RNS Number:1543B
Mwana Africa PLC
31 July 2007
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR
INTO THE UNITED STATES
MWANA AFRICA PLC TO MAIL OFFER CIRCULAR REGARDING ITS FORMAL OFFER FOR
SOUTHERNERA DIAMONDS INC.
London, July 31, 2007 - On 16 March 2007, Mwana Africa PLC ("the Company" or
"Mwana", AIM Symbol MWA-L) announced its intention to make a share exchange
take-over offer (the "Offer") to acquire the outstanding common shares
("SouthernEra Shares") of SouthernEra Diamonds Inc.("SouthernEra"), other than
SouthernEra Shares held by Mwana and its affiliates, on the basis of one Mwana
ordinary share ("Mwana Shares") for every 2.3333 SouthernEra Shares held.
The Company announces that the formal offer to purchase any and all of the
SouthernEra Shares and related materials (the "Offer Circular") will be mailed
to SouthernEra shareholders today and filed on SEDAR (http://www.sedar.com).
Further details regarding the Offer, including the conditions to the Offer and
information relating to the Mwana Shares, are included in the Offer Circular.
The Offer Circular is also available from the Company's website (http://
www.mwanaafrica.com/) free of charge.
The Offer represents an implied offer price of approximately C$0.718 (#0.334)
per SouthernEra Share, based on the closing price of the Mwana Shares on AIM of
#0.780 (C$1.676) on July 27, 2007 (being the last practicable trading day
before the date of the Offer), and values the outstanding SouthernEra Shares at
approximately C$112.8 million (#52.5 million).
In addition, the consideration under the Offer represents an implied premium to
SouthernEra shareholders for each SouthernEra Share held of approximately:
* 19.7% over the closing price of SouthernEra Shares on the Toronto
Stock Exchange ("TSX") of C$0.600 on July 27, 2007, based on the closing
price of the Mwana Shares on AIM of #0.780 (C$1.676) on July 27, 2007;
* 43.1% over the closing price of SouthernEra Shares on the TSX of C$0.295
on March 15, 2007, being the last trading day prior to Mwana's announcement
of its intention to make the Offer, based on the closing price of the
Mwana Shares on AIM of #0.433 (C$0.985) (#1: $2.2771) on March 15, 2007
(the last trading day before Mwana's announcement of its intention to make
the Offer).
Unless otherwise set out, all dollar amounts are stated in Canadian $, sterling
equivalents are calculated at #1: $2.1487.
As of the date hereof, Mwana beneficially owns in the aggregate 16,457,500
SouthernEra Shares, representing approximately 9.5% of the outstanding
SouthernEra Shares.
In addition, as previously disclosed, the Company has entered into lock-up
agreements with JP Morgan Asset Management (UK) Limited ("JP Morgan"), OZ
Management, L.L.C. ("OZ Management") and BHP Billiton, each on behalf of certain
of their managed funds, in respect to an aggregate 52,427,330 SouthernEra
Shares, representing approximately 30.2% of the outstanding SouthernEra Shares.
A copy of each lock-up agreement is available to the public and may be obtained
on request from the Company.
Information on Mwana
Mwana is a pan-African resource company with production, exploration and
development assets across Africa. Mwana holds exploration assets in the
Democratic Republic of Congo (the "DRC"), Ghana, Zimbabwe and in Australia, as
well as production assets in Zimbabwe, and has been actively building an African
diamond exploration and production business. All current production is in
Zimbabwe and the focus of greenfields exploration is in the DRC and Ghana. Mwana
intends to pursue further development and exploration opportunities across
Africa. In May 2006, Mwana acquired 20% of Societe Miniere de Bakwanga ("MIBA"),
the DRC's leading diamond producer based in Mbuji Mayi, signaling its entry into
the diamond industry and significantly strengthening its interests in the DRC.
Building on this, on May 21, 2007 Mwana completed the acquisition of Gravity
Diamonds Limited ("Gravity Diamonds"), a diamond exploration business with
exploration assets in the DRC and Australia.
Mwana's strategy is to use its management skills and experience in Africa to
develop into a major resource group on the African continent, exploiting
opportunities across different countries and commodities. Mwana is focused on
building a portfolio of producing and near-producing assets by identifying and
acquiring efficient and low-cost producing mines in Africa as well as by seeking
to partner with industry majors on new projects while aiming to be the preferred
vehicle for African investors and entrepreneurs. The proposal to merge Mwana and
SouthernEra will allow the management of Mwana to apply its skills to the
projects owned by SouthernEra, and in particular, in the DRC and Angola.
