Shearwater Regulatory News (SWG)

26 Feb 2007 07:03

Aurum Mining PLC26 February 2007 For Immediate Release 26 February 2007 AURUM MINING PLC ("Aurum" or "the Company") Placing to raise £30 million to fund construction of Andash Zone 1 mine Aurum Mining plc (AIM: AUR) is pleased to announce that 30 million new ordinaryshares of 1p each in the share capital of the Company (the "Placing Shares")have been placed by Arbuthnot Securities Limited, acting as the Company'sNominated Adviser and Broker, at a price of 100p per share to raiseapproximately £30 million before expenses (the "Placing"). The issue was fullysubscribed and marks the largest fundraising so far this year in the AIMmarket's mining sector. Highlights • Aurum has raised £30 million before expenses at 100p per share to fund the construction and commissioning of the open-cast mine at the Andash Zone 1 gold and copper project in the Kyrgyz Republic. • Initial production at Andash Zone 1, which contains reserves of 1.1 million ozs of gold and gold equivalent, is expected to begin in 2008, marking Aurum's transition from an exploration company to a gold producer. • The Andash Zone 1 mine will be funded entirely through the equity raised in the Placing, and there will be no requirement for debt or associated hedging. • The Placing will also support Aurum's exploration programme within other areas of the Andash licence. Mark Jones, Aurum Mining's Chief Executive, said: "We are delighted by thesuccess of this Placing which will fully fund the construction and commissioningof the Andash Zone 1 mine and which should take the Company through to positivecashflows. The strength of demand for shares in this Placing underlines the highquality of the Andash resource and the robustness of our strategy to monetiseboth Zone 1 and the other exploration areas within the Andash licence." Details of the Placing A total of 30 million new ordinary shares of 1p each in the share capital of theCompany (the "Placing Shares") have been placed by Arbuthnot Securities Limited,acting as the Company's Nominated Adviser and Broker, at a price of 100p pershare to raise approximately £30 million before expenses (the "Placing"). ThePlacing Shares represent approximately 71 per cent of the enlarged issued sharecapital of the Company. The net proceeds of the Placing will enable the Company to wholly fund thedevelopment of the Company's 100 per cent owned Andash Zone 1 gold and copperproject as well as providing on-going working capital and support to continuethe Company's exploration programme. With finance now in place, and followingthe announcement of the award of a mining licence and completion of the bankablefeasibility study at the end of 2006, commercial production from Andash Zone 1is expected during 2008. As previously announced the Wardell Armstrong International (WAI) compiledbankable feasibility study increased the measured and indicated resource base by12.5% to 19.2 million tonnes at 1.1 grams per tonne of gold and 0.4% copperwhich equates to 1.1 million ounces of gold and gold equivalent. The feasibilitystudy anticipates a mining rate of 2 million tonnes per annum with a pit life of8.5 years and an average cash operating cost of $223 per ounce. Furthermore, thestudy confirmed the open-cast operation will combine low costs with highproduction rates resulting in a payback period of 3.5 years and an NPV of 36.9%based on WAI's conservative mineral price assumptions. Further details of thefeasibility study are available at the Company's website (www.aurummining.net). Application has been made to the London Stock Exchange for the Placing Shares tobe admitted to trading on AIM. The Placing Shares will rank pari passu with theexisting issued ordinary shares of 1p each in the share capital of the Company(the "Ordinary Shares"). The Placing is conditional, inter alia, on the admission of the Placing Sharesto AIM becoming effective ("Admission"), which is expected to occur onWednesday, 28 February 2007, when dealings in the Placing Shares are expected tocommence. Upon Admission, the Company's enlarged issued share capital willcomprise 42,429,753 ordinary shares with voting rights. The Company does nothold any shares in treasury. This figure of 42,429,753 Ordinary Shares may beused by shareholders in the Company as the denominator for the calculations bywhich they will determine if they are required to notify their interest in, or achange in their interest in, the share capital of the Company under the FSA'sDisclosure and Transparency Rules. On 31 January 2005, a waiver was granted by the Panel on Takeovers and Mergersfrom the obligation of the Concert Party (as set out in the admission documentsent to shareholders on 13 January 2005) to make an offer to all shareholders ofthe Company pursuant to Rule 9 of the City Code on Takeovers and Mergers. Thiswaiver related to the potential allotment of up to 3,100,000 new ordinary sharespursuant to the acquisition of Kaldora Company Limited and options over afurther 1,000,000 Ordinary Shares granted to members of that Concert Party asset out in the admission document. As a result of the Placing, the percentageholding of the Concert Party upon Admission will be reduced to 6.8 per cent andthe potential shareholdings of the Concert Party as a result of the issue ofshares and exercise of options for which the waiver has been obtained would beup to 12.9 per cent. For further information:Aurum Mining plc Tel: 020 7478 9050Mark Jones, Chief ExecutiveChris Eadie, Chief Financial Officer Arbuthnot Securities Tel: 020 7012 2000Graham SwindellsJohn Toll Buchanan Communications Tel: 020 7466 5000Mark Court / Rebecca Skye Dietrich Notes to editors Aurum Mining, which joined the AIM market of the London Stock Exchange in May2004, is a mining company focussed on gold opportunities in the Former SovietUnion. Its principal asset is an exploration licence over the Andash gold andcopper project in the Kyrgyz Republic. A mining licence for Andash Zone 1 wasawarded by the Kyrgyz authorities in 2006. The bankable feasibility studycompiled by Wardell Armstrong International, also in 2006, confirmed a measuredand indicated resource base of 19.2 million tonnes at 1.1 grams per tonne ofgold and 0.4% copper, which equates to 1.1 million ozs of gold and goldequivalent. Initial production at Andash Zone 1 is expected in 2008. The Andashproject also includes Zone 2 and Zone 3 along with Tokhtonysay, Nakhodka andthree other additional exploration areas. Copies of this announcement may not be published, distributed or transmitted inor into the United States. This announcement does not constitute an offer tosell or the solicitation of an offer to buy the securities discussed herein.The securities mentioned herein have not been, and will not be, registered underthe United States Securities Act of 1933 (the "Securities Act") or the laws ofany state, and may not be offered or sold in the United States except pursuantto an exemption from, or in a transaction not subject to, the registrationrequirements of the Securities Act and applicable state securities laws. Therewill be no public offer of the securities in the United States. This information is provided by RNS The company news service from the London Stock Exchange