POL.L Regulatory News (POL)

23 Nov 2007 15:45

Polo Resources Limited23 November 2007 For immediate release: 23 November 2007 POLO RESOURCES LIMITED ("Polo Resources" or "the Company") Conditional Acquisition of 26 Mongolian Coal, Uranium and Tungsten Mineral Exploration Licences ("the Acquisition") Suspension of trading pending the publication of an Admission Document The Board of Polo Resources Limited (AIM:PRL, the "Company"), the naturalresources investing company, today announces that it has agreed to acquire anumber of special purpose vehicles, namely MUC Resources LLC ("MUC", a Mongoliancompany), World Uranium Works Corporation ("WUW", a BVI company), and PoloResources LLC ("Polo Mongolia" a Mongolian company) which together with AsiaIntercept Mongolia LLC ("Asia", a Mongolian company) jointly comprise thevendors who hold a portfolio of coal, uranium and tungsten mineral licences inMongolia. Each of MUC, WUW and Polo Mongolia has no trading history and noassets or liabilities other than the licences referred to below. The total consideration payable to the vendors and introducing parties is USD2million and the issuance of 25 million shares (such shares to be held in escrowfor one year from the date of issue). In addition, a further USD1.25 million wasexpended by the Company, in the form of a Promissory Note to Asia, to fundoutstanding payments due to third party vendors on certain of the minerallicences acquired. Completion is subject inter alia to final due diligence anddocumentation, compliance with the AIM Rules and Shareholder approval. The sellers further agree to manage the Mongolian activities of Polo Mongoliaand MUC and to assist Polo Resources in ongoing management services, subject toterms of a management agreement to be entered into between Polo Resources andAsia prior to completion. As the proposals amount to a Reverse Transaction for the purposes of the AIMRules, trading in the Company's issued share capital has been suspended withimmediate effect pending the publication of a Shareholder Circular comprising anAIM Admission Document providing full details of the transaction. Coal Licences As part of the acquisition, Polo Resources will purchase two coal explorationlicences. The first licence is situated in the Choir - Nyalga Coal Basin. This basin isrenowned for its large multi-billion tonne brown coal. In more recent times thebasin has yielded high calorie black coal (e.g. Eldev pit owned by MAK Mining). The second licence covers a significant part of the Ovorkhangai basin. A singledrill hole recorded 38m of black coal from 12m depth. Further drilling isplanned in the next quarter. Neither of the coal licences has been subjected to significant exploration workin the past. Polo Resources intends to commence field exploration activities,including drilling, on the coal licences by year-end. Exploration expendituresfor the initial 18 months are budgeted at approximately USD2 million. Uranium Licences Polo Resources will acquire a total of 22 Uranium exploration licences covering617 km2 of the highly prospective Central Uranium Belt. The licence areasinclude volcanic hosted, sandstone roll front, quartz vein systems and paleochannel U3O8 mineralisation. A total of 35 anomalies have been recorded on these licences. The anomalies willrequire drill testing. Several of the licences have historic Russian drill dataindicating ore grade mineralisation and this mineralisation will be validated inthe coming months. Polo Resources intends to commence field exploration activities, includingdrilling, on the uranium licences by year-end. Exploration expenditures for theinitial 18 months are budgeted at approximately USD2 million. Tungsten Licences Polo Resources will acquire two Tungsten exploration licences. Neither have anyhistorical drilling. Polo Resources intends to commence field explorationactivities, including drilling, on the tungsten licences in the first quarter of2008. Exploration expenditures for the initial 18 months are budgeted atapproximately USD2 million. Reasons for the Acquisition Polo Resources was admitted to AIM on 4 September 2007 as an "investing company"under the AIM Rules with the primary focus as an active investor within thenatural resources sector and allowed a period of 18 months to make a substantialacquisition failing which a meeting of Shareholders would be convened toconsider winding up the Company. The Acquisition, if implemented, would meetthis requirement. The Directors believe that the Acquisition provides the Company with theopportunity to build a significant and diversified mineral portfolio of coal,uranium and tungsten in Mongolia at an attractive entry price. Proposed Directors It is anticipated that there will be a number of additional appointments to theBoard in conjunction with the Acquisition and details will be announced in duecourse. Publication of Circular and Admission Document When all necessary matters are completed including due diligence, the Companywill make a further announcement and send a circular to Shareholdersincorporating an AIM Admission Document. Polo Resources is continuing its ongoing evaluation of a number of coal, uraniumand other exploration and development projects in the Northern Asia Region. The resource information contained in this announcement has been reviewed byPaul Ingram, Consulting Geologist. He is the Qualified Person who advised PoloResources on this coal licence acquisition in Mongolia. Mr. Ingram hassufficient experience relevant to the style of mineralisation and type ofdeposit under consideration and to the activity which he is undertaking, toqualify as a Qualified Person for the purposes of this announcement. - end - For further information, please contact: Polo Resources Limited Guy Elliott (Non-Executive Chairman) Tel +1 941 284 5954Harald Van Hoeken (CEO) Tel +44 (0) 7771 913717 Beaumont Cornish Limited Roland Cornish/Rosalind Hill Abrahams Tel +44 (0) 20 7628 3396 GTH Communications Limited Toby Hall/Jade Mamarbachi Tel+44 (0)20 7153 8039/8035 This information is provided by RNS The company news service from the London Stock Exchange