RNS Number:6617S
Gold Mines Of Sardinia PLC
01 December 2003
Gold Mines of Sardinia plc
("GMS") or ("the Company")
Proposed Business Combination with Full Riches Investments Ltd
Proposed Capital Reduction
Proposed Distribution
Notice of Extraordinary General Meeting
A circular containing full details of the Business Combination and other matters
has been posted to shareholders.
*Pursuant to the announcement of 8 October 2003, GMS has agreed, subject
to shareholder approval, to complete a business combination with Full Riches
Investments Ltd ("FRI"), a public company listed on the Toronto Stock
Exchange Venture Exchange ('TSX Venture') which is currently in a fund
raising process, as follows:
*the transfer of shares in the Company's principal subsidiary, GMS
Australia, which holds the Group's main asset being its 90% interest in
Sardinia Gold Mining S.p.A, into a new Canadian subsidiary of the Company,
GMS Canco;
*GMS Canco will combine with FRI to form NewCo, to be renamed Medoro
Resources Ltd
*NewCo will issue 50% of its common shares on a fully diluted basis to GMS
shareholders and the remaining 50% to FRI shareholders;
*post completion shareholders will receive one NewCo common share for
every 7.0844 ordinary GMS shares held by them on completion; and
*admission of the shares in NewCo to trading on AIM
(together the "Proposals")
*It is a condition that, by Completion, FRI shall have raised Cdn$10m
(gross) in equity financing in cash (approx #4.5m), for the future
exploration and development costs and general working capital requirements
of NewCo.
*FRI is currently in a fund-raising process. It has announced a
fundraising of Cdn$4m (gross) (approximately #1.8m) of which Cdn$2.5m
(approximately #1.1m) has already been completed with the balance expected
to be completed shortly after the date of posting of the circular to FRI
shareholders, which is expected to be 28 November 2003, and is seeking to
raise a further Cdn$8m (gross) (approximately #3.6m) via a second placing.
*NewCo will be incorporated in the Yukon Territory, Canada, with its
shares quoted on the TSX Venture.
*NewCo will also seek admission of its shares to trading on AIM and an AIM
Admission Document will be posted to shareholders in the New Year.
*NewCo directors will include Serafino Iacono - Chairman and CEO of
Bolivar Gold Corp ("Bolivar"), a key joint venture partner in GMS's Monte
Ollasteddu project.
*Completion of the Amalgamation Agreement is also subject to the execution
and delivery by FRI of a joint venture agreement relating to the
exploration, development and/or operation of properties to be acquired by
NewCo, with a third party, having the appropriate mining expertise and
financial capacity.
*The Board believes that the Amalgamation will not only provide necessary
funding for the Company but also significant technical, cultural and
political knowledge and experience to the management of the Group's
operations - new senior management of NewCo will be expected to commit to
provide these areas of expertise to NewCo for at least 2 years.
*Shareholders will be invited to vote on the Proposals at the EGM. In the
event that the Shareholders do not approve the Proposals and/or completion
does not occur by 1 March 2004, FRI has the option either to require
repayment of the Interim Finance of US$1,500,000 within 90 days, or to enter
into an option and joint venture with the Company to explore and develop
those parts of the Company's properties in Sardinia not already covered by
other joint venture agreements.
*Shareholders will be invited to vote on the Proposals at the EGM to be
held on December 23rd.
John Pither, Chairman, commented:
"I strongly advise shareholders to support the proposed business combination
with Full Riches Investments. The Board believes that, not only does the
combination provide necessary funding to the Group, but the proposed management
team of NewCo, with its established relationships with Italian government and
industrial authorities and past record of raising funds for mining operations on
the Toronto Stock Exchange, will provide the expertise and resources necessary
to successfully exploit and the develop the Group's assets."
