Bezant Res Regulatory News (BZT)

10 December 2012

Bezant Resources Plc

("Bezant" or the "Company")

Proposed Extension of the Option for the Disposal of

Asean Copper Investments Limited

Proposed Subscription by Gold Fields to raise US$7.5m

Notice of General Meeting

Highlights:

Background

·; Exclusive option granted to Gold Fields Netherlands Services BV ("Gold Fields") in October 2011 for the disposal of Asean Copper Investments Limited ("Asean") (the "Option"). Asean holds the Group's entire interest in its flagship Mankayan copper/gold project in the Philippines

o US$7m non-refundable upfront payment received in October 2011

o US$63m to be paid if the Option is exercised. Option due to expire on 31 January 2013

Proposed Subscription and Option Extension

·; Proposed equity participation in Bezant by Gold Fields and potential further upfront payment in return for an extension of the Option

o Further US$2.5m non-refundable upfront payment to be made to Bezant

o Gold Fields to fund the Company's 2013 licence commitments on the Mankayan Project

o Option to be extended until 31 January 2014 with revised consideration of US$60.5m to be paid on future exercise of the Option

o Gold Fields to subscribe for US$7.5m of equity in Bezant at a price of 25.97 pence per ordinary share representing a premium of 5 per cent. to the volume weighted daily VWAP at which Bezant's Shares were trading on AIM for the 25 trading days preceding 6 December 2012 (being the latest practicable business day prior to the date of the subscription agreement)

o Bezant's Board unanimously recommends that Bezant shareholders approve the proposals

·; Bezant is cognisant of the adverse impact of the recent industrial action in South Africa on Gold Fields and the current licensing delays being experienced by mining companies in the Philippines

o Gold Fields' proposed significant equity participation demonstrates its support for Bezant's existing asset portfolio, management and exploration activities as it seeks to diversify its global interests

Planned Initial Return of Capital

·; Planned initial return of capital to Bezant's shareholders in the first half of 2013

o Minimum amount of US$7.5m, being the subscription proceeds, intended to be returned to shareholders, excluding Gold Fields, subject, inter alia, to shareholder approval at the appropriate time

o Approximately 50% of the gross US$60.5m sale proceeds will potentially be available for further distribution to all Bezant shareholders, assuming future exercise of the Option and completion of the sale of Asean

o Gold Fields to refrain from voting on any further extension or material variation of the terms of the Option whilst remaining a substantial shareholder in Bezant

The proposals are subject to the approval of Bezant's shareholders at a General Meeting to be held at 10.00 a.m. on 10 January 2013.

Gerry Nealon, Executive Chairman of Bezant, commented: 

"Gold Fields' proposed significant equity participation provides valuable endorsement and support for Bezant's activities in both the Philippines and Argentina whilst enabling the Company to fund the implementation of a sizeable initial return of capital in the first half of 2013. Following approval of the proposals, Gold Fields would be able to exercise its option over Asean, in return for the payment of US$60.5m, at any time until 31 January 2014, while funding our 2013 licence commitments in respect of the Mankayan Project.

With the recent industrial action in South Africa affecting its mining industry, Bezant represents an attractive vehicle with proven capability to successfully delineate economically viable projects in other global jurisdictions. The Board unanimously recommends these proposals, which facilitate near-term shareholder returns and secure a well renowned, experienced and resourced strategic investor to support the group's future growth and development. Gold Fields has paid a premium over the recently prevailing volume weighted daily VWAP which we believe illustrates its confidence in Bezant's potential."

For further information, please contact:

Introduction

Bezant (AIM: BZT), the AIM listed gold and copper exploration and development company operating in the Philippines and Argentina, announces that it has entered into an option extension agreement (the "Option Extension Agreement") to extend by twelve months the period in which the option granted to Gold Fields Netherlands Services BV ("Gold Fields") on 4 October 2011 (the "Option") can be exercised. Gold Fields has also entered into a Subscription Agreement with the Company whereby it has agreed to subscribe for 17,945,922 new ordinary shares of 0.2p each in the capital of the Company ("Ordinary Shares") for an aggregate subscription amount of US$7.5m (approximately £4.7m). Both the Option Extension Agreement and the Subscription Agreement are conditional on Bezant shareholders' approval.

Further to the Company's comprehensive review of the strategic options available for its Mankayan Project and subsequent sale process, the Company entered into a conditional Option Agreement with Gold Fields on 4 October 2011 (the "Exchange Date"), pursuant to which Gold Fields was granted an Option to acquire the entire issued share capital of Asean, a wholly owned subsidiary of Bezant. Asean holds the Group's entire interest in its flagship copper/gold Mankayan Project which as at 30 June 2012 had an audited carrying value of approximately £7.68m. The Option Agreement was conditional on Shareholder approval, which was provided by Shareholders at a General Meeting of the Company held on 26 October 2011. Pursuant to the terms of the Option Agreement, the Option is exercisable by Gold Fields at any time up to and including 31 January 2013 (the "Expiry Date").

