Adm Energy Regulatory News (ADME)

PAN PACIFIC AGGREGATES PLC

PLACING OF 1,335,000,000 NEW ORDINARY SHARES AT 0.1P PER SHARE TO RAISE £1.335 MILLION, LOAN FACILITIES, GRANT OF WARRANTS, TRADING UPDATE AND RESTORATION OF TRADING

Earlier today the Board of Pan Pacific Aggregates plc (the "Board") announced its audited results for the year ended 31 December 2010, that the report and accounts for the same period had been published and that the Company had appointed Zeus Capital Limited ("Zeus Capital") as Nomad and Alexander David Securities Limited ("Alexander David Securities") as joint broker, with immediate effect.

The Board is now pleased to announce:

·; a placing by Alexander David Securities of 1,335,000,000 new ordinary shares at 0.1p per share ("New Ordinary Shares") at a placing price of 0.1p per share ("Placing Price") to raise £1.335 million (gross of expenses);

·; that it believes that the net proceeds of the Placing (being approximately £1.22 million) clarifies the Company's financial position and has therefore requested that the Exchange restore trading in its shares on AIM;

·; non legally binding heads of terms with a third party financial institution ("Financial Institution") in respect of an equity backed revolving finance facility to raise US$500,000 which may be increased to up to US$2,000,000, subject to certain conditions and 2) a Standby Equity Distribution Agreement to raise up to a further £3,000,000;

·; Sales at the Quadling Quarry ("Quadling") during the second quarter of 2011 increased by 109 per cent. as compared to the second quarter of 2010; and

·; The average selling price per tonne increased by 16 per cent. during the second quarter of 2011 as compared to the second quarter of 2010. The increases arise from an established customer base and higher specification materials available in the current phase of development.

Further details in relation to these agreements are set out below.

The Placing

The gross proceeds of the Placing amount to £1.335 million and the net proceeds of the Placing amount to approximately £1.22 million. The net proceeds will be utilised for working capital and to satisfy Supervisor, professional and creditor claims under the Company's Voluntary Arrangement announced on 7 June 2011. The New Ordinary Shares under the Placing are being placed under existing authorities to issue and allot shares in the Company. Application has been made to London Stock Exchange plc (the "Exchange") in relation to admission of these New Ordinary Shares to AIM and it is expected that dealings will commence on or around 22 July 2011 ("Admission").

In connection with the Placing, Euan McAlpine, a director of the Company has subscribed for, in aggregate, 75,000,000 new ordinary shares at the Placing Price by way of the subscription for 50,000,000 New Ordinary Shares under the Placing, and the issue and allotment of 25,000,000 new ordinary shares at the Placing Price in consideration for Mr McAlpine agreeing to capitalise £25,000 of salary, fees and expenses owed to him by the Company. Following this transaction, Mr McAlpine's beneficial interest in the Company will be 170,180,555 ordinary shares (representing approximately 4.4 per cent. of the enlarged issued share capital of the Company on Admission).

Under the terms of the Placing Agreement entered between the Company, the Directors, Zeus Capital and Alexander David Securities, the Company gave an Indemnity and the Company and Directors gave warranties in favour of Zeus Capital and Alexander David Securities. Further, Alexander David Securities agreed to take commissions owed to it under the Placing in equity rather than cash and the Company has therefore issued to Alexander David Securities 170,555,550 new ordinary shares at the Placing Price (representing £170,555.55 at the Placing Price), conditional only upon admissions to AIM. Application has today been made for these new ordinary shares to be admitted to dealings.

Following the Placing, the enlarged issued share capital of the Company on Admission will be 3,879,536,792 ordinary shares. The Board recognises that the Company has a significant number of shares in issue following the Placing but was unable to raise further equity funds at a price other than par value, being 0.1p per share. Over the medium term the Board will consider means of addressing the large number of shares in issue and is unlikely to raise further capital prior to this.

Loan Facilities

On 17 July 2011, the Company entered into heads of terms in respect of the Promissory Note with the Financial Institution to raise US$500,000 which may be increased to up to US$2,000,000, subject to certain conditions. The heads of terms are non legally binding and subject to due diligence, however, it is the Board's intention to enter into a legally binding agreement in the near future and will make a further announcement at that time.

On 17 July 2011, the Company also entered into heads of terms in respect of the proposed entry into by the Company of an equity backed financing agreement with the Financial Institution to raise up to a further £3,000,000. The heads of terms are non-legally binding and are subject to conditions including the completion of legal and financial due diligence. It is the Board's intention to enter into a legally binding agreement in the near future and a further announcement will be made at that time.

Grant of Warrants

On 18 July 2011, the Company entered into a Warrant Deed pursuant to which Alexander David Securities plc, broker to the Company, has, conditional on Admission, been granted warrants to subscribe for up to 34,111,111 new ordinary shares (representing approximately 0.9 per cent. of the enlarged issued share capital of the Company on Admission), conditional on Admission.

The warrants are exercisable at any time in any amounts at a price of 0.1p per share for a period of three years from Admission.

In addition, on the same date, the Company entered into a Warrant Deed pursuant to which Zeus Capital Limited, nominated adviser to the Company, has been granted a warrant to subscribe for up to 34,111,111 new ordinary shares (representing approximately 0.9 per cent. of the enlarged issued share capital of the Company on Admission), conditional on Admission and shareholders' approval at the Annual General Meeting.

Save as described above, the Zeus Capital Limited warrants have been granted on the same terms.

Following this grant of new warrants, warrants over 122,103,951 ordinary shares (representing approximately 3.1 per cent. of the enlarged issued share capital of the Company on Admission) and options over 92,750,000 ordinary shares (representing approximately 2.4 per cent. of the enlarged issued share capital of the Company on Admission) will be in existence.

Trading Update

Sales at the Quadling Quarry ("Quadling") during the second quarter of 2011 increased by 109 per cent. as compared to the second quarter of 2010. This represents the first comparable quarter we have, following the commencement of operations at the end of March 2010 with the completion of the access road. The average selling price per tonne increased by 16 per cent. during the second quarter of 2011 as compared to the second quarter of 2010. The increases arise from an established customer base and higher specification materials available in the current phase of development.

In line with the Board's review of operations and associated cost reductions, the Directors have agreed to a temporary reduction in Directors' total remuneration until such time that the Remuneration Committee agree otherwise.

The Directors' believe that whilst the net proceeds of the Placing clarifies its financial position it may be necessary to raise additional debt or equity finance in the medium term to further strengthen the financial position of the Company and to pursue acquisition opportunities.

Restoration of trading on AIM

On 18 April 2011, it was announced that for reasons beyond the Company's and its advisers' control, the Company been unable to complete the fundraising to finance the Reverse Takeover announced on 17 January 2011. The Company's shares have remain suspended pending clarification of its financial position.

The Directors believe that the £1.22 million net raised pursuant to the Placing announced today has clarified the Company's financial position and on that basis, the Company has today requested that the Exchange restore trading in its shares on AIM with immediate effect.

For further information please see the Company's web site, www.panagg.com or contact: