Condor Gold raises £5.242 million. Lead Investor Ross Beaty

/EINPresswire.com/ — LONDON, ENGLAND–(Marketwired – Feb 20, 2017) – Condor (AIM:CNR), is pleased to announce a placing (“the Placing”) of 8,293,443 Units (as defined below) at a price of 62p per Unit (the “Placing Price”) together with a proposed Director’s subscription of 161,290 Units (“Director’s Subscription”) to raise in aggregate gross proceeds of approximately £5.242 million. The Placing has been undertaken by the Company with institutional and other investors. The completion of the Placing and proposed Director’s Subscription is conditional, inter alia, upon admission of the Placing Shares to trading on AIM.

Each Unit comprises one ordinary share of 20p each in the Company (“Placing Share”) and half of one share purchase warrant of the Company (a “Warrant”). Each Warrant, which is unlisted and fully transferable, will entitle the holder thereof to purchase one ordinary share at a price of 93p (which is at a 50% premium to the Placing Price) for a period of 24 months from the date on which the shares issued pursuant to the Placing are admitted to trading on AIM (the “Closing Date”).

The Company is pleased to announce that Ross Beaty has subscribed for £1 million worth of Units and will increase his shareholding to 8.74% in the Company’s share capital on a post placement undiluted basis. Mr Beaty is a Canadian mining entrepreneur with a successful track record of both building mining companies and developing mineral deposits for sale.

Background to and reasons for the Placing

The net proceeds of the Placing and proposed Director’s Subscription amounts to approximately £4.9 million. It will be used for general working capital purposes and to continue with the strategy to fully permit Mina La India in Nicaragua for a 2,800tpd processing plant with capacity to produce 100,000 oz gold p.a., secure the surface rights for the rural land that host and surround the future mine infrastructure and continue work to demonstrate the significant exploration upside of the 2.4 million oz gold resource at 4.0g/t gold at La India Project via scout drilling on new exploration targets that have never been drilled and expand some of the existing resource areas.

Details of the Placing and proposed Director’s Subscription

The Company has conducted the Placing as principal. A total of 8,454,733 Units (comprising of 8,454,733 ordinary shares and 4,227,364 Warrants) have been placed with placees and are proposed to be subscribed at the Placing Price to raise gross proceeds of GBP 5,241,934.46.

The completion of the Placing is conditional, inter alia, upon admission of the Placing Shares to trading on AIM. The Placing Price of 62 pence per share represents a discount of 4.6% percent to the closing price of 65 pence per share on 17th February 2017.

In addition, the Company advises that one director of the Company, namely Jim Mellon, intends to subscribe for a total of 161,290 shares on the same terms (the “Director’s Shares”) for a further sum of £99,999.80 following the announcement of the Placing.

Application is being made for the Placing Shares and Director’s Shares, to be admitted to trading on AIM (“Admission”), such Admission is expected to occur on or around 28th February 2017.

On Admission the Placing Shares and Director’s Shares will rank pari passu in all respects with the existing ordinary shares of the Company, including the right to receive all dividends and other distributions declared after the date of their issue.

Following Admission of the Placing Shares and Director’s Shares, the Company will then have 61,365,382 ordinary shares of 20p each in issue with voting rights and admitted to trading on AIM. This figure may then be used by shareholders in the Company as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.

Special note concerning the Market Abuse Regulation

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 (“MAR”). Market soundings, as defined in MAR, were taken in respect of the Placing, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

A further announcement will be made shortly.

About Condor Gold plc:

Condor Gold plc was admitted to AIM on 31st May 2006. The Company is a gold exploration and development company with a focus on Central America.

Condor completed a Pre-Feasibility Study (PFS) and two Preliminary Economic Assessments (PEA) on La India Project in Nicaragua in December 2014. The PFS details an open pit gold mineral reserve of 6.9 Mt at 3.0 g/t gold for 675,000 oz gold producing 80,000 oz gold p.a. for 7 years. The PEA for the open pit only scenario details 100,000 oz gold production p.a. for 8 years whereas the PEA for a combination of open pit and underground details 140,000 oz gold production p.a. for 8 years. La India Project contains a total attributable mineral resource of 18.08 Mt at 4.0 g/t for 2.31 M oz gold and 2.68 M oz silver at 6.2 g/t to the CIM Code.

In El Salvador, Condor has an attributable 1,004,000 oz gold equivalent at 2.6 g/t JORC compliant resource. The resource calculations are compiled by independent geologists SRK Consulting (UK) Limited for Nicaragua and Ravensgate and Geosure for El Salvador.

Disclaimer

Neither the contents of the Company’s website nor the contents of any website accessible from hyperlinks on the Company’s website (or any other website) is incorporated into, or forms part of, this announcement.

Rapier Gold Inc. Announces Private Placement to Continue Exploration Programs at Pen Gold Project

VANCOUVER, BRITISH COLUMBIA–(Marketwired – Feb. 20, 2017) –

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Rapier Gold Inc. (TSX VENTURE:RPR) (the “Company”) is pleased to announce a non-brokered private placement of non-flow through units (the “NFT Units”) and flow through units (the “FT Units”) on a best efforts basis at a price of $0.10 per Non-Flow Through Unit (the “NFT Units”) and $0.115 per Flow Through Unit (the “FT Units”) for aggregate proceeds of up to $2,500,000 (the “Offering”).

Each of the NFT units and FT Units will include a transferable common share purchase warrant that will entitle the holder to purchase one common share at an exercise price of $0.15 for a period of 24 months. The Company reserves the right to increase the size of the private placement or to modify the type, nature and/or price of the units for any reason. The Offering and any modification to it are subject to compliance with applicable securities laws and approval of the TSX Venture Exchange. The Company may pay finders’ fees in accordance with the policies of the TSX Venture Exchange. The shares will be subject to a statutory four-month hold period. Secutor Capital Management Corp., as well as other parties, are acting as finders on this financing.

The proceeds from the issuance of the FT Units will be used to incur Canadian Exploration Expenses on the Issuer’s Pen Gold Project located in the Province of Ontario, and the proceeds from the NFT Units will be used by the issuer for general working capital.

The results of the Company’s summer exploration program and winter drilling program were summarized in detail in the Company’s news release dated December 6, 2016.

Diamond drilling work permits are in place and Rapier has finalized a winter drill program of approx. 3,000 m in three areas of the Pen Gold Project;

  • Area 1 – Nib Yellowknife Area – exploration extensions of anomalous values and determine what the width and possible strike length are, once attitude of mineralization is determined. 3-4 holes
  • Area 2- Broadsword Area – Determine if grade and thickness warrant further work. 2-3 holes
  • Area 3 – Talc Mine Area – 5-7 holes to explore extension of New Vein Zone from hole PG13-108
  • Follow up for Areas 1 – 3. 10 holes; these will be allocated depending on results from the previous drilling. Targets along the Eastgate-Westgate and Porphyry trends will be investigated during the program and drill holes diverted there if warranted. The three areas are shown in Appendix 1.

High resolution aero magnetics will be flown in late winter to early spring over the Pen Gold South and newly staked grounds, totally over 12,000 hectares, to complete the geophysics coverage and to aid in geological interpretation and exploration targeting for the 2017 summer field season.

Speaking of the financing, Roger Walsh, the Company’s President, stated, “The Company’s exploration strategy has been in process since early last year where the summer exploration program, designed to deliver high value drill targets, would be funded by capital raising in late 2016. This is consistent with the corporate presentations and information provided to the market and shareholders. There has been a significant delay in raising this funding which is directly attributable to the Company providing exclusivity to a company that presented a business transaction. In compliance with the conditions of that exclusivity, the Company refrained from raising funds while the Special Committee evaluated a proposal for a potential business transaction.” See news release of February 15, 2017.

Certain directors and officers of the Company may acquire securities under the private placement. Such participation is considered to be a “related party transaction” as defined under Multilateral Instrument 61-101 (“MI 61-101”). The transaction will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of any shares issued to or the consideration paid by such persons will exceed 25% of the Company’s market capitalization.

Gary Wong, P. Eng., Vice-President Exploration of the Company, and a Qualified Person under the definition in National Instrument 43-101, has reviewed and approved the technical content of this release.

Pen Gold Project Summary

  • The Company’s activities are exclusively focused on exploring the Pen Gold Project, comprising approximately 19,333 hectares (approximately 193 sq. km.) located on Highway 101, 75 km south west of Timmins, Ontario. (See Appendix 2). The project is approximately 45 km southwest of Tahoe Resources Timmins West Mine and the recently discovered 144 Exploration Area.
  • The Pen Gold Project is located approximately 85 km northeast of Goldcorp’s Borden Gold Project. In March 2015 Goldcorp acquired this project in the takeover of Probe Mines for $526 million. Goldcorp are actively advancing the Borden Gold Project as a source of ore for the 11,000 tpd Dome Mill, located 160 km away in Timmins.
  • The Pen Gold Project appears to be on the western extension of the Porcupine-Destor Fault Zone (PDFZ), one of the most productive gold structures in the world. This fault zone extends east into Quebec and hosts many of the largest and most famous gold mines in Canada. The Timmins Camp has produced approximately 72.5 million ounces of gold to date.
  • Probe Metals acquired the Ivanhoe Project located to the west of Rapier’s Pen Gold Project and the West Porcupine and Ross Properties to the east of the Pen Gold Project.

ON BEHALF OF THE BOARD OF DIRECTORS

Roger Walsh, President & CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or the securities laws of any state of the United States and may not be offered or sold within the United States or to, or for the account or the benefit of, any person in the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.

Cautionary Note Regarding Forward Looking Statements: Certain disclosure in this release constitutes forward-looking statements. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that are based on the Company’s current beliefs as well as assumptions made by and information currently available to the Company, including that the Company is able to procure personnel, equipment and supplies required for its exploration activities in sufficient quantities and on a timely basis and that actual results of exploration activities are consistent with management’s expectations. Although the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect, and the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such risk factors include, among others, that actual results of the Company’s exploration activities will be different than those expected by management and that the Company will be unable to obtain financing, or will experience delays in obtaining any required government approvals or be unable to procure required equipment and supplies in sufficient quantities and on a timely basis. Readers are cautioned not to place undue reliance on forward-looking statements. The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

To view Appendix 1, please visit the following link: http://media3.marketwire.com/docs/1086340Appendix1.jpg.

To view Appendix 2, please visit the following link: http://media3.marketwire.com/docs/1086340Appendix2.jpg.

Falco Commences 40,000 Metre Drill Program

/EINPresswire.com/ — MONTREAL, QC–(Marketwired – February 20, 2017) – Falco Resources Ltd. (“Falco” or the “Company”) (TSX VENTURE: FPC) is pleased to announce that it is initiating exploration activities on its large 668 square kilometre land package in the Rouyn-Noranda Camp, which surrounds its 100% owned Horne 5 Project. The planned 40,000 metre exploration drill campaign is part of a $10 million budget allocated to 2017 exploration work. The exploration program will concentrate on eight different areas, including the Horne 5 project, with the objective of discovering new mineralization in the prolific past-producing Rouyn-Noranda camp.

2017 REGIONAL EXPLORATION PROGRAM

Central Camp Properties
The Central Camp properties are located in the south-central portion of Falco’s considerable land position. The properties cover approximately 90% of the historical mining camp and include several past producing VMS base metal deposits.

Exploration work on the Central Camp properties will include approximately 15,000 to 18,000 metres of drilling, and is aimed at updating the 3D Noranda Camp geological model with a systematic review and testing of existing exploration targets. Numerous drill-ready targets have been identified and will be tested during the campaign. In addition, historical data compilation in and around former producing mines will be conducted, reviewing historical resources and drilling results to further identify new opportunities and generate new targets.

RIMO
The RIMO properties are greenfield exploration projects located 25 km north west of Rouyn-Noranda. Work will focus on the western extension of the 2015 geophysical survey and field testing of geophysical targets with new drilling.

Lac Laynes
The Lac Laynes property is known for its VMS potential, however recent work has determined potential low grade gold mineralization at surface. In 2014 DDH 17931-14-02 drilled by Falco intersected a gold bearing tectonic breccia with values of 0.79 g/t Au over 14.0 metres, including 3.18 g/t Au over 1.2 metres. Planned work includes field validation (including rock sampling) and drilling of geophysical targets.

Flavrian
The Flavrian area has a historical production of 1 million ounces gold. Exploration at Flavrian will evaluate the mineral potential of the Duprat Syenite, which shows similar geological context to the Upper Beaver deposit in Ontario. Work includes approximately 2,000 metres of drilling.

Falco will also test for high-grade gold zones at depth and along strike, or proximal to the former producer Quesabe gold deposit. Quesabe encompasses more than 30 gold and copper showings over a 10 km2 area. The new work will follow-up on previously drilled mineralized intersections with the aim to upgrade mineral resources. Numerous drill-ready targets have been identified using a 3D model along three main structures in the Quesabe area (the Quesabe Fault to the south, the Beauchemin Fault to the east and the St-Jude Breccia system to the North), including potential high-grade extensions of the Quesabe main deposit.

Noralex, Routhier and Blake River Area
The Noralex property includes the Young Buck (intrusion related) showing, which bears similarities with the Doyon and Mouska mines. Historical drilling has returned low grade gold values over wide intercepts, including 1.93 g/t Au over 33.0 metres and 1.64 g/t Au over 24.5 metres. Work will include drilling approximately 4,000 metres on the Young Buck showing and drilling on the south west portion of the property. The Routhier property and Blake River properties will see new geophysics, surface trenching and drilling of approximately 3,500 metres.

2017 HORNE 5 EXPLORATION PROGRAM

The Horne 5 mineralization is hosted in a felsic volcanic sequence (known as the Horne Felsic Block) mostly composed of rhyolitic flows, rhyolite breccias and felsic lapilli to blocky tuffs. The block is confined by the Horne Creek Fault to the north, the Andesite Fault to the south and follows an East West trend. The trend extends over 1.5km to the west of the Horne mine, where gold mineralization has been recognized. The West Zone which occurs 1 km from the Horne 5 deposit has returned historical results showing the good potential for this area, including: 4.6 g/t Au over 14.6 m, 4.3g/t Au over 9.3 m and 5.5 g/t Au over 20.6m. The 2016 drill program identified a new mineralized zone 200 metres to the South West of the Horne 5 deposit, the H5-SW zone. The low gold grades defining the H5-SW zone indicates it could be an extension of the West Zone, which confirms the continuation of the mineralization in western direction. New exploration drilling will test the western extension between the West Zone and the H5-SW zone. Approximately 10,000 metres of drilling is planned. Three main areas are being targeted covering a total distance of approximately 1.4km long, and between 300 metres and 1,200 metres of vertical depth.

2017 Expected Drilling Metres
     
Property / Project   Metres
Central Camp (excluding Horne 5)   16,600 m
RIMO   900 m
Lac Laynes   750 m
Flavrian   3,600 m
Noralex and Routhier   4,650 m
Blake River   3,500 m
Horne 5   10,000 m
TOTAL   40,000 m

Qualified Person

Claude Bernier, Exploration Manager, (P.Geo. Eng.) is the qualified person for this release as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects and has reviewed and verified the technical information contained herein. Mr. Bernier is an employee of Falco and is non-independent.

About Falco

Falco Resources Ltd. is one of the largest mineral claim holders in the Province of Québec, with extensive land holdings in the Abitibi Greenstone Belt. Falco owns 68,800 hectares of land in the Rouyn-Noranda mining camp, which represents 70% of the entire camp and includes 13 former gold and base metal mine sites. Falco’s principal property is the Horne 5 Project located in the former Horne Mine that was operated by Noranda from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of copper. Osisko Gold Royalties is the largest shareholder of the Corporation and currently owns 14.2% of the outstanding shares of the Corporation.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Cautionary Note Regarding Forward-Looking Statements

This news release contains forward-looking statements and forward-looking information (together, “forward-looking statements”) within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as “plans”, “expects”, “estimates”, “intends”, “anticipates”, “believes” or variations of such words, or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will be taken”, “occur” or “be achieved” and includes, without limitation, achievement of objectives set for the drilling program on the Horne 5 property and the regional exploration properties. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include the reliability of the historical data referenced in this press release and those risks set out in Falco’s public documents, including in each management discussion and analysis, filed on SEDAR at www.sedar.com. Although Falco believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, Falco disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Image Available: http://www.marketwire.com/library/MwGo/2017/2/20/11G130739/Images/FalcoImage1-9e4fd83f3e38b223906c163a78c70a5d.jpg
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Q3 Production and Financial release

Vedanta Resources plc

16 Berkeley Street

London W1J 8DZ

Tel: +44 (0) 20 7499 5900

Fax: +44 (0) 20 7491 8440

                                                                                                                                                                   www.vedantaresources.com

20th February 2017

Vedanta Resources Plc

 Production and Financial Release for the Third Quarter

And Nine months ended 31st December 2016

 

Production figures were announced on 16th January 2017. This release contains financial and other updates.

 

Q3 Highlights

 

Financial

·  Revenue and EBITDA up significantly, reflecting benefits of higher commodity prices and production volumes

·    Robust EBITDA margin1 of 38%

·    Gross debt lower by $300mn in Q3

 

Corporate

·    Successful bond issuance of US$1 billion in January 2017 to pro-actively refinance and extend part of the 2018 and 2019 bond maturities at Vedanta Resources plc

·    S&P upgraded rating to B+ with stable outlook in January

·    Vedanta Limited – Cairn India merger approved by all sets of shareholders in September 2016; expected to complete in Q1 CY2017

 

Operations

·    Zinc India:

§ Mined metal production up 44% q-o-q in line with mine plan

§ Integrated metal production increased q-o-q: zinc 38%, lead 26% and silver 10%

§ Environment clearances received for expansion of Zawar and Sindesar Khurd mines

·    Aluminium:

§ Continued ramp up of Jharsuguda-II and BALCO-II smelters; third line of the 1.25 mtpa Jharsuguda-II smelter commenced ramp up in December 2016

§ Supply of coal has commenced from the 6mtpa coal linkages secured earlier this year

·    Power:

§ 1,980MW TSPL plant fully operational with 77% plant availability

 

·    Oil & Gas:

§ Mangala EOR with production level of 55,000 barrels per day 6% higher
q-o-q

§ Rajasthan production impacted by planned shutdown at the Mangala processing terminal

·    Iron Ore:

§ Achieved full year production cap in January at Goa (5.5mt) and Karnataka (2.3mt)

§ Received further allocation of 3mt in Goa for FY2017

·    Copper – Zambia:

§ Lower integrated volumes due to lower equipment availability and lower grades

 

 

Tom Albanese, Chief Executive Officer, Vedanta Resources plc, said: “We have made substantial operational progress during the quarter with ramp up of our Aluminium, Power and Iron Ore capacities. We are very excited about our Gamsberg Zinc project in South Africa where first ore is expected in mid-2018. At KCM, we are committed to the turnaround of this asset and continue to work towards it. Our rising capacity utilizations and the continued focus on costs, alongside stronger commodity prices, enabled us to deliver 79% higher EBITDA and strong free cash flow.