Press enquiries:
Martin Groak, Gold Mines of Sardinia Tel: +44 (0)7949 209301
Louis Castro, Williams de Broe Plc Tel: +44 (0)20 7588 7511
Zoe Biddick / Shane Dolan, Biddicks Tel: +44 (0)20 7448 1000
Notice of Extraordinary General Meeting
1 Introduction to the Proposals
The board of directors of GMS ("the Board") announced on 8 October 2003 that it
had entered into a conditional amalgamation agreement with Full Riches
Investments ("FRI"), a public company listed on the TSX Venture and incorporated
in Canada, pursuant to which FRI and GMS have agreed to complete a business
combination. In view of the fundamental importance of the Proposals to
shareholders, the Board considers that shareholders should be given the
opportunity to vote on the Proposals. The Board is therefore seeking your
approval to pursue a radical new path for the Company. The Proposals consist of
the following key elements:-
(a) The transfer of the shares of the Company's principal subsidiary, GMS
Australia, which holds the Group's main asset (being its 90 per cent interest in
Sardinia Gold Mining S.p.A.) to a new wholly-owned Canadian subsidiary of the
Company, GMS Canco.
(b) The Amalgamation of GMS Canco with Full Riches Investments, to form NewCo,
in consideration of the issue by NewCo to GMS Shareholders of common shares in
NewCo representing, in aggregate, 50 per cent. of NewCo's issued and outstanding
Common Shares (on a fully diluted basis) as at the date of completion of the
Amalgamation Agreement.
The resultant merged entity, NewCo, will be incorporated in the Yukon Territory,
Canada, with its shares quoted on the TSX Venture under the name ''Medoro
Resources Ltd''. The Company and FRI have also agreed that NewCo will also seek
admission of its shares to trading on AIM and an AIM Admission Document is
expected to be published by NewCo in the New Year, prior to completion of the
Amalgamation.
FRI is currently in a fund-raising process. It has announced an initial private
placing for gross proceeds of Cdn$4,050,000 (approximately #1.8m) of which
Cdn$2,500,000 (approximately #1.1m) has been completed as at 28 November 2003
with the balance expected to be completed shortly after the date of posting of
the circular to shareholders of FRI to approve the Proposals, which is expected
to be on 28 November 2003. FRI is also seeking to raise a further approximately
Cdn$8m (gross) (approximately #3.6m) via a second placing.
It is a condition of the Amalgamation Agreement that, by completion of the
Amalgamation, FRI shall have raised Cdn$10m (gross) in equity financing in cash
(approximately #4.5m), for the future exploration and development costs and to
meet the general working capital requirements of NewCo.
Under the terms of an umbrella agreement, signed between the Company and FRI on
3 October 2003 and pursuant to the loan agreement between GMS and FRI ("the Loan
Agreement"), FRI has already advanced the Company US$500,000, which has
primarily been used to support the Group's operations in Sardinia and it is
expected that a further US$1,000,000 of Interim Finance will be drawn down
imminently. The Company has granted FRI a charge over its shares in GMS
Australia to secure this loan.
Completion of the Amalgamation Agreement is also subject to the execution and
delivery by FRI of a joint venture agreement with a third party, having the
appropriate mining expertise and financial capacity, relating to the
exploration, development and/or operation of properties to be acquired by NewCo.
The Board believes that the Amalgamation not only provides necessary funding for
the Group but that it will add significant technical, cultural and political
knowledge and experience to the management of the Group's operations.
Shareholders will be invited to vote on the Proposals at the EGM. In the event
that Shareholders have not approved the Proposals by 1 March 2004, FRI has the
option either to require repayment of the Interim Finance within 90 days, or to
enter into an option and joint venture with the Company to explore and develop
those parts of the Company's properties in Sardinia not already covered by other
joint venture agreements. The key terms of the proposed option and joint venture
agreement with FRI are set out below.
However, Shareholders should note that, in the event that Shareholders do not
approve the Resolution and/or the other conditions to the Amalgamation Agreement
are not satisfied by 1 March 2004, there is no obligation on FRI to enter into
the option and joint venture. In that event FRI could demand repayment of the
Interim Finance, pursuant to the Loan Agreement and the Company would need to
make immediate arrangements to seek alternative financing, the outcome of which
is uncertain. In the absence of any such alternative finance it is likely that
the Company would be unable to repay this debt on the required date, being 30
May 2004. In such event, FRI would be entitled to enforce its security over the
Group and it would be likely, in those circumstances, that the Company would go
into insolvent liquidation.
In the event that the Proposals are accepted and the Amalgamation Agreement
completes, NewCo shall assume all continuing obligations of the Group including
all obligations referable to the joint venture agreements to which any Group
company is a party.
2 Information on FRI
FRI was incorporated in British Columbia, Canada, as ''Field Petroleum Corp.''
on 1 December 1980.
