5th Feb 2009 07:12
5 February 2009
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN INTO OR FROM THE UNITED STATES OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF ANY SUCH JURISDICTION
Possible Merger of Peter Hambro Mining and Aricom
The Independent Board Committees of each of Peter Hambro Mining and Aricom note the recent speculation in the press concerning the terms of a possible merger of the two companies. The Independent Board Committees are pleased to announce that they have made considerable progress towards reaching agreement on the terms of a recommended Merger of the two companies by which all of the issued share capital of Aricom would be acquired by Peter Hambro Mining. The Independent Board Committees are hopeful that final agreement will be reached shortly.
Agreement has not yet been reached on the exchange ratio for the Merger and certain other terms and there can therefore be no certainty that the Merger will proceed. However, the Independent Board Committees are working towards agreement on a fixed exchange ratio which would result in Aricom Shareholders receiving one fully paid Peter Hambro Mining Share in exchange for between 15.77 and 17.14 fully paid Aricom Shares. The fixed exchange ratio (which would be in this range) is expected to be based on a number of factors which are still subject to negotiation between the parties.
Peter Hambro Mining is also today launching a Placing to raise approximately £55 million. The Placing proceeds are expected to increase working capital headroom for Peter Hambro Mining, and, should the Merger proceed, the Enlarged Group. A separate announcement is today being released by Peter Hambro Mining in respect of the Placing.
The Merger would create a mining industry leader in the Far East of Russia with operations in both gold and iron ore with a pro forma combined market capitalisation (excluding the Placing proceeds) of approximately US$1.1 billion.
If the Merger proceeds, the Enlarged Group would be well funded, with a pro forma unaudited cash balance of approximately US$282 million (with US$25 million attributable to Peter Hambro Mining and US$257 million attributable to Aricom) as at 31 December 2008 (excluding the Placing proceeds) and pro forma unaudited net debt of US$88 million as at 31 December 2008.
If the Merger proceeds, Peter Hambro Mining would be able to implement its existing strategy of pursuing near term growth of gold production while allowing for the development of Aricom's large iron ore assets once project finance and iron ore markets recover. Peter Hambro Mining would continue to seek to create value for shareholders and, in line with its recent practice, to provide a return to shareholders as appropriate in the form of dividends.
If the Merger proceeds, and subject to satisfying eligibility criteria, Peter Hambro Mining intends to make an application to obtain a primary listing on the Official List as soon as possible following completion of the Merger.
Based on Peter Hambro Mining's closing price of 585 pence on 4 February 2009, each Aricom Share would be valued at between 34 pence and 37 pence depending on the exchange ratio.
Based on Peter Hambro Mining's closing price of 398 pence on 8 January 2009, the last day prior to the start of the offer period, each Aricom Share would be valued at between 23 pence and 25 pence depending on the exchange ratio.
Following completion of the Merger but excluding the effect of the Placing:
Peter Hambro Mining Shareholders would hold 81.2 million shares in the Enlarged Group representing between 52 per cent. and 54 per cent. of the Enlarged Group's issued share capital depending on the exchange ratio;
Aricom Shareholders would hold between 69.0 million and 75.0 million shares in the Enlarged Group, representing between 46 per cent. and 48 per cent. of the Enlarged Group's issued share capital depending on the exchange ratio;
Following completion of the Placing, the placees would be issued with further Peter Hambro Mining shares which would reduce the above shareholding percentages accordingly.
If the Merger proceeds, it is proposed that the Aricom Shares would be acquired by way of a Court sanctioned scheme of arrangement under Part 26 of the Companies Act.
If the Merger terms are agreed its implementation would be conditional upon, among other things, certain Russian regulatory conditions being fulfilled to the reasonable satisfaction of Peter Hambro Mining and Aricom, the passing of resolutions by Peter Hambro Mining Shareholders and Aricom Shareholders and the sanction of the Court.
Sir Rudolph Agnew, Senior Independent Director of Peter Hambro Mining, stated:
"Combining Peter Hambro Mining's near term gold production assets with Aricom's significant available cash resources and iron ore assets would create a mining industry leader in the Far East of Russia. We believe it would offer the opportunity for a transaction where the whole would be substantially greater than the sum of its parts."
