Petra Diamonds Regulatory News (PDL)

2 Mar 2007 13:37

Xceldiam Limited02 March 2007 Xceldiam Limited ("Xceldiam" or the "Company") Notification of Investing Strategy and notice of Extraordinary General Meeting ("EGM") Following the joint announcement made by the Company and Petra Diamonds Limited("Petra") on 1 March 2007 (the "Joint Announcement"), Xceldiam confirms that anotice of Extraordinary General Meeting ("the EGM") including an explanatoryletter from the Xceldiam Board, has been dispatched to its shareholders today toconvene an EGM to be held at the registered office of Xceldiam at ClarendonHouse, 2 Church Street, Hamilton, HM 11 Bermuda at 9:00 a.m. (Atlantic DST) on19 March 2007. EGM Notice As set out in the Joint Announcement, the EGM Notice includes three ordinaryresolutions ("the Resolutions") as set out below; (i) that the proposed disposal of Frannor Investments and Finance Limited("Frannor BVI") (the "Disposal") to Petra be approved; (ii) that the Xceldiam investing strategy as set out in the Xceldiamcircular, and also set out below, be approved; and (iii) that the interim dividend in specie of the 19,674,584 Petra shares beapproved and declared payable to Xceldiam shareholders on record as at 9 March2007 in proportion to the number of shares held by such Xceldiam shareholders. Investing Strategy Xceldiam confirms that subject to completion of the Disposal, it will become anInvesting Company for the purposes of the AIM Rules, as it will hold no assetsother than cash of US$1.25million. In accordance with AIM Rule 15, the Company'sproposed investing strategy, which is also subject to approval at the Company'sEGM, is set out below. The US$1.25 million cash reserves in Xceldiam, less the Company's operatingcosts over the next 12 months, which are expected to be approximatelyUS$600,000, will be invested by the directors as follows, whereby the Companywill: • either (i) invest by way of purchasing shares in diamond companies, orother resource opportunities, which hold exploration or mining licences in thesub-Saharan region of Africa, most notably the Democratic Republic of Congo ("DRC"), or (ii) acquire the assets held by these companies. The recent democraticelections in the DRC, and the revision of its mining legislation, makes thiscountry in the opinion of Michael Nunn and Mark Summers (being the remainingdirectors after completion of the Disposal) (the "Remaining Directors") a goodtarget for exploration and mining activities; • make an investment or acquisition within 12 months of the date of theEGM, failing which it will return all funds held by the Company to itsshareholders by way of dividend; • make only one or two key investments or acquisitions with the funds itcurrently holds; • if it chooses to invest, by way of purchase of shares, rather than byway of acquisition of assets it will be an active investor in the way that itmanages those investments; and • if it chooses to acquire further assets it will be the intention ofXceldiam to initially rely on the corporate finance, legal and geological skillsbase along with the investor base that is available from companies associatedwith Michael Nunn to facilitate initial assessment of new projects andinvestments. Following which, Xceldiam will appoint full time staff to theprojects should it be deemed appropriate. The Remaining Directors have the following expertise in respect of evaluatingand acting on the investing strategy: - Michael Nunn is a South African mining entrepreneur, recognized asthe pioneer of the worldwide tanzanite industry. He was the founder and CEO ofAIM quoted Tanzanite One and remains the major shareholder. Mike also foundedand developed Afgem Limited of which he is also the major shareholder. Mike iscurrently Chairman and CEO of AMARI (African Mining and Resource Investments)which he founded in 2006 to consolidate his various mining interests and pursuea wide spectrum of resource opportunities throughout Africa. He is the foundingmember of Xceldiam. - Mark Summers is a chartered accountant and a chartered managementaccountant. After completing his articles at Coopers and Lybrand, Mark joinedAnglo American's Corporate and International Finance Department and from 1999 to2002 was an associate director in the Mining Corporate Finance division at HSBC,where his corporate clients included Afgem, De Beers, Kroondal Platinum and theIndustrial Development Corporation of South Africa. Mark is Chief FinancialOfficer of Afgem, a position he has held since 2002 and is also the ChiefFinancial Officer of Tanzanite One Due diligence work will be carried out on potential targets by independentprofessional mining consultants To date, various discussions and technical visits have been undertaken focusingon a near production diamond exploration projects in the DRC in close proximityto Mbuji Mayi, an area well known for its diamondiferous kimberlite fields.Previous studies by SRK and other mining companies have also been reviewed aspart of the Company's evaluation process. Overview Following completion of the Disposal, which is still conditional upon approvalof the shareholders of the Company at the EGM, Xceldiam has to make anacquisition or acquisitions which constitute a reverse takeover under the AIMRules or otherwise implement its investing strategy to the satisfaction of theLondon Stock Exchange plc within twelve months of having received the consent ofits shareholders at the EGM, otherwise its shares will be suspended, pendingcancellation of its admission to AIM. For further information please contact WH Ireland Limited Tel: 0161 832 2174David Youngman/Katy Mitchell Xceldiam Limited Tim George Tel:+27 83 573 4199 This information is provided by RNS The company news service from the London Stock Exchange