BHR.L Regulatory News (BHR)

14 Aug 2006 08:01

Carnegie Minerals plc14 August 2006 14 August 2006 Carnegie Minerals PLC ("Carnegie" or the "Group") Placing of 25,000,000 new Ordinary Shares at 8p per share with one Warrant for every two Ordinary Shares subscribed exercisable at 12p per Ordinary Share Carnegie today announces that dealings in its shares have commenced on AIM underthe symbol CME. At the placing price of 8p per share, Carnegie raised £2 million(before expenses) by way of a placing through Corporate Synergy, capitalisingthe Group at approximately £4.4 million. In addition, Warrants will be issued toPlacees on the basis of one Warrant for every two Placing Shares subscribed(symbol CMW). Carnegie is the holding company of a group of companies which hold a mininglicence relating to mineral sands in The Gambia, where there are some knownmineral sands deposits, and an exploration licence relating to mineral sands inSenegal, where the Directors believe there is significant potential for mineralsands production. Following a thorough evaluation, the Group intends to commence the mining of itsvarious Gambian interests later in 2006 together with Astron, its off take and50% joint venture partner, and the largest buyer of Zircon in China. Astron hasundertaken to fully fund by way of interest-free loans the cost of mining CMG'smineral sand resources in The Gambia and, via its subsidiary YAC, has agreed tobuy the Zircon and Rutile mined from CMG's interests at prices determined withreference to prevailing market prices. In Senegal, the Company has entered into the Senegal Joint Venture Agreementwith Astron, under which they fund 50% of all exploration costs. It is theDirectors' current belief that the Company will be in a position to developpartial resource estimates on its Senegalese interests by the end of 2007. The funds raised will be used to fund exploration costs in The Gambia andSenegal until the end of 2007 with the remainder of the net Placing funds beingutilised for working capital. Alan Hopkins, Managing Director of Carnegie said: "Our team is pleased to be listing on AIM. The London market has a clearunderstanding of the international mining and mineral exploration business andis a great platform for growth. It provides a strong financial link betweenAfrican resources being supplied into the Chinese market. "With our fully funded emerging production in The Gambia, substantialexploration potential in adjoining Senegal and other regional and industryopportunities, the team here is confident that Carnegie can create value for itsshareholders. "This is a very positive step for the Group and we are delighted that dealingshave commenced in the Company's shares." Highlights * Carnegie Minerals will be one of the few pure play, mineral sands companies listed on AIM * The Group has defined resources and fully funded emerging production in The Gambia. * Carnegie has a track record of operating in coastal West Africa and has a long term off-take agreement already in place with Astron. * It has a highly experienced management team with extensive AIM credentials through Hardman Resources, Pursuit Dynamics and Renewable Energy Holdings: + Alan Burns, Chairman has over 30 years experience leading and operating in natural resource plc's, founding and building Hardman Resources and Pursuit Dynamics. + Alan Hopkins, Managing Director, has over twenty five years senior management and plc experience in the natural resources arena with extensive experience in Africa. + Boris Matveev, Technical Director has 25 years international experience in mineral exploration and multi-disciplinary earth sciences research in Australia, the former USSR and Africa. * There is strong international demand for Zircon & Rutile: + Zircon: estimated global consumption is about 1.2 million tonnes per annum (TPA). Current prices for final product are c. USD 750 / t. + Rutile: International production is c. 500,000 TPA. Rutile price is c. USD 450 / t * Operations in neighbouring Senegal provide high impact exploration potential with targets easily identifiable from aerial photographs and Landsat images, with 50% of the exploration funding already in place via strategic JV partner, Astron. Admission and Placing statistics Placing Price 8pNumber of Ordinary Shares in issue prior to the Placing 27,500,000Settlement Shares 2,500,000Number of Placing Shares 25,000,000Number of Warrants 12,500,000Net proceeds of the Placing receivable by the Company £1,530,000Proportion of Enlarged Share Capital subject to the Placing 45.45%Number of Ordinary Shares in issue at Admission 55,000,000Number of Warrants in issue following Admission 12,500,000Market capitalisation at Admission at the Placing Price £4,400,000AIM symbol - Ordinary Shares CMEAIM symbol - Warrants CMW For further information, call: Alan Hopkins, Chief Executive, Carnegie Minerals Plc 020 7831 3113John Prior / Romil Patel, Corporate Synergy Plc 020 7448 4400Billy Clegg/Edward Westropp, Financial Dynamics 020 7831 3113 - Ends - Notes to Editors The key features of Mineral Sands and Carnegie's operations: Mineral Sands Mineral sands deposits usually contain two groups of valuable minerals: Zirconand titanium minerals (Rutile & Ilmenite) The most important sources of theseminerals are modern and ancient beach sand deposits. Zircon, Rutile & Ilmenite originally grew as crystals in igneous and metamorphicrock. Following destruction of these rocks by natural processes over millions ofyears, various minerals, including Mineral Sands, were eroded and transportedinto the sea before being concentrated by wave action. As waves washed over the beach in storms, the lighter grains of quartz sand weretaken back to the sea, leaving behind concentrations of Heavy Minerals includingRutile, Ilmenite and Zircon. Rising and falling