Acquisition of Green Power and Scope

04 April 2019

Fox Marble Holdings plc
(“Fox Marble” or the “Company”)

Fox Marble, the AIM listed company focused on marble quarrying and finishing in Kosovo and the Balkans region, is pleased to announce that it has conditionally acquired Green Power Sh.p.k (“Green Power”) the licence holder of the Maleshevë quarry and Scope Sh.p.k. (“Scope”), a company through which Fox Marble has entered into two hire purchase agreements (the “Acquisitions” or “Transactions”). 

The Acquisitions will give Fox Marble the direct rights to the Maleshevë quarry in their entirety, eliminate the annual royalty which would have been due under the operating agreement, and reduce monthly outgoings for equipment and maintenance at the factory.

The Acquisitions are conditional, inter alia, on shareholders approving certain resolutions at the forthcoming Annual General Meeting of the Company relating to authorities to issue new ordinary shares in the Company.

The total consideration for the Acquisitions is £1,300,000 to be satisfied by the issue of new ordinary shares in the Company, further details of which are set out below.

Background and further information

On 19 November 2015, Fox Marble announced the opening of a new quarry at Maleshevë which comprised initially a five hectare area within a larger licensed deposit area, which contained high quality, compact and consistent dolomitic marble.  Two benches at that time had been dug at the site.

The quarry was operated subject to an agreement with the licence holder, Green Power, a company incorporated in Kosovo, which granted the Company’s Kosovan subsidiary the rights to develop and operate the quarry.

As previously notified, the Company has developed the Maleshevë quarry since 2015 and since the beginning of 2016 has been extracting and selling Illirico Selene (silver grey) found at that site as well as Illirico Bianco (off white).  Production has steadily grown and the Company has extracted circa 15,000 tonnes to date.

Fox Marble has conditionally acquired the entire share capital of Green Power, for a consideration of £1,000,000 to be satisfied by the issue of 13,000,000 new ordinary shares in the Company at a price of 7.69 pence per share.

In the period since entering into the initial agreement with Green Power for nil consideration no royalty payment has been paid, due to the costs associated with development of the quarry.  However with increasing production and expected sales of the materials it is anticipated that royalty payments over the remaining period of the agreement are expected to be paid and as such the Board believes that it is in the best interest of the Company to control the asset.

In 2018 Fox Marble entered into certain hire purchase arrangements with Scope, a company incorporated in Kosovo, to acquire and install in its factory including a new CNC machine which was announced on 16 April 2018.  The consideration paid for Scope is less than the value of the future payments due under the hire purchase agreements being acquired as part of its acquisition.

The Company has conditionally agreed to acquire the entire issued share capital of Scope for a consideration of £300,000 to be satisfied by the issue of 3,000,000 new ordinary shares in the Company at a price of 10 pence per share. 

All of the new ordinary shares being issued as part of the Acquisitions will be subject to lock-in provisions of 2 years with a further twelve month being subject to orderly market agreement.

Related Party Transaction

Florije Rrustemi has a beneficial interest in Green Power and Scope. Florije Rrustemi is the wife of Naim Rrustemi – a director of Fox Marble Kosovo Sh.p.k (“FMK”).  FMK is a wholly owned subsidiary of Fox Marble Limited (“FML”) and FML is a wholly owned subsidiary of the Company. The Transactions are therefore related party transactions pursuant to the AIM Rules.  The Directors of the Company, none of whom have an interest in the Transactions believe that the terms of the Transactions, having consulted with the Company’s nominated adviser, are fair and reasonable insofar as shareholders are concerned.

The Company will seek the authority to allot the ordinary shares referred to in this announcement at its annual general meeting, which is expected to be held in June 2019.

Chris Gilbert commented,

“The opportunity to acquire the Maleshevë quarry in Kosovo will benefit the Company and its shareholders going forward not only with respect to the elimination of the royalty costs, but also in benefiting from the underlying value of the quarry itself. I anticipate this value increasing as we continue to drive production rates in the quarry to satisfy the demand we have generated around the world.   The acquisition of Scope reduces the Company’s monthly outgoings at the Factory.  We look forward to updating the market in due course”.

