TIDMSLP TIDMMRG
RNS Number : 8889Y
Sylvania Platinum Limited
07 March 2012
Sylvania Platinum Limited
("Sylvania Platinum", "Sylvania" or the "Company")
(ASX: SLP, AIM: SLP)
Conditional agreement entered into for disposal of Bushveld
Magnetite Iron Ore Assets
Further to the Company's announcement of 27 February 2012
regarding its intention to dispose of its iron ore assets, located
on the Bushveld complex, South Africa("Iron Ore Assets"), the
Directors are pleased to announce that the Company has entered into
a legally binding conditional agreement with Mercury Recycling
Group Plc ("Mercury"), which is traded on the AIM Market of the
London Stock Exchange ("AIM"), pursuant to which Mercury will
acquire the Iron Ore Assets for approximately GBP13.7 million by
issuing 203,022,285 fully paid ordinary shares in Mercury
("Consideration Shares") to Sylvania (the "SPA"). The Iron Ore
Assets consist of interests in prospecting rights and future mining
rights in the Northern Lobe of the Bushveld Complex north of
Mokopane, South Africa.
In addition, Mercury intends to carry out a placing of new
ordinary shares (the "Placing"). The proceeds from the Placing
would be used to fund the development of the Iron Ore Assets and
for general working capital requirements.
As previously noted, the Consideration Shares will be
distributed to Sylvania shareholders as a dividend in specie,
unless the distribution would result in a Sylvania shareholder
holding a small number of Consideration Shares, in which case those
Mercury shares will be sold for the benefit of the Sylvania
shareholder. Upon such distribution, Sylvania shareholders will
hold approximately 85% of the issued share capital of Mercury prior
to the issue of any shares pursuant to the Placing.
Further details of the SPA are set out below.
Consideration and value
Subject to satisfaction of the various conditions precedent set
out in the SPA (detailed further below), Sylvania will sell to
Mercury all of the shares in the capital of a holding company being
established to hold the Iron Ore Assets. Whilst the Iron Ore Assets
are currently held by wholly-owned subsidiaries of the Company, it
is intended that a restructure will occur prior to completion under
the SPA whereby the Iron Ore Assets will be transferred to a
separate holding company.
The consideration for the sale and purchase of the Iron Ore
Assets will be the payment by Mercury to Sylvania of the aggregate
sum of approximately GBP13.7 million which is to be satisfied by
the issue to Sylvania (or as it directs) of 203,022,285
Consideration Shares. The Consideration Shares are being issued at
a deemed issue price of 6.75 pence, being the closing price of
Mercury shares on AIM on 6 March 2012.
Mercury will distribute the Consideration Shares directly to
Sylvania shareholders pro rata to their shareholdings in Sylvania.
In the case of Sylvania shareholders entitled to a small number of
Consideration Shares, the Consideration Shares will be sold for the
benefit of such shareholders. The Consideration Shares will rank
pari passu in all respects with Mercury's existing ordinary shares
admitted to trading on AIM. It is a condition of the SPA that the
Consideration Shares are admitted to trading on AIM from the date
of allotment.
Conditions precedent
The acquisition of the Iron Ore Assets will constitute a reverse
takeover for Mercury under Rule 14 of the AIM Rules for Companies
and is therefore conditional upon the approval of Mercury's
shareholders at a general meeting (the "General Meeting"). An
admission document (the "Admission Document") giving details of the
proposals and incorporating a notice convening a General Meeting
will be posted to Mercury shareholders in due course.
The SPA is conditional upon the fulfilment of certain conditions
including, inter alia:
-- completion of certain outstanding due diligence by Mercury in
relation to the Iron Ore Assets and no material adverse matters
arising prior to the posting of the Admission Document;
-- completion of certain outstanding due diligence by Sylvania
in relation to Mercury and no material adverse matters arising
prior to the posting of the Admission Document;
-- as noted above, completion of the restructuring of the
corporate group currently holding the Iron Ore Assets; and
-- approval by Mercury shareholders and re-admission of the
enlarged Mercury Group to trading on AIM.
