KEMET SIGNS DEAL WITH SMALL AUSTRALIAN PRODUCER:here is the announcement to the ASX:
Document date: Thu 16 Nov 2000 Released time: Thu 16 Nov 2000 11:28:45
Document No: 187816 Document part: A
Market Flag: Y
Classification: Issued Capital - Other, Asset Acquisition, Progress Report
AUSTRALASIAN GOLD MINES NL 2000-11-16 ASX-SIGNAL-G
HOMEX - Perth
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Australasian Gold Mines NL ("ATE") and KEMET Corporation of
Greenville, South Carolina, USA ("KEMET") have entered into a
Memorandum of Understanding ("Agreement") whereby KEMET will acquire
a 50% interest with ATE in a joint venture company referred to
hereafter as Tantalum Australia ("TA"), to own and fund the
development of ATE's existing tantalum projects, the pilot plant at
Dalgaranga, feasibility of future mining and commissioning of full
scale plants at Dalgaranga and/or Walwa, assess new project
opportunities on a global basis, and to consider the establishment of
a refinery or other facilities for further processing of tantalum
concentrate and other downstream tantalum products within Australia
or elsewhere. It also provides for the purchase by KEMET of processed
tantalum products from the pilot plant and any future processing
developments.
KEMET is the largest manufacturer of solid tantalum capacitors and
the fourth largest manufacturer of multilayer ceramic capacitors in
the world and is a significant consumer of tantalum powder. KEMET is
listed on the New York Stock Exchange (Code: KEM) in the USA and has
a market capitalization in excess of US$2 billion. Further
information can be obtained from KEMET's website at www.kemet.com.
Highlights of the Agreement with KEMET are:
1. KEMET shall contribute A$10,000,000 to TA to acquire a 50%
interest, which will own ATE's existing tantalum projects and
pilot plant;
2. KEMET will purchase from TA all tantalum concentrate (contained
Ta(2)O(5)) produced from the pilot plant subject to the usual
terms and conditions;
3. TA shall use the A$10,000,000 contributed by KEMET ("Initial
Funding") to fund the:
(a) capital cost, establishment, commissioning and ongoing
operation of the Pilot Plant;
(b) further exploration of the Dalgaranga and/or Walwa deposits
and other deposits held by TA in Australia and development of
other sources of supply; and
(c) undertaking of a feasibility study in relation to a full scale
plant and related downstream operations;
TA will implement these objectives as soon as practicable after
the date of signing this Agreement;
4. KEMET and ATE agree that TA will be given the exclusive right to
assess and develop future tantalum deposits and any new tantalum
project that may be introduced to either party from time to time;
5. Upon completion of the feasibility study, TA will present the
results of that study to ATE and KEMET. KEMET will assist in
procuring project finance up to a value of A$40,000,000 for a full
scale plant, including negotiating with TA in good faith for the
purposes of entering into arrangements for a prepayment for sales
pursuant to long-term take or pay sales contracts;
6. KEMET will subscribe for approximately 18 million shares in ATE at
A$0.25 per share. This investment represents 10% of the fully
diluted capital of ATE and will raise approximately A$4.5 million.
KEMET will be entitled to maintain its investment in ATE at 10% in
the event of ATE's capital expanding in the future and
representation in the form of one seat on the Board of Directors
of ATE;
7. ATE will be appointed managers of TA and will be paid a management
fee negotiable annually; and
8. In the event that the feasibility of the full scale plant is
established, TA will undertake a feasibility study in relation to
the establishment of a plant ("Downstream Plant") to add further
value to the products to be produced from the full scale plant.
KEMET shall have the same right to purchase the output of such
Downstream Plant on the same terms and conditions as its purchases
from the full scale plant.
Charles Culbertson II, President and Chief Operating Officer of KEMET
said, "Our partnership with ATE gives us the opportunity to
participate in the establishment of a potential new supply source of
tantalum to meet out increasing demand for the metal."
"KEMET's participation in the joint venture will result in all
acceleration of the exploration, identification, and development of
additional tantalum resources, which will increase the supply of an
important raw material for the high-growth electronics industry."
added Michael Fotios, Managing Director of ATE.
The Agreement is conditional upon any regulatory, shareholder and
third party approvals if required, completion of detailed due
diligence and documentation within 90 days, and the final approval of
the Board of Directors of KEMET. The Board of KEMET has already
approved the execution of the Agreement.
The company will make further announcements in relation to the
implementation of the Agreement as they occur.
M G Fotios
MANAGING DIRECTOR
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