The head office is at Suite 3123, Three Bentall Centre, 595 Burrard Street,
Vancouver, British Columbia, Canada V7X 1J1 and registered office of FRI is
located at 1400-1055 West Hastings Street, Vancouver, British Columbia, Canada
V6E 2E9.
FRI operated until April 1990 as a natural resource company, engaged in the
acquisition, exploration and development of petroleum and natural gas
properties. From 1990 until 2002, FRI was involved in a number of activities,
including property investment and investigating the setting up of various
businesses. Since September 2002, the management of FRI have focused on finding
new acquisition opportunities. The Board of FRI consider that the proposed
business combination of FRI and GMS, by way of the Amalgamation Agreement,
represents such an opportunity.
FRI is a reporting issuer in the provinces of Alberta and British Columbia and
is listed on the NEX board of the TSX Venture under the symbol ''FIL.H''. FRI
currently has one subsidiary and is not trading.
FRI is currently in a fund-raising process. It has announced an initial private
placing for gross proceeds of Cdn$4,050,000 (approximately #1.8m) of which
Cdn$2,500,000 (approximately #1.1m) has been completed already with the balance
expected to be completed shortly after the date of posting of the circular to
FRI shareholders, which is expected to be 28 November 2003, and is seeking to
raise a further approximately Cdn$8m (gross) (approximately #3.6m) via a second
placing.
3 Background and reasons for the Proposals
The Company is in an exploration phase on its properties in Sardinia, which will
require ongoing funding. The Board set about finding potential partners to give
the financial support necessary to see the Group's prospects at Furtei and Monte
Ollasteddu through to the next stages.
At Furtei, GMS and SGM entered into a joint venture agreement in May this year
with Sargold and have an exploration process already under way, solely funded by
Sargold over the next eight years subject to its option to withdraw.
At Monte Ollasteddu, the Board chose Bolivar as its partner, and the Board's
reasons for doing this were specific, as summarised below:
Over the last two years the Company has experienced a significant increase in
the complexity of local and regional politics in Sardinia. This and heightened
security at nearby military zones, has resulted in access for drilling at Monte
Ollasteddu becoming unexpectedly delayed.
The Board has recognised that to find partners solely to fund the Group's
activities was not the only challenge. The Board also wanted to find partners
who could deliver in four key areas, namely:
* technical expertise and management;
* longer term financial resources;
* regional and local political knowledge; and
* regional and local bureaucratic knowledge.
Serafino Iacono, Jose Francisco Arata and Miguel de la Campa, who were
introduced to GMS in the course of the Bolivar joint venture negotiations (and
who are also the executive directors of Bolivar), were, in the Board's opinion,
able to demonstrate that they had the qualities that the Board has been seeking,
namely:-
*they had managed successful gold mining operations for a number of years;
*they had raised significant funding for their operations on the TSX
Venture and the TSX;
*more recently, Bolivar announced a joint venture agreement with Gold
Fields to fund the Monte Ollasteddu exploration, showing once again their
ability to bring in significant resources; and
*they have demonstrated their ability to achieve progress in communicating
in the political arena at national ministerial level and regional
presidential level.
The Board believes that the proposed management team of NewCo (which will
include Messrs. Iacono, Arata (both of whom are Italian) and de la Campa) with
its established relationships with relevant Italian government and industrial
authorities and past record of raising funds for mining operations on the
Toronto Stock Exchange, will provide the expertise and resources necessary to
successfully exploit and develop the Group's assets. To that end, the proposed
new senior management of NewCo will be expected to commit to provide these areas
of expertise to NewCo for at least two years.
4 The Amalgamation
Amalgamation Agreement
In connection with the proposed Amalgamation, the Company has formed a new
subsidiary, GMS Canco, incorporated under the laws of the Yukon Territory,
Canada. Pursuant to the Amalgamation Agreement, GMS will transfer the shares of
GMS Australia, the holding company of the Group's principal assets and
operations, to GMS Canco in consideration of the right to receive shares in GMS
Canco. FRI will concurrently be amalgamated with GMS Canco under the laws of the
Yukon Territory, resulting in a continuing corporation (NewCo). Pursuant to the
terms of the Amalgamation Agreement:
(a) GMS, as the sole shareholder of GMS Canco, will be entitled to receive
Common Shares in NewCo (on a fully diluted basis) representing, in aggregate, 50
per cent. of NewCo's issued and outstanding Common Shares as at the Completion
Date;
(b) it is a condition of closing that GMS shall distribute the NewCo Common
Shares receiveable by GMS on the Amalgamation to Shareholders through a
winding-up or reduction of capital, or in some other appropriate manner.
