20th Jul 2009 07:26
DWYKA RESOURCES LIMITED (ASX:DWY.AX; AIM:DWY.L)
Highlights during the Quarter
Corporate
Takeover offer made for AIM-listed Minerva Resources Plc ("Minerva") on the basis of 1 Dwyka share for every 5 Minerva shares
Offer for Minerva declared wholly unconditional on 14 July 2009 with 80.9% acceptances
Cash balance at 30 June 2009 GBP6.3 million (AUD12.8 million)
Muremera Nickel Project in Burundi
Drilling commences at 3 highest priority targets near Kabanga
Renewal of Muremera project licence secured
TAKEOVER OFFER FOR MINERVA
On 23 June 2009, Dwyka announced the making of a takeover offer to acquire all of the issued and to be issued share capital of Minerva, on the basis of offering one Dwyka share for every five Minerva shares (the "Offer"). The Offer was recommended by the Board of Minerva and valued the entire issued capital of Minerva at approximately GBP1.8 million and each Minerva share at approximately 1.2 pence.
Minerva's principal assets are a portfolio of gold and platinum licences located in Ethiopia, although it also has other mineral interests in Sierra Leone. Having considered in excess of 40 potential acquisition opportunities in the preceding 18 months, the Dwyka Directors believed that the acquisition of Minerva, together with the combination of Minerva's assets, Dwyka's in-house experience and Dwyka's financial resources, had strong commercial logic, and strategic drivers, including the following:
Gold represents a resource commodity that is likely to remain in high demand and retain mid to long-term pricing. A further investment in gold would fit with Dwyka's other assets.
The acquisition of Minerva would increase Dwyka's gold exposure on the African continent and provide a means of raising the profile and prospects for Dwyka's existing gold assets. Additionally the Minerva assets would shift the Company's primary focus from being an explorer to becoming a developer.
Dwyka believed the acquisition of Minerva would represent an opportunity to define a JORC resource in the near term based on the work performed by Minerva to date and thereafter to grow the resource through further exploration with the aim of establishing a low cost gold mining operation.
Minerva's Tula Kapi Prospect and Guji, Gudeya Guji and Dina Prospects had a simple geological structure and metallurgy which would potentially reduce the costs of exploration and future extraction of ore.
The historical work and the subsequent results achieved by Minerva were sufficiently far advanced to provide Dwyka with an opportunity to accelerate scoping and feasibility studies with a view to developing a producing gold mine.
The legislative environment in Ethiopia was recognised as being one of more conducive in Africa towards foreign investment and mining operations.
The acquisition of Minerva would potentially provide a significantly shorter lead time to first gold production for Dwyka and a share-based takeover offer represented the most effective route for Dwyka to achieve this, preserving Dwyka's cash reserves.
Since the end of the Quarter, Dwyka announced on 15 July 2009 that it had received acceptances in respect of 80.9% of the Minerva issued share capital ("Minerva Shares") and that it had declared the Offer wholly unconditional. Following that announcement, the previous Board of Minerva resigned and was replaced with a Board comprised wholly of Dwyka appointees. At this point in time, the Offer remains open for acceptance until 28 July 2009 and, should Dwyka receive acceptances in respect of a total of 90% of the Minerva Shares, it will be entitled to compulsorily acquire the outstanding Minerva Shares so as to become the 100% owner of Minerva. As Dwyka is now the owner of more than 75% of the Minerva Shares, Minerva will be de-listed from AIM in accordance with the AIM Rules. It is expected that this de-listing will occur on 23 July 2009.
Subsequent to the end of the quarter, Dwyka management has worked to finalise and commence a work programme for the Minerva assets. Details of this work programme will be announced shortly.
MUREMERA PROJECT
During the previous Quarter, Dwyka announced that it had secured 100% ownership of the Muremera Nickel Project ("Project") through its wholly owned subsidiary Danyland Limited and that it had identified the three highest priority targets in its exploration programme for drilling. Those targets, located approximately 10km from the Barrick/Xstrata Kabanga Project ("Kabanga"), currently the world's largest undeveloped nickel sulphide project, were identified from the intensive VTEM surveys undertaken to date and were generated from VTEM signatures consistent with massive sulphide bodies that may have a nickel signature. Drilling commenced during the quarter.
Renewal documentation in relation to the Project licence was submitted during the quarter to the Burundi authorities and, subsequent to the end of the quarter, it was confirmed that the renewal had been granted. The Decree which formally grants the renewal is due to be delivered. As a result, the current exploration licence is valid for a further period of two years.
SWAZIGOLD PROJECT
A project review which will allow Dwyka to determine whether Dwyka will continue to sole fund further exploration of the project (to increase its ownership level) or pursue other joint venture mechanisms to progress the project to the next stage is almost complete. A decision regarding future funding of this project should be forthcoming shortly.
Application was made during the quarter for the renewal of the SwaziGold Project licence. The renewal remains pending but is expected to be confirmed shortly.
MELISSA STURGESS
Chief Executive Officer
Enquiries:
Melissa Sturgess
Dwyka Resources Limited
+44 (0)7825 551 397 or m[email protected]
In the United Kingdom
Richard Brown
Ambrian Partners Limited
+44 (0)20 7634 4700
Press enquiries
Charlie Geller/Leesa Peters
Conduit PR
+44 (0)20 7429 6604 or +44 (0) 79 7006 7320
or visit http://www.dwyresources.com
Related Shares:
Nyota Minerals