21st Nov 2005 07:02
Weatherly International PLC21 November 2005 Press release 21 November 2005 Weatherly International plc ("Weatherly or the "Company") Proposed acquisition of Puku Minerals Limited Proposed waiver of Rule 9 of the City Code Placing of 29,312,500 Ordinary Shares at 8 pence per share Admission to trading on AIM Notice of Extraordinary General Meeting Weatherly International plc is pleased to announce today that it hasconditionally agreed to acquire the entire issued share capital of Puku MineralsLimited, a company which holds certain exploration and development rights to acopper mining project in Zambia. Puku will be acquired for a consideration of £3.25 million, to be satisfied bythe issue of approximately 40.6 million Consideration Shares at an issue priceof 8 pence per share. Additionally, Weatherly proposes to raise approximately£2.3 million by issuing approximately 29.3 million Placing Shares at an issueprice of 8 pence per share. The market capitalisation of the Enlarged Group,post-Acquisition and post-Placing, at the issue price will be approximately£11.5 million. Puku owns two prospecting licences covering a decommissioned copper mine andtailings dam situated in Luanshya, in the Zambian Copperbelt (the copperproducing region of Northern Zambia). The Luanshya Copper Project (an areadefined by these prospecting licences) is considered by the Executive Directorsto be one of the larger copper resources in Zambia with up to 1.4 million tonnesof copper contained in resource categories. The Executive Directors estimatethat the Luanshya Copper Project could be capable of producing up to 60,000tonnes of copper annually using modern, proven mining and processing techniques.The timing and cost of re-opening the mine is currently being assessed and willbe subject to a bankable feasibility study to be commissioned following theAcquisition. Chief Executive Rod Webster said: "Using some of the funds now available, weintend to progress Luanshya to the development stage, including commissioning abankable feasibility study. We believe Luanshya may contain up to 1.4 milliontonnes of copper, and is capable of producing up to 60,000 tonnes a year usingmodern mining technology not generally available when it was last worked." Pursuant to the AIM Rules, the Acquisition will constitute a reverse takeoverand, as the Executive Directors hold a controlling interest in Puku, it willalso constitute a related party transaction. Following Admission, certain Shareholders who are deemed to be acting in concertby the Panel, will have an aggregate holding of 63,972,580 ordinary sharesrepresenting approximately 44.6 per cent. of the Enlarged Share Capital of theCompany. As the Concert Party will be interested in more than 30 per cent. ofthe Enlarged Share Capital, in normal circumstances a general offer to existingShareholders would be required under Rule 9 of the City Code to acquire all theShares not held by the Concert Party. However, the Panel has agreed to waive therequirement for such a general offer to be made subject to the approval of theholders of existing Ordinary Shares being obtained. Accordingly, Shareholders'consent will be sought at the Extraordinary General Meeting to approve thereverse takeover and the waiver of the requirement for a general offer to bemade. The Non-Executive Directors consider that the Proposals and the Waiver are fairand reasonable and in the best interests of the Company and its Shareholders asa whole. Accordingly, the Non-Executive Directors unanimously recommend that theShareholders vote in favour of the EGM Resolutions to be proposed at theExtraordinary General Meeting to be held on 14 December 2005. It is expected that dealings on AIM will commence on or around 15 December 2005. This summary should be read in conjunction with the full text of theannouncement. For further information please contact: Weatherly International plcRod Webster, Chief Executive +44 (0) 20 7332 2204Peter Redmond, Non-Executive Director Libertas CapitalBrad Cheng / Aamir Quraishi +44 (0) 20 7569 9650 First City FinancialAllan Piper +44 (0) 20 7436 7486 +44 (0) 7736 064 982 Weatherly International plc Proposed acquisition of Puku Minerals Limited Proposed waiver of Rule 9 of the City Code Placing of 29,312,500 Ordinary Shares at 8 pence per share Admission to trading on AIM Notice of Extraordinary General Meeting Introduction Weatherly International plc is pleased to announce today that it hasconditionally agreed to acquire the entire issued share capital of Puku MineralsLimited, a company which holds certain exploration and development rights