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

For more information on Fox Marble please visit www.foxmarble.net or contact:

Fox Marble Holdings plc

Chris Gilbert, Chief Executive Officer

Tel: +44 (0) 20 7380 0999

Fiona Hadfield, Finance Director

Tel: +44 (0) 20 7380 0999

Brandon Hill Capital (Broker)

Oliver Stansfield

Tel: +44 (0) 20 3463 5000

Cairn Financial Advisers LLP (Nomad)

Liam Murray / Sandy Jamieson

Tel: +44 (0) 20 7213 0880

Notes to Editors

Fox Marble (AIM: FOX), is a marble production, processing and distribution company in Kosovo and the Balkans region.  

Its marble products, which includes Illirico Bianco, Illirico Selene, Grigio Argento and are gaining traction globally both to international wholesale companies as well as being supplied directly into luxury residential properties. In the UK these include among others St George’s Homes and Capital and Counties Plc’s Lillie Square development. In Sydney, Australia Rosso Cait, Alexandrian White and Breccia Paradisea marble have been used in what is expected to be Australia’s most expensive residential property. These sales serve to demonstrate the desirability of Fox’s premium marble products as the stone of choice in some of the most prestigious and expensive residential developments around the world. 

Fox Marble holds 40 year mining licences for six separate marble quarries with a maiden JORC resource indicating an in-situ valuation of approximately Euro 16.5 billion. Fox has taken three of the six sites into production (the Drini and Maleshevë quarries, both in Kosovo and from the Prilep Quarry in Macedonia) and continues to increase production. Notably, Fox has access to over 300 million cubic metres (over 1bn tons) of premium quality marble.

Marble demand continues to grow with stable pricing, predominantly driven by the construction and real-estate industries, on which Fox is looking to capitalise.

Resumption of production in Northern Macedonia and new sales

5 March 2019

Fox Marble Holdings plc
(“Fox Marble” or the “Company”)

• Commercial extraction resumed of Alexandrian marble from Prilep Quarry.

• 400 tonne order of Alexandrian white completed and paid for in February 2019.

• New equipment deployed in quarry to increase production.

Fox Marble is pleased to announce the resumption of production after the usual winter shut down in our Prilep quarry in Northern Macedonia. The quarry, which contains white marble marketed as Alexandrian White, is now also producing substantial quantities of Alexandrian Blue from a newly developed section on the east side of the site. The quarry is expected to benefit from the deployment of additional equipment to significantly increase production levels to satisfy growing demand.

In February Fox Marble sold, and received payment for, 400 tonnes of Alexandrian White blocks to a new customer.  The customer is shipping these blocks to their facility in Drama in Northern Greece for processing. This customer was responsible for supplying similar material to the Sheik Zayed Grand Mosque in Abu Dhabi and has indicated their intention to purchase additional quantities of this marble on a regular basis throughout the year.

Chris Gilbert, CEO, commented

“This large volume block order to a new customer so early in the year following the winter break is an encouraging sign for the upcoming year. The customer, who has a long history of selling material from the Prilep area throughout the world, has indicated an intent to buy further quantities of this material throughout 2019.  The increase in monthly production at this quarry, following the investment made in equipment and resourcing, gives us the ability to supply more significant orders having developed robust markets for our stone worldwide”.

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

For more information on Fox Marble please visit www.foxmarble.net or contact:

Fox Marble Holdings plc

Chris Gilbert, Chief Executive Officer

Tel: +44 (0) 20 7380 0999

Fiona Hadfield, Finance Director

Tel: +44 (0) 20 7380 0999

Brandon Hill Capital (Broker)

Oliver Stansfield

Tel: +44 (0) 20 3463 5000

Cairn Financial Advisers LLP (Nomad)

Liam Murray

Tel: +44 (0) 20 7213 0880

Notes to Editors

Fox Marble (AIM:FOX), is a marble production, processing and distribution company in Kosovo and the Balkans region.  

Its marble products, which includes Illirico Bianco, Illirico Selene, Grigio Argento and are gaining traction globally both to international wholesale companies as well as being supplied directly into luxury residential properties. In the UK these include among others St George’s Homes and Capital and Counties Plc’s Lillie Square development. In Sydney, Australia Rosso Cait, Alexandrian White and Breccia Paradisea marble have been used in what is expected to be Australia’s most expensive residential property. These sales serve to demonstrate the desirability of Fox’s premium marble products as the stone of choice in some of the most prestigious and expensive residential developments around the world. 

