30th Jul 2010 10:55
For Immediate Release 30 July 2010
AIM: TPJ
Triple Plate Junction PLC
(the "Company" or "TPJ")
UPDATE
Triple Plate Junction PLC, the AIM listed gold exploration company focussed on South East Asia, announces that it is today sending a letter to shareholders providing an update on the Company's affairs, the wording to which is set out in full below and which will be available at the Company's website at www.tpjunction.com.
Enquiries:
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Triple Plate Junction PLC |
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Tony Shearer, |
020-7602-1570 |
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Arbuthnot Securities |
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Nick Tulloch/Richard Johnson |
020 7012 2000 |
P O Box 6416
London, W1A 0UA
www.tpjunction.com
30th July 2010
Dear shareholder,
When Patrick Gorman and I were appointed to the Board on 1st June 2010, we said that we would "undertake a review of the Company to include its financial position, future commitments, the status of its joint ventures with Barrick Gold Corporation and Newmont Ventures Limited, and its own exploration projects". We said that we would review the Company's prospects and future cash requirements to enable it to fund its gold exploration work and create value for shareholders; and that we expected this assessment would take approximately six weeks, after which we would announce our findings and plans, and recommendations to all shareholders and investors.
This is our report arising from that review.
1. Summary
a. The Company's prospects:
i. The Board's initial assessment is that the Company has some exceptional exploration opportunities in Papua New Guinea ("PNG"), working with some of the best possible joint venture partners, including Newmont and Barrick. Any one of these joint ventures, if successful, could have a material uplift on the prospects of the Company. We are assessing these joint ventures to understand better the potential they offer to TPJ, and are looking at the scope for additional opportunities for TPJ beyond these JVs.
ii. It will take us longer to assess the opportunities in Vietnam where we are awaiting the re-issue of the Company's exploration licences.
iii. Provided that funding becomes available, then, overall, the newly reconstituted board is optimistic about the opportunities that lie ahead.
b. It is therefore likely that, in order to develop these opportunities, the Company will need to gain access to further funds. We currently estimate that we will need to raise, in the autumn of 2010, a substantial amount of new funding in relation to the Company's market value to fund its activities through to the spring of 2011. This is in addition to the £230,000 of shareholders' loans that we raised at the beginning of July 2010, details of which are set out in Appendix 3.
c. Our findings, plans and recommendations are:
i. Through the means of this letter, to inform shareholders of the current state of the Group;
ii. To publish at the beginning of September the annual report for the year ended 31st March 2010;
iii. During September 2010, to complete our assessment of the exploration projects, including delivery of an independent geological report;
iv. To hold the Annual General Meeting at the end of September 2010 at which shareholders will be updated with the latest information including the results of our assessment of the exploration projects;
v. To raise adequate funds in the autumn of 2010 to enable the company to continue to operate into 2011 pursuant to the Directors' determined strategy;
vi. To continue with the programme that we have already re-introduced of continuous reviews and monitoring of the joint ventures in PNG;
vii. To make a decision as to whether to re-commence exploration work in Vietnam;
viii. To continue to keep shareholders informed of developments at the Company and on its projects.
2. Exploration; the ownership position
The company explores for gold in PNG and Vietnam. The more advanced projects are in PNG, where TPJ has three active joint ventures. The ownership of the projects is, according to our current understanding, as set out below. The legal agreements are complex, and we are currently reviewing them to make sure we have a full understanding of their exact terms.
a. Papua New Guinea
i. Newmont re Morobe
Newmont will earn 51% if they spend US$ 6 million up to 23rd December 2012. They have so far spent approximately $ 5.4 million. They would earn an extra 19% if they spend a further US$ 9 million within the six years up to 23rd December 2014. After that time TPJ (through its wholly owned PNG subsidiary Terenure Limited) may elect to have Newmont solely fund all project expenditure until commencement of commercial production and Newmont's interest would increase from 70% to 75%. Alternatively TPJ may elect to provide its 30% share of the funding, in which case if either party dilutes to below 10% %, the diluting party's interest would convert to a Net Smelter Return of 1%.
