Bezant Res Regulatory News (BZT)

5 October 2011

Bezant Resources Plc

("Bezant" or the "Company")

Proposed Grant of an Option for the Disposal of Asean Copper Investments Limited and Notice of General Meeting

Highlights:

·; Option agreement entered into for the disposal of Asean Copper Investments Limited ("Asean") to Gold Fields Netherlands Services BV ("Gold Fields") (the "Option Agreement").

·; Summary terms of the Option Agreement:

o Non-refundable, upfront cash payment of US$7 million

o A further cash sum of US$63 million is payable, on exercise of the option, to acquire the entire issued share capital of Asean

o The option may be exercised by Gold Fields at any time until 31 January 2013

·; The proposed transaction, which is unanimously recommended by the Bezant board, is subject to the approval of Bezant shareholders at a General Meeting to be held at 10.00 a.m. on 26 October 2011.

·; In the event that the option is exercised and the sale of Asean is completed, Bezant currently intends to apply the net sale proceeds as follows:

o a proportion will be retained to fund the ongoing work programme and further development of the Company's Eureka Project in Argentina, to investigate the potential acquisition of additional attractive mineral projects and for general working capital purposes; and

o the balance returned to Bezant shareholders.

Gerry Nealon, Executive Chairman, commented: 

"We are very pleased to announce this transaction with Gold Fields, subject to shareholder approval, with respect to the potential disposal of our wholly owned subsidiary, Asean, at a time of considerable macroeconomic uncertainty and volatility.

Gold Fields already holds an option over Lepanto's Far Southeast copper/gold project, which is located adjacent to our Mankayan Project in the Philippines, and significant investment in infrastructure and capital expenditure will be required to bring each of the respective projects into production. Gold Fields' ongoing exploration activities at Far Southeast are expected to identify synergistic benefits, giving us confidence that their option with Lepanto will be exercised within the next twelve to eighteen months.

The negotiation of this transaction with Gold Fields follows an extensive sale process conducted by the Company with a number of interested parties and we believe represents the best means of delivering value to our shareholders in the relatively near term.

We will now focus on realising the full potential of our Eureka Project and look forward to creating and delivering further long term value to Bezant shareholders."

For further information, please contact:

Introduction

Bezant (AIM: BZT), the AIM listed gold and copper exploration and development company operating in the Philippines, Argentina and Tanzania, is pleased to announce that further to its comprehensive strategic review and sale process, it has entered into an option agreement (the "Option Agreement") dated 4 October 2011 (the "Exchange Date") with Gold Fields Netherlands Services BV ("Gold Fields").

Pursuant to the Option Agreement, Gold Fields has been granted, conditional on shareholder approval, an option to acquire the entire issued share capital of Asean Copper Investments Limited ("Asean"), a wholly owned subsidiary of Bezant (the "Option"). Asean holds the Group's entire interest in its flagship copper/gold Mankayan Project, which as at 30 June 2011 had an unaudited carrying value of approximately £7.45 million. The Mankayan Project covers a total of 534 hectares in the Guinaoang area in the Mankayan-Lepanto mining district, approximately 240 kilometres north of Manila, in the Republic of the Philippines.

The future exercise of the Option, should it occur, would give rise to a fundamental change of business pursuant to Rule 15 of the AIM Rules for Companies (the "AIM Rules") as it would divest the Company of a substantial proportion of its prevailing gross assets. Accordingly, the Company is today posting, to those shareholders who have elected to receive hard copy shareholder communications from the Company, a circular (the "Circular") containing a formal notice convening a General Meeting to be held at 10.00 a.m. on 26 October 2011 at the offices of Joelson Wilson LLP, 30 Portland Place, London W1B 1LZ to seek shareholder approval for the grant of the Option and the potential future sale by the Company of Asean in accordance with Rule 15 of the AIM Rules. The Circular and form of proxy will also shortly be made available to download from the Company's website at www.bezantresources.com.

