Confirmation Adastra Approach

28 Apr 2006 07:03

Mwana Africa PLC28 April 2006 THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR NEW ZEALAND Mwana Africa plc ("Mwana Africa" or the "Company") 28 April 2006 Confirmation of Approach to Adastra Two days ago, Mwana Africa announced the results of a cash placing (the"Placing") of 66,900,000 new ordinary shares of the Company at a price of 63.0pence per share (a 3 per cent discount to the previous night's close), to raiseapproximately £42.1 million before expenses. The Company's shares have tradedstrongly since the announcement of the Placing, yesterday closing at an all timehigh of 69.5 pence per share. Commenting on the Placing, Kalaa Mpinga, ChiefExecutive Officer of the Company, stated that the Placing would afford MwanaAfrica "the flexibility and negotiating strength we need to take advantage ofseveral attractive potential acquisition opportunities." In the announcement of the Placing, as part of the required disclosure, MwanaAfrica also stated that it had recently reviewed launching a possible offer forAdastra Minerals Inc ("Adastra"). Following both the positive reaction to the Placing, and unsolicited commentsreceived from certain existing investors in Mwana Africa, and in light of thecurrent deadline of 28 April 2006 with regard to the offer by First QuantumMinerals Ltd. ("First Quantum") for Adastra, Mwana Africa submitted a proposalto the board of Adastra on 27 April 2006. Mwana Africa notes Adastra's announcement of 27 April 2006. Mwana Africaconfirms that it sent the letter as referred to in that announcement, the mainpoints of which were as follows: "Based on current information, Mwana Africa would be prepared, subject toreceiving the Adastra Board's prior written consent, to propose to make an allcash offer for Adastra at no less than C$3.85 per share (the "Offer"),conditional only on the following: - The unanimous recommendation of the board of Adastra; - A break fee and support agreement from the board of Adastra; - Confirmation that Adastra's Kolwezi project financing package is executable; - Understanding of Adastra's financial model and the value that lies in thesub-surface rights and the potential to double production at the KolweziTailings Project; - Satisfactory confirmatory due diligence. Mwana intends to fund the consideration through a combination of existing fundsand a Convertible Loan Stock ("CULS") structure which would be fullyunderwritten by JPMorgan Cazenove. The acquisition of Adastra would require Mwana shareholder approval in generalmeeting." In its response to this letter, the Adastra board reiterated its recommendationto Adastra shareholders to accept the existing First Quantum offer ahead of itsexpiry at 11.59pm (Toronto time) on 28 April 2006, notwithstanding that theprice per Adastra share indicated by Mwana Africa was higher than the currentvalue of the First Quantum offer. Mwana Africa would encourage the shareholders of Adastra to note the followingpoints with regards to its proposal: - Mwana Africa wishes to emphasise that a fully underwritten CULS issueas proposed would result in new equity funds being raised to permit Mwana Africato make a fully underwritten cash offer for 100% of Adastra's outstanding sharecapital. - Given the nature of Adastra's assets, and others in the region, whilstrecognising the strength of First Quantum's management team, Mwana Africa feelsthe assets could be more effectively exploited by its own management team,especially given their historical knowledge of the region. - Given its management team's historical knowledge of the region, MwanaAfrica is also confident that its due diligence could be completed rapidly andwould not cause undue delays to any offer process. - Mwana Africa is bound by the terms of the confidentiality agreementdated 25 January 2006 between Adastra and the Company, and Adastra is restrictedby the terms of the support agreement dated 11 April 2006 between Adastra andFirst Quantum. Mwana Africa would nonetheless aspire to a deal on friendly termswith Adastra. - Mwana Africa re-iterates the statement it made to its existing andpotential shareholders in its placing announcement, that it was focused on twohighly attractive acquisition opportunities, consistent with its previouslystated aims of (i) consolidating neighbouring territory assets, (ii) further newterritory penetration and (iii) bolt-on acquisitions. This stated use ofproceeds remains extant in the context of this announcement. Despite the impending closure of the First Quantum offer, Mwana Africa remainsof the view that its proposal to the board of Adastra, as outlined above,represents a potentially highly attractive opportunity which should be carefullyconsidered by Adastra's shareholders. Enquiries: Mwana Africa plc Tel: +44 (0)20 7654 5581Oliver Baring - ExecutiveChairmanKalaa Mpinga - Chief ExecutiveOfficer JPMorgan Cazenove Tel: +44 (0)20 7588 2828Ian HannamNeil Passmore Canaccord Adams Tel: +44 (0)20 7518 7365Mike JonesRyan Gaffney Merlin Tel: +44 (0)20 7653 6620David SimonsonTom Randell This announcement has been issued by, and is the sole responsibility of, MwanaAfrica plc. JPMorgan Cazenove Limited is acting for the Company and no one else inconnection with the Placing and will not be responsible to any other person forproviding the protections afforded to its clients, or for providing advice inrelation to the Placing and/or any other matter referred to in thisannouncement. This announcement is for information purposes only and does not constitute anoffer to sell or issue or the solicitation of an offer to buy, subscribe oracquire any securities in any jurisdiction. This announcement does notconstitute an offer to sell or issue or the solicitation of an offer to buy,subscribe or acquire any securities in the capital of Mwana Africa in the UnitedStates, Canada, Australia, Japan or New Zealand or any jurisdiction in whichsuch offer or solicitation would be unlawful and should not be relied on inconnection with any decision to acquire the Placing Shares or any othersecurities in the capital of Mwana Africa. This announcement does not constitute an offer to buy, subscribe or acquire orthe solicitation of an offer to sell, subscribe or dispose of any securities inthe capital of Adastra. The information contained in this announcement is not for publication ordistribution, directly or indirectly, in or into the United States, Canada,Australia, Japan or New Zealand or any jurisdiction in which such publication ordistribution would be unlawful. The securities of Mwana Africa referred to herein have not been, and will notbe, registered under the U.S. Securities Act of 1933, as amended (the"Securities Act"), and may not be offered or sold in the United States (as suchterm is defined in Regulation S under the Securities Act) unless they areregistered under the Securities Act or pursuant to an exemption fromregistration. No public offer of the securities of Mwana Africa is being made inthe United States. This information is provided by RNS The company news service from the London Stock Exchange