 

In line with our stated financial strategy to extend near-term maturities and optimise the balance sheet, we successfully issued a $1bn USD bond in January 2017 to proactively refinance part of our 2018 and 2019 bond maturities. We are pleased with the strong demand these bonds received, with support from all major markets.

 

1Excluding custom smelting at Zinc India and Copper operations

 

 

Oil & Gas

 

 

Q3

Q2

Nine months ended

Particulars

FY2017

FY2016

% change YoY

FY2017

% change QoQ

FY2017

FY2016

% change YoY

OIL AND GAS

 

 

 

 

 

 

 

 

Average Daily Total Gross Operated Production  (boepd) 1

 

191,230

211,843

(10)%

206,230

201,286

214,663

(6)%

Average Daily Gross Operated Production (boepd)

181,818

202,668

(10)%

196,399

191,674

205,909

(7)%

   Rajasthan

154,272

170,444

(9)%

167,699

(8)%

162,957

170,258

(4)%

   Ravva

18,172

21,703

(16)%

18,823

18,874

25,430

(26)%

   Cambay

9,375

10,521

(11)%

9,877

9,843

10,221

(4)%

Average Daily Working Interest Production (boepd)

115,829

128,402

(10)%

125,575

122,254

128,991

(5)%

   Rajasthan

107,990

119,311

(9)%

117,390

(8)%

114,070

119,180

(4)%

   Ravva

4,089

4,883

(16)%

4,235

4,247

5,722

(26)%

   Cambay

3,750

4,208

(11)%

3,951

3,937

4,089

(4)%

Total Oil and Gas (million boe)

 

 

 

 

 

 

 

   Oil & Gas- Gross

16.73

18.65

(10)%

18.07

52.71

56.62

(7)%

   Oil & Gas-Working Interest

10.66

11.81

(10)%

11.55

33.62

35.47

(5)%

Brent (US$/bbl)

 49.3

 43.8

13%

45.9

8%

 46.9

 51.9

(10)%

Average Price Realisation (US$/boe)

 46.0

 35.2

31%

 41.7

10%

 41. 9

 45.0

(7)%

Oil – US$/bbl

 46.2

 35.0

32%

 41.7

11%

 41.9

 45.1

(7)%

Gas – US$/mscf

 5.9

 7.2

(18)%

 7.5

(21)%

 7.0

6.9

1%

Revenue (US$ million)

 318.7

307.8

4%

 304.4

5%

 904.6

 1,063.1

(15)%

EBITDA (US$ million)

 158.2

 95.5

66%

 154.8

2%

 432.1

 469.2

(8)%

 

Third quarter FY 2017 vs. previous quarters

 

For Q3 FY2017, average gross production across assets was lower at 181,818 barrels of oil equivalent per day (boepd), primarily due to planned maintenance shutdown in Rajasthan and natural decline in offshore assets.

 

Gross production from the Rajasthan block averaged 154,272 boepd for the quarter, lower mainly due to the planned maintenance shutdown at the Mangala Processing Terminal which will help maintain asset integrity and improve the plant performance.

 

We had encouraging results from the Mangala Enhanced Oil Recovery (EOR), driven by enhanced well productivity and production optimization activities. The production from EOR increased to an average of 55 kboepd in Q3 FY2017 from 52 kboepd in Q2 FY2017. Continued reservoir management including production optimization helped maintain steady production from Bhagyam and Aishwariya. Gross production from Development Area-1 (DA-1) and Development Area-2 (DA-2) averaged 141,177 boepd and 13,095 boepd, respectively.

 

The water-flood operating cost in Rajasthan was at US$ 4.3/boe in Q3 FY2017 compared to US$ 3.9/boe in Q2 FY2017. The increase was primarily due to lower volume owing to the planned shut-down in November 2016, which was partially offset through optimization of costs for crude processing and work-over activities. Q3 FY2017 blended operating cost including polymer-flood was US$ 6.3/boe compared to US$ 5.8/boe in Q2 FY2017. We continue to focus on optimisation of polymer cost and higher captive power generation while maintaining the injection of polymer at the target level of 400 kblpd.

 

Production from Ravva and Cambay was steady q-o-q at 18,172 and 9,375 boepd, respectively. Production optimization activities helped offset some of the natural decline in the blocks. The Ravva and Cambay facilities recorded an excellent uptime of 99.9% and 99.8%, respectively.

 

Gas production from RDG was lower at an average of 21 mmscfd in Q3 FY2017 compared to 33 mmscfd in Q2 FY2017. Gas sales also declined quarter-on-quarter to 4 mmscfd from 17 mmscfd. The sales have been temporarily suspended due to a technical issue between the gas transporter and the buyers. Cairn is closely engaged with various stakeholders to address the issue and enable the resumption of the sales at the earliest.

 

In Q3 FY2017, revenue increased by 4% y-o-y mainly due to higher oil realization which was partly offset by lower volumes due to a planned shutdown. Overall oil realization increased by 32% y-o-y to US$ 46.2/bbl, primarily due to higher brent prices by 13% y-o-y and also strengthened by lower discount to Brent realised for our oil. Discount to Brent on Rajasthan crude in Q3 was at 6.9%.

 

EBITDA was 66% higher y-o-y due to higher oil prices, lower discount, and lower opex despite shutdown (Q3 water flood opex of $4.3/boe and blended opex of $6.3/boe vs. Q3 FY2016 water flood opex of $5.1/boe and blended opex of $6.9/boe).

 

 

Nine months FY 2017 vs. nine months FY 2016

 

Gross production declined 7% y-o-y primarily due to lower volumes from offshore assets and planned maintenance shutdown in Rajasthan during the current year, partially offset by volume ramp up from Mangala EOR and continued effective reservoir management across assets.

 

Revenue and EBITDA were 15% and 8% lower respectively, compared to the nine month period last year, mainly due to lower brent prices and volumes.

 

 

Zinc India

 

Particulars

Q3

Q2

Nine months ended

FY2017

FY2016

% change YoY

FY2017

% change QoQ

FY2017

FY2016

% change YoY

Zinc India(kt)

 

 

 

 

 

 

 

 

   Mined metal content

 276

 228

21%

 192

44%

 595

 700

(15)%

   Refined Zinc – Total

 205

 206

0%

 150

37%

 457

 605

(24)%

   Refined Zinc – Integrated

 205

 206

0%

 149

38%

 456

 605

(25)%

   Refined Zinc – Custom

  –   

 –  

–  

 1

 1

 –  

0%

   Refined Lead – Total 2

 39

 35

10%

 31

26%

 94

 107

(12)%

   Refined Lead – Integrated

 39

 35

10%

 31

26%

 94

 102

(8)%

   Refined Lead – Custom

  –   

  –   

 –  

 –  

 5

   Silver – Total  (in mn ounces) 3

 3.79

 3.73

2%

 3.45

10%

 10.08

 9.73

4%

   Silver- Integrated (in mn ounces)

 3.79

 3.73

2%

 3.45

10%

 10.08

 9.64

5%

   Silver- Custom (in mn ounces)

  –   

  –   

 –  

  –   

 0.09

Average LME – Zinc (US$/t)

2,517

1,613

56%

2,255

12%

2,230

1,878

19%

Average LME – Lead (US$/t)

2,149

1,681

28%

1,873

15%

1,913

1,776

8%

Average Silver Prices (US$/oz)

17.2

14.8

16%

19.6

(12)%

17.9

15.3

17%

Zinc COP  (US$/t) 8

861

796

8%

809

6%

852

789

8%

Revenue (US$ million)

 731.4

 508.7

44%

 507.8

44%

 1,604.1

 1,659.2

 (3)%

EBITDA (US$ million)

406.4

217.8

87%

295.9

37%

862.5

799.7

8%

 

Third quarter FY 2017 vs. previous quarters

 

Mined metal production was 276,000 tonnes, 21% higher compared to Q3 FY2016 and 44% higher sequentially. The sequential increase was on account of higher volumes from Rampura Agucha open cast mine in accordance with mine plan and the y-o-y increase was driven by higher volumes from Rampura Agucha underground as well as open cast mines. We are on track to achieve stated guidance of higher mined metal production in FY2017 compared to FY2016.

 

Integrated zinc metal production during the quarter was at 205,000 tonnes, up 38% from the previous quarter, and flat y-o-y on account of accretion of mined metal inventory. Integrated saleable lead production during the quarter was 39,000 tonnes, up 26% sequentially and 10% y-o-y. The y-o-y increase was in line with mined metal production, while the sequential increase was on account of enhanced smelter efficiencies. Integrated silver production during the quarter increased by 10% to 3.79 million ounces from previous quarter and 2% y-o-y.

 

In line with the on-going expansion to reach 1.2 mtpa mined metal production capacity, environmental clearances were received for Sindesar Khurd expansion of ore production capacity from 3.75 mtpa to 4.5 mtpa and for Zawar mine to 4 mtpa.

 

The cost of production excluding royalty was higher at US$ 861 per tonne compared to US$ 796 per tonne in Q3 FY2016 and US$ 809 per tonne in Q2 FY2017. The increase was primarily on account of additional excavation at Rampura Agucha underground, change in global waste to ore ratio, higher mine development, input commodity inflation (primarily coal and met coke), and lower by-product credits driven by lower sulphuric acid prices, which were partially offset by higher volumes, better average grades and cost optimization initiatives in procurement and commercial functions.

 

Q3 FY2017 revenue was US$ 731 million, 44% higher y-o-y mainly on account of higher LME prices and higher volumes. EBITDA in Q3 FY2017 was US$ 406 million, an increase of 87% compared to Q3 FY2016 mainly due to higher realized LME. Further the costs were helped with rupee depreciation and cost optimization initiatives across the procurement and commercial functions.

 

Nine months FY 2017 vs. nine months FY 2016

 

Mined metal production during the nine month period was 15% lower y-o-y. This was in line with the earlier guidance of substantially higher mined metal production in H2, and Q4 production will be higher than Q3. Integrated silver production was higher by 5% y-o-y primarily due to higher volume from our silver-rich Sindesar Khurd mine. During the nine month period, underground mines ramped up significantly to achieve a substantial 60% y-o-y increase in ore production and 55% y-o-y increase in mined metal production. Revenue for the nine month period was US$ 1,604 million, 3% lower mainly due to lower volume which was partially offset by higher LME prices. EBITDA was US$ 863 million, higher by 8% mainly due to higher realized prices and one off renewable power obligation charges provided in FY2016 for the previous years which was partially offset by lower volumes.

 

FY2017 mined metal production is expected to be higher than FY2016, in line with earlier guidance. However, integrated zinc metal production is expected to be lower than FY2016 in accordance with the low availability of mined metal in H1. CoP is expected to be marginally higher than FY2016.

 

 

Zinc – International

 

                 

Q3

Q2

Nine months ended

Particulars (in’000 tonnes, or as stated)

FY2017

FY2016

% change YoY

FY2017

% change QoQ

FY2017

FY2016

% change YoY

Zinc International

 33

 51

(35)%

 39

(17)%

 115

184

(38)%

  Zinc -refined -Skorpion

 17

 13

34%

 23

(25)%

 64

 55

16%

Mined metal content – BMM

 15

 17

(11)%

 16

(5)%

 51

 48

5%

Mined metal content – Lisheen

 –  

 21

 –  

 –  

 81

Average LME – Zinc (US$/tonne)

 2,517

 1,613

56%

 2,255

12%

 2,230

 1,878

19%

CoP including Royalty (US$/tonne)

 1,615

 1,579

2%

 1,446

12%

 1,412

 1,475

(4)%

Revenue(US$ million)

 87.1

 64.3

35%

 102.3

(15)%

 257.1

 308.8

(17)%

EBITDA(US$ million)

 29.7

 (0.2)

 51.0

(42)%

 118.1

 56.4

 

Third quarter FY 2017 vs. previous quarters

 

Total production for Q3 FY2017 was 33,000 tonnes, 35% lower y-o-y primarily due to the closure of the Lisheen mine in November 2015, following 17 years of successful operations. Q3 FY2017 production excluding Lisheen was 9% higher y-o-y. Production was 17% lower q-o-q mainly due to technical issues at Skorpion and BMM which necessitated some production rescheduling.

 

Skorpion production during the quarter was 17,000 tonnes, 34% higher y-o-y but 25% lower q-o-q, due to increased upstream material handling challenges to treat wetter than anticipated ore through the refinery. In Q3 FY2016, Skorpion production had been impacted by the extended planned 30-day maintenance shutdown. BMM production for the quarter was 15,000 tonnes, 11% lower y-o-y and 5% lower q-o-q, primarily due to lower equipment availability.

 

At the Gamsberg Project, pre-start activities and waste-stripping is progressing well. To date, we have excavated over 13 million tonnes of waste rock, of which 2mt was in Q3. 75% of project costs have been committed to date with major orders for the mining contract, the concentrator plant and power and water connections placed. The balance of orders for equipment are planned to be placed in Q4 FY2017. First production is on track for mid CY2018, with 9-12 months for ramp up to full production of 250 ktpa. The expected COP at Gamsberg is $1,000-$1,150 per tonne.

 

During Q3 FY2017, the average cost of production including royalty was US$ 1,615 per tonne, 7% lower compared to US$1,737 per tonne in Q3 FY2016 (excluding Lisheen). Reduction in cost was primarily on account of higher volumes from Skorpion and local currency depreciation.

 

EBITDA at US$30 million was significantly higher y-o-y, mainly driven by higher LME and improved volumes at Skorpion.

 

Nine months FY 2017 vs. nine months FY 2016

 

Total production was 115,000 tonnes, 38% lower compared to corresponding prior period mainly due to closure of the Lisheen mine. Production volume from Skorpion and BMM was up by 16% and 5%, respectively. During the period, revenue was US$ 257 million, 17% lower, primarily on account of lower production which was partially offset by higher LME prices. EBITDA for the period was US$ 118 million, significantly higher primarily on account of higher LME and a one-off insurance claim refund, which was partly offset by lower volumes driven by the Lisheen mine closure.

 

FY2017 volume is expected to be at 160kt and Q4 CoP estimated at $1200-$1250/t.

 

Iron Ore

 

 

Q3

Q2

Nine months ended

Particulars (in million dry metric tonnes, or as stated)

FY2017

FY2016

% change YoY

FY2017

% change QoQ

FY2017

FY2016

% change YoY

IRON ORE

 

 

 

 

 

 

 

 

Sales

 3.7

 1.5

 0.8

 7.1

 2.7

     Goa

 2.7

 0.6

 0.3

 5.1

 0.6

     Karnataka

 1.0

0.9

4%

 0.5

 2.0

 2.1

(6)%

Production of Saleable Ore

 2.6

 1.4

1.5

 7.3

 2.4

     Goa

 2.3

 0.3

0.5

 5.2

 0.3

     Karnataka

 0.4

 1.1

(66)%

 0.9

(60)%

 2.1

 2.1

3%

Production (‘000 tonnes)

 

 

 

 

 

 

 

 

     Pig Iron

 154

 146

5%

 192

(20)%

 526

 466

13%

Revenue(US$ million)

 208.8

 81.7

 73.1

 426.9

 219.5

94%

EBITDA(US$ million)

 63.0

 11.1

 17.7

 134.6

 18.3

 

Third quarter FY 2017 vs. previous quarters

 

At Goa, production was 2.3 million tonnes and sales were 2.7 million tonnes during the quarter. Mining activities resumed post the monsoon season, and hence production was significantly higher sequentially. At Karnataka, production was 0.4 million tonnes and sales were 1.0 million tonnes. Sales were higher than production at both Goa and Karnataka due to sales from opening inventory.

 

During Q3 FY2017, production of pig iron was 5% higher y-o-y at 154,000 tonnes due to higher plant availability post debottlenecking. Production was 20% lower q-o-q primarily due to the maintenance shutdown for relining one of the furnaces for about 35 days in Q3 FY2017. 

 

Our annual mining allocation of 5.5mt and 2.3mt for Goa and Karnataka, respectively, was achieved in January 2017. We have been engaged with the respective state governments for an increase in the mining caps. The Goa government has granted additional mining allocation to us for the current fiscal year, and we expect to produce an additional 3mt this year.

 

Revenue for the quarter was at US$ 209 million, significantly higher compared to Q2, primarily due to the ramp up at Goa in Q3 post monsoon and higher iron ore prices. Price realization at Goa in Q3 FY2017 was US$ 40.7 per tonne compared to US$ 32.5 per tonne in Q2 FY2017. Price realization at Karnataka was at US$ 17.3 per tonne in Q3 compared with US$ 12.1 per tonne in Q3 last year.

 

EBITDA was US$ 63 million in Q3 FY2017, in line with higher revenue driven by volume ramp-up.

 

Nine months FY 2017 vs. nine months FY 2016

 

Production at Goa was 5.2 million tonnes and sales were 5.1 million tonnes. At Karnataka, production was 2.1 million tonnes and sales were 2.0 million tonnes. Production of pig iron ramped up to a record of 526,000 tonnes due to higher plant availability post debottlenecking. During the period, iron ore sales volume was 7.1 million tonnes primarily due to recommencement of Goa mining operations resulting in higher revenue and EBITDA.

 

Copper – India

 

 

Q3

Q2

Nine months ended

Particulars (in’000 tonnes, or as stated)

FY2017

FY2016

% change YoY

FY2017

% change QoQ

FY2017

FY2016

% change YoY

COPPER- INDIA

 

 

 

 

 

 

 

 

  Copper – Cathodes

102

 89

15%

 97

5%

300

282

6%

  Tuticorin Power Sales (MU)

 46

 40

     15%

 30

55%

 136

 334

(59)%

Realized TC/RC (USc/lb)

 22.2

 23.5

(6)%

 20.5

8%

 21.9

 23.9

(8)%

Conversion cost (USc/lb)

3.9

4.4

(11)%

5.3

(26)%

5.0

3.1

61%

Revenue(US$ million)

 769.0

 686.9

12%

 699.7

10%

 2,164.2

 2,383.4

(9)%

EBITDA(US$ million)

 66.8

 91.3

(27)%

 60.5

10%

 193.1

 261.5

(26)%

 

Third quarter FY 2017 vs. previous quarters

 

The Tuticorin smelter produced 102,000 tonnes of cathodes during Q3 FY2017, up 15% y-o-y. During Q3 FY2016, volumes had been lower on account of flooding in the state and unplanned shutdowns.

 

The 160 MW power plant at Tuticorin operated at a plant load factor (PLF) of 56% during Q3 FY2017 (PLF of 52% in Q3 FY2016, 48% during Q2 FY2017). PLF was low due to lower off-take by the Telangana State Electricity Board (TSEB). However, as per our offtake agreement with TSEB, we are entitled to compensation at the rate 20% of the contracted rate, for off-take below 85% of the contracted quantity.

 

In Q3 FY2017, Tc/Rc’s were at USc 22.2 per lb, 6% lower compared to Q3 FY2016 and 8% higher compared to Q2 FY2017. This was in line with movement in global benchmark Tc/Rc rates. Tc/Rc realization for CY 2017 is expected to be c.5% lower at c. USc 21/lb.

 

The net cost of conversion in Q3 FY2017 was USc 3.9 per lb, compared to USc 4.4 per lb in Q3 FY2016 and USc 5.3 per lb in Q2 FY2017. The net cost of conversion was lower primarily due to better acid prices during the current quarter.

 

Revenue for the quarter was at US$ 769 million lower mainly due to lower LME.
Q3 EBITDA was US$ 67 million, lower mainly due to lower Tc/Rc and lower by-product credits.  

 

Nine months FY 2017 vs. nine months FY 2016

 

Production volume from the Tuticorin smelter was 300,000 tonnes of cathodes, higher by 6% compared to the corresponding prior period. The 160MW power plant at Tuticorin operated at a PLF of 55% in the first nine months of FY2017 compared to 95% in corresponding prior period, primarily due to lower offtake from Tamil Nadu Electricity Board (TNEB) and TSEB. The power purchase agreement with TNEB ended on 31st May 2016 post which we entered into an agreement with TSEB.

 

Revenue for the nine month period FY2017 was US$ 2,164 million, 9% lower compared to nine month period FY2016, primarily on account of lower LME. During the period EBITDA was US$ 193 million, 26% lower primarily due to lower Tc/Rc and lower sulphuric acid credits which was partially offset by higher volumes. This was also adversely impacted by one off export incentive scheme benefit recognized last year and lower EBITDA from the 160MW power plant due to lower power offtake.

 

Copper – Zambia

 

 

Q3

Q2

Nine months period

Particulars (in’000 tonnes, or as stated)

FY2017

FY2016

% change YoY

FY2017

% change QoQ

FY2017

FY2016

% change YoY

COPPER -ZAMBIA

 

 

 

 

 

 

 

 

Mined metal

 21

 32

(33)%

 29

(27)%

 79

 94

(16)%

Copper – Total

 37

 45

(18)%

 47

(20)%

 130

 136

(5)%

  Integrated

 21

 28

(25)%

 28

(23)%

 77

 89

(14)%

  Custom

 16

 17

(7)%

 19

(16)%

 53

 47

11%

Average LME – Copper (US$/t)

 5,277

 4,892

8%

 4,772

11%

 4,924

 5,387

(9)%

C1 cash cost (USc/lb)

 194

 175

11%

 169

15%

 187

199

(6)%

Revenue (US$ million)

 205.8

 195.5

5%

 209.8

(2)%

 610.4

 720.6

(15)%

EBITDA (US$ million)

 0.7

 10.8

(94)%

 13.4

(94)%

 17.9

 (13.5)

 

Third quarter FY 2017 vs. previous quarters

 

During Q3, mined metal production was 21,000 tonnes, 33% lower y-o-y, due to lower production from Nchanga underground which was placed on managed care and maintenance in Q3 FY2016, lower trackless equipment availability at Konkola mine, throughput constraints at the mills and lower feed from reclaimed tails at Tailings Leach Plant.

 

During Q3, we commenced trial mining at the Nchanga underground mine and initial results for recovery and mining productivity are promising. The plan is to ramp-up the annual ore production to a rate in excess of 2 million tonnes. 

 

Custom volumes at 16,000 tonnes were 7% lower on a y-o-y basis and 16% lower compared to the prior quarter. Production was primarily impacted by a biennial shutdown of the smelter for 40 days, which commenced on 26 September 2016. Operations have recommenced post the shutdown and the smelter availability has improved to 98% with the ability to handle feed rates of greater than 90 tonnes per hour compared to 70 tonnes per hour prior to the shutdown.

 

We are working on the engineering design for accelerated dewatering and development to increase production from Konkola Mine.

 

The elevated temperature leach project, which would improve recoveries at the Tailings Leach Plant, has been commissioned in Q3 and is currently under stabilisation. The initial recovery results are encouraging.

 

In Q3 FY 2017, cost of production excluding royalty and exceptional items of increased power tariff in January 2016 and unrealized gains/losses on Kwacha denominated VAT receivables, was USc 176/lb which is lower by 4% on y-o-y basis. Factors contributing to this include sustained operational cost-saving initiatives, renegotiation of commercial contracts and alternate sourcing for major bulk supplies. Cost of production excluding royalty was USc 194/lb compared to USc 175/lb for Q3 FY2016 mainly on account of increase in power cost in FY2017 and appreciation of Zambian Kwacha during Q3 FY2016.   

 

The power tariff increase in January 2016 resulted in an adverse impact of US$ 3 million per month on the cost of production. In Q3 FY2017, power cost increase was USc 18/lb y-o-y. The company is working on a range of possible solutions to reduce the cost of power including new technical intervention to put oil-fired boilers as an alternate to power for electrolyte heating at refinery.

 

Revenue for the period was US$206 million, 5% higher due to increase in realized LME prices partly offset by lower volumes. EBITDA for Q3 FY2017 was US$0.7 million, significantly lower y-o-y mainly due to lower volumes.

 

In January 2017, KCM has successfully signed off a consent order with ZCCM-IH to settle its price participation liability which outlines the amended schedule of repayment in three parts, being US$20 million by 31 January 2017, US$22 million by 28 February 2017 and the balance in 24 equal monthly instalments which is a progressive step towards amicable settlement of the case.

 

Water levels at Kariba Dam are improving and are currently at 26% compared with 22% at the end of H1 FY2017. Copper belt Energy Corporation Plc has recently announced revised power tariffs effective from 1 Jan 2017 which are 15% lower than the last tariffs that were announced in January 2016. The process of formalization of tariff change is now underway across the mining industry.

 

Production in Q4FY2017 is expected to be in line with Q3.

 

Nine months FY2017 vs nine months FY2016

 

Mined metal production was at 79,000 tonnes, 16% lower y-o-y and integrated volume was at 77,000 tonnes, lower compared to mined metal production due to an increase in the concentrate inventory. Custom volumes were at 53,000 tonnes, 11% higher compared to nine months ended 31 December 2015 despite the 40 days planned maintenance shutdown.

 

During the period, revenue was US$ 610 million, 15% lower mainly due to lower realized LME and lower volumes. EBITDA was US$ 18 million, higher mainly on account of unrealized loss on Kwacha denominated VAT receivables in the previous year partially offset by lower volume and lower realized LME during the current period.

 

Amendments to The Mines & Mineral Development Act 2015 were formalized on 6 June 2016.  This provides for a ‘sliding scale’ royalty rate with effect from 1 June 2016. Accordingly, there is a 4% royalty at a copper LME of < US$4,500 per tonne, 5% royalty at a copper LME between US$4,500 and US$6,000 per tonne and 6% royalty at a copper LME >US$6,000 per tonne.

 

Aluminium

 

 

Q3

Q2

Nine months period

Particulars(in’000 tonnes, or as stated)

FY2017

FY2016

% change YoY

FY2017

% change QoQ

FY2017

FY2016

% change YoY

Aluminium

 

 

 

 

 

 

 

 

Alumina-Lanjigarh

 328

 218

50%

 292

12%

 895

 760

18%

Total Aluminium Production

 319

 234

37%

 296

8%

 860

 697

23%

     Jharsuguda-I

 132

 131

1%

 132

0%

 393

 392

0%

     Jharsuguda-II 4

 84

 19

 48

75%

 161

 57

     Korba-I

 65

 65

0%

 63

3%

 192

 192

0%

     Korba-II 5

 38

 19

 52

(27)%

 115

 56

     Balco 270 MW 6

 –  

 –  

 

 –  

Jharsuguda 1800 MW (Surplus Power Sales in Million Units) 6

 –  

 156

 511

Average LME – Aluminium (US$/tonne)

 1,710

 1,495

14%

 1,620

6%

 1,634

 1,615

1%

Average CoP – Aluminium (US$/tonne)

1,429

1,528

(7)%

1,462

(2)%

1,452

1,620

(10)%

Revenue(US$ million)

531.9

 418.9

27%

 452.1

18%

1,396.0

1,270.4

10%

EBITDA(US$ million)

 95.0

 20.9

 62.8

51%

 197.1

 42.6

 

 

Third quarter FY 2017 vs. previous quarters

 

The first line of the 1.25 mtpa Jharsuguda-II smelter was impacted by a transformer failure incident in mid- January. Rectification work is in process and 80 pots of the 336 pots are currently operational. The first line is expected to be ramped up by Q1 FY2018 post rectification. The second line is fully ramped up and is expected to be capitalised in Q4 FY2017. The ramp up of the third line of the smelter has commenced in end December 2016, with 42 pots operational and is expected to be fully ramped up by  Q2 FY2018.

 

The 325kt BALCO-II smelter had been impacted by a pot failure incident in Q2 FY2017. 257 pots of the 336 pots are currently operational and full ramp-up of the smelter is expected by Q1 FY2018. The rolled product facility at BALCO, which was temporarily shut-down last year, successfully re-commenced its operations in Q2 FY2017 following optimisation of its cost structure, and produced 6,100 tonnes during the quarter. 

 

The two streams of the Lanjigarh refinery operated during the quarter and produced 328,000 tonnes in Q3 FY2017, 12% higher than Q2 FY2017. The refinery currently has a debottlenecked capacity of 1.7 – 2.0 million tonnes per annum and we expect to produce 1.3mt in FY2017 to offset high alumina import prices.

 

There were no external sales from the 1,800 MW Jharsuguda power plant due to a weak power market. However, the PLF’s will continue to increase as we ramp up the Jharsuguda-II smelter.

 

Coal linkages of 6mtpa had been secured through auctions in Q2 FY2017 for captive power plants. Supply has commenced from these linkages in November 2016.

 

The cost of production of hot metal was US$1,429 per tonne with Jharsuguda and Korba at US$1,388 per tonne and US$1,499 per tonne respectively, lower y-o-y and q-o-q. The cost was lower q-o-q due to lower power and other costs which were partially offset by higher alumina import prices (Alumina CoP was $265/t with bauxite from BALCO and purchased bauxite, vs. $304/t for imported alumina).

 

EBITDA for the quarter was US$95 million, significantly higher q-o-q due to higher realized LME prices, volume ramp-up and rupee depreciation.

 

We expect to produce between 1.0 to 1.1 mtpa of Aluminium (excluding trial run production) in FY2017. Q4FY2017 CoP is expected to be at $1450-1475/t. The bauxite mines at BALCO are ramping up production and expect to exit FY2017 with a run rate of 2mtpa. 

 

Nine months FY2017 vs nine months FY2016

 

Aluminium production was a record at 860,000 tonnes, 23% higher y-o-y mainly on account of ramp up of additional pots at the BALCO-II and Jharsuguda-II smelters. Alumina production was 18% higher at 895,000 tonnes, due to the commencement of the second stream of the refinery from 1st April 2016. During this period, revenue was US$ 1,396 million, higher by 10% compared to corresponding prior period. EBITDA was at US$ 197 million significantly higher due to volume ramp-up, higher realized LME, lower input commodity prices and various cost saving initiatives.

 

 

Power

 

 

Q3

Q2

Nine months ended

Particulars (in million units)

FY2017

FY2016

% change YoY

FY2017

% change QoQ

FY2017

FY2016

% change YoY

Power

 

 

 

 

 

 

 

 

Total Power Sales

3,413

 2,934

16%

3,030

13%

9,453

8,728

8%

   Jharsuguda 600 MW 6

879

 1,593

(45)%

605

45%

2,376

5,413

(56)%

   Balco 600 MW

 660

79%

549

20%

1,817

 526

   Balco 270 MW6

–  

 41

–  

–  

169

   MALCO

 29

 26

12%

25

16%

144

345

(58)%

   HZL Wind Power

53

 67

(22)%

172

(69)%

373

353

6%

   TSPL

1,792

 839

1,679

7%

4,743

1,922

   TSPL – Availability

77%

85%

77%

76%

77%

Revenue (US$ million)

 227.4

 175.0

30%

 206.7

10%

 610.8

 517.5

 18%

EBITDA (US$ million)

67.4

 45.4

48%

 56.7

 19%

 175.3

 138.1

 27%

 

 

Third quarter FY 2017 vs. previous quarters

 

Total power sales were higher y-o-y due to the commissioning of additional power units at TSPL and BALCO over the last one year.

 

Power sales from TSPL increased with all three units being operational. In Q3 FY2017, the three units operated at an availability of 77%. The Power Purchase Agreement with the Punjab State Power Corporation Limited (PSPCL) compensates us based on the availability of the plant.

 

The Jharsuguda 600MW power plant operated at a plant load factor (PLF) of 72% in Q3 FY2017 (PLF 66% in Q3 FY2016, 50% in Q2 FY2017).

 

The 600 MW units (2x300MW) of BALCO IPP operated at a PLF of 55% in Q3 FY2017 due to a weaker power market (PLF 54% in Q2 FY2017)

 

PLF at the MALCO power plant was at 15%, lower due to lower off-take by the Telangana State Electricity Board (TSEB). However, as per the contract entered into with TSEB, we are entitled to compensation at 20% of the contracted rate for off-take below 85% of the contractual quantity.

 

Average power realisation for Q3 FY2017, excluding TSPL, was INR 2.77 per unit (USc 4.11 per unit) compared with INR 2.88 per unit (USc 4.37 per unit) in Q3 FY2016. The NSR was lower compared to corresponding prior quarter on account of weaker demand, resulting in a lower power price environment in India. Average power CoP, excluding TSPL, for Q3 FY2017 was INR 2.10 per unit (USc 3.11 per unit) compared to INR 2.21 per unit (USc 3.35 per unit) in Q3 FY2016.

 

Realisation and CoP of TSPL was at INR 3.32 per unit and INR 2.34 per unit respectively based on declared plant availability of 77%.

 

Revenue for the quarter was US$ 227 million, 30% higher y-o-y and EBITDA was US$ 67 million, 48% higher y-o-y mainly driven by commissioning of additional units at TSPL and Balco. 

 

Nine months FY2017 vs nine months FY2016

 

Power sales were higher by 8% compared with corresponding prior period due to commissioning of additional units at TSPL and BALCO power plants.

 

Revenue for the period was US$ 611 million, 18% higher y-o-y and EBITDA was US$ 175 million, 27% higher driven by volume ramp up. 

 

Financial Update and Balance Sheet Management

 

Our financial position remains robust, with total cash and liquid investments of US$ 7.9 billion and undrawn committed facilities of US$ 0.5 billion as at 31 December 2016. Gross debt and net debt were at US$ 16.0 billion and US$ 8.2 billion, respectively, at 31 December 2016 compared to US$ 16.3 billion and US$ 8.2 billion, respectively, as at 30 September 2016.

 

During the quarter, Vedanta Limited repaid $0.3 billion of the $0.4 billion of outstanding inter-company loan to Vedanta Plc.  The remaining US$0.1 billion was paid off by Vedanta Limited in January.  

 

In January 2017, Vedanta Resources plc issued $1 billion of 6.375% bonds due 2022 to primarily refinance part of its 2018 and 2019 bond maturities and extend its average debt maturity. $796 million of face value of the 2018 and 2019 bonds was tendered. The bond issue received strong subscription from investors globally.

 

The Group continues to actively manage its maturities and evaluate various options to optimise and strengthen its balance sheet, extend its maturity profile and reduce financing costs.

 

 

Production Summary (Unaudited)

                                                                                                                                                   (In ‘000 tonnes, except as stated)

Particulars

Q3

Q2

Nine months ended

FY 2017

FY 2016

% Change YoY

FY 2016

% Change QoQ

FY 2017

FY 2016

% Change YoY

OIL AND GAS

 

 

 

 

 

 

 

 

Average Daily Total Gross Operated Production  (boepd) 1

191,230

211,843

(10%)

206,230

(7)%

201,286

214,663

(6)%

Average Daily Gross Operated Production (boepd)

181,818

202,668

(10%)

196,399

(7)%

191,674

205,909

(7)%

   Rajasthan

154,272

170,444

(9%)

167,699

(8)%

162,957

170,258

(4)%

   Ravva

18,172

21,703

(16%)

18,823

(3)%

18,874

25,430

(26)%

   Cambay

9,375

10,521

(11%)

9,877

(5)%

9,843

10,221

(4)%

Average Daily Working Interest Production (boepd)

115,829

128,402

(10%)

125,575

(8)%

122,254

128,991

(5)%

   Rajasthan

107,990

119,311

(9%)

117,390

(8)%

114,070

119,180

(4)%

   Ravva

4,089

4,883

(16%)

4,235

(3)%

4,247

5,722

(26)%

   Cambay

3,750

4,208

(11%)

3,951

(5)%

3,937

4,089

(4)%

Total Oil and Gas (million boe)

 

 

 

 

 

 

 

   Oil & Gas- Gross

16.73

18.65

(10%)

18.07

(7)%

52.71

56.62

(7)%

   Oil & Gas-Working Interest

10.66

11.81

(10%)

11.55

(8)%

33.62

35.47

(5)%

Zinc India

 

 

 

 

 

 

 

 

   Mined metal content

 276

 228

21%

 192

44%

 595

 700

(15)%

   Refined Zinc – Total

 205

 206

0%

 150

37%

 457

 605

(24)%

   Refined Zinc – Integrated

 205

 206

0%

 149

38%

 456

 605

(25)%

   Refined Zinc – Custom

  –   

 –  

 1

 1

 –  

0%

   Refined Lead – Total 2

 39

 35

10%

 31

26%

 94

 107

(12)%

   Refined Lead – Integrated

 39

 35

10%

 31

26%

 94

 102

(8)%

   Refined Lead – Custom

  –   

  –   

 –  

 –  

 5

   Silver – Total  (in mn ounces) 3

 3.79

 3.73

2%

 3.45

10%

 10.08

 9.73

4%

   Silver- Integrated (in mn ounces)

 3.79

 3.73

2%

 3.45

10%

 10.08

 9.64

5%

   Silver- Custom (in mn ounces)

  –   

  –   

 –  

  –   

 0.09

Zinc International

 33

 51

(35)%

 39

(17)%

 115

184

(38)%

Zinc -Refined -Skorpion

 17

 13

34%

 23

(25)%

 64

 55

16%

Mined metal content – BMM

 15

 17

(11)%

 16

(5)%

 51

 48

5%

Mined metal content – Lisheen

 –  

 21

 –  

 –  

 81

IRON ORE (in million dry metric tonnes, or as stated) 

 

 

 

 

 

 

 

 

Sales

 3.7

 1.5

 0.8

 7.1

 2.7

     Goa

 2.7

 0.6

 0.3

 5.1

 0.6

     Karnataka

 1.0

0.9

4%

 0.5

 2.0

 2.1

(6)%

Production of Saleable Ore

 2.6

 1.4

1.5

 7.3

 2.4

     Goa

 2.3

 0.3

0.5

 5.2

 0.3

     Karnataka

 0.4

 1.1

(66)%

 0.9

(60)%

 2.1

 2.1

3%

     Pig Iron

 154

 146

5%

 192

(20)%

 526

 466

13%

 