Principal terms of the Option Agreement

Pursuant to the terms of the Option Agreement, in return for a non-refundable upfront cash payment of US$7 million (the "Option Fee") Gold Fields has been granted an Option, conditional on shareholder approval, to purchase the entire issued share capital of Asean for a further cash sum of US$63 million (the "Exercise Price"). Asean directly holds 40% of the issued share capital of Crescent Mining and Development Corporation ("Crescent"), the Contractor under Mineral Production Sharing Agreement 057-96-CAR (the "MPSA") and the Applicant under Application for Production Sharing Agreement No. 041 (the "Application"). The MPSA and the Application cover Crescent's Mankayan Project. Asean also holds an option with Bezant Holdings Inc. ("BHI"), to acquire or assign the remaining 60% of Crescent's issued share capital subject to applicable Philippine law or 'qualified persons' for mineral agreements.

The key material terms of the Option Agreement are as follows:

·; The Option Agreement may be terminated by either party serving notice on the other if the approval of Bezant's shareholders, being the sole condition to the agreement, has not been obtained within thirty-one business days' of the Exchange Date (the "Long Stop Date").

·; During the period commencing on the Exchange Date and ending on the earlier of the Long Stop Date, the first business day immediately after the date on which shareholder approval has been obtained or the date of termination (the "Exclusivity Period"), Bezant is, inter alia, prevented from directly or indirectly soliciting expressions of interest or offers from third parties to acquire control or a majority economic interest in any member of the Group or the Mankayan Project ("Competing Proposal") and Gold Fields has a right to match any such Competing Proposal received by Bezant during this time period.

·; In the event that a superior Competing Proposal is received by Bezant during the Exclusivity Period and Bezant completes such Competing Proposal in accordance with its terms, Bezant has agreed to pay a termination fee of US$750,000.

·; On receipt of shareholder approval, the grant of the Option to Gold Fields will become unconditional and Gold Fields will pay Bezant an Option Fee of US$7 million in cash. The Option Fee is non-refundable (unless there has been a breach of a title warranty or a capacity warranty). The Option may then be exercised by Gold Fields at any time until 31 January 2013, but if the Option is not exercised by Gold Fields within this time period, then the Option shall lapse.

·; Gold Fields may terminate the Option Agreement at any time by serving at least 20 business days' notice on Bezant.

·; On signing the Option Agreement, the Company provides Gold Fields with various warranties and indemnities, including warranties in relation to title and capacity, of the type commonly found in such agreements. The Company's aggregate liability under such warranties and indemnities is limited to an amount equal to the Option Fee received by Bezant.

·; Gold Fields is under no obligation to exercise the Option.

·; In the event that the Option is exercised by Gold Fields, Bezant will repeat the title, capacity and certain other warranties and Bezant shall sell and Gold Fields shall purchase the entire issued share capital of Asean for cash consideration of US$63 million. Bezant's aggregate liability under the warranties and indemnities after exercise of the Option is then limited to an amount equal to the aggregate of the Option Fee and the Exercise Price received by Bezant. There is also a time limit on bringing warranty claims of three months after the sale completes, and 3 years and 7 years in respect of indemnities, and a provision that provides that no claim or claims can be brought unless the aggregate amount exceeds US$500,000.

·; Until completion of the potential future sale and transfer of the issued share capital in Asean (or if applicable, until such time as the Option lapses), the Company has agreed not to carry out or omit to carry out (as the case may be) certain prescribed actions of the type commonly found in such agreements, without the express consent of Gold Fields, which would otherwise have an adverse effect on Asean, Crescent or the Mankayan Project.

·; The Option Agreement is governed by the laws of England and Wales.

Future direction of the Company and use of the potential sale proceeds

The Board of directors of Bezant (the "Board") believes that granting the Option to Gold Fields represents the best means of realising value for Bezant's shareholders from the Mankayan Project in the relatively near term. Accordingly, the Board unanimously recommends that Bezant shareholders vote in favour of this transaction, in the absence of a superior proposal.

