Investment company Papillon Holdings’ prospectus, which relates to the company’s readmission on the LSE, has been approved by the Financial Conduct Authority (FCA).
The company is expected to be readmitted to the official list of the FCA and to be trading on the LSE by August 23, with a dual listing on the Frankfurt Stock Exchange.
Papillon also raised gross proceeds of about £5.5-million through the issue of placing shares.
Following the readmission, and as part of Papillon’s new corporate strategy to solidify its position as an emerging East Africa-focused gold producer, the company aims to rapidly increase production to about 50 000 oz/y.
Meanwhile, in a separate statement on July 20, Aim-listed Goldplat said the approval of Papillon’s prospectus was a key step towards Papillon's readmission to trading on the LSE and its proposed reverse takeover of Mayflower Gold.
Subsequent to the takeover, 30% of the $15-million consideration for Mayflower will be payable in cash and the remainder through the issue of Papillon shares to Gold Mineral Resources – Goldplat's subsidiary.
Following the readmission, Papillon will also build a Joint Ore Reserves Committee- (Jorc-) compliant resource base upwards of three-million ounces within 12 to 18 months.
Further, the company will advance a well-defined mine optimisation strategy at the Kilimapesa gold mine, where there is significant expansion potential and potential to increase gold production to 25 000 oz/y and the resource to more than two-million ounces.
The company will use its experienced management team to acquire other complementary and strategically located gold mine and development projects in East Africa, Papillon said on July 20.
Further to the Kilumapesa gold mine, specifically, Papillon intends to support future growth including the acquisition of strategic assets, working capital and other general corporate purposes.
The company will trade under the name of Caracal Gold, with a market cap upon readmission of about £14.5-million.
BACKGROUND
In September 2020, Papillon announced that it had signed a binding heads of agreement to acquire certain contractual production and exploration rights held by Mayflower Capital Investments in gold assets located in Kenya and Congo-Brazzaville.
These rights are held by Mayflower through a special purpose vehicle, Mayflower Gold Investments (MGIL), incorporated by Mayflower in the UK in December 2020.
The company will acquire 100% of the share capital of MGIL and the options that MGIL holds to acquire 100% of the share capital of Kilimapasa Gold Limited, which holds a 100% interest in Kilimapesa and a 70% joint venture interest in Congo Gold, which holds a 100% interest in the Kakamoeka gold project.
Kilimapesa is an established gold mine and gold processing operation that offers immediate value to Papillon. Kilimapesa is located in Kenya about 230 km west of Nairobi in the historically productive Migori Archaean Greenstone Belt.
Contemporaneously with readmission, the company will exercise its newly acquired option to acquire a 100% interest in Kilimapesa and, immediately thereafter, the company intends to devote substantially all of its resources to the exploration and development of gold in Kilimapesa.
Kakamoeka, which includes four exploration licences covering over 3 000 km2 of the Mayombe Greenstone Belt, in Congo-Brazzaville, provides the company with further gold exploration and development opportunities.
In January, the parties amended their heads of agreement and in March this year, the company and Mayflower supplemented their heads of agreement with a formal purchase agreement.
Papillon’s directors believe that securing a near-term gold asset with significant upside from resource expansion and mine optimisation activities represents a significant opportunity for Papillon’s stakeholders to gain exposure to the junior gold mining industry.