 

Particulars

Q3

Q2

Nine months ended

FY 2017

FY 2016

% Change YoY

FY 2017

% Change QoQ

FY 2017

FY 2016

% Change YoY

 

 

 

 

 

 

 

 

 

COPPER – INDIA

 

 

 

 

 

 

 

 

  Copper –  Cathodes

102

 89

15%

 97

5%

300

282

6%

  Tuticorin Power Plant Sales (MU)

 46

 40

15%

 30

55%

 136

 334

(59)%

COPPER – ZAMBIA

 

 

 

 

 

 

 

 

Mined metal

 21

 32

(33)%

 29

(27)%

 79

 94

(16)%

Copper – Total

 37

 45

(18)%

 47

(20)%

 130

 136

(5)%

  Integrated

 21

 28

(25)%

 28

(23)%

 77

 89

(14)%

  Custom

 16

 17

(7)%

 19

(16)%

 53

 47

11%

ALUMINUM

 

 

 

 

 

 

 

 

Alumina-Lanjigarh

 328

 218

50%

 292

12%

 895

 760

18%

Total Aluminum Production

 319

 234

37%

 296

8%

 860

 697

23%

     Jharsuguda-I

 132

 131

1%

 132

0%

 393

 392

0%

     Jharsuguda-II4

 84

 19

 48

75%

 161

 57

     Korba-I

 65

 65

0%

 63

3%

 192

 192

0%

     Korba-II5

 38

 19

 52

(27)%

 115

 56

Balco 270 MW 6

 –  

 –  

 –  

Jharsuguda 1800 MW (Surplus Power Sales in Million Units) 6

 –  

 156

 511

POWER (in million units)

 

 

 

 

 

 

 

 

Total Power Sales

3,413

 2,934

16%

3,030

13%

9,453

8,728

8%

   Jharsuguda 600 MW 6

879

 1,593

(45)%

605

45%

2,376

5,413

(56)%

   Balco 600 MW

 660

 368

79%

549

20%

1,817

 526

   Balco 270 MW 6

–  

 41

–  

–  

169

   MALCO

 29

 26

12%

25

16%

144

345

(58)%

   HZL Wind Power

53

 67

(22)%

172

(69)%

373

353

6%

   TSPL

1,792

 839

1,679

7%

4,743

1,922

   TSPL – Availability

77%

85%

77%

76%

77%

VGCB Port (in million tonnes) 7

 

 

 

 

 

 

 

 

Cargo Discharge

 0.6

 1.8

(65)%

 1.3

(49)%

 3.5

 5.5

(36)%

Cargo Dispatches

 0.7

 1.9

(65)%

 1.5

(56)%

 3.6

 5.7

(36)%

 

 

1.     Including Internal Gas consumption

2.     Excluding Captive consumption of 1,731 tonnes in Q3 FY2017 vs 2,051 tonnes in Q3 FY2016, 837 tonnes in Q2 FY2017 and 3,652 tonnes in Nine months ended FY2017 vs. 5,749 tonnes in Nine months ended FY2016

3.     Excluding captive consumption of 463,000 ounces in Q3 FY2017 vs. 344,000 ounces in Q3 FY2016, 139,000 ounces in Q2 FY2017 and 602,000 ounces in Nine months ended FY 2017 vs. 956,000 ounces in Nine months ended FY 2016

4.     Including trial run production of 36 kt in Q3 FY2017, 12 kt in Q3 FY2016, 19 kt in Q2 FY2017,  67 kt in Nine months ended FY2017 vs 51 kt in Nine months ended FY 2016

5.     Including trial run production of 270 tonnes in Q3 FY2017, Nil in Q3 FY2016, 28 kt in Nine months ended FY2017 vs Nil kt in Nine months ended FY2016

6.     Jharsuguda 1,800MW and Balco 270 MW have been moved from the power to the Aluminum segment from 1st April 2016

7.     Vizag General Cargo Berth

8.     Before adjusting revenue from silver

 

 

Financial Summary (Unaudited)

                                                                                                    (in US$ million, except as stated)

Group Revenue

Q3

Q2

Nine months ended

FY 2017

FY 2016

% Change YoY

FY 2017

% Change QoQ

FY 2017

FY 2016

% Change YoY

Zinc

 818.6

 573.0

43%

 610.1

 34%

1,861.2

1,968.0

 (5)%

India

 731.4

 508.7

44%

 507.8

 44%

1,604.1

1,659.2

 (3)%

International

 87.1

 64.3

35%

 102.3

 (15)%

 257.1

 308.8

 (17)%

Oil and Gas

 318.7

 307.8

4%

 304.4

 5%

 904.6

1,063.1

 (15)%

Iron Ore

 208.8

 81.7

 73.1

 –

 426.9

 219.5

 94%

Copper

 974.8

 882.4

10%

 909.5

 7%

2,774.6

3,104.0

 (11)%

India/ Australia

 769.0

 686.9

12%

 699.7

 10%

2,164.2

2,383.4

 (9)%

Zambia

 205.8

 195.5

5%

 209.8

 (2)%

 610.4

 720.6

 (15)%

Aluminium

 531.9

 418.9

27%

 452.1

 18%

1,396.0

1,270.4

 10%

Power

 227.4

 175.0

30%

 206.8

10%

 610.8

 517.5

 18%

Others

 (12.7)

 (3.5)

 (28.8)

 (56)%

 (38.8)

 (7.7)

 –

Total

 3,067.4

 2,435.3

26%

 2,527.2

 21%

7,935.2

8,134.8

 (2)%

 

 

                                                                                                    (in US$ million, except as stated)

Group

 EBITDA

Q3

Q2

Nine months ended

FY 2017

FY 2016

% Change YoY

FY 2017

% Change QoQ

FY 2017

FY 2016

% Change YoY

Zinc

436.1

 217.6

346.9

26%

 980.7

 856.1

 15%

India

406.4

 217.8

87%

295.9

37%

 862.5

 799.7

 8%

International

29.7

 (0.2)

51.0

(42)%

 118.1

 56.4

 –

Oil and Gas

158.2

 95.5

66%

154.8

2%

 432.1

 469.2

 (8)%

Iron Ore

63.0

 11.1

17.7

 134.6

 18.3

 –

Copper

67.5

 102.1

(34)%

73.9

(9)%

 211.0

 248.0

 (15)%

India/ Australia

66.8

 91.3

(27)%

60.5

10%

 193.1

 261.5

 (26)%

Zambia

0.7

 10.8

(94)%

13.4

(94)%

 17.9

 (13.5)

 –

Aluminium

95.0

 20.9

62.8

51%

 197.1

 42.6

 –

Power

67.4

 45.4

48%

56.7

19%

 175.3

 138.1

 27%

Others

 (4.9)

 1.0

 (6.8)

(29)%

 (15.4)

 6.9

 –

Total

 882.3

 493.6

79%

 706.1

 25%

 2,115.4

1,779.2

 19%

 

 

 

For further information, please contact:

Communications

 

Roma Balwani

President – Group Communications, Sustainability

and CSR

Tel: +91 22 6646 1000

gc@vedanta.co.in

 

Investors

 

Ashwin Bajaj

Director – Investor Relations

 

Radhika Arora

Associate General Manager – Investor Relations

 

Ravindra Bhandari

Manager – Investor Relations

Finsbury

 

Daniela Fleischmann

Tel:  +44 20 7251 3801

vedanta@finsbury.com

 

 

 

 

 

Tel:  +91 22 6646 1531

ir@vedanta.co.in

 

 

About Vedanta Resources plc

Vedanta Resources plc (“Vedanta”) is a London listed diversified global natural resources company. The group produces Aluminium, copper, zinc, lead, silver, iron ore, oil & gas and commercial energy. Vedanta has operations in India, Zambia, Namibia, South Africa, Ireland, Liberia and Australia. With an empowered talent pool globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of trust, sustainability, growth, entrepreneurship, integrity, respect and care. For more information, please visit www.vedantaresources.com.

 

Disclaimer

This press release contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

 

 

A cracking iOS game for diamond geezers everywhere – He who dares wins

[prMac.com] Southampton, United Kingdom – Endless Arcade, a new independent games company from the UK, today is pleased to announce the worldwide release of Diamond Geezer 1.4.1, its debute arcade title developed exclusively for iPhone, iPad and iPod touch devices. You’re a crack and a swipe away from hitting the big time. But will you smash it? You’ve stumbled on a diamond mine in Botswana (as you do!), pickaxe in hand.

Falco débute un programme de forage de 40 000 mètres

20 févr. 2017 07h18 HE

Exploration régionale visant de nouvelles découvertes dans le camp prolifique de Rouyn-Noranda

MONTREAL, QC–(Marketwired – 20 février 2017) – (” Falco ” ou la ” Société “) (TSX CROISSANCE: FPC) a le plaisir d’annoncer qu’elle lance des activités d’exploration sur son imposante détention de terrain de 668 km2 dans le camp de Rouyn-Noranda, entourant son projet Horne 5 détenu à 100 %. Le programme envisagé de forages d’exploration de 40 000 mètres fait partie d’un budget de 10 millions de dollars alloué aux travaux d’exploration pour l’année 2017. Le programme d’exploration sera axé sur huit différentes zones, incluant le projet Horne 5, avec l’objectif de découvrir de la nouvelle minéralisation dans le camp prolifique de Rouyn-Noranda, historiquement en production.

PROGRAMME D’EXPLORATION RÉGIONALE 2017

Propriétés du Camp central

Les propriétés du Camp central sont situées dans la partie centre-sud de la position de terrain importante de Falco. Les propriétés couvrent près de 90 % du camp minier historique et comprennent plusieurs gisements de SMV de métaux de base exploités dans le passé.

Les travaux d’exploration sur les propriétés du Camp central incluront approximativement de 15 000 à 18 000 mètres de forages et sont destinés à mettre à jour le modèle géologique en 3D du camp Noranda en effectuant une révision systématique et des vérifications des cibles d’exploration existantes. Plusieurs cibles prêtes à forer ont été identifiées et seront vérifiées durant la campagne. De plus, les données historiques dans et autour des anciennes mines seront compilées, et les ressources historiques et les résultats de forage seront passés en revue afin d’identifier de nouvelles opportunités et générer de nouvelles cibles.

RIMO

Les propriétés RIMO sont au stade préliminaire et sont situées à 25 km au nord-ouest de Rouyn-Noranda. Les travaux cibleront le prolongement vers l’ouest du levé géophysique de 2015 ainsi qu’une vérification sur le terrain des cibles géophysiques par du forage.

Lac Laynes

La propriété Lac Laynes est connue pour son potentiel pour les SMV; toutefois, les travaux récents ont permis d’établir un potentiel pour une minéralisation aurifère à basse teneur en surface. En 2014, le sondage DDH 17931-14-02 foré par Falco a recoupé une brèche tectonique aurifère montrant des valeurs de 0,79 g/t Au sur 14,0 mètres, incluant 3,18 g/t Au sur 1,2 mètre. Les travaux prévus incluent une validation sur le terrain (incluant de l’échantillonnage de roches) et le forage de cibles géophysiques.

Flavrian

La zone de Flavrian affiche une production historique de 1 million d’onces d’or. L’exploration sur Flavrian évaluera le potentiel minéral de la Syénite de Duprat, qui présente un contexte géologique similaire à celui du gîte Upper Beaver en Ontario. Les travaux comprennent approximativement 2 000 mètres de forage.

Falco vérifiera également des zones minéralisées à haute teneur en or en profondeur et latéralement, ou à proximité de l’ancienne mine d’or Quesabe. Quesabe englobe plus de 30 indices d’or et de cuivre sur une superficie de 10 km2. Ces nouveaux travaux se veulent un suivi des intersections minéralisées déjà obtenues par forage, dans le but de convertir les ressources minérales à des catégories supérieures. Plusieurs cibles prêtes à forer ont été identifiées à l’aide d’un modèle 3D, le long de trois structures principales dans le secteur Quesabe (la faille Quesabe au sud, la faille Beauchemin à l’est et le système de la Brèche de St-Jude au nord), incluant notamment des extensions potentielles des zones à haute teneur du gisement principal à Quesabe.

Noralex, Routhier et la région de Blake River

La propriété Noralex englobe l’indice Young Buck, associé à une intrusion, et montre des similitudes avec les mines Doyon et Mouska. Les forages historiques ont retourné des valeurs aurifères à basse teneur sur de larges intersections, incluant 1,93 g/t Au sur 33,0 mètres et 1,64 g/t Au sur 24,5 mètres en forage. Les travaux comprendront du forage à raison d’approximativement 4 000 mètres sur l’indice Young Buck et dans la partie sud-ouest de la propriété. La propriété Routhier et les propriétés Blake River recevront des travaux géophysiques, l’excavation de tranchées en surface et du forage à hauteur de 3 500 mètres.

Localisation des sites impliqués dans le programme d’exploration régionale

PROGRAMME D’EXPLORATION 2017 SUR HORNE 5

La minéralisation sur le projet Horne 5 est encaissée dans une séquence volcanique felsique (connue sous le nom du Bloc felsique Horne) principalement composée de coulées rhyolitiques, de brèches rhyolitiques et de tufs à lapilli et à blocs de composition felsique. Le bloc est bordé par la faille du ruisseau Horne, au nord, et la faille Andésite, au sud, et suit un axe est-ouest. Cet axe s’étend sur une distance de 1,5 km à l’ouest de la mine Horne où de la minéralisation aurifère a été retrouvée. La zone Ouest, qui se trouve à 1 km du gîte Horne 5, a livré des résultats historiques démontrant le potentiel de ce secteur, avec des teneurs de 4,6 g/t Au sur 14,6 m, 4,3 g/t Au sur 9,3 m, et 5,5 g/t Au sur 20,6 m. Le programme de forage 2016 a permis d’identifier une nouvelle zone minéralisée à 200 mètres au sud-ouest du gîte Horne 5 : la lentille H5-SW. Les basses teneurs en or caractéristiques de la lentille H5-SW suggèrent qu’il pourrait s’agir d’un prolongement de la zone Ouest, confirmant ainsi la continuité de la minéralisation vers l’ouest. De nouveaux forages d’exploration vérifieront l’extension vers l’ouest, entre la zone Ouest et la lentille H5

SW. Environ 10 000 mètres de forage sont prévus. Trois principales zones sont visées sur une distance totale d’environ 1,4 km, entre 300 et 1 200 mètres de profondeur verticale.

Programme d’exploration sur le projet Horne 5

Répartition des forages prévus pour 2017

Propriété / Projet   Mètres
Camp Central (excluant Horne 5)   16 600 m
RIMO   900 m
Lac Laynes   750 m
Flavrian   3 600 m
Noralex et  Routhier   4 650 m
Blake River   3 500 m
Horne 5   10 000 m
TOTAL   40 000 m

Personne qualifiée

Claude Bernier, directeur de l’exploration (géo., ing.), est la personne qualifiée pour ce communiqué tel que défini par le Règlement 43-101 sur l’information concernant les projets miniers. Il a révisé et vérifié les renseignements techniques contenus dans ce communiqué. M. Bernier est un employé de Falco et n’est donc pas indépendant.

À propos de Falco

Ressources Falco ltée est l’un des plus grands détenteurs de titres miniers dans la province de Québec, avec un vaste portefeuille de propriétés dans la ceinture de roches vertes de l’Abitibi. Falco contrôle 68 800 hectares de terrains dans le camp minier de Rouyn-Noranda, ce qui représente 70 % du camp dans son ensemble et qui comprend 13 anciens sites miniers pour l’or et les métaux de base. La propriété principale de Falco est le projet Horne 5 situé dans l’empreinte de l’ancienne mine Horne, laquelle a été exploitée par Noranda de 1927 à 1976 et a produit 11,6 millions d’onces d’or et 2,5 milliards de livres de cuivre. Redevances Aurifères Osisko Ltée est le plus important actionnaire de la Société et détient actuellement 14,2 % des actions ordinaires en circulation de la Société.

La Bourse de croissance TSX et son fournisseur de services de règlementation (au sens attribué à ce terme dans les politiques de la Bourse de croissance TSX) n’acceptent aucune responsabilité quant à la pertinence et à l’exactitude du présent communiqué.

Mises en garde concernant les énoncés prospectifs

Le présent communiqué contient des énoncés prospectifs et des renseignements prospectifs (collectivement, les ” énoncés prospectifs “) au sens des lois applicables sur les valeurs mobilières et de la loi des États-Unisintitulée ” Private Securities Litigation Reform Act of 1995 “. Tout énoncé, autre qu’un énoncé basé sur des faits historiques, est un énoncé prospectif. De façon générale, les énoncés prospectifs peuvent être identifiés par l’emploi de termes comme ” planifie “, ” espère “, ” estime “, ” prévoit “, ” anticipe “, ” croit ” ou des variantes de ces mots ou expressions ou encore lorsqu’ils indiquent que certains actes, évènements ou résultats ” pourraient ” ou ” devraient ” être posés, ” se produiront ” ou ” seront atteints “, et incluent, sans s’y limiter, la réalisation des objectifs établis dans le cadre de la campagne de forage sur la propriété Horne 5 et sur les propriétés d’exploration régionales. Les énoncés prospectifs impliquent des risques, des incertitudes et d’autres facteurs qui pourraient faire en sorte que les résultats réels, le rendement, les perspectives et les opportunités soient sensiblement différents de ceux exprimés ou suggérés par de tels énoncés prospectifs. Les facteurs qui pourraient faire en sorte que les résultats réels soient sensiblement différents de ceux compris dans ces énoncés prospectifs comprennent la conformité des données historiques mentionnées dans ce communiqué et ceux compris dans les documents publics de Falco, incluant les rapports de gestion de la direction déposés sur SEDAR, auwww.sedar.com. Bien que Falco soit d’avis que les hypothèses et les facteurs pris en compte dans l’élaboration des énoncés prospectifs sont raisonnables, l’on ne devrait pas se fier indûment aux énoncés prospectifs, qui s’appliquent uniquement en date du présent communiqué, et rien ne garantit que de tels évènements se produiront dans les délais indiqués ou à tout autre moment. Sauf si requis par les lois applicables, Falco décline toute intention ou obligation d’actualiser ou de réviser tout énoncé prospectif, que ce soit en raison de nouvelles informations, d’évènements futurs ou pour toute autre raison.

Linguamatics To Provide Varian Medical Systems With NLP Technology for Oncology Care Management Platform

CAMBRIDGE, United Kingdom and BOSTON, Feb. 20, 2017 /PRNewswire/ — Clinical NLP provider Linguamatics, and Varian Medical Systems, today announced that Varian will utilize Linguamatics’ natural language processing (NLP) technology as part of the data analytics within Varian’s 360 Oncology™ care management platform.