Sir Malcolm Field, Senior Independent Director of Aricom, stated:
"I am confident that the proposed merger would deliver significant benefits from combining the current and prospective gold interests of Peter Hambro Mining with the longer term development of Aricom's valuable iron ore assets. It would enhance the market position of the group creating scale and a platform for growth leading to significant increase in value for shareholders of both companies."
1. Independent Board Committees
Because a number of individuals (including Peter Hambro and Pavel Maslovskiy) are directors and/or shareholders of both companies, Peter Hambro Mining and Aricom have each constituted committees of independent directors for the purposes of the Merger.
The Independent Peter Hambro Mining Board Committee consists of Sir Rudolph Agnew (as Chairman), Andrey Maruta, Alya Samokhvalova, Peter Hill-Wood and Lord Guthrie.
The Independent Aricom Board Committee consists of Sir Malcolm Field (as Chairman), Brian Egan, Martin Smith, Sir Roderic Lyne and Tony Redman.
Independent Peter Hambro Mining Board Committee
The Independent Peter Hambro Mining Board Committee believes that the Merger would result in the Enlarged Group being in a stronger strategic and financial position than either of the current Peter Hambro Mining and Aricom are as separate entities.
The Independent Peter Hambro Mining Board Committee believes that the Enlarged Group's cash (including any Placing proceeds) could be used to eliminate or reduce the exposure to certain of Peter Hambro Mining's short-term obligations (in particular, Gold Exchangeable Bonds which are repayable at the holders' option on or after 19 October 2009).
The Independent Peter Hambro Mining Board Committee believes that the Merger would deliver significant benefits as a result of combining the currently producing and prospective gold interests of Peter Hambro Mining with the iron ore assets and significant available cash resources of Aricom. Benefits include:
streamlining operations and infrastructure shared by Peter Hambro Mining and Aricom;
administrative cost savings;
ensuring the Enlarged Group is well funded; and
increased near term cash flow from Peter Hambro Mining's operating businesses generated by using Aricom's significant available cash resources to meet Peter Hambro Mining's near term plans and in due course to support Aricom's capital investment programme and finance the Enlarged Group's further growth.
The Independent Peter Hambro Mining Board Committee believes achieving these benefits would be facilitated by the shared Anglo-Russian culture, management and directors, shareholders and head offices of both companies.
The Independent Peter Hambro Mining Board Committee is receiving financial advice from JPMorgan Cazenove and Liberum Capital. Liberum Capital will provide independent advice to the Independent Peter Hambro Mining Board Committee for the purposes of Rule 3 of the Code.
Independent Aricom Board Committee
The Independent Aricom Board Committee considers that the Merger would represent an attractive opportunity for Aricom Shareholders.
The Independent Aricom Board Committee has examined Aricom's long-term development plans, funding requirements and the current state of project finance and capital markets. The Independent Aricom Board Committee believes Aricom's project pipeline is attractive. However, given current market conditions it is currently expected to take significant investment over several years in order to generate returns on these projects. Against this background, the Merger would allow Aricom Shareholders to maintain an interest in Aricom's assets as well as gaining exposure to Peter Hambro's attractive portfolio of producing assets and their associated near term earnings and cash flow.
The Merger would allow Aricom Shareholders to benefit from participation in the Enlarged Group with benefits resulting from:
enhanced market position, scale and growth platform and operational and strategic synergies through shared infrastructure of closely located operations;
cashflow from the Enlarged Group's portfolio of producing assets which would help fund the investment required for Aricom's long-term development plans; and
the potential for a significant increase in value of both Peter Hambro Mining and Aricom.
The Independent Aricom Board Committee is receiving financial advice from Canaccord Adams and Morgan Stanley. Morgan Stanley will provide independent advice to the Independent Aricom Board Committee for the purposes of Rule 3 of the Code.
