31st Jul 2007 07:02
Mwana Africa PLC31 July 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES MWANA AFRICA PLC TO MAIL OFFER CIRCULAR REGARDING ITS FORMAL OFFER FOR SOUTHERNERA DIAMONDS INC. London, July 31, 2007 - On 16 March 2007, Mwana Africa PLC ("the Company" or"Mwana", AIM Symbol MWA-L) announced its intention to make a share exchangetake-over offer (the "Offer") to acquire the outstanding common shares("SouthernEra Shares") of SouthernEra Diamonds Inc.("SouthernEra"), other thanSouthernEra Shares held by Mwana and its affiliates, on the basis of one Mwanaordinary share ("Mwana Shares") for every 2.3333 SouthernEra Shares held. The Company announces that the formal offer to purchase any and all of theSouthernEra Shares and related materials (the "Offer Circular") will be mailedto SouthernEra shareholders today and filed on SEDAR (http://www.sedar.com).Further details regarding the Offer, including the conditions to the Offer andinformation relating to the Mwana Shares, are included in the Offer Circular.The Offer Circular is also available from the Company's website (http://www.mwanaafrica.com/) free of charge. The Offer represents an implied offer price of approximately C$0.718 (£0.334)per SouthernEra Share, based on the closing price of the Mwana Shares on AIM of£0.780 (C$1.676) on July 27, 2007 (being the last practicable trading daybefore the date of the Offer), and values the outstanding SouthernEra Shares atapproximately C$112.8 million (£52.5 million). In addition, the consideration under the Offer represents an implied premium toSouthernEra shareholders for each SouthernEra Share held of approximately: • 19.7% over the closing price of SouthernEra Shares on the Toronto Stock Exchange ("TSX") of C$0.600 on July 27, 2007, based on the closing price of the Mwana Shares on AIM of £0.780 (C$1.676) on July 27, 2007; • 43.1% over the closing price of SouthernEra Shares on the TSX of C$0.295 on March 15, 2007, being the last trading day prior to Mwana's announcement of its intention to make the Offer, based on the closing price of the Mwana Shares on AIM of £0.433 (C$0.985) (£1: $2.2771) on March 15, 2007 (the last trading day before Mwana's announcement of its intention to make the Offer). Unless otherwise set out, all dollar amounts are stated in Canadian $, sterlingequivalents are calculated at £1: $2.1487. As of the date hereof, Mwana beneficially owns in the aggregate 16,457,500SouthernEra Shares, representing approximately 9.5% of the outstandingSouthernEra Shares. In addition, as previously disclosed, the Company has entered into lock-upagreements with JP Morgan Asset Management (UK) Limited ("JP Morgan"), OZManagement, L.L.C. ("OZ Management") and BHP Billiton, each on behalf of certainof their managed funds, in respect to an aggregate 52,427,330 SouthernEraShares, representing approximately 30.2% of the outstanding SouthernEra Shares.A copy of each lock-up agreement is available to the public and may be obtainedon request from the Company. Information on Mwana Mwana is a pan-African resource company with production, exploration anddevelopment assets across Africa. Mwana holds exploration assets in theDemocratic Republic of Congo (the "DRC"), Ghana, Zimbabwe and in Australia, aswell as production assets in Zimbabwe, and has been actively building an Africandiamond exploration and production business. All current production is inZimbabwe and the focus of greenfields exploration is in the DRC and Ghana. Mwanaintends to pursue further development and exploration opportunities acrossAfrica. In May 2006, Mwana acquired 20% of Societe Miniere de Bakwanga ("MIBA"),the DRC's leading diamond producer based in Mbuji Mayi, signaling its entry intothe diamond industry and significantly strengthening its interests in the DRC. Building on this, on May 21, 2007 Mwana completed the acquisition of Gravity Diamonds Limited ("Gravity Diamonds"), a diamond exploration business with exploration assets in the DRC and Australia. Mwana's strategy is to use its management skills and experience in Africa todevelop into a major resource group on the African continent, exploitingopportunities across different countries and commodities. Mwana is focused onbuilding a portfolio of producing and near-producing assets by identifying andacquiring efficient and low-cost producing mines in Africa as well as by seekingto partner with industry majors on new projects while aiming to be the preferredvehicle for African investors and entrepreneurs. The proposal to merge Mwana andSouthernEra will allow the management of Mwana to apply its skills to theprojects owned by SouthernEra, and in particular, in the DRC and Angola. For the financial year ended March 31, 2007, Mwana reported a profit beforetaxation and minority interests of £41,735,000, principally generated by Mwana'sZimbabwean operations. After taxation and minority interests, this equated to aprofit of £21,879,000. Mwana also raised a total of £41,002,000 in cash fundsduring the