Varian 360 Oncology care management is a software solution designed to meet the full spectrum of needs in oncology care management for hospitals and cancer centres at the oncology department level. It is capable of tracking physician and cancer specialist referrals, integrating evidence, outcomes data, guidelines and care pathways, coordinating data from multiple sites and settings including patients and external caregivers. Varian will utilize the Linguamatics Health platform, powered by Linguamatics I2E text mining technology, to extract unstructured concepts from within pathology reports and convert them to discrete data elements for analytics reporting within Varian 360 Oncology.

“We chose to work with Linguamatics because of their experience in mining oncology data to improve clinical reporting and patient outcomes,” said Rachan Rao, Director Software Support Services, Varian Medical Systems.  “The use of NLP to extract key clinical concepts from patient documentation such as pathology, radiology and progress notes, provides oncology specialists with a more comprehensive view of their patients’ conditions and facilitates the creation of care management plans that are more precisely tailored to each individual patient based on their health status.”

“Varian has a rich history of delivering innovative, state-of-the-art cancer-fighting solutions and is dedicated to its goal of realizing a world without the fear of cancer,” said Simon Beaulah, Senior Director of Healthcare, Linguamatics. “Like Varian, Linguamatics is committed to leveraging clinical information so that care is improved for every patient to achieve optimal outcomes. We look forward to working with Varian and further advancing the fight against cancer.”

To learn more about the Linguamatics and Varian relationship, please visit Linguamatics (booth 4944) or Varian (booth 8067) at the HIMSS17 Conference and Expo, February 19-23 in Orlando. 

About Varian Medical Systems

Varian Medical Systems focuses energy on saving lives and is the world’s leading manufacturer of medical devices and software for treating and managing cancer. Headquartered in Palo Alto, California, Varian employs approximately 6,400 people at sites around the world. For more information, visit http://www.varian.com and follow @VarianMedSys on Twitter.

About Linguamatics

Linguamatics transforms unstructured big data into big insights to advance human health and wellbeing. A world leader in deploying innovative natural language processing (NLP)-based text mining for high-value knowledge discovery and decision support, Linguamatics’ solutions are used by top commercial, academic and government organizations, including 17 of the top 20 global pharmaceutical companies, the US Food and Drug Administration (FDA) and US National Cancer Institute, Cancer Research UK, and leading US healthcare organizations. Linguamatics I2E is used to mine a wide variety of text resources, such as scientific literature, patents, Electronic Health Records (EHRs), clinical trials data, news feeds, social media and proprietary content. I2E can be deployed as an in-house enterprise system, or as Software-as-a-Service (SaaS) on the cloud. For more information, visit linguamatics.com and follow @Linguamatics on Twitter.

Linguamatics Media contact:
Michelle Ronan Noteboom, Sr. Account Director
Amendola Communications
+ 1 512.426.2870
mnoteboom@acmarketingpr.com

Varian Medical Systems Media contact:
Mark Plungy, Director of PR
Varian Medical Systems
+ 1 650.424.5630
mark.plungy@varian.com

 

SOURCE Linguamatics

Falco Commences 40,000 Metre Drill Program

MONTREAL, QC–(Marketwired – February 20, 2017) – Falco Resources Ltd. (“Falco” or the “Company”) (TSX VENTURE: FPC) is pleased to announce that it is initiating exploration activities on its large 668 square kilometre land package in the Rouyn-Noranda Camp, which surrounds its 100% owned Horne 5 Project. The planned 40,000 metre exploration drill campaign is part of a $10 million budget allocated to 2017 exploration work. The exploration program will concentrate on eight different areas, including the Horne 5 project, with the objective of discovering new mineralization in the prolific past-producing Rouyn-Noranda camp.

2017 REGIONAL EXPLORATION PROGRAM

Central Camp Properties
The Central Camp properties are located in the south-central portion of Falco’s considerable land position. The properties cover approximately 90% of the historical mining camp and include several past producing VMS base metal deposits.

Exploration work on the Central Camp properties will include approximately 15,000 to 18,000 metres of drilling, and is aimed at updating the 3D Noranda Camp geological model with a systematic review and testing of existing exploration targets. Numerous drill-ready targets have been identified and will be tested during the campaign. In addition, historical data compilation in and around former producing mines will be conducted, reviewing historical resources and drilling results to further identify new opportunities and generate new targets.

RIMO
The RIMO properties are greenfield exploration projects located 25 km north west of Rouyn-Noranda. Work will focus on the western extension of the 2015 geophysical survey and field testing of geophysical targets with new drilling.

Lac Laynes
The Lac Laynes property is known for its VMS potential, however recent work has determined potential low grade gold mineralization at surface. In 2014 DDH 17931-14-02 drilled by Falco intersected a gold bearing tectonic breccia with values of 0.79 g/t Au over 14.0 metres, including 3.18 g/t Au over 1.2 metres. Planned work includes field validation (including rock sampling) and drilling of geophysical targets.

Flavrian
The Flavrian area has a historical production of 1 million ounces gold. Exploration at Flavrian will evaluate the mineral potential of the Duprat Syenite, which shows similar geological context to the Upper Beaver deposit in Ontario. Work includes approximately 2,000 metres of drilling.

Falco will also test for high-grade gold zones at depth and along strike, or proximal to the former producer Quesabe gold deposit. Quesabe encompasses more than 30 gold and copper showings over a 10 km2 area. The new work will follow-up on previously drilled mineralized intersections with the aim to upgrade mineral resources. Numerous drill-ready targets have been identified using a 3D model along three main structures in the Quesabe area (the Quesabe Fault to the south, the Beauchemin Fault to the east and the St-Jude Breccia system to the North), including potential high-grade extensions of the Quesabe main deposit.

Noralex, Routhier and Blake River Area
The Noralex property includes the Young Buck (intrusion related) showing, which bears similarities with the Doyon and Mouska mines. Historical drilling has returned low grade gold values over wide intercepts, including 1.93 g/t Au over 33.0 metres and 1.64 g/t Au over 24.5 metres. Work will include drilling approximately 4,000 metres on the Young Buck showing and drilling on the south west portion of the property. The Routhier property and Blake River properties will see new geophysics, surface trenching and drilling of approximately 3,500 metres.

2017 HORNE 5 EXPLORATION PROGRAM

The Horne 5 mineralization is hosted in a felsic volcanic sequence (known as the Horne Felsic Block) mostly composed of rhyolitic flows, rhyolite breccias and felsic lapilli to blocky tuffs. The block is confined by the Horne Creek Fault to the north, the Andesite Fault to the south and follows an East West trend. The trend extends over 1.5km to the west of the Horne mine, where gold mineralization has been recognized. The West Zone which occurs 1 km from the Horne 5 deposit has returned historical results showing the good potential for this area, including: 4.6 g/t Au over 14.6 m, 4.3g/t Au over 9.3 m and 5.5 g/t Au over 20.6m. The 2016 drill program identified a new mineralized zone 200 metres to the South West of the Horne 5 deposit, the H5-SW zone. The low gold grades defining the H5-SW zone indicates it could be an extension of the West Zone, which confirms the continuation of the mineralization in western direction. New exploration drilling will test the western extension between the West Zone and the H5-SW zone. Approximately 10,000 metres of drilling is planned. Three main areas are being targeted covering a total distance of approximately 1.4km long, and between 300 metres and 1,200 metres of vertical depth.

2017 Expected Drilling Metres
     
Property / Project   Metres
Central Camp (excluding Horne 5)   16,600 m
RIMO   900 m
Lac Laynes   750 m
Flavrian   3,600 m
Noralex and Routhier   4,650 m
Blake River   3,500 m
Horne 5   10,000 m
TOTAL   40,000 m

Qualified Person

Claude Bernier, Exploration Manager, (P.Geo. Eng.) is the qualified person for this release as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects and has reviewed and verified the technical information contained herein. Mr. Bernier is an employee of Falco and is non-independent.

About Falco

Falco Resources Ltd. is one of the largest mineral claim holders in the Province of Québec, with extensive land holdings in the Abitibi Greenstone Belt. Falco owns 68,800 hectares of land in the Rouyn-Noranda mining camp, which represents 70% of the entire camp and includes 13 former gold and base metal mine sites. Falco’s principal property is the Horne 5 Project located in the former Horne Mine that was operated by Noranda from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of copper. Osisko Gold Royalties is the largest shareholder of the Corporation and currently owns 14.2% of the outstanding shares of the Corporation.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Cautionary Note Regarding Forward-Looking Statements

This news release contains forward-looking statements and forward-looking information (together, “forward-looking statements”) within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as “plans”, “expects”, “estimates”, “intends”, “anticipates”, “believes” or variations of such words, or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will be taken”, “occur” or “be achieved” and includes, without limitation, achievement of objectives set for the drilling program on the Horne 5 property and the regional exploration properties. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include the reliability of the historical data referenced in this press release and those risks set out in Falco’s public documents, including in each management discussion and analysis, filed on SEDAR at www.sedar.com. Although Falco believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, Falco disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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Exercise of the Bluejay Option; Change of Name

FinnAust Mining plc / EPIC: FAM / Market: AIM / Sector: Mining

20 February 2017

FinnAust Mining plc (‘FinnAust’ or the ‘Company’)

 

Exercise of the Bluejay Option, Rule 9 Waiver, Change of Name to Bluejay Mining plc and Notice of General Meeting

 

FinnAust Mining plc, the AIM and FSE listed company with projects in Greenland & Finland, is pleased to announce that it is the intention of the Company to exercise the option to acquire 82,560 shares of Bluejay Mining Limited (‘Bluejay’) (the ‘Bluejay Option’) representing 39.63 per cent. of Bluejay that it does not already own.  Exercising the Bluejay Option will result in the Company increasing its ownership in Bluejay and the Pituffik Titanium Project (‘Pituffik’ or ‘Pituffik Project’) from 60.37 per cent. to 100 per cent.  Following the exercise of the Bluejay Option, the Company intends to change its name to Bluejay Mining plc. Exercising the Bluejay Option and the change of name is conditional on Shareholder approval to be sought at a General Meeting to be held by FinnAust, details of which are set out below.

 

Highlights

 

·    FinnAust to increase interest in Bluejay to 100 per cent.  Bluejay is the 100 per cent. owner of the 150km2 high grade Pituffik Titanium Project located in North West Greenland. The Pituffik Project comprises three main exploration target areas across more than 80km of coastline historically proven to contain large and high-grade accumulations of primary ilmenite, with mining in Greenland envisaged to be achieved via a low capex dredging operation.

 

·    The Pituffik Project has demonstrated the potential to be a top percentile ilmenite project in terms of heavy mineral grade with the maiden mineral resource targeted to be published in Q1 2017.

 

·    Advancing the Pituffik Project continues to be the Company’s primary focus. The near term strategy of the Company is the delivery of a bulk sample during 2017 and larger scale production in 2018.

 

·    The Directors believe that moving to 100% ownership of the Pituffik Project will provide certainty of title and remove any issues associated with joint venture partners.

 

·    The consideration for Bluejay was agreed in December 2015 with the number of shares to be issued pursuant to the Exercise of the Bluejay Option agreed at the time the Company purchased its initial interest in 60.37 per cent. of Bluejay (see RNS dated 9 December 2015).

 

·    Acquisition price of £594,393 to be satisfied by the issue of 108,071,388 new Ordinary Shares to the Bluejay Vendors.

 

·    Recent placing of 76,428,572 Ordinary Shares at 7 pence to raise £5.35m in December 2016 demonstrated strong support for the Company and the Pituffik Project.

 

FinnAust Managing Director Rod McIllree said, “Pituffik has proven its potential to be in the top percentile of ilmenite projects in terms of heavy mineral grade.   With a maiden mineral resource targeted to be published in Q1 2017, a bulk sample due later this year, and larger scale production targeted in 2018, we believe the Project offers significant value upside.  It is therefore our intention, subject to shareholder approval, to increase our interest in the Project to 100 per cent. by acquiring the remaining 39.63 per cent. interest in Bluejay which we do not currently own.  Being the sole owner of Pittufik will ensure that the Company benefits from maximum exposure to this highly prospective asset and will also aid future development plans by having a simplified ownership structure. 

 

“Whilst we maintain additional assets in Finland, which offer further upside to our company, our primary development focus is undoubtedly on our portfolio of assets in Greenland.  Accordingly, we are proposing a change of name to BlueJay Mining plc.  This change is again subject to shareholder approval at a General Meeting to be held in a few weeks time.  We believe the proposed change of name and exercise of the Bluejay Option will best position our company for growth.”

 

Notice of General Meeting

The Board of FinnAust announces a General Meeting of the Company to be held at The Washington Mayfair Hotel, 5 Curzon Street, London, W1J 5HE on 10 March 2017 at 10:00 a.m. for the purposes of approving the exercise of the Bluejay Option.

 

The circular convening the General Meeting dated 20 February 2017 (‘Circular’) will be posted to shareholders today. Further details of the Bluejay Acquisition (which constitutes a related party transaction under the AIM Rules for Companies), Rule 9 Waiver and Change of Name as extracted from the Circular are set out below.

 

The Circular is available at www.finnaust.com

 

**ENDS**

 

For further information, please visit www.finnaust.com or contact:

 

Roderick McIllree

FinnAust Mining plc

+44 (0) 20 7907 9326

Graham Marshall

FinnAust Mining plc

+44 (0) 20 7907 9326

Ewan Leggat

SP Angel Corporate Finance LLP

+44 (0) 20 3470 0470

Laura Harrison

SP Angel Corporate Finance LLP

+44 (0) 20 3470 0470

Elisabeth Cowell

St Brides Partners Ltd

+44 (0) 20 7236 1177

Charlotte Page

St Brides Partners Ltd

+44 (0) 20 7236 1177

 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

 

Circular

Extracts from the Circular are set out below. The same definitions apply throughout this announcement as are applied in the Circular. A list of definitions is set out at the end of this announcement.

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 

Date of this document

 

20 February 2017

Last time and date of receipt of Forms of Proxy

 

10.00 a.m. on 8 March 2017

Ordinary Shares to begin trading under the new name and TIDM

 

On or around 8.00 a.m on 13 March 2017

Admission of Consideration Shares

 

On or around 13 March 2017

 

KEY STATISTICS

 

Number of Ordinary Shares as at the date of this document

 

619,169,499

Consideration Shares to be issued pursuant to the Exercise of the Bluejay Option

 

108,071,388

Enlarged Issued Share Capital*

 

727,240,887

Consideration Shares as a percentage of the Enlarged Issued Share Capital

 

14.86%

International Security Identification Number (ISIN) of the Ordinary Shares

 

GB00BFD3VF20

Legal Entity Identifier (LEI)

 

213800E9AEFEHFLOVJ19

Tradeable Instrument Display Mnemonic (TIDM)

FAM

 

New TIDM following the change of name

 

JAY

 

 

*assuming no options or warrants are exercised between the date of this document and Admission

 

 

 

PART I

 

LETTER FROM THE BOARD

 

1 Introduction

On 8 December 2015, the Company entered into a sale and purchase agreement to conditionally acquire a 60.37 per cent. stake in Bluejay Mining Limited, which holds the mineral resource exploration licence for the Pituffik Project. Following receipt of change of control consent from the Greenlandic authorities, the acquisition of this majority stake in Bluejay was completed on 8 March 2016.  Under the terms of the sale and purchase agreement the Company was also granted an option to acquire the remaining 39.63 per cent. of Bluejay by way of the issue of 108,071,388 new Ordinary Shares to the Bluejay Vendors, pro rata, to their respective holdings in Bluejay.

 

It is the intention of the Company to exercise the Bluejay Option which would result in FinnAust increasing its ownership of Bluejay and the Pituffik Project to 100 per cent. 

 

The issue by the Company of the Consideration Shares to the Bluejay Vendors pursuant to the Exercise of the Bluejay Option gives rise to certain considerations under the Takeover Code. The issue of the Consideration Shares to the Bluejay Vendors requires Independent Shareholder approval of the Waiver under Rule 9 of the Takeover Code. 

 

Approval of Shareholders other than Western Areas and the Bluejay Vendors is therefore being sought, by means of the Whitewash Resolution, to the Waiver, which the Panel has granted subject to such approval of the Independent Shareholders being obtained.

 

The purpose of this document is to provide Independent Shareholders with further details of the Waiver and the Exercise of the Bluejay Option.

 

Further details on the background to and terms of the Proposed Transaction are set out below.

 

2 Background to and reasons for the Exercise of the Bluejay Option

Bluejay is the 100 per cent. owner of the 150km2 high grade Pituffik titanium project located in North West Greenland. The Pituffik Project comprises three main exploration target areas across more than 80km of coastline historically proven to contain large and high-grade accumulations of primary ilmenite, with mining in Greenland envisaged to be achieved via a low capex dredging operation. 

 

The Company currently has an interest in 60.37 per cent. of the Pituffik Project via its existing shareholding in Bluejay. The Company was focused on developing the Pituffik Project throughout 2016 and it continues to be the Company’s primary focus. The Pituffik Project has demonstrated the potential to be a top percentile ilmenite project in terms of heavy mineral grade with the maiden mineral resource targeted to be published in the first quarter of 2017. FinnAust’s near term strategy for the Pituffik Project remains the delivery of a bulk sample during 2017 and larger scale production in 2018.

 

Roderick McIllree and Gregory Kuenzel, both Directors of FinnAust, are amongst the vendors of Bluejay. It is the opinion of the Board that the Exercise of the Bluejay Option by the Company will ensure Bluejay becomes a wholly owned subsidiary of the Company and will mitigate any potential future conflicts of interest which may arise as a result of Roderick McIllree’s and/or Gregory Kuenzel’s interest in Bluejay.

 

The Directors believe that FinnAust moving to 100% ownership of the Pituffik Project will provide certainty of title and remove any issues associated with joint venture partners.

 

The consideration for Bluejay was agreed in December 2015 with the number of new Ordinary Shares to be issued pursuant to the Exercise of the Bluejay Option agreed at the time the Company purchased its initial interest in 60.37 per cent. of Bluejay.

 

The recipients of a majority of the Consideration Shares, being the Bluejay Vendors, consist of board members or consultants of the Company and are the team members who are working to deliver the Pituffik Project. The issue of the Consideration Shares to these board members and senior managers is considered to further align management and Shareholders’ interests in increasing the value of the Pituffik Project due to their shareholdings in Bluejay and the Company.

 

If Bluejay had been fully consolidated into the Company’s accounts from 1 January 2015, the consolidated statement of income of the Group for the year ended 30 June 2016 would have shown an additional loss of £6,300 and revenue would have remained unchanged. There would be no change to FinnAust’s assets or liabilities as Bluejay is already controlled by FinnAust and therefore consolidated into the Group statement of financial position.

 

Since the publication of the final results for the year ended 30 June 2016 the following key events have taken place:

 

·    On 13 July 2016 the Company raised £500,000 via the issue and allotment of 10,000,000 new Ordinary Shares at 5 pence per share;

·    On 5 September 2016 the Group proposed to acquire 100% of Avannaa Exploration Limited (‘Avannaa’) for consideration of £500,000 to be paid via the issue and allotment of new Ordinary Shares, and on 5 January 2017 the Company successfully completed the acquisition of Avannaa and issued 7,584,238 new Ordinary Shares; and

·    On 8 December 2016 the Company raised £5,350,000, before expenses by the issue and allotment of 76,428,572 new Ordinary Shares at 7 pence per share.