to acopper mining project in Zambia. Puku will be acquired for a consideration of £3.25 million, to be satisfied bythe issue of approximately 40.6 million Consideration Shares in the Company atan issue price of 8 pence per share. Additionally, Weatherly proposes to raiseapproximately £2.3 million by issuing approximately 29.3 million Placing Sharesat an issue price of 8 pence per share. Pursuant to the AIM Rules, the Acquisition will constitute a reverse takeoverand, as the Executive Directors hold a controlling interest in Puku, it willalso constitute a related party transaction. Following Admission, certain Shareholders who are deemed to be acting in concertby the Panel, will have an aggregate holding of 63,972,580 Ordinary Sharesrepresenting 44.6 per cent. of the Enlarged Share Capital of the Company. As theConcert Party will be interested in more than 30 per cent. of the Enlarged ShareCapital, in normal circumstances a general offer to Existing Shareholders wouldbe required under Rule 9 of the City Code to acquire all the Shares not held bythe Concert Party. However, the Panel has agreed to waive the requirement forsuch a general offer to be made subject to the approval of the holders ofexisting Ordinary Shares being obtained. Accordingly, Shareholders' consent willbe sought at the Extraordinary General Meeting to approve the reverse takeoverand the waiver of the requirement for a general offer to be made. Information on Puku Puku Minerals Limited is a privately owned company incorporated in Zambia whichacquired two tenements comprising prospecting licences PLLS 239 and PLLS 240 inApril 2005. These licences cover the historic Luanshya underground copper mineand tailings dams situated in the Zambian Copperbelt and offer the right toexplore and develop the Luanshya tenements (comprising PLLS 239 and PLLS 240).These licences were granted for a period of two years, which commenced on 4April 2005, and can either be renewed or converted into mining licences at theoption of the licence holder dependent upon the licence holder satisfyingstandard exploration obligations during the two year period. The performance ofthese obligations has already commenced. In June 2005, Puku also acquiredprospecting licence PLLS 252, which covers an exploration area adjacent to theareas covered by PLLS 239 and PLLS 240. The Executive Directors, prior to their appointments as directors of Weatherly,had been investigating the opportunity to acquire the Luanshya tenements sinceNovember 2003. The vendors of Puku comprise Dr. Martinick, Mr. Webster andASX-listed Ezenet Limited. The Executive Directors are also directors of, and,through direct and indirect shareholdings, controlling shareholders in, Puku. Luanshya Copper Project The Luanshya Copper Project comprises some nine kilometres of historicalunderground workings which, between 1927 and 2001, have produced in totalapproximately 4.8 million tonnes of copper. Based on historic resourcestatements and annual reports, it is estimated that up to a further 1.4 milliontonnes of copper in resource categories remains in situ. Most of the copper iscontained in extensions to the existing underground workings, although asignificant amount of copper also remains in the various surface dumps andtailings dams. It is the belief of the Executive Directors that Luanshya has significantinherent value and will serve as a solid foundation towards building aworld-class mining operation. The Executive Directors further believe that withnew flexible workforce arrangements and the implementation of modern, provenmining and processing techniques, the Luanshya Copper Project could beestablished as a profitable, "long-life'' operation. The Company's immediate focus will be to complete the acquisition of Puku andprogress the Luanshya Copper Project to the development stage, including thecompletion of a bankable feasibility study, with the aim of bringing theLuanshya Copper Project into production within the next three years. The Executive Directors have made preliminary investigations in respect of thedevelopment of the Luanshya tenements. They believe that a number of profitabledevelopment options exist, each requiring increasing amounts of capital relativeto the proposed scale and output. The Executive Directors believe that followingcompletion of the bankable feasibility study, the most attractive options willbe capable of producing up to 60,000 tonnes per annum (and up to a total ofapproximately 0.9 million tonnes) of copper, either as concentrate or finishedmetal. In the short term, the Company is also evaluating a number of