year, principally through the placement of 66.9 million Mwana Shares.As at March 31, 2007, Mwana retained £38,086,000 in cash. The Offer presents Mwana and SouthernEra shareholders with an opportunity toparticipate in the benefits of a combined group. The diamond concessions ofMIBA, Gravity Diamonds and SouthernEra are contiguous in the DRC and Mwana believes that, developed together, they would form a solid foundation for a major African diamond exploration and production business. Further details ofthe strategic rationale behind the Offer are set out in the Offer Circular. Time and Manner for Acceptance The Offer is open for acceptance until 5:00 p.m. (Toronto time) on September 5,2007 or until such later time and date to which the Offer may be extended byMwana at its discretion (the "Expiry Time"), unless withdrawn by Mwana. SouthernEra shareholders may accept the Offer by depositing certificatesrepresenting SouthernEra Shares that are being deposited, together with theLetter of Transmittal, duly completed and signed, at the offices of ComputershareInvestor Services Inc., the depositary for the Offer (the "Depositary") as specified in the Letter of Transmittal at or before the Expiry Time. Any shareholder holding SouthernEra Shares in the form of Crest DepositaryInterests must additionally arrange for the appropriate electronic acceptanceinstruction to be sent to CREST Depository at or before the Expiry Time. TheOffer will be deemed to be accepted only if the Depositary has actually receivedthese documents and, where applicable, electronic acceptance instructions haveactually been received by CREST Depository at or before the Expiry Time.Shareholders whose SouthernEra Shares are registered in the name of a broker,dealer, bank, trust company or other nominee should request their nominee toeffect the transaction. Shareholders whose certificates for SouthernEra Shares are not immediatelyavailable may use the procedures for guaranteed delivery set forth in the Noticeof Guaranteed Delivery (printed on yellow paper). Shareholders may also accept the Offer in Canada by following the procedures for book-based transfers, provided that a confirmation of the book-transfer ofSouthernEra Shares through CDSX into the Depository's account at CDS is receivedby the Depository at its office in Toronto prior to the Expiry Time. TheDepository has established an account at CDS for the purpose of the Offer. Anyfinancial institution that is a participant in CDS may cause CDS to make abook-based transfer of SouthernEra Shares into the Depository's account inaccordance with CDS procedures for such transfer. Delivery of the SouthernEraShares using the CDS book-based transfer system will constitute a valid tenderunder the Offer. Shareholders and their respective CDS participants who utilize CDSX to acceptthe Offer through a book-based transfer of their holdings into the Depository'saccount with CDS shall be deemed to have completed and submitted a Letter ofTransmittal and to be bound by the terms thereof and to have acknowledged thatMwana may enforce such terms against the applicable Shareholder and CDSparticipant, as the case may be, and therefore any book-based transfer ofSouthernEra Shares into the Depository's account at CDS in accordance with CDSprocedures will be considered a valid tender in accordance with the terms of theOffer. Further details regarding the procedure for accepting the Offer are set out inthe Offer Circular. Independent Technical Report on the Material Assets of Mwana As part of preparing the Offer Circular, Mwana retained SRK Consulting toprepare an independent technical report on Mwana's material assets. This reportwill be filed on SEDAR (http://www.sedar.com/) later today together with theOffer Circular and is also available on the Company's website (http://www.mwanaafrica.com/). Mwana has engaged Numis Securities Limited ("Numis") as financial adviser inconnection with the Offer. Canaccord Adams Limited acts as Nominated Adviser and Joint Broker to Mwana inthe United Kingdom. JP Morgan Cazenove Limited also acts as Joint Broker toMwana in the United Kingdom. Canaccord Adams Limited acts as Dealer Manager for the Offer. Information on SouthernEra This information concerning SouthernEra contained in this press release has been taken from or is based upon publicly available documents and records ofSouthernEra on file with Canadian securities regulatory authorities and otherpublic sources. Although Mwana has no knowledge that would indicate that any ofthe statements contained herein concerning SouthernEra taken from or based uponsuch documents and records are untrue or incomplete, neither Mwana nor any ofits directors or officers assumes any responsibility for the accuracy orcompleteness of such information, including any SouthernEra financial statements, or for any failure by SouthernEra to disclose publicly events or facts which mayhave occurred or which may affect the significance or accuracy of any such information