 

3 Principal terms of the Bluejay Acquisition Agreement

On 8 December 2015, the Company entered into a sale and purchase agreement, pursuant to which it conditionally agreed to acquire 125,788 shares of no par value each in Bluejay representing an interest of 60.37 per cent. of Bluejay for a maximum purchase price of £905,607, based on a total maximum valuation of Bluejay of £1.5 million, to be satisfied by the issue of up to 164,655,885 new Ordinary Shares to the Bluejay Vendors, pro rata, to their respective holdings in Bluejay as follows:

 

(a)   the allotment and issue of the initial consideration shares, namely, 123,900,000 new Ordinary Shares on the satisfaction of the conditions (being the December 2015 Placing and obtaining the change of control consent from the Greenlandic authorities in respect of Bluejay in its capacity as the holder of the mineral exploration permit for the Pituffik Project) of the Initial Bluejay Acquisition, which occurred on 8 March 2016; and

(b)   the allotment and issue of the deferred consideration shares, namely, 40,755,885 new Ordinary Shares, subject to certain conditions (being grant of mineral exploration permit to Bluejay over the offshore Pituffik project area and the deferred shares not triggering a mandatory offer pursuant to Rule 9 of the Takeover Code), which occurred on 8 December 2016.

 

Under the terms of the Bluejay Acquisition Agreement, the Company was also granted an option by the Bluejay Vendors to acquire the remaining 39.63 per cent. of Bluejay for the sum of £594,393 to be satisfied by the issue of 108,071,388 new Ordinary Shares to the Bluejay Vendors, pro rata, to their respective holdings in Bluejay. The expiry date of the Bluejay Option is 8 March 2020.

 

It is the Company’s intention to exercise the Bluejay Option as soon as possible. However, the issue of the Consideration Shares to the Bluejay Vendors gives rise to certain considerations under the Takeover Code. Approval of Shareholders other than Western Areas and the Bluejay Vendors is therefore being sought, by means of the Whitewash Resolution, to a waiver of this offer obligation (the “Waiver”), which the Panel has granted subject to such approval of the Independent Shareholders being obtained.

 

The purpose of this document is to provide Independent Shareholders with further details of the Waiver and to explain why SP Angel considers that the Waiver is in the best interests of both the Company and the Independent Shareholders as a whole.

 

The Exercise of the Bluejay Option also constitutes a related party transaction as defined by the AIM Rules for Companies.

 

Further information in relation to these matters is set out below.

 

4 Takeover Code and Concert Party

The Takeover Code is issued and administered by the Panel. The Takeover Code applies to all takeover and merger transactions, however effected, where the offeree company is, inter alia, a listed or unlisted public company incorporated in the United Kingdom. The Company is such a company and Shareholders are entitled to the protections afforded by the Takeover Code.

 

Under Rule 9 of the Takeover Code, any person who acquires an interest (as defined in the Takeover Code) in shares which, taken together with shares in which he and persons acting in concert with him are already interested, carry 30 per cent. or more of the voting rights in a company which is subject to the Takeover Code is required to make a general offer to all the remaining shareholders to acquire their shares.

 

Similarly, when any person, together with persons acting in concert with him, is interested in shares which, in aggregate, carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights, a general offer will normally be required if any further interest in shares is acquired by any such person, or any person acting in concert with him, which increases the percentage of shares carrying voting rights in which he is interested.

 

An offer under Rule 9 must be made in cash (or with a full cash alternative) at a price not less than the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares of the company during the 12 months prior to the announcement of the offer.

 

Rule 9 of the Takeover Code further provides, amongst other things, that where any person who, together with persons acting in concert with him holds over 50 per cent. of the voting rights of a company, acquires an interest in shares which carry additional voting rights, then they will not be required to make a general offer to the other shareholders to acquire the balance of their shares.

 

Under the Takeover Code, a concert party arises where persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate to obtain or consolidate control (as defined below) of a company or to frustrate the successful outcome of an offer for a company. Control means holding, or aggregate holdings, of shares carrying 30 per cent. or more of the voting rights of the company, irrespective of whether the holding or holdings give de facto control.

 

As set out in the December 2015 Circular, the Panel determined that pursuant to the Initial Bluejay Acquisition, the Bluejay Vendors are acting in concert with each other and Western Areas is acting in concert with the Bluejay Vendors (the “Concert Party“).

 

As at the date of this document, Western Areas holds an interest in 138,611,112 Ordinary Shares representing 22.39 per cent. of the Existing Ordinary Shares and the Bluejay Vendors hold an interest in 163,190,336 Ordinary Shares representing 26.36 per cent. of the Existing Ordinary Shares. Therefore, in aggregate, the Concert Party is interested in 301,801,448 Ordinary Shares which represents 48.74 per cent of the voting rights of the Company.

 

A table which sets out the current interests, interests following completion of the Proposed Transaction and maximum potential interests in the ordinary share capital of the Company for each member of the Concert Party is set out in Part II of this document. 

 

Following completion of the Proposed Transaction, Western Areas will have an interest in 138,611,112 Ordinary Shares which will represent 19.06 per cent of the Enlarged Issued Share Capital and the Bluejay Vendors will have an interest in 271,261,724 Ordinary Shares which will represent 37.30 per cent of the Enlarged Issued Share Capital. Therefore, in aggregate, the Concert Party will be interested in 409,872,836 Ordinary Shares which will represent 56.36 per cent of the total voting rights of the Company.

 

Due to the Share Options, the maximum potential interest in the Company of the Bluejay Vendors is 275,111,724 Ordinary Shares, which would represent 37.63 per cent of the total voting rights of the Company. The maximum potential interest of the Concert Party is therefore 413,722,836 Ordinary Shares which would represent 56.59 per cent of the total voting rights of the Company.

 

The Bluejay Vendors, in aggregate, will have a maximum potential interest in more than 30 per cent. but less than 50 per cent. of the voting rights of the Company following completion of the Bluejay Acquisition. Each of the Bluejay Vendors will therefore be prevented from acquiring any Ordinary Shares, other than through the exercise of the Share Options, without incurring a further obligation under Rule 9 to make a general offer.

 

Shareholders should note that the Concert Party currently holds less than 50 per cent. of the voting rights of the Company. The Concert Party will hold over 50 per cent. of the voting rights of the Company when the Consideration Shares are issued. Following completion of the Bluejay Acquisition, the Bluejay Vendors will not be permitted to increase their maximum potential interests in the voting rights of the Company through or between a Rule 9 threshold without Panel consent. Western Areas will be able to increase its interests in the voting rights of the Company, but will not be permitted to cross the Rule 9 threshold (being 30 per cent or more of the voting rights) without Panel consent.

 

Further background information in relation to the Bluejay Vendors, Western Areas and the Waiver is set out in Part II of this document.

 

5 Related Party Transaction

The Exercise of the Bluejay Option constitutes a related party transaction as defined by the AIM Rules for Companies, due to the fact that two of the Bluejay Vendors, being Gregory Kuenzel and Roderick McIllree, are Directors of the Company. As a result of the Proposed Transaction Gregory Kuenzel will receive 15,147,257 of the Consideration Shares and Roderick McIllree will receive 37,477,556 of the Consideration Shares. In addition, Jeremy Whybrow, another Bluejay Vendor, has been a substantial shareholder of the Company in the last 12 months and he will receive 37,477,556 of the Consideration Shares.

 

Graham Marshall, Non-Executive Chairman of the Company is not deemed to be independent for the purpose of the Exercise of the Bluejay Option as he is also an employee of Western Areas. There is therefore, no independent director for the purpose of the related party transaction as defined by the AIM Rules.

 

The Company’s Nominated Adviser, SP Angel, considers that the terms of the Exercise of the Bluejay Option and the Bluejay Acquisition are fair and reasonable insofar as Shareholders are concerned.

                                                                                                                     

6 Change of Name

In order to better reflect the focus of the Company’s operations, it is proposed that the name of the Company be changed to Bluejay Mining plc. The new TIDM will be JAY. The change of name is conditional upon the Independent Shareholders approving the Proposed Transaction and Resolution 5 being passed by Shareholders at the General Meeting.

 

7 General Meeting

You will find at the end of this document a notice convening the General Meeting to be held at 10:00 a.m. on 10 March 2017 at The Washington Mayfair Hotel, 5 Curzon Street, London, W1J 5HE. The Resolutions to be proposed at the General Meeting are as follows:

Resolution 1 – Approval of the Proposed Transaction

This is an ordinary resolution proposing that the Exercise of the Bluejay Option by the Company (which constitutes a related party transaction as defined by the AIM Rules for Companies) be and is hereby approved and that the directors of the Company be and are hereby authorised to do all such things as any of them may consider necessary or desirable to implement the Exercise of the Bluejay Option.

 

Resolution 1 may only be voted on by Independent Shareholders.

 

Resolution 2 – Whitewash Resolution

This is an ordinary resolution to approve the Waiver granted by the Panel of the obligation that would otherwise arise on any of the Bluejay Vendors to make a general offer to Shareholders pursuant to Rule 9 of the Takeover Code as a result of the Exercise of the Bluejay Option, the issue of the Consideration Shares to the Bluejay Vendors and the exercise of Share Options.

 

Resolution 2 will be conducted by way of a poll and may only be voted on by Independent Shareholders.

 

Resolution 3 – Section 551 authority

This is an ordinary resolution authorising the directors to allot and issue new Ordinary Shares and grant rights to subscribe for such shares up an aggregate nominal value of £500,000. The authority will expire at the commencement of the next Annual General Meeting following this meeting or 31 December 2017, whichever is the earlier to occur. 

 

Resolution 4 – Section 570 authority and dis-application of Section 561(1)

This is a special resolution authorising the directors to issue equity securities wholly for cash on a non-pre-emptive basis pursuant to the authority conferred by resolution number 3 above.  This will allow the Board to allot shares without recourse to the Shareholders so that it can move quickly from time to time as it deems appropriate.  This authority will expire at the commencement of the next Annual General Meeting following this meeting or 31 December 2017, whichever is the earlier to occur.

 

Resolution 5 – Change of Name

This is a special resolution that, subject to the passing of Resolutions 1 and 2, proposes to change the name of the Company to Bluejay Mining plc.

 

8 Action to be taken

A Form of Proxy for use at the General Meeting is enclosed.  Please complete and sign the Form of Proxy and return it to the Company’s Registrars so as to arrive no later than 48 hours before the time fixed for the General Meeting. 

 

The return of the Form of Proxy will not, however, prevent you from attending the General Meeting and voting in person should you wish to do so.

 

9 Conflicts of interest

Certain Directors of the Company, namely Roderick McIllree and Gregory Kuenzel, are Bluejay Vendors and as such have a personal interest in the Exercise of the Bluejay Option. In addition, Graham Marshall Non-Executive Chairman is an employee of Western Areas, a member of the Concert Party and the Company’s current largest shareholder. As such Roderick McIllree, Gregory Kuenzel and Graham Marshall (the “Conflicted Directors”) are each deemed to have a conflict of interest with regard to the Proposed Transaction.

 

In accordance with Rule 25.2 of the Takeover Code the Conflicted Directors give no expression of their views on the Proposed Transaction.

 

10 Recommendation

SP Angel considers that the terms of the Proposed Transaction are fair and reasonable and in the best interests of the Shareholders and the Company as a whole. In providing this opinion, SP Angel has taken into account the Directors’ commercial assessment.

 

Accordingly, SP Angel recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.

 

Yours faithfully

 

 

Graham Marshall

Non-Executive Chairman

 

 

 

 

PART II

ADDITIONAL INFORMATION IN RELATION TO THE WAIVER

1          Background

Under the Takeover Code a concert party arises where persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate to obtain or consolidate control (as defined below) of a company or to frustrate the successful outcome of an offer for a company. Control means holding, or aggregate holdings, of shares carrying 30 per cent. or more of the voting rights of the company, irrespective of whether the holding or holdings give de facto control.

 

As set out in the December 2015    Circular, the Panel determined that pursuant to the Initial Bluejay Acquisition, the Bluejay Vendors are acting in concert with each other and Western Areas is acting in concert with the Bluejay Vendors. Together, Western Areas and the Bluejay Vendors are referred to as the “Concert Party”. 

 

Western Areas was previously the subject of a waiver granted in respect of Rule 9 and approved by Independent Shareholders on a poll at the general meeting held on 29 November 2013. At that time Western Areas held an interest in 67.8 per cent of the voting rights of the Company.

 

Furthermore, as stated in the December 2015 Circular there was no obligation under Rule 9 to make a general offer in respect of the issue of new Ordinary Shares to either Western Areas or the Bluejay Vendors pursuant to the December 2015 Placing nor the Initial Bluejay Acquisition, as at that time Western Areas had an interest in excess of 50 per cent. of the voting rights of FinnAust and the Concert Party retained an interest in excess of 50 per cent. of the voting rights of the Company following the completion of the December 2015 Placing and the Initial Bluejay Acquisition.

 

Western Areas held between 30 per cent. and 50 per cent. of the voting rights of the Company and the Bluejay Vendors held an interest in 29.99 per cent of the voting rights of the Company following completion of the December 2015 Placing and the Initial Bluejay Acquisition, therefore both Western Areas and the Bluejay Vendors were unable to increase their interests in the voting rights of the Company through or between a Rule 9 threshold without Panel consent.

 

As at the date of this document, Western Areas holds an interest in 138,611,112 Ordinary Shares representing 22.39 per cent. of the Existing Ordinary Shares and the Bluejay Vendors hold an interest in 163,190,336 Ordinary Shares representing 26.36 per cent. of the Existing Ordinary Shares. Therefore, in aggregate, the Concert Party is interested in 301,801,448 Ordinary Shares which represents 48.74 per cent of the voting rights of the Company.

 

On completion of the Exercise of the Bluejay Option the Consideration Shares will be issued to the Bluejay Vendors. This will result in the Bluejay Vendors being interested in 271,261,724 Ordinary Shares which will represent 37.30 per cent of the Enlarged Issued Share Capital and total voting rights of the Company. Therefore, in aggregate, the Concert Party will be interested in 409,872,836 Ordinary Shares which will represent 56.36 per cent of the total voting rights of the Company.

 

Due to the Share Options, the maximum potential interest in the Company of the Bluejay Vendors is 275,111,724 Ordinary Shares, which would represent 37.63 per cent of the voting rights of the Company. The maximum potential interest of the Concert Party therefore is 413,722,836 Ordinary Shares which would represent 56.59 per cent of the voting rights of the Company.

 

2          Current interests and maximum potential interests in the voting rights of the Company of the Concert Party

Details of the current interests, interests following completion of the Proposed Transaction and maximum potential interests in the ordinary share capital of the Company for each member of the Concert Party are set out in the table below:  

 

3          Waiver

The Company applied to the Panel for a waiver of Rule 9 of the Takeover Code in order to permit the Exercise of the Bluejay Option by the Board without triggering an obligation on the part of the Bluejay Vendors to make a general offer to Shareholders. The Panel has agreed, subject to the approval of Independent Shareholders on a poll vote, to waive the requirement for the Bluejay Vendors to make a general offer to all Shareholders where such an obligation would arise as a result of the issue of the Consideration Shares or the exercise of the Share Options.

 

4          Further details on the Bluejay Vendors

The current interests of each of the Bluejay Vendors in the share capital of Bluejay are set out in the table below along with the number of Consideration Shares that they will receive on completion of the Exercise of the Bluejay Option.

 

Name

Shareholding in Bluejay

Percentage shareholding in Bluejay

Number of consideration Shares (to be issued on a pro rata basis)

Shaun Bunn

8,740

4.19%

11,443,696

Gregory Kuenzel*

11,575

5.56%

15,147,257

Roderick McIllree*

28,630

13.74%

37,477,556

Garth Palmer

4,985

2.39%

6,525,323

Jeremy Whybrow

28,630

13.74%

37,477,556

TOTAL

82,560

39.63%*

108,071,388

 

*The remaining 60.37% of Bluejay (being 125,788 shares) is already owned by the Company.

 

Biographies for the Bluejay Vendors are set out below.

 

a.   Shaun Bunn

Mr. Bunn is a mining executive with over 30 years of experience in exploration, mining, processing and project development. Shaun has a BSc and GDip in Metallurgy from WA School of Mines, and an MBA from Deakin University. Shaun has managed mining projects through all stages of development, from grass roots exploration, feasibility studies, financing, construction, commissioning and operations.

 

b.   Gregory Kuenzel

Mr. Kuenzel is Non-Executive Director of the Company. He joined the Board of the Company on 30 June 2010. Greg holds a Bachelor of Business Degree and is an associate of the Institute of Chartered Accountants in England and Wales. Greg has many years of experience in providing accounting and corporate advice across various industry sectors including mining and resource development in the UK, USA and Australia. Greg is the Managing Director of AIM quoted Georgian Mining Corporation.

 

c.    Roderick McIllree

Mr. McIllree is the Managing Director of FinnAust. He joined the Board of the Company on 8 December 2015, having been appointed as non-board interim Chief Executive officer in July 2015. Rod has more than 20 years of experience operating in both the resources and financial sectors. Having worked initially as an exploration geologist for global mining houses he migrated to the financial / advisory side of the industry where he worked extensively as a mining analyst, then later as a corporate adviser to listed exploration and mining companies with projects across a broad spectrum of commodities and countries, including Greenland.

 

d.   Garth Palmer

Mr. Palmer is the Company Secretary of FinnAust. He holds a Bachelor of Commerce Degree and is a member of the Institute of Chartered Accountants in England & Wales. Garth began his career at Horwath Chartered Accountants in Perth (now part of BDO) in the audit and corporate services division before moving to KPMG’s audit and risk advisory team. Mr Palmer works with AIM quoted companies, predominantly within the mining and resources industries, providing corporate and financial consulting services. Garth is the Finance Director of AIM quoted SigmaRoc plc.

 

e.   Jeremy Whybrow

Mr. Whybrow holds a Bachelor degree from the Curtin University of Technology and has over 15 years of experience in the minerals industry. Jeremy has worked for companies such as Sons of Gwalia Ltd, PacMin Ltd, Teck Australia Ltd, Mount Edon Gold Mines Ltd and Croesus Mining NL. His experience was mainly in the operational environment and includes significant exposure to exploration and mining operations, project evaluation and feasibility studies. Jeremy also has extensive international exploration experience having worked in China, Africa and the Philippines as well as numerous localities in Australia. As a founding director of Greenland Minerals and Energy Ltd, Jeremy was instrumental in conducting the exploration programs that have seen the Kvanefjeld project in Greenland emerge as the world’s largest resource of rare earth elements.