Accordingly, the Company proposes to implement the Capital Reduction and to
direct that the Distribution of the NewCo Common Shares be made directly to
Shareholders; and
(c) the shareholders of FRI will receive Common Shares of NewCo (on a fully
diluted basis)
representing, in aggregate, 50 per cent of NewCo's issued and outstanding common
shares as at the Completion Date.
Completion of the Amalgamation Agreement is subject to the successful raising of
Cdn$10,000,000 (gross) in equity financing by FRI, of which FRI has announced an
initial private placing of up to 40,500,000 special warrants of FRI (the
''Special Warrants'') at a price of Cdn$0.10 per Special Warrant for gross
proceeds of Cdn$4,050,000 (the ''Private Placement''). To date, Cdn$2,500,000
has been completed, with the balance expected to be completed shortly after the
date of posting of the circular to FRI shareholders. Each Special Warrant will
be exercisable, for no additional consideration, to acquire one common share of
FRI. FRI is seeking to raise a further Cdn$8,015,000 (gross) (approximately
#3.6m) through a second placing. The proceeds of the financings will be used for
future exploration and development costs and to meet the general working capital
requirements of NewCo.
Completion of the Amalgamation Agreement is also subject to the execution and
delivery by FRI of a joint venture agreement relating to the exploration,
development and/or operation of properties to be acquired by NewCo under the
Amalgamation with a third party having the appropriate mining expertise and
financial capacity. In addition, as requested by the Board, the new management
of NewCo will, in connection with the completion of the Amalgamation Agreement,
be required to enter into consulting agreements, having a minimum two year term,
to make available to NewCo their assistance and expertise in its business
activities in Italy, including assisting in government relations and industrial
relations, and to assist NewCo in obtaining necessary concessions and access
rights required for exploration and mining in Sardinia.
It is also a condition of the Amalgamation Agreement that the common shares in
NewCo be admitted to trading on AIM. Pursuant to the Amalgamation Agreement,
each of FRI, GMS and GMS Canco may waive the conditions, which are in their
favor. In the event that a delay in completing the Amalgamation before 1 March
2004 occurs for reasons outside the reasonable control of FRI and GMS, they will
negotiate in good faith to agree to a reasonable extension of the date for
completing the Amalgamation.
Interim Finance
Pursuant to the Umbrella Agreement, FRI agreed to arrange the interim finance
for GMS of up to US$1,500,000 which could be drawn down by GMS in two tranches
(the "Interim Finance"). Accordingly, the Loan Agreement was entered into
between FRI and GMS on 3 October 2003. The Interim Finance bears interest at a
rate of 10 per cent. per annum from the date of issue, payable on maturity and
will mature upon completion of the Amalgamation, such that the obligations of
GMS thereunder will expire and be discharged on completion of the Amalgamation
Agreement. The Interim Finance constitutes direct obligations of GMS, secured by
a pledge over GMS' holding in GMS Australia and may, at the option of FRI, be
converted into a joint venture interest if the Amalgamation is not completed by
1 March 2004 (see below). All funds advanced under the Interim Finance will be
paid directly to the account of SGM, a subsidiary of GMS and be used primarily
for the expenses of SGM.
The first tranche of the Interim Finance in the principal amount of US$500,000
has now been advanced to GMS. At the request of GMS, the second tranche of the
Interim Finance, in the principal amount of US$1,000,000, will be advanced as
soon as practicable upon satisfaction of certain conditions precedent, the
principal outstanding condition being the execution and delivery into escrow on
terms satisfactory to FRI, of a signed option and joint venture agreement
(details of which are summarised below).
Further to the completion of the first tranche of the Interim Finance, FRI had
the right to appoint two directors to GMS's board of directors. Accordingly,
Serafino Iacono and Jose Francisco Arata have been appointed to the board of
Directors of the Company.
Further details of the terms and conditions of the Loan Agreement are set out in
the Circular.
