16th Feb 2005 10:45
Aricom PLC16 February 2005 THIS INFORMATION IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THEUNITED STATES Aricom plc proposes to raise £10.7m (US$20.0m)by the issue of 38.25 million new shares pursuant to a placing at 28p per share to fund planning and construction of Olekma mining operations London, February 16 2005, Aricom plc, the titanium dioxide company withoperations in Russia, has conditionally agreed with Canaccord Capital (Europe)Ltd ("Canaccord") that it will issue a total of 38.25 million new ordinaryshares to placees procured by Canaccord at 28p per share. The placing is conditional upon shareholder approval at an Extraordinary GeneralMeeting ("EGM") to be held on 11 March 2005 and for which the notice is beingsent to Shareholders. Peter Hambro and Pavel Maslovsky, together with companiesassociated with them, have irrevocably undertaken to vote in favour of theresolution to be put to the EGM in respect of their beneficial holdings of, inaggregate 44,104,191 Ordinary Shares representing approximately 46% of theCompany's existing issued share capital. Associates of Peter Hambro and PavelMaslovsky have agreed to subscribe to an aggregate 1.3 million shares, which iswithin the limit permitted without triggering an obligation to make a mandatoryoffer for the Company. The placing is also subject to the new shares being admitted to trading on AIM,which is expected to take place on or around 15 March 2005. Aricom intends to use the estimated net proceeds of the placing of approximately£9.6 million (US$18.0 million) to continue with its plans to become avertically-integrated low cost producer of titanium dioxide focused on theChinese and Russian markets. This development is intended to take place in twoconcurrent stages. The first stage which is expected to be completed in late2007 is the construction of mining and beneficiation operations at Olekma andKuranakh in the Amur Region. The second stage is the development of a70,000-80,000tpa titanium dioxide plant, also in the Amur Region. Theimplementation of both stages will require Aricom to raise additional fundingand to obtain all corporate and regulatory necessary approvals and permissions. The funds from the placing will be used primarily to progress implementation ofthe first stage of Aricom's development, including to: • complete a full bankable feasibility study for development of the mine; • obtain the necessary permissions and approvals; • commence the construction of the mining and beneficiation operations; • purchase mining and transport equipment; • carry out additional exploration work to upgrade Aricom's reserves and resources, in line with the conditions of the licence; • assess the economic potential of recent indications of gold and zircon at Kuranakh. The completion of the mine and beneficiation plant as currently scheduled, wouldenable deliveries to commence in 2007 under the conditional offtake agreementswith China National Gold Corporation announced in January. These agreementsprovide for Aricom to supply to China National Gold Corporation a total of atleast 360,000 tonnes of ilmenite concentrate over one and a half years and atleast 3,300,000 tonnes of titanomagnetite concentrate over five years. Theagreements will come into effect once Aricom has secured the final equity anddebt financing required to complete the mining and beneficiation project. The second stage of Aricom's development is the intended construction of a70,000-80,000tpa titanium dioxide plant, also in the Amur Region. Funds raisedin the placing will be used to progress discussions regarding the acquisition oftechnology to produce TiO2 at this plant and to move the project into theinitial design phase. Aricom will need to raise additional finance for thissecond stage of its development, which may involve additional equity funding. Funds will also be made available to cover estimated working capital needs forthe 16 month period to June 2006, including the costs of the Company'soperations in London and Moscow. Peter Hambro and Pavel Maslovsky and their associates, together with Sir MalcolmField have agreed with Canaccord that they will not, for a period of 12 monthsfollowing the placing, except in certain limited circumstances, sell any Aricomplc shares without the prior consent of Canaccord and the Company. No existing shares are being sold as part of the placing. Sir Malcolm Field, Chairman of Aricom plc, said: "With today's fundraising we move into the implementation phase of Aricom'sdevelopment. After a period of thorough preparation, we can now start laying thephysical foundations for our mining and beneficiation operations at Olekma andKuranakh. Over the coming months, we expect to complete the bankable feasibilitystudy for the mine and beneficiation operations and to progress discussionsregarding the acquisition of technology for our titanium dioxide processingplant. We have commissioned work to establish the economics of extracting goldand zircon at Kuranakh, a potential source of additional revenue. Ourdevelopment as the first vertically-integrated low-cost titanium dioxideproducer in Russia remains firmly on track." Enquiries: Tom Swithenbank/ Sir Malcolm Field Aricom plc 020 7201 8939Tom Randell/ David Simonson Merlin 020 7653 6620 This announcement shall not constitute or form any part of an offer orinvitation to subscribe for, underwrite or otherwise acquire, or anysolicitation of any offer to purchase or subscribe for, securities including inthe United States. This announcement does not constitute an offer of securities for sale in theUnited States of America. Neither this announcement nor any copy of it may betaken or distributed in the United States of America or distributed orpublished, directly or indirectly, in the United States of America. Any failureto comply with this restriction may constitute a violation of US securities law.The securities referred to herein have not been and will not be registered underthe US Securities Act of 1933, as amended (the "Securities Act"), and may not beoffered or sold in the United Sates to or for the benefit of US persons unlessthey are registered under the Securities Act or pursuant to an availableexemption therefrom. No public offering of securities is being made in theUnited States. Canaccord, which is regulated by The Financial Services Authority, is actingsolely for the Company in relation to the Placing. Canaccord is not acting for,or responsible to, any person other than the Company for providing theprotections afforded to customers of Canaccord. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Orogen Gold