Minco PLC Regulatory News (MIO)

19 Nov 2007 07:01

Minco PLC19 November 2007 MINCO PLC MINCO ANNOUNCES FINAL AGREEMENT FOR FINANCING ARRANGEMENTS FOR MEXICAN PROJECTS WITH PACIFIC ROAD CAPITAL London, 19 November, 2007 - Minco plc (MIO), the London AIM quoted precious andbase metals exploration and development company is pleased to announce that ithas, together with its Canadian subsidiary Orca Minerals Limited ("Orca Minerals"), today entered into an Agreement (the "Final Agreement") with mininginvestment funds managed or advised by Pacific Road Capital Management Pty Ltd(the "Funds") ("Pacific Road Capital"). The Final Agreement governs the relationship between the parties based on thepreviously announced (19 September 2007) financing arrangements for Minco'sMexican projects, which are held by Orca Minerals. As previously announced, it is intended that the proceeds of the financing willprimarily be used to further advance the Bilbao and Laguna projects, includingdeeper drilling, step-out drilling and infill drilling on both the sulphide andoxide deposits and in conducting preliminary metallurgical test work on theoxide and sulphide ores at Bilbao as well as completing engineering updates onmining methods, tailings disposal and process design for the Laguna tailingsproject. In addition, the proceeds of the financing may also be used to fundfurther exploration work on Minco's other Mexican properties. Minco is also pleased to announce that certain terms of the initial Agreement(the "Initial Agreement") announced on 19 September 2007 have been amended bythe Final Agreement with Pacific Road Capital to provide for additionalfinancing options, further details of which are set out below. Enlarged First Placement Pacific Road Capital's Funds have already invested C$2.12m (.£1.08m) for specialwarrants in Orca Minerals ("Special Warrants") at a subscription price of C$0.50(£0.25) per Special Warrant (the "First Placement"). The parties have now agreed that the Initial Agreement will be amended so thatPacific Road Capital will have the option to subscribe for C$2.75m (£1.40m)additional Special Warrants in Orca Minerals in place of investing directly inthe Bilbao and Laguna projects. The additional Special Warrants will be issued to Pacific Road Capital at thesame subscription price and on terms no less favourable than those to be givenby Orca Minerals to other subscribers as part of a further fundraising to becompleted prior to or in conjunction with the Orca Listing (as defined below)(the "Enlarged First Placement")). Orca Minerals will pay Pacific Road Capital afee of 6.5% on funds subscribed pursuant to the Enlarged First Placement. Second Placement Orca Minerals intends to raise further funds of between C$7m to $10m (£3.55m to£5.08m) (the "Second Placement"), conditional upon and to be completed by thetime of the proposed listing of Orca Minerals on the TSX Venture Exchange orother stock exchange by 30th June 2008 (the "Orca Listing"). Pursuant to the Initial Agreement, Pacific Road Capital will have an option tosubscribe for between C$2.00m and C$5.00m (£1.02m and £2.54m) ("AdditionalFinancing") as a lead cornerstone investor in the Second Placement on terms noless favourable than those to be given by Orca Minerals to other placees. Under the Final Agreement, the parties have agreed that following completion of: (i) the Enlarged First Placement with an aggregate investmentproceeds to Orca Minerals of at least C$4.00m (£2.03m); or (ii) the Second Placement; and (iii) the Orca Listing, certain of the options held by Pacific Road Capital under the terms of theInitial Agreement to provide up to US$5.25m (£2.49m) equity finance directly tothe Laguna and Bilbao projects will terminate and be of no further effect. Pacific Road Capital will retain the options negotiated in the terms of theInitial Agreement, subject to the undertakings set out below, to provide financeof up to US$15.00m and US$17.5m (£7.12m and £8.30m) directly to the Laguna andBilbao projects in order to obtain interests of up to 35% and 25% of OrcaMineral's interests respectively. Such project financing can be convertible intoshares of Orca Minerals based on the 30-day volume weighted average tradingprice at the time of conversion. A fee of 2.5% will be payable to Pacific RoadCapital on any project financing provided under the options. Under the Final Agreement, if Orca Minerals has not achieved the Orca Listingprior to 30 June 2008, or such later time as the parties may agree, theinvestments made will be convertible at Pacific Road Capital's option intoordinary shares of Minco. Such conversion into shares of Minco will be based onthe 30-day volume weighted average trading price at the time of conversion. Pacific Road Capital will also have the right to appoint a representative to theBoard of Orca Minerals or Minco if the Orca Listing has not completed by 30 June2008. Undertaking Pacific Road Capital's Funds have irrevocably and unconditionally undertakenthat they shall not conduct any activities or effect any transaction pursuant tothe Final Agreement which would result in an event exceeding 75% in any of theclass tests provided for in the AIM Rules of the London Stock Exchange plc ("AIMRules"), to which Minco is subject. Pacific Road Capital and Minco have alsoirrevocably and unconditionally undertaken that if they agree to conduct anyactivities or effect any transaction pursuant to the Final Agreement which wouldresult in a figure exceeding 75% in any of the class tests provided for in theAIM Rules that they will procure that a meeting of the shareholders of Minco isheld in order to approve any such transaction in accordance with the AIM Rules.In addition, Pacific Road Capital and Minco have confirmed their commitment tofulfill the terms of the Final Agreement subject to all regulatory and otherconsents and authorizations required in all relevant jurisdictions, includingbut not limited to the AIM Rules and the Irish Takeover Code. Pacific Road Capital's Funds have entered into the Final Agreement in relianceon warranties and representations given by Minco and Orca Minerals. Chairman's Comment Commenting on the announcement, Roger Turner, Executive Chairman and CEO ofMinco said: "We are very pleased that in completing the Final Agreement with Pacific RoadCapital we have been able to improve the terms to provide for additional equityfinancing of Orca Minerals. We are encouraged by the interest shown by Canadianequity markets in our Mexican projects. We look forward to being able toannounce further developments in the ultimate repositioning of our Mexicanholdings." About Minco: Minco PLC is an AIM quoted precious and base metals exploration and developmentcompany with zinc-silver projects in Mexico and zinc exploration in Ireland. About Orca Minerals: Orca Minerals Limited is a Toronto, Canada based exploration and developmentcompany and a wholly-owned subsidiary of Minco in which Minco has 30,000,000shares. Orca plans to seek a listing of its shares on a recognized Canadianstock exchange. About Pacific Road Capital: Pacific Road Capital refers to the private equity mining investment fundscollectively known as the Pacific Road Resources Funds, which are managed oradvised by Pacific Road Capital Management Pty Limited, of Sydney, Australiawww.pacroad.com.au. For further information, www.minco.ie or contact:Roger Turner: Executive Chairman & CEO +44 (0)20 7397 8155Terence McKillen: Director of Exploration & Business Development +1 416 362 6686/8243Danesh Varma, CFO & Company Secretary +44 (0)20 7397 8154Mark Connelly / Oliver Quarmby: (UK NOMAD) Collins Stewart +44 (0)20 7523 8350Tom McCormack (Ireland PR) ConneXions +353 (0)1 230 3015 This information is provided by RNS The company news service from the London Stock Exchange