sea levels over geological timemay result in mineral sand deposits being found inland raised above the currentsea level. Whilst mineral deposits vary between regions, the Heavy Mineralassemblage of the explored Gambian deposits includes on average approximately15% Zircon, 3% Rutile and 71% Ilmenite. Gambian interests Carnegie's Gambian project comprises three Joint Ore Reserve Commission ("JORC")defined Mineral Sands resources, Batukunku, Sanyang and Kartung, contained in aseries of coast paralleling unconsolidated dune ridges situated along a 45 kmstretch of coast between the estuary of the River Gambia to the north and theSenegalese border to the south. Astron Joint Venture and Off Take Agreement in relation to The Gambia Astron is an ASX-listed company and one of the largest independent purchasersand processors of Zircon products in China. Astron supplies approximately 25 %of the Chinese Zircon market and is a market leader in China for Zircon andadvanced Zirconium chemicals. Coast (a subsidiary of Carnegie) entered into the Shareholders' Agreement withAstron on 7 April 2006 establishing the terms of an incorporated joint ventureand determining operational issues within the joint venture operating company,CMG. Coast has also entered into an Off Take Agreement with Astron and YAC, for theeconomic life of the Gambian Licence: * CMG must offer to YAC, and YAC must accept delivery of, all non-magnetic Mineral Sands concentrate produced by CMG at the Gambian Project which contain Zircon and/or Rutile at a price determined by reference to published prices for Zircon and Rutile; and * YAC shall also have right of first refusal to purchase all magnetic product (Ilmenite) produced by CMG at a fixed price which YAC must accept provided such product meets YAC's specifications. Under the terms of the Shareholders' Agreement and the Off Take Agreement, ifAstron fails to fulfil its funding obligations Coast may purchase a proportionof Astron's shares in CMG (the proportion depending on the extent of Astron'sfunding) for a nominal sum and Coast may terminate the Off Take Agreement Senegal exploration potential In August 2004, CCL and the Senegalese government signed a mining agreementcovering mineral sands exploration and future mining activities overapproximately 750 km2 of the southern coastal region of Senegal. In accordancewith the mining agreement, CCL was granted the Senegal Licence in November 2004,being an exclusive exploration licence for mineral sands and associatedsubstances. The Senegal Licence was granted for 3 years with extensions for twofurther periods of 3 years each. The Senegal Licence has been assigned from CCLto Coast. The Senegal Licence also provides for the grant of an exploitationpermit in respect of any discovery of a deposit (subject to agreement with theSenegalese government). The senior management: Alan Burns, aged 65, Non-Executive Chairman Alan Burns has been actively involved at senior levels in the oil and miningindustries in Australia and worldwide for over 28 years. In this period, he hasvariously been a chairman and managing director of companies that haveparticipated in the exploration and development of oil and gas fields onshoreand offshore and gold and diamond mines in Australia. Alan is the chairman andfounder of Hardman Resources Limited which listed on AIM and currently has amarket capitalisation of approximately £400 million and a director of RenewableEnergy Holdings plc and Westralian Gas and Power Limited (listed on the ASX). Hehas also been a board member and chairman of CCL for 13 years. Alan Hopkins, aged 50, Managing Director Alan Hopkins has more than 25 years experience in senior management roles in theresource industry. He has served as managing director of Carnegie CorporationLtd for the past 7 years and was responsible for successfully procuring thelicences, the joint venture funding and the offtake arrangements for theprojects in The Gambia and Senegal. He also served as managing director ofMoonstone Diamond Corporation NL and was a founding Australian executive for themajor international engineering group, Edward L. Bateman Pty Ltd. At GrantsPatch Mining Limited, as Chief Financial Officer, he was part of a significantturnaround success story that brought on-stream multiple mining operations. Dr Boris Matveev, aged 47, Technical Director Dr Matveev has 25 years international experience in mineral exploration andmulti-disciplinary earth science research in Australia and the former USSR. Hisbroad technical expertise includes geology, geomorphology, computer remotesensing methods and environmental management. Dr Matveev has worked with CCL for12 years and was responsible for all technical aspects of the company's resourceprojects including mineral sands exploration and mining trials in West Africaand diamond exploration in Australia and Africa. Before moving to Australia in1994, he held the distinguished position of associate professor at the MoscowState Geological Exploration University and senior research positions at theMoscow State University where he undertook numerous research and appliedprojects in geology and natural resource management. Timothy Jones, aged 57, Financial Director Timothy Jones qualified as a Chartered Accountant with Price Waterhouse in 1974.In 1983, he joined a client as financial director before founding his ownaccountancy and consultancy practice in 1990. He now has clients in a range ofbusiness sectors and sits on the boards of a number of companies, includingFalkland Oil and Gas Limited, which listed on AIM in October 2004. Grant Mooney, aged 39, Non-Executive Director Grant Mooney is the principal of Perth-based corporate advisory firm Mooney &Partners, specialising in corporate compliance administration to publiccompanies. Currently, he acts as a