ii. Barrick re Wamum
Barrick have earned 80% for which they had to spend A$ 5 million, though they have spent just under A$ 8.9 million to date. TPJ, through Terenure, now has approximately 12% of the project, but this will be down to 11.7% if Barrick spend the A$ 970,000 that they have budgeted for the approved programme in 2010. After that time TPJ would need to provide its share of the funding; if TPJ dilutes below 5% then the interest converts into a Net Smelter Return of 1%
iii. Gold Anomaly re Crater Mountain
Gold Anomaly are earning 70% of the project. TPJ, through Terenure, will then own 20% and a TSX-V listed company New Guinea Gold Corporation 10%. TPJ will need thereafter to contribute its share of expenditure to maintain its interest in the project. If TPJ does not contribute and so dilutes further, it has a minimum non-dilutable share of 10% up to feasibility stage.
b. Vietnam;
Significant exploration was carried out at the Pu Sam Cap project in Vietnam from 2005 to 2009. Under Vietnam's Mineral Law the Company's licences then expired in accordance with a maximum four year exploration term but may be re-issued for a further two years if additional work can be justified. The Vietnamese authorities have told the Company that they are in the process of preparing to re-issue documents. On being offered the new licence, TPJ would need to pay a performance deposit of about £150,000 before the licence is formally issued, and this deposit would be repaid after 6 months if TPJ has commenced an agreed exploration work programme. The scope and cost of the work programme is subject to our internal review and that of the independent geologist. TPJ has 70% of the project, with various central and provincial Government agencies holding 30%.
Before TPJ pays the deposit it needs to be satisfied that the "political risks" of operating in Vietnam represent an acceptable risk. Soundings are being taken through the Company's networks and through discussions on the ground, and the Directors hope to provide shareholders with some initial views on this aspect in due course.
3. Exploration
Because of financial constraints, none of the joint venture projects in PNG (except the Newmont Morobe project) has been visited by TPJ personnel since the middle of 2008. Management of the Newmont Morobe project was assumed by Newmont at the end of 2009. Accordingly certain information on the Company's website is out of date but is the latest that is available currently. During July 2010 Bill Howell has been in touch with the joint venture partners and is currently visiting most of the joint venture projects to obtain an up-to-date assessment of them. The Directors intend to update this information between now and the end of September 2010.
4. Exploration: our plans
During June and July Bill Howell, Patrick Gorman and Chris Goss have been assembling the information that is available about the different exploration opportunities. At the beginning of September 2010 Bill and Patrick intend to visit PNG and then Vietnam to make an in-country assessment of the projects if logistics allow, or at least review the data and interact with the JV teams in PNG and with government entities in PNG and Vietnam. It is the Directors' intention that the results of this work will be reported to shareholders at the end of September, together with a preliminary assessment of the future funding that might be needed to advance these projects, together with an early stage assessment of the potential economic benefits that might arise.
As part of this process A C A Howe International Limited have been hired to carry out an independent review of the exploration projects and opportunities. This will involve a desk-top review of the property portfolio based on information to be provided by TPJ over the course of July and August. A short form report, based on the executive summaries included in the main report, will also be produced by Howe. The long-form report will be based on the Canadian NI 43-101 format but is not intended to be NI-43-101 compliant. The Company had hoped to include a site visit as part of this independent programme, but unfortunately time and cost constraints do not allow this to happen this year.
The A C A Howe work will be carried out primarily by David J Patrick, BSc, PhD Principal Geologist and Director and is considered by TPJ to be a qualified or competent person due to his education, experience and extensive knowledge of most of the TPJ properties. On behalf of TPJ, Dr Patrick has previously visited and reported on the Pu Sam Cap project in Vietnam, the Morobe and Crater Mountain projects in PNG, and has reported on the Manus Island and Wamum projects in PNG. Dr Patrick produced the initial TPJ listing report on Pu Sam Cap and subsequently was involved in target identification using satellite imagery interpretation. His involvement in the Pu Sam Cap project ceased in 2004. In PNG he assisted TPJ in their original licence selection and applications, and subsequently conducted detailed studies on the licences, culminating in the selection of target areas, several of which now form the basis of the joint ventures in the Morobe and Wamum areas. His involvement in the projects essentially ceased in 2005, but he was subsequently engaged to produce a valuation of the Morobe licences on behalf of TPJ in August 2008.