2. Capital expenditure
If the Merger proceeds, the Enlarged Group, with its increased cash resources, would have greater flexibility in terms of the timing and amount of its capital expenditure. The capital expenditure plans for the Enlarged Group would be a matter for the Enlarged Group to finalise upon completion of the Merger. However, Peter Hambro Mining currently expects to:
continue the development of its Pioneer and Malomir assets as highlighted in the Peter Hambro Mining trading update dated 26 January 2009;
announce its annual update on production plans later in the first quarter of 2009;
complete construction of the Kuranakh beneficiation plant and to commence production and sales of concentrate during 2009; and
incur expenditure on Aricom's iron ore projects at a level that allows for a later development of the K&S and Garinskoye assets while observing commercial and legal requirements for the preservation of the licences.
The rationale for this strategy is to preserve the inherent value in, and the ability to accelerate development of, these projects once the project finance and iron ore markets recover.
3. Revised K&S development plan
Due to the current global economic crisis and the resulting significant downturn in the availability of debt financing, Aricom has sought to optimise the construction and development phasing of the K&S and Garinskoye projects to bring smaller, less capital intensive, mining and processing operations into production at the earliest possible time whilst maintaining attractive returns.
An updated analysis of the K&S operation has been developed based upon mining ore at an initial capacity of 3.5mtpa (increasing in year seven to 10mtpa) to be delivered to a processing plant producing 1.1mtpa of saleable iron ore concentrate at a grade of 65.8% Fe. The analysis also assumes that two years after the start of the processing plant, a DRI plant, employing the Kobe Steel ITmk3 technology, would process 0.75mtpa of iron ore concentrate to produce 0.5mtpa of DRI nuggets.
The K&S analysis shows that significant project optimisation can be achieved by reducing the initial capacity of the processing and DRI plants, with the modular nature of both allowing expansion at a later date. This should achieve an immediate capital expenditure reduction of approximately 70 per cent. in the cost of the processing plant and nearly 80 per cent. in the DRI plant versus the original plan. Further reductions can be achieved in capital expenditure for site infrastructure with the reduced size of the operation allowing a very significant saving of approximately US$70.0 million to be made to the original plan of building additional railway infrastructure near to the pit. The total infrastructure saving, which also includes reductions in the size of the accommodation camp and the tailings facilities, represents an approximately 50 per cent. reduction versus the original plan.
Any option to reduce the size of the K&S operation would also reduce capital expenditure required at the mining site itself. The sequential mining of the project's three pits (Kimkanskoye Central, Kimkanskoye West and Sutarskoye) makes it possible to reduce initial capital investments in the mining equipment such as drill rigs, excavators, bulldozers and mine trucks. The total mining reduction is approximately 60 per cent. versus the original plan. Overall capital expenditure for the reduced K&S project to progress to the start-up stage is estimated to be approximately US$420.0 million, US$116.0 million less than envisaged under the original plan.
This reduced capital expenditure gives the project significant option value. Financial and iron ore markets would, if the Merger proceeds, continue to be monitored by the Enlarged Group for evidence that the projected economic requirements of the study are in place. In the interim, the work programme at K&S is under constant review to minimise cash outflow whilst keeping some positive momentum on project development.
4. Information on Peter Hambro Mining
Peter Hambro Mining is focused on the acquisition, exploration and development of gold deposits and the production of gold in Russia. Peter Hambro Mining's principal operations are located in the Amur Region in the Far East of Russia, where it has operated since 1994. Peter Hambro Mining is also active (itself or through joint ventures) in other areas of Russia including Yamal, Buryatia, Magadan, Chita and Irkutsk. Peter Hambro Mining is the second largest producer of gold in Russia (by production volume), with attributable gold production in 2008 of c. 393,000 oz and is one of the lowest cost producers of gold worldwide. Peter Hambro Mining's Pokrovskiy Mine has one of the lowest GIS total cash costs and GIS total production costs in Russia.
Peter Hambro Mining's primary operations are its Pokrovskiy and Pioneer producing mines, Malomir (a development project), and its exploration projects at the Pokrovskiy Satellite Deposits and Albyn and Tokur deposits, all of which are in the Amur Region, and the Novogodnee Monto and Petropavlovskoye deposits in Yamal.
The Peter Hambro Mining Group includes various in-house services companies and contractors that currently meet the majority of its geological, exploration and construction needs and also provide some services under contracts to third parties.
For the 12 month period to 31 December 2007, the Peter Hambro Mining Group had revenue of US$226.4 million (2006:US$157.8 million) and operating profit of US$67.5 million (2006: US$50.7 million) representing an operating margin of 29.8 per cent. (2006: 32.2 per cent.).
