Berkeley Eng Regulatory News (BKY)

23 Mar 2009 07:00



23 March 2009

Placement to polo resoURces Limited

Stephen dattels to join board of berkeley

The Directors of Berkeley Resources Limited are pleased to advise that the Company has reached agreement to place up to 14 million new shares in the company at A$0.50 each, along with 7 million free attaching options exercisable at A$0.75, to a number of corporate and institutional shareholders, to provide funding for completion of the Feasibility Study for Berkeley's Salamanca Regional Uranium Project.

The cornerstone investor in the placement, subscribing for 10 million shares and 5 million options, is Polo Resources Limited, an AIM listed energy resources investor chaired by Mr Stephen Dattels (see www.poloresources.com ). Mr Dattels, who will join the Berkeley Board on completion of the placement, was previously a founder and Director of Uramin Inc, which was sold for USA$2.5 billion to Areva in mid 2007.

A number of Berkeley's existing institutional shareholders have agreed to subscribe up to a further 4 million shares and 2 million options in the placement ("Institutional Placement").

The placements, totalling 14 million shares, along with 7 million free attaching options exercisable at A$0.75, are conditional upon receipt of the approval of the Spanish Council of Ministers for the transaction announced on 10 December 2008. 

Subsequent to the placements, Berkeley shareholders will also be given the opportunity to participate in a non-renounceable 1:20 rights issue on the same terms, including the 1 for 2 free attaching options at A$0.75. 

If all shares available under the issues are subscribed, a total of just less than A$10m (before costs) will be raised. As a minimum, A$5m will be raised from the Polo Resources placement.

The Berkeley Board is very pleased to have secured this essential funding for the Feasibility Study in a very difficult market environment. Mr Dattels and the executive team from Polo Resources not only have very considerable mining and corporate expertise but they have an outstanding track record in developing world class uranium assets. 

The outlook for nuclear power and uranium mining is compelling and Berkeley believes the Salamanca Regional Uranium Project - which includes a very substantial resource base and an existing uranium process plant presently on care and maintenance - is ideally placed to deliver into the forecast uranium production shortfall.

As the Polo Resources placement exceeds Berkeley's 15% placement limit under ASX Listing Rule 7.1, part of the Polo Resources issue as well as the Institutional Placement will be put to shareholders for approval. 

Details of the issues are:

- Berkeley has signed a Subscription Agreement with Polo Resources Limited pursuant to which Polo will subscribe 10 million shares at A$0.50 each, along with 5 million free attaching options, exercisable at A$0.75 each, within 4 years of the date of issue.

 - Mr Stephen Dattels, Chairman of Polo Resources, will join the Board of Berkeley at settlement.

- Polo Resources' adviser in the transaction, Regent Securities Capital Corporation, will receive a fee on completion of 2.5 million options to subscribe new Berkeley shares at A$1.00, within 4 years of the date of issue.

- Other existing major institutional and sophisticated shareholders of Berkeley will subscribe a further 4 million shares and 2 million attaching options.

- Apart from shareholder approval, the only condition of the placements is receipt of the approval of the Spanish Council of Ministers for the transaction set out in Berkeley's announcement of 10 December 2008.

- Subsequent to the placements the Company will undertake a non-renounceable rights issue of 1 new share for each 20 existing shares at A$0.50 each, along with 1 free attaching option exercisable at A$0.75 within 4 years from the date of issue, for each 2 new shares subscribed.

- RBC Capital Markets acted as broker for the placements.

- The Company will seek to list the new A$0.75 options.

- A general meeting of shareholders will be called shortly to approve part of the Polo Resources issue as well as the Institutional Placement. 

- Polo Resources has agreed to a standstill period of 6 months from the date of issue of shares under this Agreement, where the relevant interest of Polo and its associates will not exceed 19.9%.

- Shareholders will also be asked to approve the issue of up to 3 million new director incentive options on the same terms as the placement options, to replace those options which expired in late 2008.

Further details will be included in the Notice of Meeting to be sent to shareholders shortly.

Enquiries - Managing Director: Matt Syme Tel: +61 417 906 717

RBC Capital Markets:  Martin Eales Tel: +44 20 7029 7881