27th Sep 2006 10:53
Investika Ltd27 September 2006 INVESTIKA LTD Update on Investment 27 September 2006 Investika Ltd the investment company in the mining finance industry with a focuson pre-production emerging resource opportunities is pleased to announce thatits UK associated company, UMC Energy plc, in which Investika Ltd presently hasa 19.6% interest, has reached agreement with Cline Mining Corporation of Canadato acquire an 80% interest in Uramad SA, which has uranium explorationprospects in Madagascar. The announcement made by UMC Energy plc on 26 September 2006 is set out below. Enquiries to: Chrisilios Kyriakou, Chief Executive OfficerInvestika LtdTelephone: 020 7514 1480 Paul Dudley/Peter JacksonWH Ireland LimitedTelephone: 020 7220 1666 ___________________________________________ UMC ENERGY PLC ("UMC" or "the Company") 26 September 2006 ACQUISITION OF 80% INTEREST IN URANIUM EXPLORATION PROPERTIES IN MADAGASCAR The Board of UMC Energy plc (AIM ticker: UEP), the uranium exploration andmining investment company, is pleased to announce that it has entered into aShare Purchase Agreement ("SPA") with Cline Mining Corporation ("Cline") toacquire Cline's 80% equity interest in URAMAD SA ("URAMAD"). URAMAD has theequivalent of beneficial ownership of eight exploration permits issued by thegovernment of Madagascar covering approximately 9,994 square kilometres (the "Exploration Permits") in Western Madagascar. The acquisition of URAMAD constitutes a reverse take over under the AIM Rules.Accordingly, shareholder approval is required and an admission documentcontaining full information on the transaction will be circulated toshareholders in due course, together with a Notice convening an extraordinarygeneral meeting. The Properties The Exploration Permits, which have been granted for 10 years expiring in 2015and 2016 are located in the Morondava Basin which is infilled and layered withsediments, most notably the Karoo formation that hosts uranium mineralisation(the "Properties"). The areas were previously identified and explored during the uranium cycles of1956 to 1963 and 1979 to 1982 by the United Nations (PUND) and the Office ofNational Mines and Strategic Industries, a Malagasy State Body ("OMNIS"),respectively. Later, the French uranium company Cogema took on large permits andcontinued regional exploration that terminated in the late 1990s with thedownturn in uranium prices and demand. URAMAD is the owner of a data base for the Morondava Basin that includes theresults of airborne geophysical and radiometric surveys, drill logs for 790drill holes (approximately 83,000 metres of drilling) with indicated uraniumvalues, and visible uranium mineralization associated with targets picked from7,000 radioactive anomalies, recorded and plotted. Terms and Conditions of the SPA The acquisition of URAMAD will be effected through the Company's acquisition ofthe entire issued capital of URAMAD (UK) Limited ("UUK"). UUK is a holdingcompany which on completion will own 80% of the issued capital of URAMAD and hasno other assets or liabilities. The remaining 20% of URAMAD is owned by OMNIS, which will retain a free-carriedinterest in the Properties until the feasibility stage of the project has beencompleted. The consideration for the acquisition of UUK is the allotment to Cline of12,272,667 ordinary shares in the Company (the "Consideration Shares"), whichwill constitute 40% of the Company's enlarged share capital. Following the signing of the SPA, the Company will advance US$480,000 to URAMADfor the purposes of initial exploration and project related activities on theProperties (the "Advance"). The Advance is refundable if the SPA does notcomplete other than in circumstances where UMC fails to obtain shareholderapproval for the transaction. In addition, subsequent to completion, theCompany will meet continuing project exploration and development costs (as willbe described in further detail in the admission document to be despatched toshareholders). Completion under the SPA is subject to the following conditions precedent: • receipt of shareholder approval for the acquisition of UUK; • all necessary authorisations, orders, grants, confirmations, consents, permissions and approvals having been obtained from all relevant regulatory authorities in respect of the transfer and registration of the Exploration Permits in the name of URAMAD. At the date of signing the SPA the Exploration Permits have been transferred to URAMAD, granting the equivalent of beneficial ownership to URAMAD, with only the registration of legal title being the outstanding condition with respect to the Exploration Permits; • all necessary authorisations, orders, grants, confirmations, consents, permissions and approvals having been obtained from all relevant regulatory authorities for the transfer to UUK of Cline's 80% shareholding in the issued capital of URAMAD; and • the assumption by UUK of Cline's rights and obligations pursuant to a pre-existing agreement between OMNIS and Cline. Upon completion of the SPA and the issue of the Consideration Shares the Companywill assume all existing debts owing to Cline by URAMAD in consideration for thepayment of a further approximately US$340,000 to Cline. The terms and conditions of the SPA also provide for the following: • the grant of a pre-emptive right in favour of Cline that will entitle Cline to participate in future issues of securities by the Company, at a price equivalent to any such issues, in order to maintain Cline's shareholding in the Company. The pre-emptive right is conditional upon Cline's shareholding in the Company being not less than 30% and not more than 40%; and • the issue of 3,499,667 warrants exercisable at 30p each on or before 2 February 2007 to Cline. Exploration of the Properties - proposed programme Phase 1 Following completion of the acquisition, the Company's initial focus will be toidentify and outline suitable exploration targets on the Properties through acombination of airborne geophysical surveys, tectonic and structural geologystudies and the review of URAMAD's historical exploration database. Phase 2 Fieldwork and target evaluation will be carried out on the exploration targetsidentified in Phase 1, including ground radiometry, geological mapping and othersurface methods, in order to develop targets for diamond and reverse circulationdrilling. Further information regarding the proposed exploration programme, timing andbudget will be included in the admission document to be despatched toshareholders. Operating Agreement Cline and URAMAD intend to enter into an Operating Agreement for the purposes ofmanaging the Phase 1 exploration and development activities of the Properties.Cline will provide technical personnel at cost and in addition shall providemanagement and government liaison services for which it will be paid a fixedmonthly fee of $US20,000. Board appointments Following completion, Kenneth Bates and William (Bill) McKnight of Cline will beappointed to the Board of UMC. Further details for Messrs Bates and McKnightare set out in Appendix 1 to this Announcement. A full list of their previousdirectorships and any other matters to be disclosed under Schedule 2 paragraph(g) of the AIM rules will be set out in the admission document. Bob Cleary, Chairman, UMC and Chris Kyriakou, Director, UMC will join the Boardof URAMAD. Heading the project as Director General of URAMAD will be Michael (Mike) Smith,formerly a Divisional Director of Anglo American Platinum who has over 35 yearsmining experience. Bob Cleary, Chairman, UMC, commented "We are very pleased to have agreed theacquisition of these prospective uranium properties. The project hassignificant uranium potential and modern exploration methods will be applied tofollow up prospective uranium targets. This, combined with the currentfavourable political and investment climate, enables us to look forward todeveloping the project and maximising value for our shareholders." This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
UEP.L