMW 2,914,751,858 (US$104,546,336‡) due to shareholders (“Shareholders Loan”). Following the exercise of the second tranche of the Option, Firering has increased its right to 30.7% (cUS$28.1m‡) of the Shareholders Loan.
Firering Strategic Minerals published its Interim Results on 29 September, which included an update on operations at Limeco.
Notes
* the Option was described as the “New Option” in the Company’s notification of 28 May 2024 which sets out detail of the Share Purchase Agreement and Option arrangements
† at the exchange rate of Zambian Kwacha (ZMW) 26.18 : $1
‡ at the exchange rate of ZMW 27.88 : $1