FRI Option and Joint Venture Agreement
If the Amalgamation Agreement is not completed by 1 March 2004, or such later
date as FRI and GMS may agree, FRI and GMS have agreed at FRI's election, to
form a joint venture for the exploration and mining of all project areas held by
GMS or its subsidiaries in Sardinia, Italy at that date, subject to any
agreements GMS may have entered into with third parties prior to such date.
The terms of the joint venture are that FRI will convert amounts outstanding
under the Interim Finance into a 15 per cent. vested interest in the projects in
Sardina, and FRI will then have the right to earn up to a total of 60 per cent.
interest in the projects upon completion of a bankable feasibility study. FRI
will be responsible for managing the joint venture. If FRI fail to complete a
bankable feasibility study within six years, FRI will lose all of its interest
in the project in Sardinia. Alternatively, FRI could, within two weeks following
1 March 2004, opt not to go ahead with the joint venture and instead seek
repayment of all the Interim Finance which would then be payable within 90 days
of that date.
5 Capital Reduction and Distribution
It is a condition of completion of the Amalgamation that the Company shall
distribute to its Shareholders the shares in NewCo receivable by the Company on
completion of the Amalgamation, through a winding up or reduction of capital or
in some other manner.
The Articles provide that the Board may, with the authority of an ordinary
resolution of the Company, direct the payment of the Distribution to
Shareholders.
However, the Act provides that the Company shall not make the Distribution
except out of distributable profits available for that purpose. The Company does
not have distributable profits. As at 30 June 2003, the net deficit on the
profit and loss account of the Company was #467,552.
In order to effect the Distribution, the Company must eliminate this deficit and
create positive distributable reserves of at least #4,836,500 being the
estimated book value of the Common Shares in NewCo receivable by GMS. Under the
Act, the Company may reduce or cancel its share capital and apply the reserve
arising on the reduction or cancellation to write off the accumulated deficit on
the profit and loss account and create positive distributable reserves, provided
that it obtains the approval of Shareholders in general meeting and the
confirmation of the High Court.
As at today's date the Company has a share premium account of #444,444 and the
issued share capital of the Company was #13,717,528. The Company is proposing,
subject to the passing of the Resolution at the Extraordinary General Meeting
and the subsequent confirmation of the Court, to cancel the share premium
account and reduce the nominal value of the shares to enable the deficit on the
profit and loss account to be eliminated and to create sufficient distributable
reserves to enable the Distribution to be made.
The Court will need to be satisfied that any creditors of the Company whose
debts remain outstanding at the Effective Date are adequately protected.
Appropriate arrangements (if any) will be made, with the approval of the Court,
for the protection of any creditors of the Company.
It is anticipated that, subject to the Court agreeing to the Capital Reduction,
the Court Order confirming the Capital Reduction will be made by mid-February
2004. The Capital Reduction will only take effect when an office copy of the
Court Order is duly registered by the Registrar of Companies, which is expected
to take place within five business days of the Court Order. The Board intends to
make arrangements for the Company to be able to make the Distribution upon
completion of the Amalgamation, which must take place by 1 March 2004 (subject
to extension).
Effect on Shareholders and Optionholders
Following the Capital Reduction, Shareholders will still hold the same number of
Ordinary Shares as they held immediately prior to the Capital Reduction. The
nominal value of these shares will be reduced by 4.9 pence per share from 5
pence per share to 0.1 pence per share.
Pursuant to the Amalgamation, GMS will be entitled to receive 38,726,261 NewCo
Common Shares in exchange for or replacement of all of the issued and
outstanding shares in GMSCanco, which shares shall be distributed to
Shareholders. In addition, 319,857 NewCo Common Shares will be issued to
Williams de Broe Plc in consideration of its fees for acting in respect of the
Proposals. Newco shall also issue 1,182,888 Newco GMS Entitlement Options to the
Optionholders and 5,793,918 NewCo GMS Replacement Warrants.
Therefore, Shareholders will receive 1 NewCo Common Share for every 7.0844
Ordinary Shares held by them on Completion. Pursuant to Article 45.1.1 of the
Company's Articles of Association, on 24 November 2003 the Board determined that
fractional entitlements of less than #5 (being the sum determined by the Board
on 24 November 2003) be retained for the benefit of the Company.
Optionholders will receive, in addition to their existing options, GMS
Entitlement Options, details of which are contained in the Circular. Holders of
outstanding warrants in the Company will receive GMS Replacement Warrants.