Peter Hambro Mining's interim results for the period to 30 June 2008 were announced on 22 September 2008. These showed unaudited revenue of US$146.4 million (period to 30 June 2007: US$93.1 million) and operating profit of US$32.0 million (period to 30 June 2007: US$36.3 million) representing an operating margin of 21.9 per cent. (period to 30 June 2007: 39.0 per cent.).
Peter Hambro Mining is headquartered in London and its shares are traded on AIM.
5. Information on Aricom
Aricom engages in the mining development of iron ore deposits and the production and trading of iron ore in the Far East of Russia to serve the Russian and Chinese market. Aricom was formed in late 2003 in order to develop the Kuranakh ilmenite and titanomagnetite deposit.
Aricom owns seven licences in the Far East of Russia and China: the Kuranakh (100 per cent. interest), Bolshoi Seym (49 per cent. interest), Garinskoye (99.6 per cent. interest) and Garinskoye Flanks (100 per cent. interest) iron ore and ilmenite deposits in Amur, the K&S (100 per cent. interest) and Kostengingskoye iron ore deposits (100 per cent. interest) in the Evreyskaya Avtonomnaya Oblast (EAO) and the Titanium Sponge Plant joint venture (65 per cent. interest) in North East China.
In October 2008, Aricom completed and published the results of its combined K&S and Garinskoye feasibility study, which envisaged both K&S and Garinskoye both producing at the rate of 10mtpa and delivering their ore to feed a single optimised processing plant to be located at K&S. Also included in the feasibility study were plans to commission a direct reduced iron facility at the K&S project site utilising iron ore concentrate feed from the processing plant to produce iron nuggets. Aricom has sought to optimise the construction and development phasing of the K&S and Garinskoye projects to bring smaller, less capital intensive, mining and processing operations into production at the earliest possible time whilst maintaining attractive returns.
For the 12 month period to 31 December 2007, Aricom had sales of US$4.9 million (2006: nil) and operating losses of US$22.7 million (2006: US$7.5 million).
Aricom's interim results for the period to 30 June 2008 were announced on 6 August 2008. These showed revenues of US$4.2 million (2007: nil) and operating losses of US$14.6 million (2007: US$6.0 million). Losses for the six month period were US$2.5 million (2007: US$5.3 million).
Due to the current world economic crisis, as with many other mining companies, the Board of Aricom is reviewing the Company's portfolio of assets and will provide for impairment where it is considered prudent to do so. Details of any impairment provision will be reported in the Aricom Group's full financial results expected on or around 25 February 2009.
Aricom is headquartered in London and its shares have been admitted to the Official List.
6. Board of Directors
If the Merger proceeds, the Enlarged Group would be led by a team comprising Peter Hambro as Executive Chairman, Pavel Maslovskiy as CEO and Brian Egan as CFO and the non-executive directors would be Sir Rudolph Agnew, Sir Malcolm Field, Lord Guthrie, Peter Hill-Wood and Sir Roderic Lyne.
7. Aricom Warrants, Aricom IFC Options
If the Merger proceeds it is expected that the terms of the Merger would extend to holders of Aricom Shares issued or transferred prior to the Scheme Effective Date pursuant to the exercise of options granted under the Aricom Share Option Scheme. In addition Peter Hambro Mining would in due course make appropriate proposals to the holders of Aricom Warrants and Aricom IFC Options. The incentive and remuneration structure for employees would be reviewed by the board of the Enlarged Group.
8. Implementation Agreement
Peter Hambro Mining and Aricom expect that if the Merger proceeds they would enter into an implementation agreement, which would contain customary obligations in relation to the implementation of the Scheme and a break fee.
9. Conditions to the Merger
If the Merger proceeds it would be subject to certain conditions, which would be set out in full in the announcement of a firm intention to proceed with the Merger.
10. UK and Overseas Shareholders
The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.
There will be an analysts presentation on the Merger at 9.30am on 5 February 2009. For details please contact the media and investor contacts below.
A recording of the analysts presentation will be available on both companies' websites.