5. Financial position
On 1st June the Company had bank balances of approximately £120,000, with outstanding creditors of approximately £100,000 mainly comprising money owing to Her Majesty's Revenue & Customs. Earlier on that same date TPJ had received £569,283 from the sale of its equity stake in Golden Anomaly, and had paid out the amounts totalling £515,226 that are summarised in Appendix 1, to reduce the liabilities to the former directors and to pay advisers for services accrued over the last year and longer.
The Company's financial position as at 26th July 2010 is that bank balances stand at approximately £190,000 and creditors are owed approximately £20,000.
The above Creditors do not include any amounts owing to the former Directors and Bill Howell as at 1st June 2010.
On 15th June 2010, I wrote to the former Directors asking for details of any monies they believed were still due to them from TPJ. They have replied and set out their claims in respect of unpaid remuneration, compensation for loss of office, and loans totalling of £149,486.48. Recently they have also informed us that they expect payment from TPJ by 31st October 2010.
Bill Howell has notified the Board that he is also owed £39,270 by TPJ for unpaid remuneration and a further £23,230 in respect of expenses that have not been reimbursed.
The Company is in the process of preparing financial statements for the Group for the year ended 31st March 2010, and for the period since that date. Some progress has been made in understanding the financial records of the UK company over that period, but financial records of the activities outside the UK (PNG, Vietnam and the offshore companies) are still being compiled. The Directors expect to release audited accounts for the year ended 31st March 2010 in early September 2010, though it is expected that the audit report may be qualified on the grounds of doubts over whether the Company is a "going concern" (similar to last year's qualified audit report), and also due to the currently incomplete information and explanations about the activities outside the UK. The Directors do not regard these potential qualifications as serious. The important aspects are the Company's cash position and creditors (of which a good understanding is expected), and also the state of the exploration projects.
6. Composition of the Board and Officers
The Board now comprises Bill Howell (interim CEO and Exploration Director) who lives in Vietnam, and three Non-Executive Directors Patrick Gorman, Chris Goss and me who all live in England. Terry Cross, the Chief Financial Officer, also lives in England, and he is expected to join the board shortly. Short biographies of each Director are in Appendix 2.
Ian Gowrie-Smith, David Lees and Peter Wright resigned from the Board on 1st June 2010. Since that date they have provided full co-operation with the Company to effect as smooth a handover as possible.
7. Other employees
In addition to the four Directors and Terry Cross as Chief Financial Officer the only other employees at present are four loyal Vietnamese nationals who continue to man TPJ's Hanoi office. Most of the Company's PNG national employees at the Company's Lae exploration office transferred to the Newmont Morobe joint venture at the beginning of 2009.
8. Shareholders' loans
At the very beginning of June 2010 it became clear that TPJ needed to raise further funds immediately. As a result, at the beginning of July 2010, the Comany obtained loans totalling £230,000 from some shareholders under the terms summarised in Appendix 3.
TPJ had to raise loans from shareholders' as the Board did not then, and still does not, have the power to issue new shares. Accordingly resolutions will be proposed at the AGM to be held at the end of September that will, if passed, enable the Company to issue new shares, the shareholders' loans to be converted into equity, and the Company to honour its obligations under warrants and share options.
9. Advisers
The Company has continued to retain Arbuthnot as its Nominated Advisers, Grant Thornton UK LLP as its Auditors, and Capita as its Registrars.
Cobbetts have replaced Fasken Martineau as the Company's solicitors, and Buchanans have been asked to resign; TPJ currently has no PR advisers appointed.
