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25 Mar 2009 07:00
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GRIFFIN MINING LIMITED
60 St James's Street,Β LondonΒ SW1A 1LE,Β United Kingdom
Telephone: + 44 (0)20 7629 7772 Facsimile: + 44 (0)20 7629 7773
E mail:Β griffin@griffinmining.com
24thΒ March 2009
Griffin's ProposedΒ Offer forΒ IverniaΒ Inc
Griffin Mining Limited ("Griffin" or "the Company"),Β hasΒ announced todayΒ that itΒ intends to make aΒ cashΒ offerΒ ("the Offer")Β through a wholly owned subsidiaryΒ to acquire all of the issued andΒ outstandingΒ commonΒ shares ofΒ IverniaΒ IncΒ ("Ivernia") at a price ofΒ C$0.15Β per IverniaΒ share.Β The totalΒ consideration payable underΒ the Offer is expected to be approximately C$27Β millionΒ excluding expensesΒ if the entire offer isΒ accepted. In additionΒ GriffinΒ is seeking to acquire orΒ repayΒ US$33.4m of convertible loanΒ notesΒ in the event the offer is successful.Β
Ivernia'sΒ shares are traded on the Toronto Stock Exchange under the symbol "IVW".Β The Offer price represents a premium of approximatelyΒ 25Β per cent over the closing price of IverniaΒ shares onΒ 24Β March, 2009Β being the last dealing day prior to the date of this announcementΒ and a premium of approximatelyΒ 26.1Β per cent over the average trading price ofΒ Ivernia's shares for the previous 20 trading days.
The offer will not be subject to any financing conditions and will be financed withΒ Griffin'sΒ currentΒ cashΒ resources. The offer will be made toΒ Ivernia's shareholders following receipt of a complete shareholder list fromΒ IverniaΒ or earlier by publication of an advertisement and filing of the takeover bid circular as required under applicable Canadian securities laws. The takeover bid will be open for acceptance for not less than 35 calendar days from the date of mailing or publication of an advertisement of the takeover bid that includes full details of the offer.
Completion of theΒ offer will be subject to certainΒ conditions, including there having been deposited under the offer and not withdrawn, a number ofΒ IverniaΒ shares which constitutesΒ not less thanΒ 50.1Β per cent of the outstandingΒ IverniaΒ shares (on a fully diluted basis), there having been obtained all government and regulatory approvals that Griffin considers necessary or desirable in connection with the offer, the waiver or cease trade of theΒ Ivernia'sΒ shareholder rights plan,Β the withdrawal or defeat by shareholders of Ivernia's proposed refinancing,Β and no material adverse change having occurred in the business ofΒ Ivernia. Any of these conditions may be waived byΒ GriffinΒ in its discretion.
IverniaΒ advised in a news release onΒ 20 MarchΒ 2009 that it intends to a) reduce the conversion price from US$1.08 per share to US$0.11 per share on US$20 million of outstanding convertible notes (at least half of which are held by a related party), b) add an additional US$3 million to these notes for interest and fees, and c) issue an additional US$10.4 million of notes to a related party with the same conversion price. This will cause Ivernia's fully diluted share capital to be increased by 303.6 million shares, or 169% of Ivernia's outstanding share capital, primarily to related parties. IverniaΒ has advised that it intends to proceed with these related party transactionsΒ without shareholder approval by seeking an exemption from the Toronto Stock Exchange on the basis that IverniaΒ is in serious financial difficulty, and by relying on a similar exemption from shareholder approval and valuation requirements of the Ontario Securities Commission. ItΒ has previously been reported by IverniaΒ that this debt wasΒ due forΒ settlementΒ by April 27, 2009Β and calls into question the timing and price of this refinancing with a related party being sought without shareholder approval.Β
In the event thatΒ GriffinΒ is successful inΒ acquiringΒ a controlling stake in IverniaΒ but minority shareholders remain,Β GriffinΒ is prepared to complete the same financingsΒ at a conversion price of US$0.15 which equates toΒ anΒ amount payable of US$33.4. This represents a premium of approximately 36% to the new conversion prices which IverniaΒ and its related parties have agreed upon.
RATIONALEΒ OF PROPOSED TRANSACTION
GriffinΒ has successfully constructed and brought into production its Caijiaying zinc, gold, silver, leadΒ mine inΒ Northern China,Β on time and to budget.Β Although production is currently suspended, CaijiayingΒ has operatedΒ as a low cost profitable mine. With substantial cash balancesΒ and no debt,Β GriffinΒ has the funds and abilityΒ to bring Ivernia'sΒ 100% owned MagellanΒ lead mine inΒ WesternΒ Australia, currently shut,Β followingΒ an environmental incident, backΒ into production.Β GriffinΒ already has a presence inΒ WesternΒ AustraliaΒ with administrative and service officesΒ inΒ Perth,Β and a 39.2% interest in Spitfire Oil Ltd withΒ itsΒ Salmon Gums lignite project inΒ WesternΒ Australia.Β The acquisition of IverniaΒ will giveΒ GriffinΒ control overΒ a second projectΒ in aΒ different commodity and aΒ separate geographical areaΒ fromΒ itsΒ principal venture inΒ ChinaΒ and enhance its existing management team.
Β Further information
Griffin Mining Limited
Mladen Ninkov - Chairman Telephone: +44(0)20 7629 7772
Roger Goodwin - Finance Director
Investec Investment Banking:Β Nomad and Broker
Gerard Kisbey-Green Telephone: +44 (0)20 7597 5167
Stephen Cooper Telephone: +44 (0)20 7597 5104
Griffin Mining Limited's shares are quoted on the Alternative Investment Market (AIM) of the London Stock Exchange (symbol GFM).
The Company's news releases are available on the Company's web site:Β www.griffinmining.com
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