Investor Contacts: Peter Hambro Mining
Alya Samokhvalova
+44 (0) 20 7201 8900
Investor Contacts: Aricom
Charlie Gordon
+44 (0) 20 7201 8939
JPMorgan Cazenove, financial adviser, nominated adviser, corporate broker, sole bookrunner, co-lead manager and placing agent to Peter Hambro Mining
Ian Hannam
+44 (0)20 7588 2828
Patrick Magee
+44 (0)20 7588 2828
Joe Seifert
+44 (0) 20 7588 2828
Liberum Capital, financial adviser and Rule 3 adviser to Peter Hambro Mining
Chris Bowman
+44 (0) 20 3100 2228
Clayton Bush
+44 (0) 20 3100 2227
Tom Fyson
+44 (0) 20 3100 2230
Morgan Stanley, financial adviser and Rule 3 adviser to Aricom
Peter Bacchus
+44 20 7425 8000
Richard Allan
+44 20 7425 8000
Laurence Hopkins
+44 20 7425 8000
Canaccord Adams, financial adviser and corporate broker to Aricom
Robert Finlay
+44 20 7050 6500
Mike Jones
+44 20 7050 6500
Guy Blakeney
+44 20 7050 6500
Canaccord Adams, co-lead manager and placing agent to Peter Hambro Mining on the placing
Neil Johnson
+44 20 7050 6500
Merlin, media contacts for Peter Hambro Mining
David Simonson and Tom Randell
+44 (0) 20 7653 6620
Abchurch, media contacts for Aricom
Charlie Jack and George Parker
+44 (0) 20 7398 7700
JPMorgan Cazenove and Liberum Capital, which are authorised and regulated in the United Kingdom by the Financial Services Authority, are acting exclusively for Peter Hambro Mining and no-one else in connection with the possible Merger and will not be responsible to anyone other than Peter Hambro Mining for providing the protections afforded to clients of JPMorgan Cazenove or Liberum Capital or for providing advice in relation to the Merger.
Morgan Stanley is acting exclusively for Aricom and no-one else in connection with the matters described in this announcement and will not be responsible to anyone other than Aricom for providing the protections afforded to clients of Morgan Stanley nor for providing advice in relation to the possible Merger or any other matter described in the announcement.
Canaccord Adams is acting exclusively for Aricom and no-one else in connection with the Merger described in this announcement and will not be responsible to anyone other than Aricom for providing the protections afforded to clients of Canaccord Adams nor for providing advise in relation to the possible Merger or any matter related to the possible Merger.
Canaccord Adams is acting exclusively for Peter Hambro Mining and no-one else in connection with the Placing referred to in this announcement and described fully in the Placing announcement and will not be responsible to anyone other than Peter Hambro Mining for providing the protections afforded to clients of Canaccord Adams nor for providing advice in relation to the Placing or any matter relating to the Placing.
This announcement is not intended to, and does not, constitute or form any part of an offer to sell or an invitation to purchase or subscribe for any securities or the solicitation of an offer to buy or subscribe for any securities nor shall there be any sale, issuance or transfer of the securities referred to in the announcement in the United States or any jurisdiction in contravention of applicable law.
The announcement has been prepared in accordance with English law and the Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England. Any Offer will be subject to the applicable rules and regulations of the London Stock Exchange and the Code.
The New Peter Hambro Mining Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any state, district, province or other jurisdiction of the United States, Canada, Australia or Japan or any other Restricted Jurisdiction. No regulatory clearances in respect of the New Peter Hambro Mining Shares have been, or will be, applied for in any state, province, territory or jurisdiction other than the United Kingdom. Accordingly, unless an exemption under relevant securities laws is applicable, the New Peter Hambro Mining Shares are not being, and may not be, offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into the United States, Canada, Australia or Japan or any other Restricted Jurisdiction or to or for the account or benefit of any resident of the United States, Canada, Australia or Japan.
The Placing Shares have not been, and will not be, registered under the Securities Act or under the securities laws of any state of the United States. The Placing Shares will only be offered pursuant to an exemption from, or in transactions not subject to, the registration requirements of the Securities Act. Neither the US Securities Exchange Commission nor any securities commission of any state of the United States has approved or disapproved of the Placing or passed upon the merits or fairness of the possible Merger or Placing. Any representation to the contrary is a criminal offence in the United States.
