21st Nov 2007 12:04
Churchill Mining plc21 November 2007 21 November 2007 CHURCHILL MINING PLC ("Churchill" or "the Company") CHURCHILL COMPLETES MAJOR CAPITAL-RAISING TO ADVANCE INDONESIAN ENERGY PROJECTS NOTICE OF AGM Highlights: • £10 million raised through a placing at 50p per share • Placing supported by Company's current institutional shareholders and new investors • Current 10,000 metre coal drilling programme to be expanded up to 65,000 metres Churchill's Managing Director, Paul Mazak commented: "The results from the first4,000 metres of the initial 10,000 metre programme at the East Kutai CoalProject have been very encouraging and this has lead the Churchill directors toseek additional funds to, in particular, upgrade the current drilling programmefrom its current target to as much as 65,000 metres, with the aim of defining aJORC compliant mining reserve of 100 million tonnes of coal by the end of 2008with an additional 400 million tonnes of resource for continued drilling andupgrading". "Assuming that the targeted mining reserve is reached by the end of 2008,"continued Mr. Mazak, "then Churchill should be in a position to advise a minedevelopment schedule thereafter." Introduction The Company is pleased to announce that, conditional upon the passing of certainresolutions at the Company's Annual General Meeting ("AGM"), it has raised£10,000,000 by the issue of 20,000,000 new Ordinary Shares at 50p per share ("the Placing"). At the AGM resolutions have been included to grant to the Directors an authoritypursuant to Section 80 of the Act to allot shares and a power pursuant toSection 95 of the Act to allot shares for cash. A notice convening the AGM has been sent to shareholders of the Company. The AGMis to be held at the offices of Blue Oar Securities Plc, 30 Old Broad StreetLondon EC2N 1HT on 14 December 2007 at 11.00 a.m. Background to and reasons for the Placing The Company recently announced its preliminary results for the financial yearended 30 June 2007. These results included: the acquisition of a 75 percentinterest in the East Kutai Coal Project ("EKCP") in Kalimantan, Indonesia andthe commencement of a major drilling campaign; the investigation of coal bedmethane ("CBM") potential at Sendawar; and the spin-off of the South WoodieWoodie Manganese Project in Western Australia. Now that Churchill is entirely focused on its large scale energy projects inIndonesia, including coal and CBM, the Company requires further funding toundertake an aggressive exploration and drilling programme at EKCP as well asfor evaluation studies at its CBM project in Sendawar. EKCP The Directors believe EKCP is an exciting project for Churchill as it liesapproximately 55km from a major new coal discovery at Pakar, which, as atDecember 2006, had a JORC compliant reserve of 270 million tonnes of coal.Drilling results to date have been positive with over 250 coal outcrops mappedand the first coal volume calculations are expected at the end of January 2008. Churchill designed an initial drilling programme of 10,000 metres at EKCP. Theinitial results from the first 4000 metres of that programme were veryencouraging and this has lead the Churchill directors to seek additional fundsto expand the drilling programme to 65,000 metres, with the aim of defining aJORC compliant mining reserve of 100 million tonnes of coal by the end of 2008with an additional 400 million tonnes of resource for continued drilling andupgrading. In conjunction with this, the Company intends to undertakefeasibility studies during 2008 in order to take the next step of minedevelopment in 2009 if drilling and reserve calculations are successful. To date, all exploration camps and facilities are in place and the Company nowhas a field team of over 100 personnel, including drilling contractor staff, 12geologists, community liaison and local development officers, logistical supportand locally sourced non-skilled personnel working on the project. Sendawar The Company announced in September 2007 that, following work and the collectionof historical drilling data, the Sendawar project area had the potential to hostvery large amounts of CBM and that Churchill had been awarded Indonesia's firstCBM joint evaluation agreement ("JEA") licence in Kalimantan, Indonesia. Thishas concentrated the Company's focus on the CBM at Sendawar and with jointventure partner PT Ridlatama Mining Utama, will spend the first half of 2008completing a joint evaluation study in order to assess the potential of CBM atSendawar. If the study is positive, the Company will look to convert the JEAinto a Production Sharing Contract. Details of the Placing The Company is proposing to raise £10,000,000, before expenses, through theissue of 20,000,000 new Ordinary Shares ("Placing Shares") at 50p per share toboth existing institutional shareholders and a number of new professionalinvestors and institutions. The Placing Shares will represent approximately30.7 percent of the enlarged share capital immediately following admission ofthe Placing Shares to trading on AIM. The Placing is conditional on the passing of the resolutions at the AGM. The Placing Shares will, upon issue, rank pari passu in all respects with theexisting Ordinary Shares, including the right to receive any dividends and otherdistributions declared, made or paid following Admission and will be issuedcredited as fully paid. Admission of the Placing Shares is expected to takeplace on 17 December 2007, bringing the total number of shares in issue to65,076,000. Use of Proceeds Proceeds from the Placing will be used to fund: • An extensive exploration and drilling program at the EKCP; • Pre-feasibility and feasibility studies at the EKCP; • Joint evaluation studies at the Sendawar CBM project; and • The identification and due diligence of other projects for group integration. The resolutions In order to enable the Placing to proceed the following resolutions, amongstothers (together the "Resolutions"), have been proposed at the AGM: 1. Permit the allotment of up to 50,000,000 Ordinary Shares pro rata to existing Shareholders or otherwise than to existing Shareholders for non-cash consideration; and 2. Empower the Directors to allot up to 30,000,000 Ordinary Shares, including for the purposes of the Placing for cash otherwise than pro rata to existing shareholders. Following the Placing the authorities granted to the Directors to allot OrdinaryShares as summarised will endure to the extent that:- (a) The Directors will be authorised to allot such number of Ordinary Shares as is equal to approximately 46 percent of the number of Ordinary Shares in issue immediately following the Placing pro rata to existing Shareholders or otherwise than to existing Shareholders for non-cash consideration; and (b) The Directors will be empowered to allot such number of Ordinary Shares for cash otherwise than pro rata to existing Shareholders as is equal to approximately 15 percent of the number of Ordinary Shares in issue immediately following the Placing. AGM recommendation The Directors unanimously recommend that Shareholders vote in favour of theResolutions, as they intend to do in respect of their own shareholdings. Enquiries: Churchill Mining Plc Blue Oar Securities Parkgreen CommunicationsManaging Director - Paul G. Mazak Romil Patel / Jerry Keen Justine Howarth+61 (0)8 9388 0377 +44(0)20 7448 4000 +44 (0) 20 7851 7480 [email protected] Olly [email protected] +61 (0)8 6430 1631 Ends. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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