Fox Marble holds 40 year mining licences for six separate marble quarries with a maiden JORC resource indicating an in-situ valuation of approximately Euro 16.5 billion. Fox has taken three of the six sites into production (the Drini and Maleshevë quarries, both in Kosovo and from the Prilep Quarry in Macedonia) and continues to increase production. Notably, Fox has access to over 300 million cubic metres (over 1bn tons) of premium quality marble.

Marble demand continues to grow with stable pricing, predominantly driven by the construction and real-estate industries, on which Fox is looking to capitalise.

TR 1 Notification of major interest in shares

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Operating Update and Issue of Shares

7 February 2019

Fox Marble Holdings plc

(“Fox Marble” or the “Company”)

Operating Update and Issue of Shares

·         Unaudited sales for the year ended 31 December 2018 of c. €1.4 million, (2017 – c. €1.2million).

·         Production for the year ended 31 December 2018 of 12,561 tonnes (2017 – 8,811 tonnes) driven by an increase in production in Prilep in the last quarter of the year, not yet reflected in sales. 

·         Fundraising completed raising £2 million with the funds planned to increase capital equipment at the quarries in order to expand production and meet the confirmed demand for material in 2019. 

·         Block order book from existing customers for the year ended 31 December 2019 of around €3 million.

Operating Update

Fox Marble, the AIM listed company focused on marble quarrying and finishing in Kosovo and the Balkans region, is pleased to provide the following operational update ahead of the publication of its preliminary results for year ended 31 December 2018 which are anticipated to be notified in May 2019.

Sales

Unaudited sales for the year ended 2018 were c. €1.4 million, with a further €0.3 million in advances which have not yet been recognised in sales. Whilst sales growth has not been as strong as expected, this has been driven by lower than expected quarry production volumes in Maleshevë.  The demand for our Illirico Selene marble is currently outpacing production. We have seen encouraging signs in the development of our customer base, with a core of recurring block sale customers, with steady and regular demand for our material. We expect these customers to form the backbone of expected revenues in 2019.

·         In 2018, the Company has seen its first significant orders from China. A single Chinese customer has purchased and paid for 894 tonnes of Illirico Selene in three separate shipments.  This customer has confirmed it wishes to take 300 tonnes of this material each month for the next 12 months.

·         Turkey continues to be a consistent market for the Company, with over 1,200 tonnes of material sold in 2018. The customer has confirmed its expected demand in 2019 will be increased to 2,000 tonnes. 

·         In January 2019, the Company announced that it had started production of a new material at the Prilep quarry called Alexandrian Blue.  The new material has dense blue grey banding with smaller bands of white which produce a marked blue tone and is akin to the highly desirable Zebrino marble from Northern Italy.  This new material will be quarried alongside Alexandrian White which is already in commercial production at the quarry.  Fox Marble sold, and received payment for, 441 tonnes of Alexandrian Blue extracted in December 2018 to a single customer. Following this order, the Company entered into a sales agreement with this customer to purchase Alexandrian Blue with an expected value in excess of €1 million over the next twelve months. The same customer has confirmed its intention to purchase 3,500 tonnes of Illirico Selene. 

·         In 2018, the Company has established an office in Dubai to service the Gulf Cooperation Council region and has entered into a forward purchase agreement for processed marble including a $500,000 advance. The Company completed two large cut-to-size orders to a client in the UAE at the end of 2018, including the production of 50,000 10 cm x 10 cm tiles, which were secured via our new Dubai office.

Quarry Production

Our focus has continued to be on the Maleshevë quarry in Kosovo and Prilep quarry in Macedonia.  Total production has increased to 12,561 tonnes, a 42% increase since 2017. 

Production at the Maleshevë quarry, which produces the Illirico Bianco and Illirico Selene stone was 7,278 tonnes (2017 – 6,526 tonnes). This was below the Company’s expectations for the year, particularly in relation to the second half of 2018. The Company intends to make a significant investment in capital equipment in order to address the production shortfall and meet demand for these types of stone.  

In Prilep, the introduction of a new quarry team at the site in November 2018 increased the total production for the quarry to 5,282 tonnes (2017 - 2,285 tonnes). This 130% increase in production was achieved primarily in the last six weeks of the year, and provides an encouraging outlook for 2019 production at this quarry. The Company is also intending to invest in capital equipment in this quarry.