Cautionary and Forward-Looking Statements
This announcement contains a number of "forward-looking statements" relating to Peter Hambro Mining and Aricom and the business sectors in which they operate. Generally, the words "will", "would", "may", "should", "continue", "believes", "expects", "intends", "anticipates", "forecast", "plan" and "project" or similar expressions identify forward-looking statements. Such statements reflect the relevant company's current views with respect to future events and are subject to risks, assumptions and uncertainties that could cause the actual results to differ materially from those expressed or implied in the forward-looking statements. Many of these risks, assumptions and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions, changes in general economic and business conditions, introduction of competing products and services, lack of acceptance of new products or services and the behaviour of other market participants. Although Peter Hambro Mining believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Aricom Shareholders should not, therefore, place undue reliance on these forward-looking statements, which speak only as of the date of this announcement.
Dealing disclosure requirements
Under the provisions of Rule 8.3 of the City Code (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in, one per cent or more of any class of "relevant securities" of Aricom or Peter Hambro Mining, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by not later than 3.30pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances or lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Aricom or Peter Hambro Mining, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of Aricom or Peter Hambro Mining by Peter Hambro Mining or Aricom, or by any of their respective "associates" must also be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a dealing under Rule 8, please consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44(0)20 7638 0129; fax number +44(0)20 7236 7013.
The Peter Hambro Mining Directors accept responsibility for all the information contained in this Announcement except for that information for which the Aricom Directors accept responsibility. To the best of the knowledge and belief of the Peter Hambro Mining Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
The Aricom Directors accept responsibility for all information in this Announcement relating to Aricom, the Aricom Group and its directors. To the best of the knowledge and belief of the Aricom Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
Appendix I
Sources and Bases
a. The pro forma combined market capitalisation of Peter Hambro Mining and Aricom is based upon an undiluted number of Peter Hambro Mining Shares of 81,155,052, the latest closing price of Peter Hambro Mining Shares on AIM on 4 February 2009 of 585 pence (converted into US$ as set out in paragraph (e) below), the undiluted number of Aricom Shares of 1,182,863,763 and the latest closing price of Aricom Shares on the Official List on 4 February 2009 of 24 pence (converted into US$ as set out in paragraph (e) below) and excludes the Placing proceeds.
b. The statement that the pro forma net debt of the Enlarged Group is US$88 million is derived from an estimate of Peter Hambro Mining's gross debt of US$370 million less Peter Hambro Mining's cash of US$25 million less Aricom's cash of US$257 million.
c. The market price of Peter Hambro Mining Shares is the closing middle market quotation derived from AIM.
d. The market price of Aricom Shares is the closing middle market quotation derived from the Official List.
e. The US dollar : sterling exchange rate used in this announcement is 1.436
f. The percentage holdings of Aricom Shareholders and Peter Hambro Mining Shareholders in the Enlarged Group are based on the existing undiluted ordinary share capital of Peter Hambro Mining and Aricom as set out in (a) above.