strategicacquisition opportunities which are complementary to the Luanshya Copper Projectand which the Executive Directors believe will further enhance the value of theCompany. Information on Weatherly Weatherly is a former financial services group that experienced financialdifficulties and was subsequently rescued by means of a CVA approved on 23January 2004. Following a refinancing, which raised £250,000 (before expenses)and which was arranged by the Non-Executive Directors, the Ordinary Shares werereadmitted to trading on AIM in January 2004 as an investing company. In July2005, there was a further cash injection of £723,500 (before expenses) and achange in strategy with the appointments of Dr. Martinick and Mr. Webster asexecutive directors following the acquisition of WM Exploration Limited inexchange for new Ordinary Shares. Dr. Martinick and Mr. Webster participated inthis placing and, through their interests in the shares in WM ExplorationLimited, also acquired (or became interested in) Ordinary Shares pursuant to theacquisition of that company by Weatherly. In August 2005, the Company announced a further placing of 23.5 million OrdinaryShares which raised approximately £1.41 million (before expenses) for theCompany. Dr. Martinick participated in this placing. The new strategy entailed seeking opportunities for acquisition or investment inthe natural resources sector, mainly in Africa. Following the Acquisition, the Enlarged Group's main activity will be that ofexploration and development of mining and mineral projects. On Admission, cashresources of the Company are expected to be £3.8 million. The Board Dr. Wolf Martinick, Chairman, aged 60Dr. Martinick is an environmental scientist with extensive experience in themineral resource industry. Dr. Martinick has been involved with mineral exploration and mining projectsaround the world, especially in Australasia, southern, central and northernAfrica, China, India and parts of the former Soviet Union. Dr. Martinick is a non-executive director of Sun Resources NL, an oil and gasexploration company listed on the ASX, and the executive chairman andsubstantial shareholder of Ezenet Limited, a digital movie supply anddistribution company, also listed on the ASX. He was a founding director ofBasin Minerals Limited, another ASX listed mineral exploration company thatdiscovered a world-class mineral project in Victoria, Australia, and thenparticipated in negotiations that led to a recommended takeover of Basin byIluka Resources Limited in 2003. He is also a founding director andnon-executive chairman of MBS Environment Pty Ltd, an environmental and socialconsultancy company to the mining industry in Australasia. He has been associated with the exploration and mining industry for over 35years. He has particular experience in environmental, water, land access andindigenous people issues and has (in his role as non executive chairman of MBSEnvironment Pty Ltd) conducted due diligence on mining projects around the worldon behalf of international financial institutions and resource industrycompanies for a variety of transactions including listings on internationalstock exchanges, mergers and debt financing. He has in recent years been activein identifying and investigating mineral projects and prospects in central andother parts of Africa. Mr. Rod Webster, Chief Executive Officer, aged 55Mr. Webster is a graduate mining engineer from the University of Sydney. He hasover 30 years' of experience in the resources industry, including more than 10years' in managing director or chief executive officer positions. Between August 2001 and February 2005 Mr. Webster was a senior executive atFirst Quantum Minerals Ltd ("FQM''), a Toronto Stock Exchange and AIM listedcompany, developing and operating copper mines in Zambia, the DemocraticRepublic of Congo and Mauritania. Most recently, he was in charge of the FQM'sMauritanian activities, but prior to this he was the chief executive officerresponsible for the development of the Kansanshi mine in Zambia, probably theworld's most significant new copper mine to come on stream in recent times.During 2001, he was also a non-executive director of another major Zambiancopper producer, Mopani Copper Mines Ltd, in which FQM had a major interest. Prior to his involvement with FQM, he was a founding director and the chiefexecutive officer of an Australian base metals producer, Western Metals Ltdbetween 1994 and 2000. During his stewardship, the company grew to beAustralia's third largest base metals producer, with annual production exceeding260,000 tonnes of zinc, 100,000 tonnes of lead