For the financial year ended March 31, 2007, Mwana reported a profit before
taxation and minority interests of #41,735,000, principally generated by Mwana's
Zimbabwean operations. After taxation and minority interests, this equated to a
profit of #21,879,000. Mwana also raised a total of #41,002,000 in cash funds
during the year, principally through the placement of 66.9 million Mwana Shares.
As at March 31, 2007, Mwana retained #38,086,000 in cash.
The Offer presents Mwana and SouthernEra shareholders with an opportunity to
participate in the benefits of a combined group. The diamond concessions of
MIBA, Gravity Diamonds and SouthernEra are contiguous in the DRC and Mwana
believes that, developed together, they would form a solid foundation for a
major African diamond exploration and production business. Further details of
the strategic rationale behind the Offer are set out in the Offer Circular.
Time and Manner for Acceptance
The Offer is open for acceptance until 5:00 p.m. (Toronto time) on September 5,
2007 or until such later time and date to which the Offer may be extended by
Mwana at its discretion (the "Expiry Time"), unless withdrawn by Mwana.
SouthernEra shareholders may accept the Offer by depositing certificates
representing SouthernEra Shares that are being deposited, together with the
Letter of Transmittal, duly completed and signed, at the offices of Computershare
Investor Services Inc., the depositary for the Offer (the "Depositary") as
specified in the Letter of Transmittal at or before the Expiry Time.
Any shareholder holding SouthernEra Shares in the form of Crest Depositary
Interests must additionally arrange for the appropriate electronic acceptance
instruction to be sent to CREST Depository at or before the Expiry Time. The
Offer will be deemed to be accepted only if the Depositary has actually received
these documents and, where applicable, electronic acceptance instructions have
actually been received by CREST Depository at or before the Expiry Time.
Shareholders whose SouthernEra Shares are registered in the name of a broker,
dealer, bank, trust company or other nominee should request their nominee to
effect the transaction.
Shareholders whose certificates for SouthernEra Shares are not immediately
available may use the procedures for guaranteed delivery set forth in the Notice
of Guaranteed Delivery (printed on yellow paper).
Shareholders may also accept the Offer in Canada by following the procedures
for book-based transfers, provided that a confirmation of the book-transfer of
SouthernEra Shares through CDSX into the Depository's account at CDS is received
by the Depository at its office in Toronto prior to the Expiry Time. The
Depository has established an account at CDS for the purpose of the Offer. Any
financial institution that is a participant in CDS may cause CDS to make a
book-based transfer of SouthernEra Shares into the Depository's account in
accordance with CDS procedures for such transfer. Delivery of the SouthernEra
Shares using the CDS book-based transfer system will constitute a valid tender
under the Offer.
Shareholders and their respective CDS participants who utilize CDSX to accept
the Offer through a book-based transfer of their holdings into the Depository's
account with CDS shall be deemed to have completed and submitted a Letter of
Transmittal and to be bound by the terms thereof and to have acknowledged that
Mwana may enforce such terms against the applicable Shareholder and CDS
participant, as the case may be, and therefore any book-based transfer of
SouthernEra Shares into the Depository's account at CDS in accordance with CDS
procedures will be considered a valid tender in accordance with the terms of the
Offer.
Further details regarding the procedure for accepting the Offer are set out in
the Offer Circular.
Independent Technical Report on the Material Assets of Mwana
As part of preparing the Offer Circular, Mwana retained SRK Consulting to
prepare an independent technical report on Mwana's material assets. This report
will be filed on SEDAR (http://www.sedar.com/) later today together with the
Offer Circular and is also available on the Company's website (http://
www.mwanaafrica.com/).
Mwana has engaged Numis Securities Limited ("Numis") as financial adviser in
connection with the Offer.
Canaccord Adams Limited acts as Nominated Adviser and Joint Broker to Mwana in
the United Kingdom. JP Morgan Cazenove Limited also acts as Joint Broker to
Mwana in the United Kingdom.
Canaccord Adams Limited acts as Dealer Manager for the Offer.
