Adm Energy Regulatory News (ADME)

12 Jul 2006 14:26

Pan Pacific Aggregates PLC12 July 2006 12 July 2006 Pan Pacific Aggregates Plc Acquisition of waterfront property and issue of Unsecured Convertible Loan Notes The Board of Pan Pacific Aggregates plc ("PPA" or the "Company") is pleased toannounce that it has agreed to acquire 2.23 hectares of waterfront land on thePacific coast side of the Sechelt peninsula, the location of the Company'sSechelt Project. The Company intends, subject to obtaining usual permit approvals, to use thisland to site a ship loading facility for the future transport of IndustrialMinerals and Construction Aggregates from the Sechelt Project to coastal marketsin British Columbia, the USA and Asia. The Directors believe that the development of this land should significantlyenhance the economics of the Sechelt Project and will reduce substantially theuse of barges through Skookumchuck Narrows on the inland side of the SecheltPeninsular. The acquisition price of C$1,900,000 (which the Directors believe reflects theopen market value of the property) will be paid in cash. This acquisition, anddrilling and mine definition of additional recently defined deposits, is to befunded by the issue of £2,000,000 Unsecured Convertible Loan Notes ("the LoanNotes") pursuant to a Loan Note Investment Agreement entered into on 12 July2006 between the Company and RAB Special Situations (Master) Fund Limited ("RAB"), a fund managed by RAB Capital plc. RAB has agreed to subscribe for the Loan Notes, on which interest will bepayable at a rate of 8% per annum, increasing to 24% per annum if the Loan Notesare not repaid before certain pre-determined dates. Interest at the rate sodetermined is payable from the date of issue of the Loan Notes and capitalisedand payable at the time of redemption or conversion. The Loan Notes are transferable and repayable at par together with accruedinterest at the option of the holder on or at any time following 21 June 2007(or 31 December 2007 depending on the performance of the share price of theordinary shares of £0.001 each of the Company ("Ordinary Shares")). The LoanNotes are repayable at par together with accrued interest by the Company at anytime. The Loan Notes can be converted into Ordinary Shares at a conversion price whichis the lesser of (a) a price ranging between 80 to 75 pence per Ordinary Share;and (b) a price which reflects a discount (ranging between 10% to 15%) to thevolume weighted average daily price at which the Company's Ordinary Shares aretraded over the 15 consecutive trading days immediately prior to the businessday on which the conversion notice is lodged. The maximum number of OrdinaryShares into which Loan Notes may be converted is limited to 6,000,000. As mentioned above and in addition to funding the purchase price of thewaterfront property, the amounts subscribed for the Loan Notes will be used forfurther drilling and development of mine plans on the Company's Sechelt claims.A recent geological report commissioned by the Company indicated the potentialfor additional deposits of gabbro carbonates and associated minerals and thisadditional drilling will allow the Company to define the extent of thoseadditional deposits. It is considered that the issue of the Loan Notes is a related party transactionfor the purposes of rule 13 of the AIM Rules, as RAB holds 13,206,750 OrdinaryShares (approximately 20.59%) of the issued share capital of the Company andholds warrants to subscribe up to an additional 6,800,000 Ordinary Shares, andunder the terms of the Loan Notes, could subscribe Ordinary Shares representingmore than 5% of the issued share capital of the Company. The Directors of theCompany consider, having consulted with the Company's Nominated Adviser,Insinger de Beaufort, that the terms of issue of the Loan Notes are fair andreasonable in so far as the Company's shareholders are concerned. Enquiries William Voaden, Non-Executive Director 020 7628 3989 This information is provided by RNS The company news service from the London Stock Exchange