Major investment of $3m; director appointed
Western Pacific Gold Inc WPI
Shares issued 11,827,329 Aug 21 close $0.50
Wed 27 Aug 97 News Release
Mr Nicholas Mather reports
Four million shares ($3,000,000) has been placed with Oribi Resources, a
wholly owned subsidiary of Iscor Mineral Developments BV, a subsidiary of
companies wholly owned by the major South African steel and mining company,
Iscor Ltd. The private placement consists of 4,000,000 units with each unit
consisting of one share at $0.75 per and one warrant exercisable at prices
escalating from $2.00 to $7.00 over the next four years. If all of the
warrants were exercised at the minimum exercise prices this would result in
WPI receiving total proceeds of $16,000,000.
Iscor is a major South African steel and mining company with a market
capitalization of approximately US$2 billion. The company listed on the
Johannesburg Stock Exchange in 1989, and is now the seventh largest
industrial company on the JSE with about 30% of its equity held by
investors outside South Africa. Its operations in southern Africa produce
approximately 26 mt/y of iron ore and 15 mt/y of coal, as well as zinc-lead
and industrial minerals. The company is also the largest steel producer on
the African continent, with output of seven million tonnes in 1996.
Iscor is pursuing a strategy to grow its mining division internationally.
It has a significant investment in Australia and has recently concluded a
joint venture with Gecamines to refurbish the large Kamoto copper-cobalt
mine in Congo (formerly Zaire). In addition, Iscor and Oribi are directing
considerable effort towards the acquisition of highly prospective tenements
and companies in Southeast Asia and the Southwest Pacific Rim nations.
The company had been approached by several major mining organizations
seeking to participate in WPI's Solomon Island and Papua New Guinea
projects. WPI was interested in Iscor as they were offering long term
agreements and support for its exploration and management. Given positive
exploration results, WPI would be expecting Oribi to exercise warrants at
up to $7.00 per share over the next four years. The warrants are
exercisable at a rate of one million per year at prices of $2.00, $3.00,
$4.00 and $7.00 per share for each successive year. Any warrants not
exercised in the year can be rolled forward to the next year at the higher
price.
In addition to the subscription agreement, WPI and Oribi have agreed on a
participation agreement that outlines the terms and conditions of Oribi's
first right of refusal in the event WPI explores, joint ventures or sells
any of its exploration projects.
WPI, Oribi and certain shareholders have entered into a shareholder's
agreement whereby Oribi has the right, under certain conditions, to
participate on a pro rata basis on any future financings of WPI and has a
first right of refusal over any shares offered for sale from the
shareholder group.
Mr David Moore of Iscor Australia and Oribi Resources will join the board
of directors. The addition of Mr Moore's international exploration
experience will provide WPI with additional exploration and project
management and strengthen the relationship with Iscor.
Drilling programs at WPI's wholly owned porphyry and volcanogenic massive
sulphide copper gold projects in Solomon Islands and at Ofi Creek, Papua
New Guinea are now well financed.
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