Recently, Gold Fields indicated to the Company that in light of (amongst other things) the continuing uncertain global economic environment, market conditions in some of the jurisdictions in which it operates as well as developments in the Philippines, it was most unlikely that it would be exercising the Option before the Expiry Date. Accordingly, the Company entered into negotiations with Gold Fields with a view to the Company potentially granting Gold Fields a twelve month extension of the period in which it could exercise the Option.

As part of these negotiations, Gold Fields indicated that it would be prepared to subscribe for new Ordinary Shares in the Company for up to an aggregate subscription amount of US$7.5m (approximately £4.7m).

On 7 December 2012 (the "Extension Exchange Date"), the Company entered into the Option Extension Agreement with Gold Fields, conditional on Shareholder approval, to extend the period within which the Option may be exercised to 31 January 2014 in return for an additional non-refundable upfront cash payment of US$2.5m, which is to be deducted from the Option exercise price in the event that Gold Fields exercises the Option on or before the end of the extended option period. On the Extension Exchange Date, the Company and Gold Fields also entered into the Subscription Agreement, pursuant to which and also conditional on Shareholder approval, Gold Fields agreed to subscribe for a total of 17,945,922 new Ordinary Shares in the Company for the aforementioned aggregate subscription amount of US$7.5m. The subscription by Gold Fields is conditional on Shareholders approving all of the transactions contemplated by the Option Extension Agreement and the Subscription Agreement.

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 formal notice convening a General Meeting to be held at 10.00 a.m. on 10 January 2013 at the offices of Joelson Wilson LLP, 30 Portland Place, London W1B 1LZ to seek Shareholder approval for the extension of the period in which the Option may be exercised and the potential future sale by the Company of Asean in accordance with Rule 15 of the AIM Rules.

Approval is also being sought to update the relevant Board authorities to allot Ordinary Shares and to dis-apply the statutory pre-emption provisions to permit the allotment of Ordinary Shares to Gold Fields pursuant to the terms of the Subscription Agreement.

The Circular will also shortly be made available to download from the Company's website at www.bezantresources.com.

Principal terms of the Option Extension Agreement

Pursuant to the terms of the Option Extension Agreement, in return for a non-refundable upfront cash payment of US$2.5m (the "Option Extension Fee") and a corresponding reduction in the option exercise price, which is currently US$63m under the terms of the 4 October 2011 Option Agreement (the "Existing Exercise Price"), Gold Fields has been granted an extension of the period within which the Option may be exercised, conditional on Shareholder approval, to purchase the entire issued share capital of Asean for a cash sum of US$60.5m (the "Amended Exercise Price"). Asean directly holds 40 per cent. of the issued share capital of Crescent, the sole legal and beneficial owner of the Mankayan Project. Asean also holds an option with BHI, to acquire or assign the remaining 60 per cent. of Crescent's issued share capital subject to applicable Philippine law or 'qualified persons' for mineral agreements.

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

·; The Option Extension Agreement may be terminated by either party serving notice on the other if Shareholder approval of each of the Option Extension Agreement, the Subscription and the Resolutions to permit the Company to allot the Subscription Shares pursuant to the Subscription Agreement (the "Conditions"), being the only conditions to the agreement, has not been obtained by 15 January 2013 (the "Long Stop Date").

·; During the period commencing on the Extension 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.

·; On receipt of Shareholder approval, the extension of the term in which the Option may be exercised by Gold Fields will become unconditional and Gold Fields will pay Bezant the Option Extension Fee of US$2.5m in cash and the Existing Exercise Price will be reduced to the Amended Exercise Price. Once paid to the Company, the Option Extension Fee is non-refundable. The Option may be exercised by Gold Fields at any time until 31 January 2014, but if the Option is not exercised by Gold Fields within this period, then the Option shall lapse.

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

·; On signing the Option Agreement, the Company provided Gold Fields with various warranties and indemnities, including warranties in relation to title and capacity, of the type commonly found in such agreements. Other than in respect of certain warranties as to title and capacity, the Company's aggregate liability under such warranties and indemnities is limited to an amount equal to the original US$7m Option Fee received by Bezant.

·; The warranties and indemnities remain in place for certain periods of time after any exercise of the Option these being 3 months in respect of the warranties, 3 years in respect of the indemnities and 7 years in respect of the tax covenant from, in each case, the date the sale of Asean pursuant to any exercise of the Option completes.

·; Gold Fields is under no obligation to exercise the Option pursuant to the Option Extension Agreement nor was it previously under any obligation to exercise the Option under the terms of the Option Agreement.

·; If 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 a further cash consideration of US$60.5m. Again, other than in respect of certain title and capacity warranties, Bezant's aggregate liability under the repeated warranties and indemnities is limited to an amount equal to the aggregate of the original US$7m Option Fee and the amount of the Amended Exercise Price received by Bezant. The provisions in the Option Agreement which provide that no claim or claims can be brought unless the aggregate amount exceeds US$500,000 remain in place.