but which are unknown to Mwana. Mwana has no means of verifying the accuracy or completeness of any of the information contained herein that is derived from SouthernEra's publicly available documents or records or other public sources or whether there has been any failure by SouthernEra to disclose events that may have occurred or may affect the significance or accuracy of any information. SouthernEra is a producer of diamonds. SouthernEra's mineral properties includethe Camafuca Diamond Project in Angola, the Klipspringer Diamond Project inSouth Africa and a portfolio of diamond exploration projects, in Canada, the DRC and South Africa. SouthernEra holds a 57% joint venture interest in the Klipspringer Mine located250km north of Johannesburg in the hills of the northsouth trending HighlandMountains in the Limpopo Province. The project consists of several en echelon(staggered or overlapping) kimberlite fissures and blows trending in a northeastorientation, and includes the Leopard Fissure, the Sugarbird Fissure, theSugarbird Blow, the Kudu Fissure, and the Kudu Blow, amongst others. In January 2004, the Klipspringer Mine was placed on care and maintenance;however during the third quarter of 2006, a trial mining and bulk samplingexercise was undertaken to try a new mining method and test market conditions. SouthernEra also holds an 18% free-carried interest in the Camafuca DiamondProject in Angola through the Camafuca Joint Venture between Endiama, thestate-owned national diamond mining company of Angola, SouthernEra, Minex Lda("Minex"), and Comica SARL. The Camafuca Diamond Project is located in the LundaNorte province of northwestern Angola, approximately 20km southeast of the townof Lucapa. The project area covers the primary kimberlite deposits associatedwith the Camafuca-Camazamba kimberlite pipe complex, which has a surface area of160 hectares and is one of the world's largest, known, undeveloped diamondresources. Under the joint venture agreement, US$20 million will be provided byone of the stakeholders, Minex, to finance Phase 1 of the proposed dredge-miningoperation at Camafuca. Since 2000, no further technical work has been carriedout at Camafuca, and further progress on development of the project will onlycommence once finance for Phase 1 is received from Minex. As of early 2006SouthernEra was awaiting the release of funds by Minex. On March 28, 2007, SouthernEra announced that it had acquired a 55% interest inthe BK16 kimberlite pipe located within the Orapa Kimberlite Field in Botswana.Under the agreement, SouthernEra has the right to earn up to a 70% interest inthe project by funding exploration to the completion of a definitive feasibilitystudy. SouthernEra announced that it has entered into an agreement with KenrodEngineering Services (Proprietary) Limited, a Botswana registered company whichowns the BK16 prospecting license, and has immediately earned a 55% interest inthe BK16 pipe. Subsequently, on May 16, 2007, SouthernEra announced that the agreement wasapproved by the Minister of Mines of Botswana and that SouthernEra is fast-tracking the BK16 evaluation program. SouthernEra's diamond exploration strategy is focused on developing and workingon projects located in high potential on-craton diamond regions that include the Slave and Superior Cratons in Canada, the Kaapvaal Craton in South Africa and the Congo Craton in the DRC, in programs that range from early stagereconnaissance to advanced drilling to bulk sampling. SouthernEra controls inexcess of 2 million hectares of diamond properties, exploring for diamonds inthree of the world's top eight diamond producing countries. According to SouthernEra's audited financial statements, for the fiscal yearended December 31, 2006, SouthernEra had a net loss of approximately US$21.2million, or US$0.14 per share based on the weighted average number ofSouthernEra Shares outstanding during the period. In addition, for the threemonths ended March 31, 2007, SouthernEra had a net loss of US$0.242 million. IMPORTANT NOTICE The Offer is not being made, directly or indirectly, to "U.S. persons" (as suchterm is defined in Regulation S of the United States Securities Act of 1933, asamended, the "U.S. Securities Act") or in or into the United States (includingits territories, possessions, each state thereof and the District of Columbia,the "United States") or any other jurisdiction where it would be unlawful to doso, or by use of the mails, or by any means or instrumentality (including,without limitation, telephonically or electronically) of interstate or foreigncommerce, or by any facility of a national securities exchange of anyjurisdiction where it would be unlawful to do so, and the Offer will not becapable of acceptance by U.S. persons or by any such means, instrumentality orfacility from or within the United States or any other jurisdiction where itwould be unlawful to do so. Accordingly, copies of this press release, theOffer, Circular and all other documents