23 Nov 2009 09:08
News Release
23rd November 2009
Anglo Pacific Group plc
Provision of A$5 million to Mundo Minerals by a convertible debenture
Anglo Pacific Group plc ("the Company") announces that it has agreed, subject to contract and due diligence, to provide funding of A$5 million to Mundo Minerals Limited ("Mundo") (ASX: MUN) in the form of a convertible debenture. This will either be convertible into a 3% net smelter royalty ("NSR") on the production from the Torrecillas project in Peru, or be convertible into equity in Mundo at a conversion price of A$0.32, or be repayable.
The funds will be used to increase production at Mundo's Engenho Gold Mine in Brazil to a targeted level of 48,000oz per annum by 2011 and underpin additional project assessment work and a final Feasibility Study on the development of its Torrecillas Gold Project in Peru
Under the terms of the agreement:
The convertible debenture will expire on 31st December 2012 and will not be repayable until then.
The Company will have the option to convert into the NSR or Mundo equity at any time prior to the expiry date.
The Convertible will not be repayable if at any time prior to the expiry date the share price of Mundo trades at a level in excess of A$0.75 per share for a continuous period of not less than 3 months.
Interest will be payable on the debenture at a rate of 8.5% per annum until conversion or repayment.
The NSR will apply to all production from the Torrecillas project area.
The debenture and subsequent NSR (if converted) will be secured against the Engenho mill facilities and will be noted on all relevant mining titles in accordance with relevant Brazilian and Peruvian law.
Upon signing of this agreement, an amount of up to A$2 million will be provided as an advance against the debenture on the following terms:
Interest will be applied at an annualised rate of 8.5% per annum.
Mundo will pay to the Company an arrangement fee of 1,000,000 options at A$0.35, exercisable for a period of 18 months.
If the Company's due diligence results in a withdrawal of this offer, the A$2 million will become repayable.
This acquisition marks another positive step in the Company's strategy to broaden and diversify its portfolio of royalties.
Anglo Pacific Group plc generates returns for shareholders by receiving royalties from operating mines including coking coal mines in Australia owned by BHP and Rio Tinto. The Company's strategy is to pay a substantial proportion of these royalties to shareholders as dividends, while reinvesting the balance in strategic listed and unlisted metal exploration and production opportunities with a view to obtaining more royalties for shareholders. The Company will continue to adopt an active, merchant banking approach to mining projects to achieve better returns at reduced risk.
For further information:
Anglo Pacific Group plc +44 (0) 20 7318 6360
Peter Boycott, Chairman
Matthew Tack, Finance Director
Liberum Capital +44 (0) 20 3100 2000
Chris Bowman
Simon Stilwell
Scott Harris +44 (0) 20 7653 0030
Stephen Scott
James O'Shaughnessy
Website: www.anglopacificgroup.com