Africo Resources announces CAD$100 million private placement to develop the Kalukundi project, signs agreements to acquire property contiguous to
Mon Apr 21, 12:05 PM
ca.news.finance.yahoo.com
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TORONTO, April 21 /CNW/ - Africo Resources Ltd (TSX: ARL.TO) is pleased to announce that it has entered into a Subscription Agreement for a private placement of $100 million (Cdn) at a price of $2.50 per unit with Camrose Resources Limited ("Camrose"), a company incorporated under the laws of the British Virgin Islands and of which a trust for the benefit of family members of Dan Gertler is a major shareholder. The subscription price represents approximately a 51% premium to the five day weighted average price as at April 16, 2008. Each unit will consist of a common share and one-half of a share purchase warrant. Each whole warrant will entitle Camrose to acquire an additional common share at a price of $3.50 per share for an eighteen month period following closing. The private placement is subject to satisfaction of a number of conditions, including termination of Africo's Shareholders Rights Plan Agreement, regulatory approval and the approval of Africo's shareholders.
This placement will result in Camrose owning approximately 60% of the outstanding share capital of Africo prior to the exercise of any warrants. Camrose will have majority representation on the Board of Africo, and the right to participate in future financings to maintain its percentage equity ownership.
Concurrently with execution of the Subscription Agreement, Camrose has loaned Cdn.$2 million to Africo. This loan bears interest at a rate equal to the London Interbank Offer Rate plus 2% per annum and matures on the earliest of (i) the completion of the Subscription Agreement, (ii) the termination of the Subscription Agreement and (iii) August 31, 2008. If demand is made upon the completion of the subscription contemplated by the Subscription Agreement, the entire amount will be set off against the aggregate subscription price payable to Africo. If demand is made for any other reason, the entire amount may, at the option of Africo, be repaid by the issuance of common shares at a deemed price of Cdn.$2.50 per share.
Camrose has entered into an agreement to acquire the outstanding shares of Akam Mining Sprl ("Akam"). Akam purportedly holds, indirectly through Swanmines Sprl ("Swanmines"), the Kalukundi property. Camrose and Africo have entered into an agreement (the "Akam Agreement") pursuant to which Africo's subsidiary will unequivocally confirm ownership of 75% of the outstanding shares of Swanmines concurrently with completion of the private placement described above in consideration of 5,400,000 common shares of Africo. Gecamines, a mining company owned by the Democratic Republic of the Congo, owns the remaining 25% of the outstanding shares of Swanmines. Africo is advised that Camrose anticipates completing the transactions with Akam shortly. The Akam Agreement also provides that Akam will release Africo from all claims it has against Africo, and Africo will release Akam from the legal proceedings it has brought against Akam upon ratification of the Akam Agreement by the Africo shareholders and completion of the transactions contemplated by the Akam Agreement. Completion of the private placement and the Akam Agreement will result in Camrose owning approximately 63% of the outstanding share capital of Africo.
In addition, Africo has agreed to acquire a 75% interest in the Mashitu property from an affiliate of Camrose, with the remaining 25% interest continuing to be held by Gecamines. The Mashitu property consists of an exploitation permit for copper, cobalt, gold and nickel in 41 blocks that are contiguous to the Kalukundi property and cover approximately 34.82 square kilometres. The purchase price is to be based on a valuation to be prepared by an independent expert agreed to by the parties and will be paid in common shares of Africo at a price per share of $2.50. The valuation is to be carried out as soon as practicable following the earlier of completion of the exploration drilling program currently being carried out by Camrose's affiliate and six months following completion of the private placement referred to above. Africo is not in a position to reliably estimate what the purchase price will be, and Africo is obligated to accept the independent expert's determination of the purchase price. This acquisition is subject to satisfaction of conditions precedent, including certain assurances with respect to title, completion of the private placement referred to above and receipt of regulatory and shareholder approval.
Africo has scheduled an annual and special meeting for its shareholders to be held on or about May 23 2008 to approve the above transactions. There can be no assurance that any of the transactions will complete.
Dr Tony Harwood stated that "Mr. Dan Gertler brings to Africo extensive business experience in the DRC, and a proven track record of successful mining investments and expertise. The private placement with Camrose will provide Africo with the equity funding required to advance the Kalukundi project. An integral part of our transaction with Camrose includes facilitating a speedy and successful resolution to the legal dispute over ownership of Swanmines. The acquisition of the Mashitu project owned by Camrose will provide Africo with project synergies and additional land to facilitate completion of its mining project as well as bringing additional resources in Africo to enhance shareholder value. A successful completion of the Akam acquisition would result in the re-establishment of Africo's interest in Swanmines and will benefit our shareholders, Gecamines and the DRC people alike."
Note for editors:
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Africo Resources Ltd. is a Canadian mineral company, committed to developing, acquiring and exploring for base metal and gold assets in Africa. The company's main project is Kalukundi, a development stage copper-cobalt deposit located in the Katangan Copperbelt in the Democratic Republic of Congo (DRC). The development team has an operational base in the DRC, with the company corporate offices located in Vancouver, Canada. The company listed on the Toronto Stock Exchange in December 2006.
Forward-looking statements:
This news release contains certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that Africo expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although Africo believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration success, continued availability of capital and financing and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward looking statements are based on the beliefs, estimates and opinions of Africo's management on the date the statements are made. Other than as required by law, Africo undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR
DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED
STATES, AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED
HEREIN. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY
NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS
REGISTERED OR EXEMPT THEREFROM.
Contacts
Dr Tony Harwood
President and Chief Executive Officer
on Tel: +27(11) 463-0081
Bill Cavalluzzo
(Investor Relations)
on Tel: (416) 265-8049
Michael O'Brien
Chief Financial Officer
on Tel: (604) 646-3225
In South Africa: Charmane Russell
on Tel +27(11) 880-3924 |