director and company secretary to severalASX-listed companies across a variety of industries including technology,resources and energy and has obtained a depth of experience through his involvement in adiversity of corporate transactions. Grant is a member of the Institute ofChartered Accountants in Australia. DEFINITIONS The following definitions apply throughout this document, unless the contextotherwise requires: "Admission" the admission of the Enlarged Share Capital and Warrants to tradingon AIM becoming effective in accordance with the AIM Rules "AIM" the market of that name operated by London Stock Exchange "Astron" Astron Limited, a company which is listed on the ASX "ASX" Australian Stock Exchange Limited "Board" the board of directors of the Company from time to time "CCL" Carnegie Corporation Limited, a company which is listed on the ASX "CMG" Carnegie Minerals (Gambia) Limited, a company incorporated in The Gambiaand held as to 50% by Coast and 50% by Astron "Coast" Coast Resources Limited, a wholly-owned subsidiary of the Company,incorporated and registered in the Isle of Man with registered number 113574C "Company" or "Carnegie" Carnegie Minerals Plc "Corporate Synergy" Corporate Synergy Plc, nominated adviser and broker (asdefined in the AIM Rules) to the Company "Directors" the directors of the Company at the date of this document, whosenames are set out on page 4 of this document "FSA" the Financial Services Authority "Gambian Licence" the mining licence dated 29 December 2005 between CMG and TheGovernment of The Gambia "Gambian Project" the Gambian mineral sands project to be operated by CMG in TheGambia under the Gambian Licence "Group" together the Company, Coast, CMG, CSA and Carnegie Minerals Limited (adormant subsidiary of the Company) "London Stock Exchange" London Stock Exchange plc "Off Take Agreement" the off take agreement dated 7 April 2006 betweenAstron,YAC and CMG relating to mineral sands in The Gambia "Ordinary Shares" ordinary shares of 1p each in the capital of the Company "Placing" the conditional placing of the Placing Shares and Warrants byCorporate Synergy, at the Placing Price, pursuant to the Placing agreement "Placing Agreement" the conditional agreement dated 8 August 2006 between theCompany, the Directors and Corporate Synergy relating to the Placing, furtherdetails of which are set out in paragraph 12.1 of Part VII of this document "Placing Price" 8p per Ordinary Share "Placing Shares" the 25,000,000 new Ordinary Shares to be issued pursuant to thePlacing "Senegal Joint Venture Agreement" the joint venture heads of agreement dated 8September 2004 between CCL and Astron relating to Senegalese mineral sands (andwhich has been assigned by CCL to Coast), "Senegal Licence" the exclusive exploration licence dated 26 November 2004granted in accordance with the mining agreement dated 16 August 2004 between CCLand The Government of the Republic of Senegal (and which has been assigned byCCL to Coast) "Senegal Project" the Senegalese mineral sands project to be operated by theGroup in Senegal under the Senegal Licence "Settlement Shares" the 2,500,000 Ordinary Shares to be issued on Admissionpursuant to the settlement agreement "Shareholder" a holder of Ordinary Shares from time to time "Shareholders' Agreement" the shareholders' agreement dated 7 April 2006 betweenAstron and Coast relating to CMG "United Kingdom" or "UK" the United Kingdom of Great Britain and NorthernIreland "Warrants" the 12,500,000 warrants to subscribe for Ordinary Shares "YAC" Yingkou Astron Chemicals Co Ltd, a company incorporated in China and asubsidiary of Astron "£" or "pound" UK pounds sterling This announcement is being distributed in the United Kingdom only to investmentprofessionals within the meaning of Article 19 of the Financial Services andMarkets Act 2000 (Financial Promotion) Order 2005 (the "Order"), to persons inthe business of disseminating information within the meaning of Article 47 ofthe Order or to persons to whom it is otherwise lawful to distribute it. It hasnot been approved by Corporate Synergy Plc. Corporate Synergy Plc, which is authorised and regulated in the United Kingdomby the Financial Services Authority, is advising the Carnegie and no one else inrelation to the placing and Admission and will not regard any other person asits client in relation to the placing and Admission and will not be responsibleto any person other than the Carnegie for providing the protections afforded toits clients or for advising any other person in relation to the placing orAdmission or any transaction or arrangement referred to or information containedin this announcement. This announcement does not constitute, or form part of, an offer or invitationto sell or issue, or any solicitation of an offer to purchase or subscribe forsecurities and any subscription for or purchase of, or application for, sharesin the Carnegie to be issued or sold in connection with the placing should onlybe made on the basis of information contained in the AIM admission document tobe issued in due course in connection with the placing and Admission and anysupplements thereto. This announcement does not contain or constitute an offerof securities for sale in the United States or in any other jurisdiction. Thesecurities referred to herein have not been and will not be registered with theUnited States Securities Act of 1933, as amended, and may not be offered or soldin the United States absent of registration under that Act or an availableexemption from it. This announcement and the information contained herein arenot for publication, distribution or release in, or into, the United States,Canada, Australia, Japan, South Africa or the Republic of Ireland. This information is provided by RNS The company news service from the London Stock Exchange