Xtract Regulatory News (XTR)

20 Feb 2006 08:49

Resmex plc20 February 2006 20 February 2006 RESMEX PLC ("Resmex" or the "Company") Admission to AIM The Company announces that its ordinary shares were admitted to AIM earliertoday and that accordingly it has completed the acquisition of the entire issuedshare capital of Xtract Oil Limited ("Xtract") not already owned by it (the"Acquisition"). Following the Acquisition, the number of issued ordinary sharesin the Company is 286,559,800; based on the share price of the Company at theclose of business on 17 February 2006, the Company's market capitalisation isapproximately £20.1 million. Information on Xtract Xtract is investigating and developing a technology for the processing of oilshale (the "Xtract Technology"). It is intended that the Xtract Technology willproduce refinery-acceptable crude oil from the kerogen contained in the oilshale. The Xtract Technology is a method of processing oil shale in the presenceof hydrogen and solvents, known as supercritical solvent hydrogenation.Validation of the experimental work and development of a commercial processwould result in intellectual property which may be licensed for use with oilshale deposits throughout the world. There is a substantial shortfall in oilproduction in Australia leading to increasing imports of oil; if successful andcommercially viable, Xtract's proposed processes will enable an additionalsupply of crude oil for the Australian market. Xtract, in conjunction withexternal consultants, has designed and intends to operate an experimentalprogramme to carry out extractions using representative oil shale samples andassess the key risks inherent in the process. Xtract's intellectual property and licensing strategy The primary objective of Xtract is to develop a technology for the extraction ofoil from kerogen in oil shale which is capable of protection and licensing. Theintellectual property developed through this work will be owned by Xtract andprotected for future commercial licensing, on a world-wide basis. Julia Creek exploration rights It was announced on 19 October 2005 that Resmex had agreed to acquire certainoil shale rights from Intermin Resources Limited ("Intermin"). These rights areover 11 mining tenement areas (the "Resmex Tenements") in the Toolebuc area ofQueensland; the majority of the tenements are grouped together in the vicinityof Julia Creek. Access to oil shale is required for Xtract to bench test and commerciallydevelop Xtract Technology. The Resmex Tenements are expected to ensure theavailability of an initial resource for the commercial development of the XtractTechnology. It is intended that access will be sought to other deposits beyondJulia Creek once the programme has commenced. The exploration rights assigned by Intermin to Resmex excluded an area overwhich Xtract has a farm-in option (the "Exclusion Zone"); as a result of theAcquisition, the option will not be exercised and the Exclusion Zone will, underthe terms of the Tenement Assignment, be incorporated into the Resmex Tenements.Geological reports on the Resmex Tenements and on the Exclusion Zone are set outin the Company's admission document dated 20 January 2006 (the "AdmissionDocument"). In the year ended 30 June 2005 Xtract made an operating loss of A$13,000 ontotal income of A$24,000; net assets at 30 June 2005 were A$190,000. Information on Resmex Resmex was established in 2004 and its shares were admitted to trading on AIM atthe end of March 2005 after an initial placing to raise £0.8 million (beforeexpenses). Resmex's purpose at the time of admission was stated to be the makingof investments in the mining and minerals sector. Pursuant to this objective,Resmex's initial investment was the acquisition of Sermines de Mexico S.A. deC.V. which owns mineral exploration and development rights in three concessionsin the California-Sonora Gold Belt in Mexico. The concessions include historicgold mines which have not been the subject of modern exploration. In October 2005, Resmex raised an additional £2.0 million and announced that ithad agreed to acquire the Resmex Tenements from Intermin for a considerationcomprising A$50,000 and 30 million new ordinary shares. The Company announced atthe same time that it had agreed to pay A$1.0 million (£0.4 million) to acquire21.6% of Xtract's issued ordinary shares and that, pursuant to underwritingarrangements, it would invest up to a further A$2.3 million (£1.0 million)increasing its holding to a maximum of 34.3% of Xtract's issued ordinary shares.Resmex and Xtract subsequently agreed the terms of the Acquisition, pursuant towhich Xtract would become a wholly-owned subsidiary of Resmex. Following completion of the Acquisition, the primary focus of the Company willinitially be the development of the Xtract Technology through Xtract. Following the issue of the Company's ordinary shares to Intermin referred toabove and of the ordinary shares issued pursuant to the Acquisition, Resmex has286,559,800 ordinary shares in issue. In addition the Company has in issuewarrants to subscribe for 134,088,500 new ordinary shares at a price of 1p pershare and 3,000,000 new ordinary shares at a price of 1.5p per share. All matters required to be disclosed under Rule 17 of the AIM Rules forCompanies are set out in the Admission Document copies of which are available atthe offices of the Company's nominated adviser, Smith & Williamson CorporateFinance Limited, 25 Moorgate, London EC2R 6AY. Shares to be issued to professional adviser As set out in the Admission Document, the Company intends to issue 250,000 newordinary shares to Smith & Williamson Corporate Finance Limited pursuant to itsengagement to provide services to Resmex in relation to admission to AIM.Application will be made for the admission of these shares to trading on AIM andthis is expected to become effective on 3 March 2006. Enquiries: ResmexSue Wickerson 020 8466 0406Director Smith & WilliamsonAzhic Basirov 020 7131 4000David Jones 020 7131 4000 This information is provided by RNS The company news service from the London Stock Exchange