Information on SouthernEra
This information concerning SouthernEra contained in this press release has
been taken from or is based upon publicly available documents and records of
SouthernEra on file with Canadian securities regulatory authorities and other
public sources. Although Mwana has no knowledge that would indicate that any of
the statements contained herein concerning SouthernEra taken from or based upon
such documents and records are untrue or incomplete, neither Mwana nor any of
its directors or officers assumes any responsibility for the accuracy or
completeness of such information, including any SouthernEra financial statements,
or for any failure by SouthernEra to disclose publicly events or facts which may
have occurred or which may affect the significance or accuracy of any such
information but which are unknown to Mwana. Mwana has no means of verifying
the accuracy or completeness of any of the information contained herein that is
derived from SouthernEra's publicly available documents or records or other
public sources or whether there has been any failure by SouthernEra to disclose
events that may have occurred or may affect the significance or accuracy of any
information.
SouthernEra is a producer of diamonds. SouthernEra's mineral properties include
the Camafuca Diamond Project in Angola, the Klipspringer Diamond Project in
South Africa and a portfolio of diamond exploration projects, in Canada,
the DRC and South Africa.
SouthernEra holds a 57% joint venture interest in the Klipspringer Mine located
250km north of Johannesburg in the hills of the northsouth trending Highland
Mountains in the Limpopo Province. The project consists of several en echelon
(staggered or overlapping) kimberlite fissures and blows trending in a northeast
orientation, and includes the Leopard Fissure, the Sugarbird Fissure, the
Sugarbird Blow, the Kudu Fissure, and the Kudu Blow, amongst others.
In January 2004, the Klipspringer Mine was placed on care and maintenance;
however during the third quarter of 2006, a trial mining and bulk sampling
exercise was undertaken to try a new mining method and test market conditions.
SouthernEra also holds an 18% free-carried interest in the Camafuca Diamond
Project in Angola through the Camafuca Joint Venture between Endiama, the
state-owned national diamond mining company of Angola, SouthernEra, Minex Lda
("Minex"), and Comica SARL. The Camafuca Diamond Project is located in the Lunda
Norte province of northwestern Angola, approximately 20km southeast of the town
of Lucapa. The project area covers the primary kimberlite deposits associated
with the Camafuca-Camazamba kimberlite pipe complex, which has a surface area of
160 hectares and is one of the world's largest, known, undeveloped diamond
resources. Under the joint venture agreement, US$20 million will be provided by
one of the stakeholders, Minex, to finance Phase 1 of the proposed dredge-mining
operation at Camafuca. Since 2000, no further technical work has been carried
out at Camafuca, and further progress on development of the project will only
commence once finance for Phase 1 is received from Minex. As of early 2006
SouthernEra was awaiting the release of funds by Minex.
On March 28, 2007, SouthernEra announced that it had acquired a 55% interest in
the BK16 kimberlite pipe located within the Orapa Kimberlite Field in Botswana.
Under the agreement, SouthernEra has the right to earn up to a 70% interest in
the project by funding exploration to the completion of a definitive feasibility
study. SouthernEra announced that it has entered into an agreement with Kenrod
Engineering Services (Proprietary) Limited, a Botswana registered company which
owns the BK16 prospecting license, and has immediately earned a 55% interest in
the BK16 pipe.
Subsequently, on May 16, 2007, SouthernEra announced that the agreement was
approved by the Minister of Mines of Botswana and that SouthernEra is
fast-tracking the BK16 evaluation program.
SouthernEra's diamond exploration strategy is focused on developing and working
on projects located in high potential on-craton diamond regions that include
the Slave and Superior Cratons in Canada, the Kaapvaal Craton in South Africa
and the Congo Craton in the DRC, in programs that range from early stage
reconnaissance to advanced drilling to bulk sampling. SouthernEra controls in
excess of 2 million hectares of diamond properties, exploring for diamonds in
three of the world's top eight diamond producing countries.
According to SouthernEra's audited financial statements, for the fiscal year
ended December 31, 2006, SouthernEra had a net loss of approximately US$21.2
million, or US$0.14 per share based on the weighted average number of
SouthernEra Shares outstanding during the period. In addition, for the three
months ended March 31, 2007, SouthernEra had a net loss of US$0.242 million.
IMPORTANT NOTICE
The Offer is not being made, directly or indirectly, to "U.S. persons" (as such
term is defined in Regulation S of the United States Securities Act of 1933, as
amended, the "U.S. Securities Act") or in or into the United States (including
its territories, possessions, each state thereof and the District of Columbia,
the "United States") or any other jurisdiction where it would be unlawful to do
so, or by use of the mails, or by any means or instrumentality (including,
without limitation, telephonically or electronically) of interstate or foreign
commerce, or by any facility of a national securities exchange of any
jurisdiction where it would be unlawful to do so, and the Offer will not be
capable of acceptance by U.S. persons or by any such means, instrumentality or
facility from or within the United States or any other jurisdiction where it
would be unlawful to do so. Accordingly, copies of this press release, the
Offer, Circular and all other documents relating to the Offer are not being,
and must not be, mailed or otherwise forwarded, distributed or sent in, into or
from the United States or any other jurisdiction where it would be unlawful to
do so. Persons receiving such documents (including, without limitation, nominees,
trustees and custodians) should observe these restrictions. Failure to do so may
invalidate any related purported acceptance of the Offer.