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

As disclosed in both Note 29 (Contingent liabilities) to the Company's Annual Report and Financial Statements for the year ended 30 June 2012 published on 15 November 2012 and Note 17 to the Interim Results for the six months ended 31 December 2011 released on 30 March 2012, litigation is on-going against the Group relating to an historic claim for a 40 per cent. interest in the Mankayan Project. Bezant's board of directors continue to be confident that the Group will successfully defend this claim, of which Gold Fields is aware, and Gold Fields cannot bring any claim against the Company under the Option Agreement, including following its amendment and restatement pursuant to the Option Extension Agreement, in respect thereof, regardless of the outcome of the claim.

Bezant and Gold Fields have also entered into arrangements concerning the continuation of the provision by Gold Fields of funding for Crescent's 2013 licence commitments on the Mankayan Project. These arrangements will continue during the extended option period if the Option Extension Agreement is approved by Shareholders.

Principal terms of the Subscription

Pursuant to the terms of the Subscription Agreement, Gold Fields has agreed to subscribe for a total of 17,945,922 new Ordinary Shares (the "Subscription Shares") at a subscription price of 25.97p per Ordinary Share (the "Subscription Price"). The Subscription Price represents a premium of 5 per cent. to the volume weighted daily VWAP at which Bezant's Shares were trading on AIM for the 25 trading days preceding 6 December 2012 (being the latest practicable business day prior to the date of the Subscription Agreement). This represents an aggregate subscription amount for all of the Subscription Shares of US$7.5m (approximately £4.7m).

The Subscription Shares will be fully paid and will represent approximately 21.64 per cent. of Bezant's enlarged issued share capital. Application will be made to the London Stock Exchange for the Subscription Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will become effective and that dealings in the Subscription Shares will commence at 8.00 a.m. on Friday 11 January 2013.

Gold Fields' obligations under the Subscription Agreement are conditional upon the Company's Shareholders passing resolutions to (i) grant the directors authority to allot the Subscription Shares on a non-pre-emptive basis; and (ii) approve the extension of the exercise period and the reduction in the exercise price of the Option.

The Company provides certain warranties to Gold Fields under the Subscription Agreement, relating to the incorporation and legal status of the Company, the nature of the Subscription Shares and the Company's ability to enter into the Subscription Agreement and, subject to Shareholder approval, allot and issue the Subscription Shares. Such warranties are in a form common for an agreement of this type.

Pursuant to the terms of the Subscription Agreement, the Subscription Shares are issued on the basis that Gold Fields will not have any entitlement to participate in the first scheme or process for the return of funds to Bezant's shareholders ("Distribution"). Gold Fields' restricted entitlement expires on the earliest of the exercise of the Option by Gold Fields, the completion of the Distribution by the Company and 30 September 2013 (the "Non-Participation Period"). Gold Fields will be entitled to participate, on a pari passu basis with the other Shareholders, in any distributions after the Non-Participation Period.

Gold Fields has also irrevocably and unconditionally agreed that it will not, at any time after the Subscription Shares are issued to it, exercise any of the voting rights attaching to the Subscription Shares in relation to any future extension or material variation of the terms of the Option whilst remaining a "substantial shareholder" (as defined in the AIM Rules).

Future direction of the Company and use of the Option Extension Fee, Subscription proceeds and potential sale proceeds

The Board of directors of Bezant (the "Board") believes that the proposed extension of the period in which the Option may be exercised by Gold Fields represents the best means of realising value for Shareholders from the Mankayan Project in the relatively near term. Accordingly, the Board unanimously recommends that Shareholders vote in favour of all the Resolutions being proposed at the General Meeting.

As the Company has previously announced, in the event that the Option is exercised and the sale and transfer of the issued shares in Asean completes, 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.

In the event that the Option is exercised and the sale and transfer of the issued shares in Asean is completed, the Company anticipates that approximately 50 per cent. of the gross sale proceeds will potentially be available for distribution to Shareholders. A return of capital to Shareholders will be subject, inter alia, to obtaining professional advice from the Company's financial, legal and tax advisers and prevailing exchange rates at the appropriate time, and will take into account the view of Shareholders at that time (as appropriate). Of the 50 per cent. of funds retained, all taxes will be paid out of this sum with the remainder being retained to progress the Company's copper/gold exploration portfolio. Gold Fields' non-participation in relation to the Distribution does not apply to any distribution or return of funds paid on exercise of the Option.

In the event that the period in which the Option can be exercised is extended by the approval of Shareholders at the General Meeting, the Company intends to investigate means by which it can use, inter alia, a portion of the aggregate proceeds from both the non-refundable Option Extension Fee and the Subscription to return an appropriate amount to Shareholders (being the Distribution referred to above). This is likely to require a further General Meeting of Shareholders to be convened in order to approve the method by which funds will be returned and details will be provided to Shareholders by way of an appropriate announcement and further circular at the appropriate time. As referred to above, Gold Fields will not be entitled to participate in the Distribution (subject to the conditions and time periods referred to above) but will have rights to participate in any subsequent distribution arrangements.

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 10 January 2013 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 10 December 2012.

Notes to editors:

Mankayan Project

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 estimate 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.

Eureka Project

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 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.