and 35,000 tonnes of copper. Toachieve this growth, the company raised approximately US$600 million for thedevelopment of six new mines and a private port. In his earlier years as a mining engineer, he held senior management positionswith the global resource companies, Homestake Gold of Australia Ltd (between1988 and 1993) and BHP Minerals Ltd (between 1980 and 1988). He is a Fellow ofboth the Australian Institute of Mining and Metallurgy and the AustralianInstitute of Company Directors. At various stages he has been a member of theExecutive Committees of both the Australian Minerals Council and theInternational Zinc Association, and a non-executive director of numerouscompanies. Mr. Peter Redmond, Non-Executive Director, aged 56Mr. Redmond has some 20 years' experience in corporate finance and venturecapital. After leaving Durlacher Limited in 2003, he joined Merchant House Groupplc and became its Chairman in May 2004. He has been active in reconstructing anumber of AIM companies as investing companies in recent years and is currentlya director of a number of companies including Bella Media plc, BWA Group plc,Fortfield Investments plc, Future Internet Technologies plc, Petsmore plc andSynigence Plc, all of which are traded on AIM. Mr. Richard Armstrong, Non-Executive Director, aged 57Mr. Armstrong has many years' experience as an investment analyst and as acorporate stockbroker. He is currently an associate of Fiske plc where he hasspecialised in raising funds for smaller quoted companies. He is a director of anumber of companies including BWA Group plc, Fortfield Investments plc andFuture Internet Technologies plc, all of which are traded on AIM. Prior to Admission, Mr. Armstrong has agreed to resign as a director of theCompany. Mr. Armstrong will not be receiving any compensation for loss of officeother than payments due under his letter of appointment. The Company intends to appoint a further Non-Executive Director followingAdmission. Terms of the Acquisition Subject to the satisfaction of the Conditions, Weatherly will acquire the entireissued share capital of Puku for a consideration of £3.25 million to besatisfied by the issue by the Company of the Consideration Shares. In accordancewith the provisions of the Acquisition Agreement, the Company has the right tonominate that the shares in Puku to which it becomes entitled at completion ofthe Acquisition (representing all of the issued share capital of Puku) shall beissued to and held by any of the wholly owned subsidiaries of the Company. Onissue, the Consideration Shares will rank pari passu in all respects with theExisting Ordinary Shares. Objectives and Strategy The Company is seeking to develop significant, profitable and "long-life''mining operations in Africa and the acquisition of Puku will, the ExecutiveDirectors believe, serve as the foundation to achieve this. The Acquisition willprovide Weatherly with exploration and development rights to a significantcopper deposit which contains up to 1.4 million tonnes of copper in resourcecategories. As a result, the Executive Directors believe that the Company willgain a significant foothold in the Zambian Copperbelt, and more generally, entryinto the natural resource sector in Africa. In addition to the Luanshya CopperProject, Weatherly is investigating a number of other opportunities in SouthernAfrica. Extraordinary General Meeting A notice convening an extraordinary general meeting of the Company which is tobe held at the offices of Watson, Farley & Williams LLP, 15 Appold Street,London, EC2A 2HB at 10:00 a.m. on 14 December 2005, will be set out in theAdmission Document. The following EGM Resolutions will be proposed:(1) to approve the Acquisition as a reverse takeover for the purposes of Rule 14of the AIM Rules;(2) to approve the Waiver;(3) to approve the Acquisition as a substantial property transaction with theDirectors for the purposes of section 320 of the Companies Act 1985 (the "Act");(4) to authorise the Directors pursuant to section 80 of the Act to allotrelevant securities including, amongst others, the Placing Shares and theConsideration Shares; and(5) to authorise the Directors to allot relevant securities for cash as if thestatutory pre-emption rights set out in section 89 of the Act did not apply tosuch allotment. EGM Resolutions (1), (2), (3) and (4) will be proposed as Ordinary Resolutionsand EGM Resolution (5) shall be proposed as a Special Resolution. EGM Resolution(2) will, as required by the Panel, be decided on a poll of IndependentShareholders. It is expected that dealings on AIM will commence on or around 15 December 2005. General The Admission Document, which contains details of the Proposals, will be sent toShareholders as soon as is practicable and will be available at the offices ofWatson, Farley & Williams LLP, 15 Appold Street, London, EC2A 2HB. Libertas Capital Corporate Finance Limited, which is authorised and regulated inthe United Kingdom by the Financial Services Authority, is acting exclusivelyfor Weatherly and no one else in connection with the Proposals and the mattersdescribed herein and will not be responsible to anyone other than Weatherly forproviding the protections afforded to its customers or for giving advice inrelation to the proposals or any other matter referred to herein. This announcement does not constitute, or form part of, any offer for, or anysolicitation of any offer for, securities. Definitions "Acquisition" the proposed acquisition of the entire issued share capital ofPukupursuant to the Acquisition Agreement"Acquisition Agreement" the conditional agreement dated the date of theAdmission Document between the Vendors and the Company relating to theAcquisition"Admission" the re-admission of the Existing Ordinary Shares to trading on AIMand the admission of the New Ordinary Shares to trading on AIM becomingeffective in accordance with the AIM Rules "AIM" the market of that name operated by the London Stock Exchange "AIM Rules" the rules for AIM companies as published by the London StockExchange "ASX" Australian Stock Exchange Limited "Board" the board of directors of the Company, namely Dr. Wolf-GerhardMartinick, Roderick John Webster, Peter Redmond and Richard James Armstrong,including a duly constituted committee of such directors "City Code" the City Code on Takeovers and Mergers "Conditions" the conditions to the Acquisition and the Placing being (i) the EGMResolutions (other than resolution 5) being passed at the Extraordinary GeneralMeeting, (ii) the Company not terminating the Acquisition Agreement prior tocompletion because of circumstances arising which have or would cause a materialadverse effect on Puku or its business and (iii) Admission "Company or "Weatherly" Weatherly International plc "Concert Party" the Vendors "Consideration Shares" the 40,625,000 new Ordinary Shares to be allotted andissued to the Vendors pursuant to the Acquisition Agreement "Directors" the directors of the Company, namely Dr. Wolf-Gerhard Martinick,Roderick John Webster, Peter Redmond and Richard James Armstrong "EGM Resolutions" the resolutions set out in the notice of Extraordinary GeneralMeeting attached to the Admission Document "Enlarged Group" the Company and its subsidiary undertakings as at the date ofAdmission "Enlarged Share Capital" the Ordinary Shares in issue immediately followingAdmission (excluding any Ordinary Shares that may be issued pursuant to theexercise of any Warrants prior to Admission) "Executive Directors" Dr. Wolf-Gerhard Martinick and Roderick John Webster "Existing Ordinary Shares" the 73,502,093 Ordinary Shares in issue at the dateof this document "Extraordinary General the extraordinary general meeting of the Company to beheld atMeeting" 10:00 a.m. on 14 December 2005 "Libertas Capital" Libertas Capital Corporate Finance Limited and/or LibertasCapital Securities Limited, as the context requires "Independent Shareholders" the holders of Existing Ordinary Shares, excludingthe Concert Party "Non-Executive Directors" Peter Redmond and Richard James Armstrong "Ordinary Shares" ordinary shares of 0.5 pence each in the capital of theCompany "Panel" the Panel on Takeovers and Mergers "Placing" the conditional placing by the Company of the Placing Shares pursuantto the Placing Letters "Placing Price" 8 pence per Placing Share "Placing Shares" the 29,312,500 new Ordinary Shares which are the subject of thePlacing "Proposals" the Acquisition, the Placing and the Admission "Puku" Puku Minerals Limited "Shareholders" the holders of Ordinary Shares of the Company "Vendors" Dr. Wolf-Gerhard Martinick, Roderick John Webster and EzenetLimited "Waiver" the waiver by the Panel of the obligation of the Concert Party tomake a general offer under Rule 9 of the City Code "Warrants" 1,416,691 warrants each of which entitles the holder to subscribe forone Ordinary Share at a price of 3 pence per share, 2,496,979 warrants each ofwhich entitles the holder to subscribe for one Ordinary Share at a price of 5pence per share, and 2,996,991 warrants each of which entitles the holder tosubscribe for one Ordinary Share at a price of 12 pence per share This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Weatherly International Plc