Panther Metals Regulatory News (PALM)

25 August 2011

Asian Plantations Limited

("APL" or the "Company")

Proposed Acquisition

Asian Plantations Limited (LSE: PALM), a palm oil plantation company with operations in Malaysia, is pleased to announce that it has entered into a conditional agreement to acquire 5,000 hectares of semi-developed plantation land (the "Dulit Estate") in Sarawak, Malaysia (the "Proposed Acquisition"). The Dulit Estate, which shares a common border with the Company's Incosetia Estate, is comprised of a planted area of 2,543 hectares with palms which are approximately 3 to 5 years old and are harvested daily, with the remainder unplanted. It is expected that the Dulit Estate will produce in excess of 22,000 tonnes of fresh fruit bunches ("FFB") in 2012, with a current market sale value in excess of RM 14.3 million (US$4.8 million).

The total maximum consideration for the Proposed Acquisition, which is subject to, inter alia, certain regulatory conditions and potential purchase price adjustments, is RM 102.0 million (US$34.4 million), of which RM 2.0 million (US$0.7 million) has been set aside for community and social investments, as part of the Company's ongoing efforts to ensure social inclusion consistent with its eventual objective of official RSPO certification. The remaining RM 100 million (US$33.7 million) is payable in three tranches:

·; a refundable deposit of RM 0.5 million (US$0.2 million), which has been paid;

·; RM 89.5 million (US$30.1 million), payable in cash at the time of completion; and

·; a further sum of up to RM 10.0 million (US$3.4 million), payable subject to a third party verification of the unplanted area.

Assuming a conservative market value of approximately RM 9,000 (c. US$3,000) per hectare for the unplanted land in the Dulit Estate, the purchase price per planted hectare is approximately RM 31,400 (US$10,600), which the board of APL (the "Board") believes represents a substantial discount to recently transacted, planted parcels in the East Malaysian market.

The consideration is to be funded with RM 71.4 million (US$24.1 million) from a new acquisition debt facility, for which the Company has received an offer letter and will be provided by a local bank in Malaysia (the "Proposed Bank Facility"). As was the case with the Company's two preceding acquisitions, the Proposed Bank Facility will be interest-only for the first three years and have a nine year maturity.

The remainder of the consideration, being RM 30.6 million (US$10.3 million), will be funded from the Company's existing cash balance, which was enhanced by the £16.0 million (US$25.7 million) equity placing undertaken in February 2011 and the US$2.1 million convertible bond issuance announced by the Company on 17 August 2011.

The transaction is expected to close by year-end 2011, subject to certain regulatory approvals and the completion of the Proposed Bank Facility.

The Board intends to commence nursery operations at the Dulit Estate in January 2012, thereby enabling in-the-ground planting to begin in the 4th quarter of 2012. The Company expects, subject to the availability of sufficient working capital, to fully complete all the in-the-ground planting by the 1st quarter of 2014.

The Board believes that the Proposed Acquisition offers numerous strategic benefits to the Company, including:

·; increasing the scale of the Company's existing operations to approximately 20,645 hectares of plantation land, which achieves the Company's stated objective, made at the time of its admission to trading on AIM on 30 November 2009 ("Admission") of exceeding 20,000 hectares within two years of Admission. Importantly, all of the Company's land resource is within close proximity and can be efficiently serviced by one central processing mill;

·; an immediate boost to short term revenues which complements the existing revenue stream from the planted fields at the Incosetia Estate and revenues expected from the BJ Estate in the 4th quarter of this year. At closing of the Proposed Acquisition, three of the Company's four estates will be revenue producing; and

·; providing the Company with further scale to supply its planned FFB crushing mill currently under development. The mill is expected to open in the 4th quarter of 2012 with an initial capacity of 60 tonnes per hour ("TPH") but is rapidly upgradeable, with minimal further capital expenditures, to 120 TPH in 2014 when the Company's FFB volumes justify the milling expansion. A larger milling operation enables improved economies of scale and allows for better competitive positioning for the processing of third party crop. The principal regulatory approvals required for the construction of the Company's mill were received from the Ministry of Land Development on 10 August 2011.

Graeme Brown, APL's Joint Chief Executive Officer, commenting on the Proposed Acquisition, said:

"The acquisition of the Dulit Estate is a milestone development for the Company and our field development team, as we have successfully achieved the Company's stated objective of owning in excess of 20,000 hectares within two years of Admission.

 "We are currently updating our planting schedules but are confident that the remainder of the Dulit Estate can be fully planted by the 1st quarter of 2014. The Proposed Acquisition, together with our existing assets, should mean the Company has over 10,000 hectares of planted land by year-end 2011; this represents over 1.35 million palm trees, with a 30 year life span, planted in the ground and growing. During the course of 2012, we expect to open our vertical sterilizer mill which will be amongst the largest mill platforms in Malaysia and maintain the momentum in our field planting programme."

Dennis Melka, APL's Joint Chief Executive Officer, added:

 "We are excited to have secured this additional parcel of land, which has tremendous operational synergies with our existing estate operations and which are located in close proximity to one another. Through our long standing local relationships and on-the-ground presence, we were able to secure the parcel in a negotiated, non-competitive situation, which demonstrates our continued ability to source acquisition opportunities for the Company, as well as securing attractive local currency bank financing, which we believe creates long term shareholder value.

"Due to the Company's significantly enhanced operating platform and recently strengthened balance sheet, we are well-positioned to consolidate the remaining land resource in our operating area. We believe that the Company now has, subject to the availability of sufficient growth capital, the potential to grow to in excess of 45,000 hectares by the end of 2012. We look forward to updating our shareholders with further positive developments in the weeks and months ahead."

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