Focus Xplore to buy Canadian gold assets, announces fundraise

Focus Xplore PLC shares fell on Tuesday after it announced its agreement to acquire five gold exploration properties, alongside a placing and subscription worth over £500,000.

The London-based exploration company, which is focused on gold assets in Canada, said it has signed a sales & purchase agreement to acquire all shares in Nova Aurum Exploration Ltd and 1597320 BC Ltd, which hold a combined portfolio of five gold exploration properties in Canada.

Focus Xplore said it is purchasing the target companies for total consideration of approximately £296,000.

It said the targets' vendors, Martlet Geoscience Ltd and Praetor Exploration Inc, will receive initial consideration of £75,000 in cash and 802.8 million shares, representing around 10% of Focus Xplore's enlarged share capital.

The firm will issue another 422.5 million shares, or roughly another 10% stake, upon completion of a phase 1 exploration programme on any two of the properties; identification of at least one drill target; or the start of a drill programme.

Upon completion of the deal, Focus Xplore will enter into a new agreement appointing Martlet as its primary geological services provider in Canada. Martlet will be responsible for developing and managing geological exploration programmes on the company's mineral licences, aiming to "effectively and efficiently determine the existence, if any, of a relevant ore body and its potential, commercial value."

Focus Xplore also announced a placing and subscription, upon which completion of the acquisition is conditional.

It expects to raise £508,750, and settle £115,750 of creditor payments, through issuing 3.47 billion new shares at 0.018 pence each.

Focus Xplore shares closed down 14% at 0.019p on Tuesday in London.

Additionally, the firm said it has received conversion notices for £37,500 of the convertible loan notes issued in March, which will result in the issue of 208.3 million new shares.

Of the fundraise proceeds, the company said it will use £75,000 to meet the initial acquisition cash consideration; £135,000 to meet the expected costs of future exploration programmes; £110,000 to repay creditors; and £188,000 to meet the costs of the transaction plus expected working capital needs.

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