10. Communications with shareholders
The website will be developed and updated as and when funds became available. It is the Director's intention to put regular updates onto the website and to set up a system where any shareholder who logs on to the appropriate place on the website will automatically receive an email of all RNS announcements as they are made.
11. AGM
TPJ intends to hold the Annual General Meeting at the end of September 2010 in London.
Yours sincerely,
Tony Shearer, on behalf of the Board
Appendix 1
Amounts paid out on 1st June 2010 before the current Board was in place
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Ian Gowrie-Smith and Thornaby |
£45,560 |
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David Lees and Ocarina |
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£161,294 |
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Peter Wright |
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£60,460 |
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Bill Howell |
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£82,686 |
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Advisers and other creditors |
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£165,226 |
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£515,226 |
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Appendix 2
Biographies of the Directors and Officers
Directors
Patrick Gorman (Non-Executive Director), 58, BSc., ARSM, MSc, C.Eng, MIOM3, Eur.Ing, JP, is a mining engineer with 35 years of managerial, technical and project experience. He has managed development programmes, prefeasibility feasibility studies, conceptual evaluations, scoping and acquisition studies and provided post privatisation support and technical audits for project financing. His feasibility study experience has included Escondida copper in Chile, Rebecca gold in Zimbabwe, Loma de Niquel in Venezuela and Castellanos lead/zinc in Cuba. He has led or been a key member of long term technical re-development and co-operation programmes at Trepca-UNMIK in Kosovo, Jiangxi Copper in China, Buryatzoloto Gold in Russia and Zhayrem Manganese in Kazakhstan. He has extensive experience in the formation, management, legal representation and business development of mining companies and consultancies in Australia, Chile and the UK. He has held non-executive positions on the boards of AIM and TSX companies.
Chris Goss (Non-Executive Director) retired in May 2010 from the IFC (International Finance Corporation), the private sector arm of the World Bank Group. IFC is a leader in project finance in emerging markets. Since 2006, Chris was based in London, leading IFC's business development for mining and oil and gas from London. He and his London team originated and structured several equity investments in junior mining and oil and gas companies and he also managed the relationship with major IFC clients headquartered in London, including Rio Tinto, Anglo American and Lonmin. Chris previously led IFC mining transactions in Africa, Russia, Central Asia and Latin America. He was with IFC's Global Advisory Group, focusing on Emerging Europe in the early 1990's and he led IFC's re-engagement in former Yugoslavia, following the fall of President Milosevic. Prior to joining IFC, Chris was an Assistant Director in the Commonwealth Secretariat, advising African Governments in natural resource policy and negotiations, especially in Ghana, Tanzania, Mozambique and Swaziland. Chris has also worked with the UK Department of Energy on North Sea Oil and with the UNDP. He has a MA in Development Economics from the University of Sussex and a BA in Economics from Cambridge University.
Bill Howell (Interim Chief Executive and Exploration Director)read Geology at Southampton University and has more than 40 years experience in all aspects of exploration management and mineral project evaluation. He has held senior executive and management positions within BHP (now BHP Billiton) and Normandy Mining, now part of Newmont Mining Corporation. Bill has managed and led teams on a number projects including the recent major (+5 million ounce) gold discovery at Martabe, Indonesia.
Tony Shearer (Non-Executive Chairman) 61, FCA, was Chief Executive of Singer & Friedlander Group plc until 2005, prior to which he held a number of senior executive roles in leading financial institutions including Finance Director and Chief Operating Officer of M&G Group plc and Deputy Chief Executive of Old Mutual International. He has held non-executive positions on the boards of AIM, UK Official List and TSX companies, including as Chairman of Uruguay Mineral Exploration, Inc. (renamed Orosur Mining, Inc.), an AIM and TSX mineral gold producer and exploration company.