 

5          Further information regarding Western Areas

Western Areas Limited, incorporated in Australia on 24 December 1999 with registered number 091049357, was listed on the Australian Securities Exchange in July 2000 and currently has a market capitalisation in excess of AUS$710 million. Its registered office is Level 2, 2 Kings Park Road, West Perth WA 6005, Australia. Western Areas is a leading Australian nickel producer. Production is built around two of the highest grade underground nickel mines in the world, Flying Fox and Spotted Quoll, both within Western Area’s Forrestania project area in Western Australia.

 

Western Areas is deemed to be acting in concert with the Bluejay Vendors.

 

6          Responsibility statements and consent

The Company accepts responsibility for the information contained in this document. To the best of the knowledge and belief of the Company, the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. 

 

The Conflicted Directors accept responsibility for the information contained in this document save for the Recommendation in paragraph 10 of Part I. To the best of the knowledge and belief of the Conflicted Directors (each of whom has taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. 

 

The Bluejay Vendors accept responsibility for the information relating to them contained in this document. To the best of the knowledge and belief of the Bluejay Vendors (each of whom has taken all reasonable care to ensure that such is the case), the information contained in this document for which the Bluejay Vendors are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.

 

Western Areas accepts responsibility for the information relating to it contained in this document. To the best of the knowledge and belief of Western Areas (which has taken all reasonable care to ensure that such is the case), the information contained in this document for which Western Areas is responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.

 

SP Angel Corporate Finance LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, has given and has not withdrawn its written consent to the issue of this document with the references to its name in the form and context in which they appear.

 

7          Intentions of the Concert Party

The Bluejay Vendors have each confirmed to the Company that they are not proposing, following any increase in their percentage interests in Ordinary Shares or voting rights as a result of the Proposed Transaction or any potential exercise of Share Options, to seek any change in the general nature of the Company’s business.

 

The Bluejay Vendors have also each confirmed that they have no intention to make any changes regarding the future of the Company’s business, the locations of the Company’s places of business and the continued employment of its employees and management (and those of its subsidiaries) as a result of any increase in their percentage interests in Ordinary Shares or voting rights as a result of the Proposed Transaction or any potential future exercise of Share Options nor will there be any redeployment of the fixed assets of the Company as a result of such an increase. The Bluejay Vendors intend that the Company remains quoted on AIM.

 

8          Interests and dealings in relevant securities

Definitions:

For the purpose of this paragraph:

acting in concert” has the meaning attributed to it in the Takeover Code;

“arrangement” includes any indemnity or option arrangements, and any agreement or understanding, formal or informal, of whatever nature, relating to relevant securities which may be an inducement to deal or refrain from dealing;

“connected person” has the meaning attributed to it in section 252 of the Companies Act 2006;

“control” means a holding, or aggregate holdings, of shares carrying 30 per cent. or more of the voting rights attributable to the share capital of a company which are currently exercisable at a general meeting, irrespective of whether the holding or aggregate holding gives de facto control;

dealing” or “dealt” includes the following:

the acquisition or disposal of relevant securities, of the right (whether conditional or absolute) to exercise or direct the exercise of voting rights attached to relevant securities, or of general control of relevant securities;

the taking, granting, acquisition, disposal, entering into, closing out, termination, exercise (by either party) or variation of an option (including a trade option contract) in respect of any relevant securities;

subscribing or agreeing to subscribe for relevant securities;

the exercise or conversion of any relevant securities carrying conversion or subscription rights (whether in respect of new or existing securities);

the acquisition of, disposal of, entering into, closing out, exercise (by either party) of any rights under, or variation of, a derivative referenced, directly or indirectly, to relevant securities;

entering into, terminating or varying the terms of any agreement to purchase or sell relevant securities; and

any other action resulting, or which may result, in an increase or decrease in the number of relevant securities in which a person is interested or in respect of which he has a short position;

derivative” includes any financial product whose value in whole or in part is determined directly or indirectly by reference to the price of an underlying security;

“disclosure date” means 17 February 2017, being the latest practicable date prior to the posting of this document;

“disclosure period” means the period commencing on 20 February 2016, being the date 12 months prior to the date of the posting of this document and ending on the disclosure date;

being “interested” in relevant securities includes where a person:

owns relevant securities;

has a right (whether conditional or absolute) to exercise or direct the exercise of the voting rights attaching to relevant securities or has general control of them;

by virtue of any agreement to purchase, option or derivative, has the right or option to acquire relevant securities or call for their delivery or is under an obligation to take delivery of them, whether the right, option or obligation is conditional or absolute and whether it is in the money or otherwise; or

is party to any derivative whose value is determined by reference to their price and which results, or may result, in his having a long position in them;

“relevant securities” includes:

shares and any other securities carrying voting rights;

equity share capital (or derivatives referenced thereto);

securities carrying conversion or subscription rights (including traded options);

“short position” means any short position (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative, agreement to sell or any delivery obligation or right to require any other person to purchase or take delivery.

 

The Concert Party’s interest in the Company at the disclosure date

 

As at the disclosure date, Western Areas holds an interest in 138,611,112 Ordinary Shares representing 22.39 per cent. of the Existing Ordinary Shares and the Bluejay Vendors hold an interest in 163,190,336 Ordinary Shares representing 26.36 per cent. of the Existing Ordinary Shares. In total, the Concert Party holds an interest in 301,801,448 Ordinary Shares representing 48.74 per cent. of the Existing Ordinary Shares as at the disclosure date.

 

Dealings in relevant securities

(a) The dealings by Bluejay Vendors in Ordinary Shares during the disclosure period were as follows:

 

Name

Description of dealing

No. of Ordinary Shares

Price per Ordinary Share

Date of transaction

Shaun Bunn

Issue of new Ordinary Shares by the Company as deferred consideration for the Initial Bluejay Acquisition in accordance with the terms of the Bluejay Acquisition Agreement

4,315,647

n/a

8 December 2016

Gregory Kuenzel

Issue of new Ordinary Shares by the Company as deferred consideration for the Initial Bluejay Acquisition in accordance with the terms of the Bluejay Acquisition Agreement

5,712,334

n/a

8 December 2016

Roderick McIllree

Issue of new Ordinary Shares by the Company as deferred consideration for the Initial Bluejay Acquisition in accordance with the terms of the Bluejay Acquisition Agreement

14,133,537

n/a

8 December 2016

Garth Palmer

Issue of new Ordinary Shares by the Company as deferred consideration for the Initial Bluejay Acquisition in accordance with the terms of the Bluejay Acquisition Agreement

2,460,830

n/a

8 December 2016

Jeremy Whybrow

Issue of new Ordinary Shares by the Company as deferred consideration for the Initial Bluejay Acquisition in accordance with the terms of the Bluejay Acquisition Agreement

14,133,537

n/a

8 December 2016

Shaun Bunn

On market disposal of Ordinary Shares

300,000

6.45 pence

19 September 2016

Shaun Bunn

On market disposal of Ordinary Shares

100,000

5.4 pence

18 August 2016

Shaun Bunn

On market disposal of Ordinary Shares

200,000

5.37 pence

17 August 2016

Shaun Bunn

Acquisition of new Ordinary Shares in a placing for cash

300,000

5.0 pence

13 July 2016

Shaun Bunn

On market disposal of Ordinary Shares

75,000

5.0 pence

26 May 2016

Shaun Bunn

On market disposal of Ordinary Shares

150,000

5.0 pence

25 May 2016

Shaun Bunn

On market disposal of Ordinary Shares

350,000

5.0 pence

24 May 2016

Jeremy Whybrow

On market disposal of Ordinary Shares

400,000

5.5 pence

17 May 2016

Garth Palmer

On market disposal of Ordinary Shares

100,000

5.25 pence

16 May 2016

Garth Palmer

On market disposal of Ordinary Shares

100,000

5.00 pence

13 May 2016

Garth Palmer

On market disposal of Ordinary Shares

150,000

3.90 pence

12 April 2016

Jeremy Whybrow

On market disposal of Ordinary Shares

300,000

3.8 pence

11 April 2016

Jeremy Whybrow

On market disposal of Ordinary Shares

300,000

3.52 pence

8 April 2016

Garth Palmer

On market disposal of Ordinary Shares

300,000

3.55 pence

8 April 2016

Jeremy Whybrow

Off market disposal of Ordinary Shares

3,125,000

2.0 pence

8 March 2016

Jeremy Whybrow

Off market disposal of Ordinary Shares

1,345,549

2.0 pence

8 March 2016

Jeremy Whybrow

Off market disposal of Ordinary Shares

250,000

2.0 pence

8 March 2016

Jeremy Whybrow

Off market disposal of Ordinary Shares

250,000

2.0 pence

8 March 2016

Shaun Bunn

Issue of new Ordinary Shares by the Company as consideration for the Initial Bluejay Acquisition in accordance with the terms of the Bluejay Acquisition Agreement

13,119,788

n/a

8 March 2016

Gregory Kuenzel

Issue of new Ordinary Shares by the Company as consideration for the Initial Bluejay Acquisition in accordance with the terms of the Bluejay Acquisition Agreement

17,365,791

n/a

8 March 2016

Roderick McIllree

Issue of new Ordinary Shares by the Company as consideration for the Initial Bluejay Acquisition in accordance with the terms of the Bluejay Acquisition Agreement

42,966,685

n/a

8 March 2016

Garth Palmer

Issue of new Ordinary Shares by the Company as consideration for the Initial Bluejay Acquisition in accordance with the terms of the Bluejay Acquisition Agreement

7,481,051

n/a

8 March 2016

Jeremy Whybrow

Issue of new Ordinary Shares by the Company as consideration for the Initial Bluejay Acquisition in accordance with the terms of the Bluejay Acquisition Agreement

42,966,685

n/a

8 March 2016

Shaun Bunn

Acquisition of new Ordinary Shares in a placing for cash

529,451

2.0 pence

8 March 2016

Jeremy Whybrow

Acquisition of new Ordinary Shares in a placing for cash

4,470,549

2.0 pence

8 March 2016

Jeremy Whybrow

Acquisition of new Ordinary Shares in a placing for cash

1,000,000

2.0 pence

4 March 2016

 

(b) The dealings by Western Areas in Ordinary Shares during the disclosure period were as follows:

Description of dealing

No. of Ordinary Shares

Price per Ordinary Share

Date of transaction

Disposal of Ordinary Shares by way of a vendor placing

45,000,000

7.0 pence

8 December 2016

Acquisition of new Ordinary Shares in a placing for cash

5,000,000

2.0 pence

8 March 2016

 

(c)  The dealings by SP Angel in Ordinary Shares during the disclosure period were as follows:

Description of dealing

No. of Ordinary Shares

Price per Ordinary Share

Date of transaction

Grant of warrants over Ordinary Shares exercisable at 7 pence per share until 14 December 2021.

2,165,357

n/a

8 December 2016

On market disposal of Ordinary Shares

1,584,244

4.54 pence

3 May 2016

Issue of new Ordinary Shares by the Company in lieu of fees due

481,928

2.075 pence

15 April 2016

Grant of warrants over Ordinary Shares exercisable at 2 pence per share until 15 April 2021.

625,000

n/a

15 April 2016

Issue of new Ordinary Shares by the Company in lieu of fees due

1,102,316

2 pence

4 March 2016

Grant of warrants over Ordinary Shares exercisable at 2 pence per share until 4 March 2017.

1,000,000

n/a

4 March 2016

Grant of warrants over Ordinary Shares exercisable at 4 pence per share until 4 March 2018.

1,000,000

n/a

4 March 2016

Grant of warrants over Ordinary Shares exercisable at 6 pence per share until 4 March 2019.

1,000,000

n/a

4 March 2016

 

As at the date of this document, SP Angel did not hold any Ordinary Shares, but has an interest in warrants to subscribe for Ordinary Shares as follows:

 

Grant date

Expiry date

Exercise price per Ordinary Share

No. of Ordinary Shares

4 March 2016

4 March 2017

2 pence

1,000,000

4 March 2016

4 March 2018

4 pence

1,000,000

4 March 2016

4 March 2019

6 pence

1,000,000

15 April 2016

15 April 2021

2 pence

625,000

8 December 2016

14 December 2021

7 pence

2,165,357

 

 

Save as disclosed in this document, as at the disclosure date, neither the Bluejay Vendors, their immediate families, any related trust and any connected persons and any persons acting in concert with the Bluejay Vendors (including, without limitation, Western Areas, any subsidiary or associated company of Western Areas or any pension fund of Western Areas or any of its subsidiaries or associated companies, any person whose investments are managed on a discretionary basis by a fund manager connected with the Bluejay Vendors, any connected adviser of the Bluejay Vendors and any person controlling, controlled or under the same control as such connected adviser) had any interest in or a right to subscribe for, or had any short position in relation to, any relevant FinnAust securities, nor had any such person dealt in any relevant FinnAust securities during the disclosure period.

 

Save as disclosed in this document, as at the disclosure date, neither the Bluejay Vendors, their immediate families or related trusts or anyone acting in concert with any of the Bluejay Vendors (including Western Areas) had borrowed or lent any relevant FinnAust securities (save for any borrowed shares which have either been on-lent or sold) or dealt in relevant securities during the disclosure period nor owns or is interested in any relevant securities (whether by interests, rights to subscribe or short positions).

 

Save as disclosed in this document, at the disclosure date:

none of the Directors (including any members of their respective immediate families, related trusts or connected persons) had any interest in or a right to subscribe for, or has any short positions in relation to any relevant securities of the Company;

no person acting in concert with the Company had any interest in, or right to subscribe for, or had any short position in relation to any relevant securities of the Company; and

none of the Directors (including any members of their respective immediate families, related trusts or connected persons) nor any person acting in concert with the Company nor the Company had borrowed or lent any relevant securities of the Company, save for any borrowed shares which have either been on-lent or sold.

 

Material contracts

The Bluejay Acquisition Agreement is the only material contract that has been entered into by the Company or its subsidiaries in the last two years. The material contract summary is given below.

 

On 8 December 2015, the Company entered into a sale and purchase agreement, pursuant to which it conditionally agreed to acquire 125,788 shares of no par value each in Bluejay representing an interest of 60.37 per cent. of Bluejay for a maximum purchase price of £905,607, based on a total maximum valuation of Bluejay of £1.5 million, to be satisfied by the issue of up to 164,655,885 new Ordinary Shares to the Bluejay Vendors, pro rata, to their respective holdings in Bluejay as follows:

 

(a)   the allotment and issue of the initial consideration shares, namely, 123,900,000 new Ordinary Shares on the satisfaction of the conditions (being the December 2015 Placing and obtaining the change of control consent from the Greenlandic authorities in respect of Bluejay in its capacity as the holder of the mineral exploration permit for the Pituffik Project) of the Initial Bluejay Acquisition, which occurred on 8 March 2016; and

(b)   the allotment and issue of the deferred consideration shares, namely, 40,755,885 new Ordinary Shares, subject to certain conditions (being grant of mineral exploration permit to Bluejay over the offshore Pituffik project area and the deferred shares not triggering a mandatory offer pursuant to Rule 9 of the Takeover Code), which occurred on 8 December 2016.

 

Under the terms of the Bluejay Acquisition Agreement, the Company was also granted an option by the Bluejay Vendors to acquire the remaining 39.63 per cent. of Bluejay for the sum of £594,393 to be satisfied by the issue of 108,071,388 new Ordinary Shares to the Bluejay Vendors, pro rata, to their respective holdings in Bluejay. The expiry date of the Bluejay Option is 8 March 2020.

 

Directors’ service contracts

A summary of the service contract entered into with the Company by each Director is set out below. None of the Directors’ service contracts have been amended in the last six months.

 

Graham Marshall

On 12 November 2013 the Company entered into a letter of appointment with Mr Marshall whereby he agreed to act as non-executive director of the Company for a nominal fee of £1 per annum terminable by either party giving two months’ prior written notice. There have been no subsequent changes to Mr Marshall’s terms of appointment.

 

Roderick McIllree

On 8 December 2015 the Company entered into a service agreement with Mr McIllree whereby he agreed to act as an executive director of the Company for a fee of £6,666.67 per calendar month terminable by either party giving six months’ prior written notice. There have been no subsequent changes to Mr McIllree’s service agreement.

 

Gregory Kuenzel

On 12 November 2013 the Company entered into a letter of appointment with Mr Kuenzel whereby he agreed to act as non-executive director of the Company for a fee of £1,000 per calendar month terminable by either party giving three months’ prior written notice. There have been no subsequent changes to Mr Kuenzel’s terms of appointment.

 

Additional disclosures required by the Takeover Code

Save as disclosed in this document, none of the Directors have any interest, direct or indirect, in any assets which have been or are proposed to be acquired or disposed of by, or leased to, the Company.

 

No agreement, arrangement or understanding (including any compensation arrangement) exists between the Bluejay Vendors or Western Areas and any of the Directors, recent directors, Shareholders or recent shareholders of the Company, or any person interested or recently interested in the Ordinary Shares, having any connection with or dependence upon the Proposed Transaction.

 

There is no agreement, arrangement or understanding whereby the legal and/or beneficial interest in any Ordinary Share held by or to be issued to any member of the the Concert Party pursuant to the Bluejay Acquisition or the future exercise of Share Options will be transferred to any other person.

 

In the event the Proposed Transaction is approved at the General Meeting, the members of the Concert Party will not be restricted from making an offer for the Company.

 

9          Middle market quotation

The following table sets out the closing middle market quotations for an Ordinary Share in FinnAust for the first business day of each of the six months immediately preceding the date of this document and for 17 February 2017 (being the latest practicable date prior to the publication of this document):

 

Date

Price per Ordinary Share (pence)

17 February 2017

7.625

1 February 2017

6.950

3 January 2017

7.075

1 December 2016

7.775

1 November 2016

6.450

3 October 2016

7.000

1 September 2016

5.125

Source: Bloomberg

 

10       Information incorporated by reference

Your attention is drawn to the following documents (or parts thereof) that are incorporated by reference into this document:

 

Information incorporated by reference

Document reference

Page number(s) in such document

Annual Report and Accounts for FinnAust Mining plc for the year ended 30 June 2016 (available for viewing on the FinnAust website at http://www.titanium.gl/documents/corporate-documents/160630-FinnAust-Mining-Plc-Accounts.pdf )

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the financial statements

Independent auditor’s opinion

15

16

14

17

19

20

13

Annual Report and Accounts for FinnAust Mining plc for the year ended 30 June 2015 (available for viewing on the FinnAust website at http://www.titanium.gl/documents/corporate-documents/FinnAustMiningPlcAccounts150630FINAL.pdf)

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the financial statements

Independent auditor’s opinion

13

14

12

15

17

18

11

 

 

Any Shareholder, person with information rights or other person to whom this document is sent may request a copy of each of the documents set out above in hard copy form. Hard copies will only be sent where valid requests are received from such persons. Requests for hard copies are to be submitted to the Company Secretary at the Company’s registered office, 47 Charles Street, London W1J 5EL or by calling +44 (0)203 006 0266. All valid requests will be dealt with as soon as possible and hard copies mailed by no later than two business days following such request.

