NKR Nikanor

RNS Number:6715W
Nikanor Plc
16 May 2007

                                                             London, 16 May 2007


Update for shareholders


Background

On 2 May 2007, the Company announced it had received a preliminary approach
concerning a possible offer for the Company. It also announced it had received
expressions of interest from other parties and that it was adjourning the
extraordinary general meeting scheduled for 3 May 2007 until 16 May 2007.

On 15 May 2007, after market close, the Company received a non-binding
indicative proposal in the form of a letter from a special purpose vehicle,
Cosaf Limited ("Cosaf"), whose shareholders will be:

   * the three existing major shareholders of the Company (Oakey Invest
    Holdings Inc., Pitchley Properties Limited and New Horizon Minerals Limited
    (collectively, the "Major Shareholders"), who together own, in aggregate,
    approximately 72% of the existing issued share capital of Nikanor); and
   * two entities wholly owned by RP Capital Partners Cayman Islands Limited
    and Glencore International AG, respectively.


The non-binding indicative proposal

Cosaf has indicated in its proposal that it would make an offer of 600 pence in
cash for each issued and to be issued ordinary share in the Company, a price
equal to the IPO offer price as established in July 2006. According to the
proposal, any such offer would be subject to the pre-conditions set out below:

   * satisfactory completion of a limited due diligence review by Cosaf;
   * a unanimous recommendation of the offer by the independent directors to
    Nikanor's shareholders;
   * irrevocable undertakings from the directors of Nikanor to tender their
    shares to the offer;
   * the finalisation of transaction documentation generally; and
   * the Company agreeing not to solicit, directly or indirectly, any
    alternative offer from any other party for a period of 30 days from the time
    of receipt of the proposal; and
   * a request to adjourn today's extraordinary general meeting ("EGM") until
    further notice.


In addition, the proposal states that any such offer would be subject to terms
and conditions of the sort customary for a take-over offer for the shares in a
public company.

The proposal clarifies that it does not constitute an offer nor an intention or
obligation to make an offer. Cosaf also states that it would expect to be in a
position to make a formal offer announcement for the Company shortly following
completion of (i) the limited due diligence review (estimated to take a few
days) and (ii) the satisfaction of the other pre-conditions referred to above.

Cosaf also requested that the details of its proposal remain confidential and
that it reserves the right to terminate discussions immediately and without any
obligation in the event that such confidentiality is breached. However, the
Company regards the terms of this proposal, including the identity of the
parties involved, to be material and recognises its obligations under the AIM
rules which require it to disclose all material non-public, price sensitive
information without delay.


Update on project cost review

Further to the Company's preliminary results announcement dated 30 March 2007,
the Company engaged, at the end of March, SRK, an independent consultant, to
review and, where possible, reduce the capital and related working capital costs
of the project. The Company currently expects that this review will be completed
within the next 10 days and the summary of SRK's findings will be published as
soon as they are finalised.


Update on the proxy vote in relation to today's EGM

In advance of today's EGM, the Company announces that it has received the
following proxy votes. In total, 41 proxies were validly received in advance of
the meeting, of which 20.5 million shares were cast in favour of the proposed
resolutions (99.5% of all proxies received), and 0.1 million shares were cast
against the resolutions (0.5%). For the avoidance of doubt, this excludes any
votes that may be cast in person at the proposed EGM and no proxies were
received from the Company's Major Shareholders.

By way of reminder, the proposed resolutions envisage (i) authorising the
Directors of the Company to allot the entire authorised but unissued share
capital of the Company, (ii) the dis-application of pre-emption rights, as well
as (iii) the waiving of certain requirements contained in the Company's articles
of association in relation to the subscription of new shares by the Major
Shareholders. As previously stated, the Directors continue to believe that the
proposed resolutions are in the best interests of the Company and its
shareholders as a whole.


Response from the Unconnected Directors

The Board excluding those directors representing the Major Shareholders (the
"Unconnected Directors") consider that the non-binding indicative proposal from
Cosaf does not reflect the true value of the Company.

The Unconnected Directors believe that it is in the interest of the Company and
its shareholders as a whole to ensure that today's EGM goes ahead as planned; in
line with previous statements made by the Company, the passing of the proposed
resolutions will be an important step to provide the Company with (i)
flexibility to obtain the funding it needs as required, and (ii) with the
opportunity to ensure that the project can continue to be implemented according
to schedule. The Unconnected Directors consider that any delay in raising
additional capital beyond the previously envisaged timetable increases the risk
of delaying the project.

These resolutions do not commit the Company to launch any capital raising and,
as disclosed previously, the Company's Major Shareholders have requested that
the Directors consult with them before exercising the authorities granted
pursuant to these resolutions. The Unconnected Directors, herewith, confirm that
the Board indeed intends to consult with the Major Shareholders before doing so.
The Unconnected Directors herewith also again confirm that they would not use
these authorities otherwise than in the best interests of the Company and the
Shareholders as a whole and that the Board would only use these authorities in
connection with, or incidentally to, satisfying the Company's current funding
requirements, as described in the Company's results announcement of 30 March
2007.

The Company has had preliminary discussions with a number of third parties in
relation to potential strategic initiatives and the Unconnected Directors
confirm that the Board continues to be willing to consider approaches from Cosaf
or other third parties that may be in the best interests of the Company and all
of its shareholders.


- ends -



For further information, please contact:


Nikanor PLC                                           +44 (0)20 7529 5800
Jonathan Leslie, Executive Chairman
Peter Sydney-Smith, Finance Director
Richard Boorman, Head of Investor Relations


JPMorgan Cazenove                                     +44 (0)20 7588 2828
Ian Hannam
Adam Brett
Robert Stafler


Merlin PR                                             +44 (0)20 7653 6620
David Simonson
Tom Randell



Notes to Editors

Nikanor is a mining group which owns assets in the heart of the African
copperbelt in the Democratic Republic of Congo. The group's key mine is KOV,
containing one of the world's largest high quality copper and cobalt ore bodies.
Nikanor is rehabilitating this proven and well documented brownfield site and
building a major state of the art refining plant to produce 250,000 tonnes per
year of LME A-grade copper cathode and 27,500 tonnes per year of cobalt
products.


Nikanor was admitted to the London Stock Exchange (AIM) on 17 July 2006.



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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