Other Officers
Terry Cross (Chief Financial Officer) has extensive finance experience at senior management and board level in small and "blue chip" companies, both in the UK and South Africa, including significant experience with mining companies on AIM, including Alexander Mining plc and Chaarat Gold Holdings Limited, and in South Africa. He holds an MBA from the University of the Witwatersrand, Johannesburg, an Advanced Financial Management Diploma from the Institute of Chartered Secretaries and Administrators, and a Bachelor of Commerce from the University of South Africa, Pretoria.
Appendix 3 -RNS release relating to the Shareholders' loans
2 July 2010
Triple Plate Junction PLC
(the "Company" or "TPJ")
FINANCING UPDATE
Highlights:
·; Immediate financial needs provided
·; £230,000 of convertible loan from certain shareholders
·; Ability to source further funding, if required
Triple Plate Junction the AIM listed gold exploration company focussed on South East Asia today announces that it has secured a convertible loan from certain of its shareholders, thus providing for its immediate financial needs.
On 28th June 2010 TPJ announced that it had less than £50,000 of available cash and does not, currently, have shareholder authority for the allotment of further shares in order to raise new equity capital. The Company also announced that the Board was in discussions with a number of shareholders in relation to the provision of convertible loans to provide the Company with the necessary operating capital until such time.
Today the Board announces that it has entered into agreements with each of Newmont Ventures Limited ("Newmont"), Asterion AV Limited ("Asterion") and Strategi Menkul Degerler A.S. ("Strategi") (together, the "Lenders" or, individually, a "Lender") for the provision of a total of £230,000 of loans to the Company by no later than close of business today through the issue of 10% Coupon Convertible Loan Notes ("Loan Notes"). The agreement with Newmont is in respect of £150,000 Loan Notes, with the balance of £80,000 Loan Notes being subscribed by Asterion and Strategi. The Lenders, have indicated that, in certain circumstances, they will provide similar amount of further funding, by way of equity or debt, by 31 October 2010 if requested by the Board of TPJ.
The Loan Notes are to provide TPJ with current and short-term working capital in order to prepare the corporate information and exploration update that is required in order to present a business plan and to support a series of resolutions at a meeting of shareholders that is planned to take place by the end of September 2010. The Loan Notes have an annual rate of interest of 10%, and are repayable by 31st December 2011, unless repaid sooner at the option of the Company, or converted sooner at the option of the Lender, subject to the Company's ability to issue sufficient equity. The Loan Notes are convertible at the rate of 1p per share.
Subject to the conversion of its Loan Notes to equity, each Lender shall also be granted one warrant for every new share issued upon conversion, exercisable within 5 years at 1.20p per share or, if lower, at 20% above the Company's next equity issue price (subject to the exercise price not being less than 1.0p per share). The number of shares issued as a result of these warrants cannot exceed 25% of the then issued share capital of the Company (after taking account of the new shares to be issued in respect of the warrants).
The Board has agreed to provide the Lenders with security if and to the extent that the general meeting to be held by the end of September 2010 fails to pass the resolutions necessary for (i) these loans to convert into Ordinary shares, (ii) shares to be issued pursuant to the exercise of the warrants, or (iii) the purpose of the general authority referred to below.
The Board also intends to seek general authority from shareholders at that general meeting of the Company for the allotment of further new Ordinary shares and intends, thereafter, to explore funding alternatives which may include an equity fundraising, subject to market conditions.
Related Party Opinion
Under the AIM Rules for Companies the Loan Note subscription by Newmont Ventures Limited ("Newmont") is classified as a related party transaction. Accordingly, the directors of the Company consider, having consulted with Arbuthnot Securities Limited, the Company's Nominated Adviser, that the terms of the transaction with Newmont are fair and reasonable insofar as the Company's shareholders are concerned.
Tony Shearer said:
"I am very pleased that we have obtained these loans from Newmont, Asterion and Strategi. The loans enable us to continue to operate over the coming months, until such time as we can request authority from our shareholders to allot shares, and can raise adequate equity capital with which to implement re-invigorated business plans. The Company has a number of exciting projects and these funds enable us to make progress. The loans also show a high degree of confidence in the Company's future."
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