The Mwana Shares have not been, and will not be, registered under the U.S.
Securities Act or any U.S. state securities or "blue sky" laws and may not be
offered or issued in the United States or to, or for the account or benefit of
U.S. persons. Notwithstanding the forgoing and the other provisions of the Offer
to Purchase, the Circular and the other documents relating to the Offer, Mwana
may, in its sole discretion in certain limited circumstances offer or issue
Mwana Shares in the United States or to, or for the account of U.S. persons,
pursuant to an exemption from the registration requirements of the U.S.
Securities Act and in compliance with any applicable U.S. state securities or
"blue sky" laws.
Persons who are resident in the United Kingdom should note that the Offer will
not be subject to the provisions of the United Kingdom Takeover Code.
The content of this press release, which has been prepared by and is the sole
responsibility of Mwana, has been approved by Numis Securities Limited, The
London Stock Exchange Building, 10 Paternoster Square, London, England EC4M 7LS,
solely for the purposes of section 21 of the United Kingdom's Financial Services
and Markets Act 2000. Numis Securities Limited is acting exclusively for Mwana
in connection with the Offer and no one else and will not be responsible to
anyone other than Mwana for providing the protections afforded to clients of
Numis Securities Limited nor for providing advice in relation to the Offer or
any other matter referred to in this press release.
This press release does not constitute or form part of any offer to sell or
invitation to purchase any securities or solicitation of an offer to buy any
securities, pursuant to the Offer or otherwise. The Offer will be made solely by
the formal offer and take-over bid circular, which will contain the full terms
and conditions of the Offer, including details of how the Offer may be accepted.
This press release is for information purposes and is not a substitute for the
formal offer and take-over bid circular. Copies of the offer and take-over bid
circular and other materials relating to the Offer can be obtained free of
charge at the SEDAR website at www.sedar.com (http://www.sedar.com).
This press release contains forward-looking statements with respect to the Offer
and the transactions contemplated thereby, including the proposed business
combination of Mwana and SouthernEra, Mwana's financial condition, results of
operations, business prospects, plans, objectives, goals, strategies, future
events, capital expenditures, and exploration and development efforts. Words
such as "anticipates", "expects", "intends", "plans", "forecasts", "projects",
"budgets", "believes", "seeks", "estimates", "could", "might", "should", and
similar expressions identify forward-looking statements. Although Mwana believes
that its plans, intentions and expectations reflected in these forward-looking
statements are reasonable, Mwana cannot be certain that these plans, intentions
or expectations will be achieved. Actual results, performance or achievements
could differ materially from those contemplated, expressed or implied by the
forward-looking statements contained in this press release. These statements
include comments regarding: operations and synergies of the combined entity,
the establishment and estimates of mineral reserves and mineral resources,
production, production commencement dates, production costs, grade, processing
capacity, potential mine life, feasibility studies, development costs, capital
and operating expenditures, exploration, the closing of certain transactions
including acquisitions and offerings, and Mwana's expansion plans.
For further information visit our web site at (http://www.mwanaafrica.com/).
Neither the Toronto Stock Exchange nor the London Stock Exchange has reviewed
and does not accept responsibility for the adequacy or accuracy of this release.
Enquiries:
Oliver Baring, Chairman Tel. +44 20 7654 5588
Kalaa Mpinga, CEO or David Fish, CFO Tel. +27 11 883 9550/1
Mwana Africa plc
Devon House
12-15 Dartmouth Street
London
SW1H 9BL
A copy of the early warning report filed by the Company pursuant to Canadian
securities laws can be obtained from the individuals identified above at Mwana.
John Harrison, Managing Director Tel. +44 20 7260 1000
Numis Securities Limited
Mark Ashurst, Managing Director Tel. +44 20 7050 6500
Canaccord Adams Limited
Michael Barman
Dealer Manager, Canaccord Adams Limited Tel. +1 416 869 7216
Tom Randell or Maria Suleymanova Tel. +44 20 7653 6620
Merlin, PR
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCWUUWAMUPMPGU
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