Metals Exploration Share News (MTL)

funds in the near term, if it has a controlling majority ownership stake in Metals Exploration commensurate with the risks involved and its required long term investment returns. Furthermore, the Solomon Board believes that Metals Exploration would be better suited to a private company environment, where management will be able to concentrate on the more efficient delivery of their strategic plans, free from the requirement to meet the public equity market's shorter term expectations. In addition, Solomon believes that, as a small UK quoted company, with a significant overseas project and operations, Metals Exploration will struggle to attract the research coverage, liquidity and level of market rating that would make retaining its existing AIM listing worthwhile. If the Offer becomes, or is declared, wholly unconditional, Solomon will become the holding company of the Metals Exploration Group. Solomon believes that with its full backing and resources, Metals Exploration would gain additional credibility and be better placed to overcome the short to medium term financial barriers to obtaining appropriate credit facilities of a reasonable quantum and on acceptable terms to progress the development of Runruno. It also believes that Metals Exploration would benefit from the elimination of the regulatory burden, constraints and numerous expenses associated with maintaining a UK public listing, thereby enhancing shareholder value in the longer term. On completion of the Offer, Solomon will undertake a full strategic and operational review of Metals Exploration in conjunction with Metals Exploration's executive management team. Upon the Offer becoming or being declared unconditional in all respects, the Offer will provide a certain cash exit for Metals Exploration Shareholders at a 26.83 per cent. premium to the Closing Price of 10.25 pence per Metals Exploration Share on 22 July 2010 (being the last Business Day prior to this announcement). 4. Letters of intent Solomon has received letters of intent to accept, or procure the acceptance of the Offer, from the following: (a) Funds managed by Baker Steel Capital Managers LLP in respect of 19,267,654 Metals Exploration Shares; and (b) Reef Securities in respect of 5,076,249 Metals Exploration Shares, representing, in aggregate, 24,343,903 Metals Exploration Shares and approximately 9.03 per cent. of the existing issued share capital of Metals Exploration. Except for Reef Securities (for the reasons set out in paragraph 5 below), no Metals Exploration Shareholder who has entered into a letter of intent with Solomon is acting in concert with Solomon. Further details of the letters of intent received by Solomon are set out in Appendix III to this announcement. The Metals Exploration Shares already held by Solomon and the Metals Exploration Shares which are the subject of the aforementioned letters of intent represent, in aggregate, approximately 53.12 per cent. of the existing issued Metals Exploration Shares. Accordingly, the acceptance condition to the Offer (as set out in paragraph 1 of Appendix I to this announcement) is most likely to be met shortly following the date of posting of the Offer Document. 5. Information on Solomon, Christian Candy and Reef Securities Solomon is a private company incorporated on 22 December 2008 under the laws of Guernsey with registered number 49841 and has its registered office at PO Box 119, Martello Court, Admiral Park, St Peter Port, Guernsey, GY1 3HB. Solomon was formed specifically to invest in Metals Exploration and is beneficially wholly owned by Christian Candy. Solomon has not traded since its date of incorporation, has paid no dividends and has not entered into any obligations other than in connection with its historic investments in Metals Exploration and the financing of the Offer. The directors of Solomon are Timothy Dean, Simon Graham and Richard Williams. Solomon does not currently have any subsidiaries or subsidiary undertakings. Christian Candy graduated from Kings College, London, in 1996 with a degree in Business Management. From there, he went to work in commodity trading and corporate finance. In the late 1990s, Christian and his brother Nick jointly bought a property in London, decorated it with their own style and sold it. It was at this point that they recognised that there was a niche in the top end of the market to supply properties that go beyond the typical luxury home. Candy & Candy has since become one of London's leading design and development managers. Christian founded Guernsey based, CPC Group, a property development business, in 2003. CPC Group specialises in purchasing trophy properties around the world and developing them with outstanding design often provided by Candy & Candy. As the joint founder and CEO of Candy & Candy, Christian remains