Factory

2018 was a transformative year for our factory.  With full slab production operational from the end Q3 2017, 2018 was focused on meeting growing demand for cut to size stone in addition to finished slabs.  The Italian Gravellona Machine Marmo Computer Numerical Control (“CNC”) machine was installed in March 2018 and was very quickly producing its first tiles for export.  Since then, cut to size capacity has been increased with the purchase of four bridge saws, two edge polishers, a cylinder (column) milling machine and a dedicated tile polishing line which will become operational in Q1 2019.  Operating processes have been consistently refined and the factory is now operating two full shifts year round.

The factory has been showcased as a key example of the benefits of investment in Kosovo and visited by various dignitaries including the Prime Minister of Kosovo, HE Ramush Haradinaj, the British Ambassador, Ruairi O’Connell and the Chairman of the Kosovo All Parties Parliamentary Group from Westminster, Martin Vickers MP.

Outlook for 2019

The investment in capital equipment is expected to significantly increase production, and allow further development of both major quarries. Currently the Company has confirmed orders from existing customers of approximately 16,000 tonnes of block material with anticipated gross revenue value of around €3 million for the year end 31 December 2019. 

Fox Marble does not expect to be significantly impacted by the expected departure of the United Kingdom from the European Union, due to the location of its operations and the majority of its customer base being located outside the European Union. The Board will continue to monitor the situation in order to address and mitigate associated risks as they arise. 

Issue of shares and convertible loan notes

Fox Marble has issued 13,263,161 new ordinary shares in the Company (“New Ordinary Shares”) at 9.5p per share. Gross proceeds of this issue of equity amounts to £1,260,000. The New Ordinary Shares will rank pari passu with the existing ordinary shares.  Admission to AIM of the New Ordinary Shares will occur on or around 12 February 2019.

Fox Marble has issued a further £700,000 in Convertible Loan Notes under the same terms as existing Loan Notes issued by the Company. The Convertible Loan Notes will carry an interest rate of 8%, per annum. The Convertible Loan Notes are due for conversion or repayment on 4 February 2022 with a conversion price set at 10.5p.

Proceeds from the issue of shares are intended to be used to fund capital equipment at the Fox Marble’s quarry sites to expand production capabilities to supply increased demand for material in 2019.

Chris Gilbert, CEO, commented “Our efforts in marketing our material globally are bearing fruit as we develop our markets in India, China Turkey and Italy.  We have repeat orders from multiple customers, ordering marble principally from our quarries in Prilep in Macedonia and Maleshevë in Kosovo. We have generated significant demand for our product, as such we are increasing our investment in these two quarries to increase our production capacity and grow revenues.  I expect this trend to continue this year and look forward to being able to report that Fox Marble has a stable and growing customer base with increasing revenues across the Group.

Our factory is now capable of processing a full range of marble products. We look forward to the sales of processed marble increasingly contributing to the bottom line throughout the year.

I expect to be advising the market of further sales as a result of our continuing focus on marketing selling and distributing our highly desirable premium quality stone throughout the world. Our new offices in Dubai and Mumbai will contribute to this momentum going forward.”

Total Voting Rights

In accordance with Rule 5.6.1 of the Disclosure Rules and Transparency Rules of the Financial Services Authority ("DTRs"), the Company's issued share capital at 12 February 2019 will consist of 231,148,483 ordinary shares of 1 pence each. The Company does not hold any ordinary shares in treasury. Therefore the total number of voting rights in the Company is 231,148,483.

The above figure of 231,148,483 may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the DTRs.

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

For more information on Fox Marble please visit www.foxmarble.net or contact:

Fox Marble Holdings plc

Chris Gilbert, Chief Executive Officer

Tel: +44 (0) 20 7380 0999

Fiona Hadfield, Finance Director

Tel: +44 (0) 20 7380 0999

Brandon Hill Capital (Broker)

Oliver Stansfield

Tel: +44 (0) 20 3463 5000

Cairn Financial Advisers LLP (Nomad)

Liam Murray / Sandy Jamieson

Tel: +44 (0) 20 7213 0880

Notes to Editors

Fox Marble (AIM: FOX), is a marble production, processing and distribution company in Kosovo and the Balkans region.  

Its marble products, which includes Illirico Bianco, Illirico Selene, Grigio Argento and are gaining traction globally both to international wholesale companies as well as being supplied directly into luxury residential properties. In the UK these include among others St George’s Homes and Capital and Counties Plc’s Lillie Square development. In Sydney, Australia Rosso Cait, Alexandrian White and Breccia Paradisea marble have been used in what is expected to be Australia’s most expensive residential property. These sales serve to demonstrate the desirability of Fox’s premium marble products as the stone of choice in some of the most prestigious and expensive residential developments around the world. 