Appendix II
Definitions
|
AIM |
the alternative investment market of the London Stock Exchange |
|
Aricom |
Aricom plc |
|
Aricom Directors |
Pavel Maslovskiy, Jay Hambro, Brian Egan, Yuri Makarov, Martin Smith, Sir Malcolm Field, Peter Hambro, Sir Roderic Lyne and Tony Redman |
|
Aricom Group |
Aricom and its subsidiaries and subsidiary undertakings |
|
Aricom IFC Options |
the options granted to IFC pursuant to which IFC can subscribe for 17,076,372 Aricom shares at an exercise price of 74 pence, subject to adjustment in accordance with the terms and conditions thereof |
|
Aricom Shareholder |
a holder of Aricom Shares |
|
Aricom Share Option Scheme |
Aricom plc Share Option Scheme approved by the shareholders of Aricom on 12 December 2003 |
|
Aricom Shares |
issued ordinary shares in the capital of Aricom |
|
Aricom Warrants |
warrants each of which gives the right to subscribe for one Aricom Share, constituted by a warrant instrument executed by Aricom dated 4 June 2007 |
|
Business Day |
a day (excluding Saturdays, Sundays and UK public holidays) on which banks are generally open for business in London |
|
Canaccord Adams |
Canaccord Adams Limited |
|
Code |
the City Code on Takeovers and Mergers issued by the Panel |
|
Companies Act |
Companies Act 2006 |
|
Court |
the High Court of Justice in England and Wales |
|
DRI plant |
direct reduced iron plant |
|
Enlarged Group |
Peter Hambro Mining Group as enlarged by the Merger |
|
Financial Services Authority |
the UK Financial Services Authority |
|
GIS |
Gold Institute Standard |
|
Gold Exchangeable Bonds |
US$180 million 7.0 per cent. of Gold Equivalent Exchangeable Bonds due 2012 |
|
IFC |
the International Finance Corporation at 2121 Pennsylvania Avenue, NW Washington, DC 20433, USA |
|
Independent Aricom Board Committee |
the committee of the Board of directors of Aricom comprising the Independent Aricom Directors |
|
Independent Aricom Directors |
the independent directors of Aricom and an Independent Aricom Director being any one such director |
|
Independent Board Committees |
the Independent Peter Hambro Mining Board Committee and the Independent Aricom Board Committee |
|
Independent Peter Hambro Mining Board Committee |
the committee of the Board of directors of Peter Hambro Mining comprising the Independent Peter Hambro Mining Directors |
|
Independent Peter Hambro Mining Directors |
the independent directors of Peter Hambro Mining and an Independent Peter Hambro Mining Director being any one such Director |
|
JPMorgan Cazenove |
JPMorgan Cazenove Limited |
|
Liberum Capital |
Liberum Capital Limited |
|
London Stock Exchange or LSE |
London Stock Exchange plc or its successor |
|
Main Market |
the main market for listed securities of the London Stock Exchange |
|
Merger |
the possible merger of Peter Hambro Mining and Aricom |
|
Morgan Stanley |
Morgan Stanley & Co. Limited |
|
mtpa |
million tonnes per annum |
|
New Peter Hambro Mining Shares |
shares to be issued by Peter Hambro Mining to Aricom Shareholders if the Merger proceeds |
|
Offer |
the possible recommended offer by Peter Hambro Mining for the whole of the issued ordinary share capital of Aricom not already owned by Peter Hambro Mining |
|
Official List |
the official list of the UK Listing Authority |
|
Panel |
the Panel on Takeovers and Mergers |
|
Peter Hambro Mining |
Peter Hambro Mining Plc |
|
Peter Hambro Mining Directors |
Peter Hambro, Pavel Maslovskiy, Alexei Maslovskiy, Andrey Maruta, Alya Samokhvalova, Karolina Subczynska, Sir Rudolph Agnew, Lord Guthrie, Peter Hill-Wood and Jay Hambro |
|
Peter Hambro Mining Group |
Peter Hambro Mining and its subsidiaries and subsidiary undertakings |
|
Peter Hambro Mining Shareholder |
a holder of Peter Hambro Mining Shares |
|
Peter Hambro Mining Shares |
ordinary shares in the capital of Peter Hambro Mining |
|
Placing |
the placing of new ordinary shares by Peter Hambro Mining to be announced today |
|
Placing Shares |
new ordinary shares to be issued by Peter Hambro Mining pursuant to the Placing |
|
Restricted Jurisdiction |
any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure for Peter Hambro Mining or Aricom if information or documentation concerning the Offer is sent or made available to Aricom Shareholders in that jurisdiction |
|
Scheme |
the scheme of arrangement under Part 26 of the Companies Act 2006 pursuant to which it is proposed that the Merger will be implemented (if it proceeds) |
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Scheme Document |
The document to be sent to Aricom Shareholders in relation to the Scheme, if the Merger proceeds |
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subsidiary and subsidiary undertaking |
have the meanings given thereto in Part 38 of the Companies Act |
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UK or United Kingdom |
United Kingdom of Great Britain and Northern Ireland |
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UK Listing Authority |
the Financial Services Authority in its capacity as the competent authority under the Financial Services and Markets Act 2000 |
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US or United States |
the United States of America, its territories and possessions, any state of the United States, and the District of Columbia |
Related Shares:
POG.LOrogen Gold