7 Oct 2010 07:00
Titanium Resources Group Limited
Successful resolution of dispute with Government of Sierra Leone
7 October 2010: Titanium Resources Group ("TRG" or the "Company") is pleased to announce that it has reached an agreement in principle (the "Agreement") to resolve the dispute between its subsidiary, Sierra Rutile Limited ("SRL"), and the Government of Sierra Leone ("GOSL or "Government") which related to funds loaned by the GOSL to SRL.
Under the terms of the Agreement, the Government will invest £13.6 million (EUR15.6 million*) of the SRL Loan into approximately 113.7 million new ordinary shares at an issue price of 12 pence per share, a 60% premium to TRG's closing share price on 6 October 2010. Upon issue of these new ordinary shares, GOSL will own 22.8% of the Company's enlarged issued share capital. The outstanding debt and accrued interest due to GOSL as at today's date will fall from EUR36.9 million to EUR21.3 million (c.£18.6 million*), a 42.3% reduction (*based on a GBP:EUR exchange rate of 1.143 on 6 October 2010).
John Bonoh Sisay, Chief Executive Officer, said:
"The Company wishes to thank the Government of Sierra Leone for its positive approach in resolving this matter quickly and amicably. This Agreement strengthens our partnership with the Government and ensures we are fully aligned in developing a strong SRL. The Company can now focus its efforts on expanding production and developing its assets towards their considerable potential."
On August 20, 2010, the Company announced that SRL and the GOSL were in a dispute over certain interest payments due to the GOSL on a loan made by the GOSL to SRL ("the SRL Loan"). Discussions between SRL, TRG, TRG's largest shareholder, Pala Investments Holdings Limited ("Pala"), and the GOSL have successfully resolved the matter, subject to the completion and signing of definitive documentation.
Definitive documentation is expected to be executed in the course of the next few weeks, at which time, the new shares will be issued to the GOSL and any actual or alleged events of default under the SRL Loan will be cured and the SRL Loan will be in good standing.
On issue of the new ordinary shares, the GOSL and Pala will be the Company's largest shareholders, holding approximately 22.8% and 23.0% of the Company's shares respectively. Admission to trading of the new ordinary shares on AIM will be sought immediately after issue. The Government's shareholding rights in SRL are unaffected by this Agreement.
Further announcements will be made as appropriate.
ENDS
For further information:
Titanium Resources Group
Wayne Malouf, Executive Chairman
John Sisay, Chief Executive
Tel: +44 (0) 20 7321 0000
Arbuthnot Securities
Nominated Advisor
Richard Johnson / Hugh Field
Tel: +44 (0) 20 7012 2000
Aura Financial
Michael Oke / Andy Mills
Tel: +44 (0) 20 7321 0000
Titanium Resources Group
Titanium Resources Group is a mining company with operations in the Republic of Sierra Leone. The Group is the country's largest private sector employer and produces rutile and ilmenite for use in industrial applications. The Group's operations have historically accounted for over 65 per cent of the exports of Sierra Leone.