SNRP.L Regulatory News (SNRP)

7 Aug 2007 08:26

Strategic Natural Resources PLC07 August 2007 Strategic Natural Resources plc ("SNR" or the "Company"; Ticker: (SNRP)) Admission to AIM ---------------- Strategic Natural Resources plc ('SNR'), a vehicle established to develop, own and manage natural resource extraction enterprises in southern Africa, is pleased to announce that trading in its shares on AIM commenced today. As part of the flotation, Hichens Harrison & Co plc placed 10 million ordinary shares at 30p per share raising a total of £3 million for the Company. At admission there are 65 million ordinary shares in issue giving a market capitalisation of £19.5 million at the placing price. HB Corporate is Nominated Adviser to the Company. The funds raised during the placing will primarily be used to cover planning andoperational costs for the development of the Company's principal asset, theprospecting right over 9,283 hectares held by its subsidiary, Elitheni Coal(Pty) Ltd, at Indwe, which is located north of East London in the Eastern CapeProvince of South Africa, and to meet the cost of additional prospecting forcoal in that area. SNR intends to develop, own and manage a coal mining operation at Indwe, closeto areas where energy supplies are falling well below current and projectedsupply. SNR's Chief Executive Jeremy Metcalfe said: "We are confident that our strategicpositioning will establish us as a long-term supplier to the energy market inSouth Africa and subsequently throughout southern Africa. We have alreadyestablished the initial contacts we believe may lead to long-term customerrelationships." SNR has entered into a framework agreement with the AIM- and AltX-quoted powergeneration group, IPSA Group PLC ('IPSA'), giving IPSA, subject to certainconditions, a right of first refusal to purchase, for IPSA's planned Indwe PowerPlant and the Da Gamma Textile CHP Plant, all of Elitheni's coal which it plansto sell to the primary energy market. It is anticipated that the majority of thecoal extracted will be used in electricity generation and industrial boilersthrough the use of clean coal combustion technology. Coal mined at Indwe is also suitable for use in brick making, as a reductant inthe metallurgical smelting industry and as a domestic fuel source. For further information contact:Jeremy P. MetcalfeChief ExecutiveStrategic Natural Resources plcTel: +44 1303 874 798 Allan PiperFirst City Financial Public RelationsTel: +44 20 7242 2666 Rod Venables / Cecil JordaanHB CorporateTel: +44 20 7510 8600 AIM Admission Details:--------------------- AIM symbol: SNRPFunds raised: £3 millionPlacing price: 30pNumber of shares placed: 10 millionNumber of shares in issue: 65 millionPercentage of enlarged share capital with placees: 15.4%Market capitalisation at placing price: £19.5 millionProportion of issued shares held by management: 42.3% Advisers:--------- Nominated Adviser: HB CorporateFinancial Adviser: Blomfield Street Securities LimitedBroker: Hichens, Harrison & Co. plc Board of Directors:------------------- Richard Henry Ringrose Latham: Non-Executive Chairman Richard Latham was appointed Chairman of Northern Petroleum Plc in 1999 and hiscareer has been closely tied to the energy industry. He holds a MBA degree fromCranfield University and has spent most of his working life in the City -initially as an investment manager and for 27 years with companies in theupstream oil and gas industry. He was formerly deputy chairman of AberdeenPetroleum Plc, chairman and managing director of Claremount Oil and Gas Limitedand a non-executive director of Atlantis Resources Limited, a company listed onthe London and Toronto stock exchanges. Jeremy Peter Metcalfe: Chief Executive Jeremy Metcalfe has a track record as a financier, marketer and promoter. He hashands on experience of the extractive minerals market having managed publiccompanies including the chairmanship of Minmet plc, Connary Minerals plc,Crediton Minerals plc and Tiger Resource Finance plc which were engaged in theexploration and production of gold, base metals and diamonds in Brazil,Portugal, Peru, Dominican Republic, Honduras and the UK. He has arranged thefunding, purchase and sale of a number of gold related projects in Europe andWest Africa including the early funding of Golden Prospect plc (since renamedAmbrian Capital plc) and of Tiger Resource Finance plc, a successful miningfinance house. He has a wide experience of running a number of businesses,latterly in the public sector commencing in 1994. Barry William Nel: Commercial Director Barry Nel is the founder of Elitheni and is involved in the South African coaland energy supply sector. He was a founder of Trans Tugela Coal (Pty) Ltd in1976 which was South Africa's first independent coal mining operation. Thebusiness grew to three medium sized collieries and captured 35 per cent. of theNatal industrial coal market. He formed Coalnet in 1990 to focus on jointventures with coal users such as the successful joint venture between Coalnetand Vakbel of Turkey, which involved exporting 2.5Mt of South African coal toTurkey. Since 1999, he has committed himself and all his resources to the fulltime task of establishing Elitheni. Elizabeth Ruth Shaw: Executive Finance Director Elizabeth Shaw has been involved in the electricity sector since 1994 when shejoined Fieldstone Private Capital Group (UK) Limited. Between 1994 and 2000, asa director of Fieldstone, she advised on a number of mergers, acquisitions anddisposals in the electricity industry, both in the UK and in developing markets.Prior to joining Fieldstone, she was involved in the financing of small tomedium sized companies in the UK, including raising equity for both listed andunlisted companies. She joined Independent Power Corporation PLC as a directorin 2000 where she is responsible for business development and finance. She isalso an executive director and founder of Rurelec PLC and of IPSA Group PLC. Sheis a graduate of Exeter University. Peter Richard Stephen Earl: Non-Executive Director Peter Earl began his career at the Boston Consulting Group Inc. advisingstate-owned companies. He has advised ministries of finance and central banks inAbu Dhabi, Albania, Kuwait and Saudi Arabia. He was previously