Minco PLC Regulatory News (MIO)

19 Sep 2007 16:20

Minco PLC19 September 2007 MINCO PLC MINCO ARRANGES FINANCING FOR MEXICAN PROJECTS REORGANISES MEXICAN ASSETS IN NEW CANADIAN SUBSIDIARY London, 19 September, 2007 - Minco plc (MIO), the London AIM quoted precious andbase metals exploration and development company is pleased to announce that ithas entered into an Agreement ("Agreement") for the financing of Minco's Mexicanprojects with Pacific Road Capital Management Pty Limited ("PRCM") a Sydney,Australia based private equity mining investment fund. The proceeds of the financing will primarily be used to further advance theBilbao and Laguna projects, including deeper drilling, step-out drilling andinfill drilling on both the sulphide and oxide deposits and in conductingpreliminary metallurgical test work on the oxide and sulphide ores at Bilbao aswell as completing engineering updates on mining methods, tailings disposal andprocess design for the Laguna tailings project. Negotiations are ongoing with respect to a Final Agreement ("Final Agreement")which will govern the relationship between the parties which is expected to befinalised and announced by 31 October 2007. NEW CANADIAN SUBSIDIARY As part of these arrangements, Minco has established a new wholly-ownedsubsidiary, Orca Minerals Limited ("Orca Minerals"), incorporated in Ontario,Canada, to hold all of Minco's Mexican assets. Minco will hold 30 million sharesin Orca Minerals. Roger Turner, John Kearney, Terence McKillen, Danesh Varma and Ian Smith formthe initial board of directors of Orca Minerals, with Terence McKillen andDanesh Varma, having been appointed President and Chief Executive Officer andChief Financial Officer respectively. Mr. Lee Graber, representing PRCM, willjoin the board of Orca Minerals as an independent Director. Subject to regulatory and other approvals. It is intended that, at theappropriate time, Orca Minerals will seek to list its shares on the TorontoStock Exchange ("TSXV") or other Stock Exchange. It is Orca Minerals intentionto achieve the TSXV listing as soon as practicable and prior to March 31, 2008. C$ 2.12 MILLION (£ 1 MILLION) RAISED IN FIRST STAGE Under the Agreement, in the first stage, PRCM has invested C$2.12 million (£1million) for Special Warrants of Orca Minerals. The Special Warrants will beconvertible into four million, two hundred and forty thousand common shares ofOrca Minerals upon the listing of Orca Minerals shares on the TSXV or otherStock Exchange. SECOND STAGE OPTIONS Subject to due diligence, execution of the Final Agreement and regulatory orother approvals, PRCM will also make an initial direct project investment ineach of the Bilbao and Laguna projects. US$1.5 million will be invested inBilbao, which will amount to a 10% project interest and in the case of Laguna,an investment of US$1.25 million will amount to a 12.5% project interest. PRCM will also have an option to provide between $2 and $5 million (Canadian) of additional financing and / or to provide further project financing, which willbe convertible into shares of Orca Minerals based on the 30 day average tradingprice at the time of conversion. A fee of 2.5% will be payable to PRCM on theadditional financing under the options. CONDITIONAL CONVERSION INTO MINCO SHARES Under the Agreement with PRCM, if Orca Minerals has not achieved a listing ofits shares on the TSXV or other Exchange (the "Liquidity Event") prior to March31, 2008 the £1 million invested by PRCM in the First Stage above and, inaddition, such other investment options held by PRCM to a minimum of $2.75million (US), will be convertible at PRCM's option into ordinary shares ofMinco. Such conversion into shares of Minco will be at a 10% discount to theaverage 30 day trading price at the time of conversion. Pursuant to the Agreement, PCRM has irrevocably and unconditionally undertakenthat PCRM shall not conduct any activities or effect any transaction pursuant tothe Agreement which would result in an event exceeding 75% in any of the classtests provided for in the AIM Rules of the London Stock Exchange plc ("AIM Rules"), to which Minco is subject. PCRM and Minco have also irrevocably andunconditionally undertaken that if PCRM and Minco agree to conduct anyactivities or effect any transaction pursuant to the 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, PRCM and Minco have confirmed their commitment to fulfil the termsof the Agreement subject to all regulatory and other consents and authorisationsrequired in all relevant jurisdictions, including but not limited to the AIMRules and the Irish Takeover Code. Chairman's Comment Commenting on the announcement, Roger Turner, Executive Chairman and CEO ofMinco said "The incorporation and initial financing of Orca Minerals in Torontois a first step in the process of improving shareholder value in the Minco'sMexican properties. We believe that opening up access to the North Americanequity and capital markets will better enable the financing of the necessarynext steps in the development of the Bilbao, Laguna and other future projects.We are gratified that Pacific Road Capital Management shares our belief in theviability of the Bilbao and Laguna projects and we look forward to working withthem." 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 PRCM: Pacific Road Capital Management is a Sydney, Australia based private equitymining investment fund. 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 8350Nick Bias: (UK IR & PR) BuckBias +44 (0)7887 920 530Tom McCormack (Ireland PR) ConneXions +353 (0)1 230 3015 This information is provided by RNS The company news service from the London Stock Exchange