In the event that the Option is exercised and the sale and transfer of the issued shares in Asean is completed, the Company will continue to operate as a mineral exploration company and intends to retain a proportion of the net sale proceeds to fund the ongoing work programme and further development of its Eureka Project in Argentina, to investigate the potential acquisition of additional attractive mineral projects in the natural resources sector and for general working capital purposes. Subject to obtaining advice from its financial, legal and tax advisers, the Company ultimately intends to distribute the balance of the net sale proceeds that are surplus to its then short to medium term strategic objectives and funding requirements, to its Shareholders.

In the event that the Option is unconditionally granted but is not exercised and lapses or terminates, the Company intends to use the proceeds from the non-refundable Option Fee to fund the ongoing work programme and further development of its Eureka Project in Argentina and for general working capital purposes.

General Meeting

A Circular containing a formal notice of a General Meeting to be held at the offices of Joelson Wilson LLP, 30 Portland Place, London WIB 1LZ at 10.00 a.m. on 26 October 2011 is today being posted, together with a form of proxy, to those shareholders who have elected to receive hard copy shareholder communications from the Company and will shortly be made available to download from the Company's website at www.bezantresources.com.

Unless the context otherwise requires, defined terms used in this announcement shall have the meanings given to them in the Circular dated 5 October 2011.

Notes to editors:

Bezant is currently focussed primarily on the copper and gold mineral sector and its flagship project is its Mankayan copper/gold project situated in the Mankayan-Lepanto mining district of the Philippines, an area of established copper and gold mining. The deposit is located approximately 240km north of Manila and 6km east of the copper/gold mine owned and operated by Lepanto Consolidated Mining Company. Since its discovery in the early 1970s, extensive drilling (more than 45,000 metres over 48 holes) and metallurgical work has been undertaken by Goldfields Asia Ltd, Pacific Falkon Resources Corp and others. Bezant currently has a JORC compliant mineral resource of 221.6 million tonnes Indicated and 36.2 million tonnes Inferred, grading at 0.49% for copper and 0.52g/t for gold, at a 0.4% copper cut-off. This equates to an Indicated Resource of 2.42 billion pounds (1.1 million tonnes) of copper and 3.7 million ounces of gold, with a further Inferred Resource of 0.44 billion pounds (0.2 million tonnes) of copper and 600,000 ounces of gold. In December 2010, the Company upgraded its independent Mankayan resource estimate to JORC Compliant Probable Ore Reserves of 189 million tonnes grading at 0.46% copper and 0.49g/t gold, resulting in total Recoverable Metal Reserves of 811,000 tonnes of copper and 2.21 million ounces of gold. A Total Mining Inventory Statement was also reported of approximately 400Mt of ore at an average grade of 0.38% copper and 0.42g/t gold.

The 11 licences comprising the Eureka Project are located in north-west Jujuy near to the Argentine border with Bolivia and are formally known as Mina Eureka, Mina Eureka II, Mina Sur Eureka, Mina Gino I, Mina Gino II, Mina Mason I, Mina Mason II, Mina Julio I, Mina Julio II, Mina Paul I and Mina Paul II, covering, in aggregate, an area in excess of approximately 5,500 hectares and accessible via a series of gravel roads. To date, no JORC compliant or equivalent resource estimate has been established, but historic exploration activities have been conducted on the project area since the 1980s by Minera Penoles, Codelco and Mantos Blancos, with unaudited unclassified estimates in the order of, in aggregate, up to approximately 62 million tonnes grading at 1% copper and approximately 52,000 ounces of gold as credits. The copper oxide mineralisation occurs in loosely consolidated conglomerates and is the focus of the project's economic potential. The near surface mineralisation is amenable to heap leaching, while the carbonate content of the conglomerate is reported to be low, thereby reducing potential acid consumption.