The Admission Document is expected to be posted before the end
of April 2012 with the General Meeting to be convened on 14 clear
days' notice thereafter. The SPA contemplates that completion of
the sale and purchase of the Iron Ore Assets will occur no later
than 30 May 2012 (or such later date as agreed between the
parties).
Board appointments to Mercury
Pursuant to the SPA both Terry McConnachie (CEO of Sylvania) and
Peter Cox (CEO of Iron Ore Assets) will be appointed as directors
of Mercury upon completion of the acquisition of the Iron Ore
Assets. Peter Cox will become CEO of Mercury following the sale of
the Iron Ore Assets and Terry McConnachie will serve as a
non-executive director of Mercury.
Mercury
Mercury operates under a Pollution Prevention and Control
licence from the Government Environment Agency, and is the UK's
leading recycler of fluorescent tubes, street lighting and other
discharge lamp types, together with mercury bearing waste streams
such as dental amalgam and thermometers. In 2011, Mercury expanded
its operations to include the collection, sorting and export of
batteries for recycling. Mercury operates out of a single site in
Manchester, which is currently one of the largest lamp recycling
facilities in Europe.
Iron Ore Assets
The Iron Ore Assets, located on the Bushveld complex, South
Africa, are currently held in the Company's wholly-owned
subsidiaries, SA Metals Pty Ltd (formerly Pan Palladium Limited)
("SA Metals") and Great Australian Resources Ltd ("GAU") which were
acquired by the Company in September 2009 and October 2009
respectively. As set out in the Company's announcement of 8 July
2011, the Company identified magnetite iron ore across the Northern
Lobe of the Bushveld Complex during its regional exploration
programme and, following a strategic review, proposed to dispose of
these in order to focus on its PGM operations and interests.
Over the period since its set up in July 2011 to 31 December
2011, the corporate entity holding the Iron Ore Assets has incurred
a loss of approximately US$15,044.
Future plans for Sylvania
During the course of the previous 18 months, Sylvania has
undertaken a major strategic review to position the Company for the
next stage in its production growth.
The Directors believe that the sale of the Iron Ore Assets will
allow Sylvania to fully focus on reaching its 2013 financial year
production target of 60,000 ounces which includes:
-- successful optimisation of two existing plants, Lannex and Mooinooi; and
-- the development of the Company's seventh plant, Tweefontein
(due to commence production during the next six months).
Sylvania also expects to make significant progress at its
Northern Limb near surface PGM and base metal operations during the
next 12 months. The Company intends to expand its low cost
production portfolio by developing shallow, open pit mines on the
Northern Limb and treat low grade material using existing
technologies to create a PGM product that can be sold to existing
refineries with a base metals credit.
Commenting on the disposal of the Iron Ore Assets Terry
McConnachie, CEO of Sylvania Platinum, said: "The disposal of the
Iron Ore Assets will allow Sylvania to remain a focused low-cost
platinum company, while allowing the Sylvania shareholders to
retain an interest in these assets."
Ends
CORPORATE INFORMATION
Registered office: Sylvania Platinum Limited
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
Postal address: PO Box 524
Wembley WA 6913
Australia
CONTACT DETAILS
For further information please contact:
South Africa Australia
Terence McConnachie (CEO) Richard Rossiter (Chairman)
Sylvania Platinum Limited Sylvania Platinum Limited
+27 (11) 673 1171 +61 (4) 1868 8338
Louis Carroll Grant Button
(Director/Assistant Company Secretary) (Director/Assistant Company Secretary)
Sylvania Platinum Limited Sylvania Platinum Limited
+44 (0) 7969 170 622 +61 (8) 9226 4777
United Kingdom Communications
Nominated Adviser Beth Harris
Ambrian Partners Limited Threadneedle Communications
Samantha Harrison/Gillian +44 (0) 20 7653 9855
Atkins
+44 (0) 20 7634 4700
Broker
RBC Europe Limited
Martin Eales/James Kelly
+44 (0) 20 7653 4000
Sylvania Website: www.sylvaniaplatinum.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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