relating to the Offer are not being, and must not be, mailed or otherwise forwarded, distributed or sent in, into orfrom the United States or any other jurisdiction where it would be unlawful to do so. Persons receiving such documents (including, without limitation, nominees,trustees and custodians) should observe these restrictions. Failure to do so mayinvalidate any related purported acceptance of the Offer. The Mwana Shares have not been, and will not be, registered under the U.S.Securities Act or any U.S. state securities or "blue sky" laws and may not beoffered or issued in the United States or to, or for the account or benefit ofU.S. persons. Notwithstanding the forgoing and the other provisions of the Offerto Purchase, the Circular and the other documents relating to the Offer, Mwanamay, in its sole discretion in certain limited circumstances offer or issueMwana Shares in the United States or to, or for the account of U.S. persons,pursuant to an exemption from the registration requirements of the U.S.Securities Act and in compliance with any applicable U.S. state securities or"blue sky" laws. Persons who are resident in the United Kingdom should note that the Offer willnot be subject to the provisions of the United Kingdom Takeover Code. The content of this press release, which has been prepared by and is the soleresponsibility of Mwana, has been approved by Numis Securities Limited, TheLondon Stock Exchange Building, 10 Paternoster Square, London, England EC4M 7LS,solely for the purposes of section 21 of the United Kingdom's Financial Servicesand Markets Act 2000. Numis Securities Limited is acting exclusively for Mwanain connection with the Offer and no one else and will not be responsible toanyone other than Mwana for providing the protections afforded to clients ofNumis Securities Limited nor for providing advice in relation to the Offer orany other matter referred to in this press release. This press release does not constitute or form part of any offer to sell orinvitation to purchase any securities or solicitation of an offer to buy anysecurities, pursuant to the Offer or otherwise. The Offer will be made solely bythe formal offer and take-over bid circular, which will contain the full termsand conditions of the Offer, including details of how the Offer may be accepted. This press release is for information purposes and is not a substitute for theformal offer and take-over bid circular. Copies of the offer and take-over bidcircular and other materials relating to the Offer can be obtained free ofcharge at the SEDAR website at www.sedar.com (http://www.sedar.com). This press release contains forward-looking statements with respect to the Offerand the transactions contemplated thereby, including the proposed businesscombination of Mwana and SouthernEra, Mwana's financial condition, results ofoperations, business prospects, plans, objectives, goals, strategies, futureevents, capital expenditures, and exploration and development efforts. Wordssuch as "anticipates", "expects", "intends", "plans", "forecasts", "projects","budgets", "believes", "seeks", "estimates", "could", "might", "should", andsimilar expressions identify forward-looking statements. Although Mwana believesthat its plans, intentions and expectations reflected in these forward-lookingstatements are reasonable, Mwana cannot be certain that these plans, intentionsor expectations will be achieved. Actual results, performance or achievementscould differ materially from those contemplated, expressed or implied by theforward-looking statements contained in this press release. These statementsinclude comments regarding: operations and synergies of the combined entity, the establishment and estimates of mineral reserves and mineral resources,production, production commencement dates, production costs, grade, processingcapacity, potential mine life, feasibility studies, development costs, capitaland operating expenditures, exploration, the closing of certain transactionsincluding acquisitions and offerings, and Mwana's expansion plans. For further information visit our web site at (http://www.mwanaafrica.com/). Neither the Toronto Stock Exchange nor the London Stock Exchange has reviewedand does not accept responsibility for the adequacy or accuracy of this release. Enquiries: Oliver Baring, Chairman Tel. +44 20 7654 5588Kalaa Mpinga, CEO or David Fish, CFO Tel. +27 11 883 9550/1 Mwana Africa plcDevon House12-15 Dartmouth StreetLondonSW1H 9BL A copy of the early warning report filed by the Company pursuant to Canadiansecurities laws can be obtained from the individuals identified above at Mwana. John Harrison, Managing Director Tel. +44 20 7260 1000Numis Securities Limited Mark Ashurst, Managing Director Tel. +44 20 7050 6500Canaccord Adams Limited Michael BarmanDealer Manager, Canaccord Adams Limited Tel. +1 416 869 7216 Tom Randell or Maria Suleymanova Tel. +44 20 7653 6620Merlin, PR This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Asa Resources