actively involved in both companies' growth strategies. Steven Smith is a director of, and owns 100 per cent. of the share capital of, Reef Securities which has given a letter of intent to accept the Offer. Mr Smith has been authorised by the Solomon Board to give instructions and provide assistance to Strand Hanson and Solomon's other professional advisers in connection with the Offer. Accordingly, Reef Securities is deemed to be acting in concert with Solomon for the purposes of the Offer. Reef Securities was incorporated on 23 January 1996 under the laws of the Bahamas with registered number 40387B and has its registered office at Providence House, East Hill Street, PO Box 3944, Nassau, Bahamas. Reef Securities is an investment company investing in a range of both quoted and unquoted companies. Mr Smith is also a director of CPC Group, of which Christian Candy, who beneficially wholly owns Solomon, is also a shareholder. Further information concerning Solomon, its beneficial shareholder and Reef Securities will be set out in the Offer Document. 6. Information relating to the Metals Exploration Group Incorporated on 8 April 2004, Metals Exploration is a UK public company whose principal activity is to identify, acquire and develop mining companies, businesses or projects with particular emphasis on precious and base metals mining opportunities in the Western Pacific Rim region. Since the Company's admission to trading on AIM in October 2004, the Metals Exploration Group has focussed its efforts on the acquisition and development of exploration properties in South East Asia. It is currently focused on the development of its Runruno gold and molybdenum project in the Philippines, following the completion of a definitive Feasibility Study in May 2010, and an ongoing step-out drilling programme intended to demonstrate the additional resource potential within the Runruno permit area. For its latest financial yearended 31 December 2009, the Metals Exploration Group reported no turnover (2008: GBPnil) and a loss on ordinary activities before and after taxation of GBP4.30 million (2008: loss of GBP0.52million). As at 31 December 2009, total assets were GBP27.51 million (2008: GBP15.59 million) with net assets of GBP24.76 million (2008: GBP13.28 million) and net cash of GBP1.4 million (2008: net debt of GBP1.27 million). The total number of Metals Exploration Shares in issue as at 22 July 2010 (the latest practicable date prior to the date of this announcement)was 269,716,344. The market capitalisation of Metals Exploration, based on the mid-market price of a Metals Exploration Share of 10.25 pence at the close of business on 22 July 2010 (being the last Business Day prior to the date of this announcement), was approximately GBP27.65 million. Further financial and other information on Metals Exploration will be set out in the Offer Document. If the Offer becomes, or is declared, wholly unconditional, Solomon will become the holder of at least a majority of the Metals Exploration Shares. 7. Metals Exploration's directors, management, employees and locations The Solomon Board gives assurances to the Metals Exploration Board that, following the Offer becoming or being declared unconditional in all respects, the existing employment rights, including pension rights, of the directors, management and employees of the Metals Exploration Group will be fully safeguarded. There are currently no plans to significantly change the incentivisation arrangements with the management of Metals Exploration. Further, Solomon has no current intention, subject to the outcome of the strategic and operational review referred to in paragraph 3 above, to change the principal locations of the Metals Exploration Group's existing places of business and no proposals currently exist to materially change the terms and conditions of employment of any of Metals Exploration's employees. Nor does Solomon currently intend to redeploy the fixed assets of Metals Exploration to an extent that would have a material impact on the business of Metals Exploration. Following the Offer becoming wholly unconditional, the employee resources of the Metals Exploration Group will be considered as part of Solomon's strategic and operational review process as referred to in paragraph 3 above. 8. Disclosure of interests in MetalsExploration Save for the interest of Solomon in Metals Exploration Shares described in paragraph 1 above and of Reef Securities in Metals Exploration Shares as described below, neither Solomon nor any person acting in concert with Solomon has any interest in, or right to subscribe for, any relevant securities of Metals Exploration, or any short positions (whether conditional or absolute and whether in the money or otherwise), including any short position under a (MORE TO FOLLOW) Dow Jones Newswires July 23, 2010 02:00 ET (06:00 GMT)