 

The documents incorporated by reference into this document have been incorporated in compliance with Rule 24.15 of the Takeover Code. Except as set forth above, no other portion of these documents is incorporated by reference into this document.

 

11       Documents on display

Copies of the following documents will be available for inspection during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) at the offices of the Company, 47 Charles Street, London, W1J 5EL from the date of this document until one month following the date of the General Meeting.

 

(a) the Memorandum and Articles of the Company;

(b) the financial information on the Company referred to in paragraph 13 above;

(c) the service contracts and letters of appointment of each of the Directors;

(d) the written consent of SP Angel Corporate Finance LLP referred to in paragraph 6.5 above; and

(e) the Bluejay Acquisition Agreement.

 

These documents will also be available from the Company’s website www.finnaust.com.

 

 

PART III

PRINCIPAL RISKS AND UNCERTAINTIES

 

The risks and uncertainties described below are the material risk factors facing the Group which are currently known to the Directors and should be read in conjunction with the other information contained in this document.

 

Additional risks and uncertainties not presently known or currently deemed immaterial may also have a material adverse effect on the Group’s business, results of operations or financial condition. If any or a combination of the following risks materialise, the Group’s business, financial condition, operational performance and share price could be materially and adversely affected to the detriment of the Group and the Shareholders. No inference ought to be drawn as to the order in which the following risk factors are presented as to their relative importance or potential effect. The risks are not presented in any order of priority nor are they exhaustive.

 

No representation is or can be made as to the future performance of the Company and there can be no assurance that the Company will achieve its objectives.

 

Exploration risks

The exploration and mining business is controlled by a number of global factors, principally supply and demand which in turn is a key driver of global mineral prices; these factors are beyond the control of the Group. Exploration is a high-risk business and there can be no guarantee that any mineralisation discovered will result in proven and probable reserves or go on to be an operating mine. At every stage of the exploration process the projects are rigorously reviewed to determine if the results justify the next stage of exploration expenditure ensuring that funds are only applied to high priority targets.

 

The principal assets of the Group comprising the mineral exploration licences are subject to certain financial and legal commitments. If these commitments are not fulfilled the licences could be revoked. They are also subject to legislation defined by the Government; if this legislation is changed it could adversely affect the value of the Group’s assets.

 

Economically viable mining

The exploration and development of natural resources involves significant financial risks over a prolonged period of time, which even if there is a combination of careful evaluation, experience and knowledge may not be eliminated. While discovery of a natural resource may result in substantial rewards, few properties that are explored are ultimately developed into economically viable operating mines. Major expenditure may be required to establish reserves by drilling and in constructing mining and processing facilities at a site, and it is possible that even preliminary due diligence will show adverse results, leading to abandonment of projects. It is impossible to ensure that preliminary feasibility studies or definitive feasibility studies on the Group’s projects will result in a profitable mining operation.

 

Acquisition, retention and conversion of licences, permits and other regulatory approvals

The ability of the Group to develop and exploit natural resources depends on its continued compliance with the obligations of its current exploration rights and the Group’s ability to convert exploration opportunities into production and/or mining licences. The Group depends on licences whose grant and renewal are subject to the discretion of the relevant governmental authorities and cannot be assured.

 

Weather conditions

It may not be possible to fully insure against adverse weather conditions and should such events occur liabilities may arise which could reduce or eliminate any future profitability, result in increasing costs or the loss of the Group’s assets and a decline in the value of the Ordinary Shares.

 

Dependence on key personnel

The Group and Company is dependent upon its executive management team and various technical consultants. Whilst it has entered into contractual agreements with the aim of securing the services of these personnel, the retention of their services cannot be guaranteed. The development and success of the Group depends on its ability to recruit and retain high quality and experienced staff. The loss of the service of key personnel or the inability to attract additional qualified personnel as the Group grows could have an adverse effect on future business and financial conditions.

 

Uninsured risk

The Group, as a participant in exploration and development programmes, may become subject to liability for hazards that cannot be insured against or third party claims that exceed the insurance cover. The Group may also be disrupted by a variety of risks and hazards that are beyond control, including geological, geotechnical and seismic factors, environmental hazards, industrial accidents, occupation and health hazards and weather conditions or other acts of God.

 

Funding risk

The only sources of funding currently available to the Group are through the issue of additional equity capital in the parent company or through bringing in partners to fund exploration and development costs. The Company’s ability to raise further funds will depend on the success of the Group’s exploration activities and its investment strategy. The Company may not be successful in procuring funds on terms which are attractive and, if such funding is unavailable, the Group may be required to reduce the scope of its exploration and development activities or relinquish some of the exploration licences held for which it may incur fines or penalties.

 

Financial Risks

The Group’s operations expose it to a variety of financial risks that can include market risk (including foreign currency, price and interest rate risk), credit risk, and liquidity risk. The Group has a risk management programme in place that seeks to limit the adverse effects on the financial performance of the Group by monitoring levels of debt finance and the related finance costs. The Group does not use derivative financial instruments to manage interest rate costs.

 

Shareholding of the Concert Party

Should the Proposed Transaction be approved by Independent Shareholders, over 50 per cent. of the Enlarged Issued Share Capital will be controlled by the Concert Party. As long as the Concert Party owns a majority of the Ordinary Shares it will be able to, among other things, propose and pass without support from Independent Shareholders all ordinary resolutions of the Company including, but not limited to, the election and removal of directors, proposed amendments to the Articles, which govern the rights attaching to the Ordinary Shares, and approval of acquisitions or disposals of significant subsidiaries or assets or other significant corporate transactions required to be subject to majority shareholder consent. The Concert Party will also be able to control or exert significant influence on all of the Company’s policy decisions and its strategic direction. Independent Shareholders will benefit from minority shareholder protection to the extent prescribed under English law.

 

 

 

DEFINITIONS

 

The following words and expressions apply throughout this document unless the context requires otherwise:

 

“Admission”

admission of the Consideration Shares to trading on AIM becoming effective in accordance with the AIM Rules for Companies;

 

“Admission Document”

the Company’s AIM admission document dated 12 November 2013;

 

“AIM”

a market of that name operated by the London Stock Exchange;

 

“AIM Rules”

together, the AIM Rules for Companies (including the Note for Mining and Oil & Gas Companies) and the AIM Rules for Nominated Advisers;

 

“AIM Rules for Companies”

 

the AIM Rules for Companies published by the London Stock Exchange as amended from time to time;

 

“AIM Rules for Nominated Advisers”

 

the AIM Rules for Nominated Advisers published by the London Stock Exchange as amended from time to time;

 

“Articles”

 

the articles of association of the Company as at the date of this document;

 

“Bluejay”

 

Bluejay Mining Limited, a company incorporated in the British Virgin Islands with registered number 1662564;

 

“Bluejay Acquisition”

 

the proposed acquisition by the Company of 82,560 shares of no par value each representing an interest in 39.63 per cent. of Bluejay, which is not already owned by the Company;

 

“Bluejay Acquisition Agreement”

 

the sale and purchase agreement entered into on 8 December 2015 by the Company and the Bluejay Vendors setting out the terms of the acquisition of Bluejay;

 

“Bluejay Option”

 

the option granted to the Company pursuant to the terms of the Bluejay Acquisition Agreement whereby the Company was granted the right to acquire the remaining 39.63 per cent. of Bluejay that it does not already own from the Bluejay Vendors to be satisfied by the issue of the Consideration Shares;

 

“Bluejay Vendors”

the vendors of Bluejay, being Roderick McIllree, Jeremy Whybrow, Gregory Kuenzel, Garth Palmer and Shaun Bunn;

 

“Board” or “Directors”

the directors of the Company whose names are set out on page 2 of this document;

 

“Company” or “FinnAust”

FinnAust Mining plc, a company incorporated in England and Wales with registered number 05389216;

 

“Concert Party”

 

Western Areas and the Bluejay Vendors;

 

“Conflicted Directors”

certain directors of the Company, being Roderick McIllree, Gregory Kuenzel and Graham Marshall are deemed to have a conflict of interest for the purposes of the Takeover Code with regard to the Proposed Transaction;

 

“Consideration Shares”

 

108,071,388 new Ordinary Shares which will be issued to the Bluejay Vendors to satisfy the consideration due in respect of the Exercise of the Bluejay Option;

 

“December 2015 Placing”

 

the placing of new shares for cash undertaken by the Company in December 2015, which was conditional upon completion of the Initial Bluejay Acquisition, further details of which are set out in the circular dated 8 December 2015;

 

“Enlarged Issued Share Capital”

the issued ordinary share capital of the Company as enlarged by the issue of the Consideration Shares;

 

“Exercise of the Bluejay Option”

 

the proposed exercise of the Bluejay Option by the Company, which will result in the Bluejay Acquisition;

 

“Existing Ordinary Shares”

the 619,169,499 Ordinary Shares in issue at the date of this document;

 

“Form of Proxy”

the form of proxy for use by Shareholders in connection with the General Meeting, which is enclosed with this document;

 

“General Meeting”

the general meeting of the Company which is to be held at 10:00 a.m. on 10 March 2017 at The Washington Mayfair Hotel, 5 Curzon Street, London, W1J 5HE, notice of which is set out at the end of this document;

 

“Group”

 

the Company and its subsidiaries;

“Independent Shareholders”

 

the Shareholders other than the Bluejay Vendors and Western Areas;

 

“Initial Bluejay Acquisition”

 

the acquisition by the Company of 125,788 Bluejay shares of no par value each representing an interest in 60.37 per cent. of Bluejay, which completed on 8 March 2016;

 

“London Stock Exchange”

 

the London Stock Exchange plc;

“Notice of General Meeting”

 

the notice of the General Meeting, which begins on page 35 of this document;

 

“Ordinary Shares”

 

ordinary shares of 0.01 pence each in the capital of the Company;

 

“Panel”

the UK Panel on Takeovers and Mergers;

 

“Pituffik Mineral Exploration Permit”

 

the exploration licence held by Bluejay with licence number 2015/08 which covers an area of approximately 150 square kilometres (including the expansion granted by the Self Rule Government of Greenland in July 2016 to cover the shallow marine environment);

 

“Pituffik Project”

 

the mineral resource exploration project covered by the Pituffik Mineral Exploration Permit, south of Qaanaaq in North West Greenland;

 

“Proposed Transaction”

together, the Exercise of the Bluejay Option, the Bluejay Acquisition and the Waiver;

 

“Resolutions”

the resolutions to be proposed at the General Meeting as set out in the Notice of General Meeting;

 

“Rule 3”

 

rule 3 of the Takeover Code;

“Rule 9”

rule 9 of the Takeover Code;

 

“Share Options”

 

options to acquire Ordinary Shares previously granted by the Company to Gregory Kuenzel and Garth Palmer;

 

“Shareholder(s)”

holders of Ordinary Shares;

 

“SP Angel”

 

SP Angel Corporate Finance LLP, the Rule 3 adviser and nominated adviser and broker to the Company;

 

“Takeover Code”

the UK City Code on Takeovers and Mergers (as amended from time to time); and

 

“TIDM”

 

tradeable instrument display mnemonic;

“Waiver”

 

the waiver which has been granted by the Panel, conditional upon the approval by the Independent Shareholders of the Whitewash Resolution on a poll, of the obligations to make a mandatory offer for the entire issued and to be issued share capital of the Company not already held by the Concert Party which might otherwise be imposed on the Concert Party under Rule 9, as a result of the issue of the Consideration Shares to the Bluejay Vendors pursuant to the Exercise of the Bluejay Option;

 

“Western Areas”

Western Areas Limited, a company incorporated in Australia with registered number 091049357; and

 

“Whitewash Resolution”

 

Resolution 2 set out in the Notice of General Meeting, which relates to the Waiver.

 

 

Letter to Shareholders

Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining

20 February 2017
Vast Resources plc

(“Vast” or the “Company”)

Letter to Shareholders

Vast Resources plc, the AIM listed mining company with operations in Romania and Zimbabwe, is pleased to announce that a letter to shareholders has been posted on the Company’s website at www.vastresourcesplc.com. 

The purpose of the letter to shareholders is to introduce a new programme of shareholder communication and to highlight the benefit of recent developments to new and existing investors.

OVERVIEW

  • The recent strategic investment by the SSCG Africa Holdings Ltd group (“SSA”), providing gross proceeds of US$8 million to Vast as announced on 30 January 2017, has fundamentally changed the Company

     

  • The Board foresee that Vast is now fully-funded through to positive cash flow* at the Manaila Polymetallic Mine (“Manaila”) and the Baita Plai Polymetallic Mine (“Baita Plai”), once the relevant licence is granted

     

  • The Board see that there is no current need to issue new equity during 2017

     

  • 2017 to be punctuated with regular operational developments charting progress across the Company’s portfolio of interests

     

  • To reflect the evolving investment proposition of Vast, and to ensure all shareholders are communicated with in a professional manner, the Board are launching a new Vast communications programme

     

  • The communications programme is intended to deliver regular and reliable news flow, in addition to providing shareholders with established channels through which to ask questions, raise concerns and provide feedback

* when all conditions precedent have been fulfilled and all the cash is received from SSA

A text only version of the letter to shareholders is copied below for shareholders’ reference:

Dear Vast Shareholder,

Although only in our second month of the year, 2017 has already been an active and exciting year for Vast. The strategic investment by the SSCG Africa Holdings Ltd group has fundamentally reshaped the near-term outlook for the Company, and for this reason I wanted to provide shareholders with a better sense of where I believe Vast is headed over the course of the year.

A New Phase of Growth.

In my statement on 30 January, I advised you that the SSA transaction “heralds a new phase of growth for Vast” – I strongly believe this to be true and in this letter I want to provide context and colour around this statement.

In addition to removing the concerns of shareholders regarding emergency equity raisings, the capital derived from the SSA transaction provides shareholders with comfort that Vast is now positioned to achieve positive cash flow at Manaila and Baita Plai (once the necessary licence is granted) without further equity raises.   Any future fund raising activities will need to be demonstrably beneficial to shareholders and the growth of the Company, therefore shielding investors to unnecessary or value destructive dilution.  I know that further dilution has been a primary concern for many long-term holders, so I want to be clear when I say that the Board’s primary focus is on building a business which offers shareholders material value increases in the long-term through sustainable and organic growth.

As longer term shareholders will be aware, Vast has not always had this level of security over finance, and the Company agreed to two equity draw down facilities in 2016.  Not only did these facilities create significant dilution in the year, but it is my belief that the market perceives that an overhang, derived from these two facilities, persists which is curbing the progression of the share price.  After detailed shareholder analysis by our registrar, I can confirm that these two entities hold no residual holdings in Vast stock and I am therefore confident that neither party represents a threat to the progress of the share price henceforth.  One of these parties does have 50,000,000 warrants exercisable at 0.4p which expire in October 2019, which only represent just over 1% of the currently issued share capital of the Company.

Professional & Reliable Communication.

The appointment of our new nominated adviser last month, together with our reinvigorated investment case post-SSA transaction, has prompted us and our advisory group to introduce a new investor communication programme, which is aimed at giving shareholders frequent and reliable news flow combined with regular access to the Board and management.

In addition to our regulatory announcement responsibilities, Vast will continue to report quarterly operational activity by way of a quarterly production report.  In the past, Vast has reported on various financial aspects relating to each operation, and the complexity of this has made subscribing to a strict reporting calendar difficult.  In order to resolve this, Vast will publish production figures only and these will be issued to the market within four weeks of the end of the period.  The Board and its advisers believe that this will be a more useful tool in keeping investors abreast of developments – rather than waiting up to ten weeks for all the relevant information to be approved by the appropriate parties.  The Company will of course continue to issue all financial results, including production and financial operating data for each mine, in its half-yearly report and annual audited accounts.  The financial details will however be disclosed in the next quarterly report, due to be announced on Tuesday 21 February, as adequate time has elapsed for these to be accurately calculated.

The Board would also like to introduce a rationalised structure for ad hoc communication between the directors, management and shareholders.  This investor relations policy will include the following:

  • Quarterly shareholder conference calls: details of which will be found in the Quarterly Production Reports announced to the market – during the call, shareholders will have the opportunity to ask questions via an online chat function.  Shareholders can also submit questions to the Board via email in advance of the call to St Brides Partners at shareholderenquiries@stbridespartners.co.uk.  The first shareholder call will be held in conjunction with the release of the next quarterly production report scheduled on Tuesday 21 February.

  • Q & A documents: shareholders will be invited to email questions to the Board which will be accumulated into Q & A documents and regularly posted on the Vast website and announced to the market – please send any questions through to St Brides Partners who will be compiling this on behalf of the Company (shareholderenquiries@stbridespartners.co.uk).

  • Private Investor Events: new and existing shareholders will be invited to exclusive Vast Investor Evenings where members of the Board will provide a presentation and be available to answer questions.  The first of these evenings will be announced to the market shortly.

A Final Word.

After 18 months of challenging times for Vast shareholders, we intend to rebuild credibility, trust and excitement in the Vast investment proposition for the benefit of all stakeholders.  I am confident that over the course of 2017, when combined with the continued operational turnaround in Romania, this will be achieved.

Whilst the Board and its advisers continue to monitor the share price constantly, it is the Board’s responsibility to build the business, which ultimately should be reflected in the share price moving forward.  The Company’s advisers will be active in communicating the progress on the ground within the investment community.  All parties concerned, be they directors, managers or advisers, are fully committed and aligned with the success of Vast and we are focussed on establishing a significant, profitable and sustainable mining company with a robust communications strategy moving forward.

Brian Moritz
Chairman

**ENDS**

For further information, visit www.vastresourcesplc.com or please contact:

Vast Resources plc

Roy Pitchford (Chief Executive Officer)
 

+44 (0) 20 7236 1177

 

Beaumont Cornish – Financial & Nominated Adviser 

Roland Cornish 

James Biddle
www.beaumontcornish.com

+44 (0) 20 7628 3396
Brandon Hill Capital Ltd – Joint Broker

Jonathan Evans
www.brandonhillcapital.com
+44 (0) 20 3463 5016
Peterhouse Corporate Finance Ltd – Joint Broker 

Duncan Vasey
www.pcorpfin.com
 +44 (0) 20 7469 0936

 

St Brides Partners Ltd

Susie Geliher

Charlotte Page
www.stbridespartners.co.uk 

+44 (0) 20 7236 1177

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (“MAR”).

**ENDS**

Notes

Vast Resources plc is an AIM listed mining and resource development company focussed on the rapid advancement of high quality brownfield projects and recommencing production at previously producing mines in Romania.

Vast Resources currently operates the Manaila Polymetallic Mine in Romania, which was commissioned in 2015.  The Company’s portfolio also includes the Baita Plai Polymetallic Mine in Romania, where work is currently underway towards obtaining the relevant permissions to start developing and ultimately commissioning the mine.

The Company also has interests in a number of projects in Southern Africa including a 25 per cent. interest in the producing Pickstone-Peerless Gold Mine in Zimbabwe.


This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Vast Resources plc via Globenewswire


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Letter to Shareholders – RNS