CEO of TranwoodPLC and The Carter Organisation Inc. in New York. In 1994 he acted on secondmentto the World Bank and UNDP in Bolivia. He has advised governments onprivatisations in Latin America and Eastern Europe having served as DeputyChairman for the United Nations Economic Commission for Europe infrastructurefinance group. He became a director of Fieldstone Private Capital Group UKLimited in London in 1994, where he advised on cross-border power sectoracquisitions and bids totalling approximately US$6 billion, involving 5,000 MWof installed generating capacity. In 1995 he founded Independent PowerCorporation PLC, and is also a founder and executive director of Rurelec PLC andof IPSA Group PLC. He is also a non-executive director of Blomfield StreetSecurities Limited and of Hichens Harrison (South America) Limited, both beingsubsidiaries of Hichens Harrison. He is the author of a European textbook oncross-border takeovers. He is an Oxford University graduate and was a KennedyScholar at Harvard University. Robert Myles Randal MacDonnell: Non-Executive Director Randal MacDonnell was a Partner of Laurie Milbank & Co Stockbrokers, stockbrokerpartnership for 16 years until it was taken over by Chase Manhattan Bank(subsequently JPMorgan Chase & Co.) in 1985. He was head of the institutionalequity department raising money for underwritings, placings and rights issues,as well as conducting normal stock exchange business. In 1986 he was appointed aDirector of Chase Manhattan Securities Limited where he remained for four years.He subsequently became a director of Credit Lyonnais Securities Limited and in1994 was appointed a Director of Kleinwort Benson Securities Limited primarilydealing with small companies. Prior to becoming a member of the London StockExchange in 1965 he was commissioned in the 9th/12th Royal Lancers. He iscurrently a non-executive director of PipeHawk plc. Use of funds:------------- O To meet the cost of the mining right application for the Elitheni coal mine, located in the Eastern Cape, South Africa;O To establish an initial mining operation at Indwe;O To meet the cost of future prospecting for coal in the Indwe area;O To repay a related party loan of approx. £450,000;O The costs of admission. Website:-------- www.snrplc.co.uk Background information:----------------------- Strategic Natural Resources PLC (the 'Company' or 'SNR') was established inOctober 2004 as a vehicle to develop, own and manage natural resource extractionenterprises in southern Africa. Acharnian Mining Ltd (incorporated in theBritish Virgin Islands), a wholly owned subsidiary of SNR and intermediateholding company, owns 90 per cent. of the share capital of Elitheni Coal (Pty)Ltd (incorporated in South Africa). The principal asset of Elitheni Coal (Pty) Ltd ('Elitheni') is the phase 1 andphase 2 prospecting right, which gives Elitheni the right to prospect for coalover these areas. The phase 1 and phase 2 area covers 9,283.80 ha in theGubahoek / Macubeni area of the Eastern Cape Province of South Africa and theprospecting right gives the Company the exclusive right to apply for and begranted a mining right for coal over the phase 1 and 2 area. On 6 March 2007,Elitheni submitted an application for a prospecting right on further land in theGubahoek / Macubeni area, to the extent of 15,922.86 ha (to be the phase 3area). Subject to the grant and registration of the phase 3 prospecting right,anticipated to be in the final quarter of 2007, Elitheni will have rights toprospect for coal over a total of 25,206.66 ha. The competent person's report confirms that the phase 1 area, over whichprospecting is complete, has a resource of 15Mt of coal, comprising 6.68Mt ofMeasured Coal Resources, 2.45Mt of Indicated Coal Resources and 5.92Mt ofInferred Coal Resources. Elitheni has commenced the work required for the submission of the phase 1 and 2area mining right application and, subject to increasing and maintaining itsHistorically Disadvantaged South African ('HDSA') shareholder base to theminimum regulatory requirement of 26 per cent., expects to submit theapplication during the third quarter of 2007. Based on this planned submissiondate, the granting of the mining right is expected to be in the third quarter of2008. Subject to the phase 3 area prospecting activities showing adequate reserves,the Directors plan to submit the mining right application for the phase 3 areabefore the end of 2008, in order to commence mining in 2009. It is anticipated there will be strong demand for Elitheni's coal from severalmarkets, predominantly the Indwe Power Plant and the Da Gama Textile Plant. Bothof these projects are planned by IPSA, the independent power generation companyquoted on both AIM and Johannesburg's junior AltX market. Elitheni's coal can also be used as a reductant within the metallurgicalindustry, an additive and primary energy source for the brick-making industry;and fuel for domestic consumption. Power generation in South Africa is currently dominated by the State-ownedelectricity generator and supplier, Eskom, which currently generates around 95per cent. of the country's installed generating capacity. The South Africanelectricity system is currently suffering from a severe reduction in reservecapacity since electricity consumption has far outstripped anticipatedproduction growth levels and no significant new generation capacity has beenadded to Eskom's generation base for a number of years. Areas of the WesternCape have been experiencing blackouts and brownouts over the past two years. In line with South Africa's Black Empowerment Act, 26% of Elitheni's shares mustbe held by HDSAs in order that the company can be granted and retain a miningright. At present, two investors whom the Directors believe to be HDSAs, hold inaggregate, 10% of Elitheni. The company is in negotiations with HDSAs wishing toacquire additional shares, and The Directors anticipate that after admission toAIM, but prior to an application for the mining right over the Phase 1 and 2Area, HDSA investors will acquire shares taking the holding to the required 26%level. SNR's interest in, Elitheni will accordingly decrease to 74%. This information is provided by RNS The company news service from the London Stock Exchange