Fox Marble holds 40 year mining licences for six separate marble quarries with a maiden JORC resource indicating an in-situ valuation of approximately Euro 16.5 billion. Fox has taken three of the six sites into production (the Drini and Maleshevë quarries, both in Kosovo and from the Prilep Quarry in Macedonia) and continues to increase production. Notably, Fox has access to over 300 million cubic metres (over 1bn tons) of premium quality marble.

Marble demand continues to grow with stable pricing, predominantly driven by the construction and real-estate industries, on which Fox is looking to capitalise.

New Material and Order

Fox Marble Holdings plc
(“Fox Marble” or the “Company”)

• Commercial extraction commenced of Alexandrian Blue marble from Prilep Quarry.

• 441 tonne order of Alexandrian Blue completed and paid in December 2018.

• Sales agreement entered into with an indicative value in excess of €1 million.

Fox Marble announces the start of commercial extraction of Alexandrian Blue from our Prilep quarry in Northern Macedonia.  Alexandrian Blue has dense blue grey banding with smaller bands of white which produce a marked blue tone and is akin to the highly desirable Zebrino marble from Northern Italy.   The quarry, which is already producing the highly sought after white marble marketed as Alexandrian White, is now also producing substantial quantities of Alexandrian Blue from a newly developed section on the East side of the quarry.

Fox Marble sold, and received payment for, 441 tonnes of Alexandrian Blue extracted in December 2018 to a single customer. This material compliments the Alexandrian White from the same quarry, as well as the highly popular Illirico Selene from the Maleshevë quarry in Kosovo.

Following this order, the Company entered into a sales agreement with this customer to purchase Alexandrian Blue with an expected value in excess of €1 million over the next twelve months. 

Under this sale and purchase deed the Company agrees to supply a minimum monthly quantity of Alexandrian Blue blocks for a 12 month period, commencing 16 January 2019.  The indicative value of the agreement is dependent upon the company making available sufficient material to the client to meet the minimum monthly commitment.

Fox Marble is now focussing on penetrating the markets in Italy, India, China, Turkey and Dubai where it has established a base with its most popular marbles, the Alexandrian White and Illirico Selene, with material from the Cervenilla quarry including Argento Grey, Rosso Cait and Flora, and Syriganë quarry which contains Breccia Paradisea and Etrusco Dorato. 

Chris Gilbert, CEO, commented

“Orders of our premium material are gaining traction and we expect to see growth in our sales in 2019. This will produce a corresponding increase in our revenues during the year as a result, and l look forward to updating the market accordingly”.

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

For more information on Fox Marble please visit www.foxmarble.net or contact:

Fox Marble Holdings plc

Chris Gilbert, Chief Executive Officer

Tel: +44 (0) 20 7380 0999

Fiona Hadfield, Finance Director

Tel: +44 (0) 20 7380 0999

Brandon Hill Capital (Broker)

Oliver Stansfield

Tel: +44 (0) 20 3463 5000

Cairn Financial Advisers LLP (Nomad)

Liam Murray / Sandy Jamieson

Tel: +44 (0) 20 7213 0880

Notes to Editors

Fox Marble (AIM:FOX), is a marble production, processing and distribution company in Kosovo and the Balkans region.  

Its marble products, which includes Illirico Bianco, Illirico Selene, Grigio Argento and are gaining traction globally both to international wholesale companies as well as being supplied directly into luxury residential properties. In the UK these include among others St George’s Homes and Capital and Counties Plc’s Lillie Square development. In Sydney, Australia Rosso Cait, Alexandrian White and Breccia Paradisea marble have been used in what is expected to be Australia’s most expensive residential property. These sales serve to demonstrate the desirability of Fox’s premium marble products as the stone of choice in some of the most prestigious and expensive residential developments around the world. 

Fox Marble holds 40 year mining licences for six separate marble quarries with a maiden JORC resource indicating an in-situ valuation of approximately Euro 16.5 billion. Fox has taken three of the six sites into production (the Drini and Maleshevë quarries, both in Kosovo and from the Prilep Quarry in Macedonia) and continues to increase production. Notably, Fox has access to over 300 million cubic metres (over 1bn tons) of premium quality marble.

Marble demand continues to grow with stable pricing, predominantly driven by the construction and real-estate industries, on which Fox is looking to capitalise.