Effect on GMS
The net asset value of GMS Australia as at 30 June 2003 was #5,104,000. GMS
Australia is the holding company of all the Group's operating subsidiaries.
Following the transfer of the shares of GMS Australia to GMS Canco and the
Amalgamation of GMS Canco and FRI to form NewCo, GMS will have no trade or
business. Following Admission, the directors of GMS in the short term intend to
maintain GMS as a shell, listed on AIM and, in order to reduce costs during this
period, none of the directors will receive any remuneration.
6 Description of NewCo following Completion
Corporate Structure
NewCo will be formed by the Amalgamation of FRI and GMS Canco pursuant to the
Amalgamation Agreement. The registered office of NewCo will be at 3081 Third
Avenue, Whitehorse, Yukon Territory, Canada, Y1A 4Z7. The head office of NewCo
will be at 110 Yonge Street Suite 1502 Toronto Ontario M5C 1T4.
Following Completion, NewCo will own all of the issued and outstanding shares of
GMS Australia. GMS Australia owns and upon Completion will own, all of the
issued and outstanding shares of Euro Mining and Mediterranean. Euro Mining and
Mediterranean each own and upon Completion will each own, 45 per cent of the
issued and outstanding shares of SGM. The remaining 10 per cent of the issued
and outstanding shares of SGM are owned by Progemisa and will not be affected by
the Proposals.
Legal and Regulatory Issues
Shareholders should note that, as a Canadian corporation, NewCo will not be
subject to rights of pre-emption. However, there are broad shareholder
protections under Canadian corporate law, ensuring that the Board acts in a way
that is not oppressive to the common shareholder or in breach of its fiduciary
obligations. Shareholders should also note that, as a Canadian corporation, the
NewCo Common Shares will not be subject to the provisions of the UK City Code on
Take-Overs and Mergers, even if the Common Shares are traded on AIM. NewCo will
be regulated by the relevant Canadian law.
Business of NewCo and stated business objectives
The business of NewCo, following Completion, will be the business currently
conducted by GMS through its subsidiaries. NewCo will therefore be a gold
exploration and development company, with interests on the Italian island of
Sardinia through its operating subsidiary, SGM.
Directors of NewCo
It is expected that the Board of NewCo will be comprised of the following
persons:-
Giuseppe Pozzo (Italian) (Director, President and Chief Executive), Age 44
Giuseppe Pozzo studied Law and Political Science at Turin University. He was
elected to the Regional Parliament of Piemonte in 2000 and has been a councillor
for the city of Settimo Torinese since 1999. He is currently Managing Director
of NextCom S.r.L.; President of Sardinia Gold Mining S.p.A. (SGM) and
Vice-President of the Piemonte Regional Advisory Group of the Forza Italia
party. He was formerly President of Chind S.p.A., Managing Director of GEORESTA
S.r.L. and of GEO, RES S.r.L. and has a background in journalism and publishing.
Gordon Keep (Canadian) (Director), Age: 46
Chairman of the Board, President and a director of Full Riches Investments since
15 April 2003. Mr Keep is the Managing Director, Corporate Finance, of Endeavour
Financial Ltd. Previously, he held positions as Senior Vice President of Lions
Gate Entertainment Corp. and Vice President of Corporate Finance with Yorkton
Securities Inc.
Serafino Iacono (Italian) (Director), Age: 43
Mr Iacono is Chairman and Chief Executive Officer of Bolivar Gold Corp. Over the
last five years, Mr Iacono has also held directorship positions at Bolivar
Goldfields Limited and Gran Colombia Resources Inc. He resigned from Bolivar
Goldfields in October 2001 and from Gran Colombia in October 2000 as a result of
a change in business in each of these two companies. He is also a director of
GMS and SGM.
Jose Francisco Arata (Italian) (Director), Age: 45
Mr Arata is an executive director of Bolivar Gold Corp. Over the past five years
Mr. Arata has also held directorships at Gran Colombia, from which he resigned
in October 2000 and Chivor Emerald Corporation, from which he resigned in May
1998. He is also a director of GMS and SGM.
Jon Pither (British) (Director), Age: 69
Mr Pither is a graduate of Cambridge University and is Chairman of the AIM
Trust. He was formerly the Managing Director of Amari plc, a director of
Selection Trust plc, a director of the London Metal Exchange, a Council Member
of the CBI, and President of the Aluminium Federation.
Martin Groak (British) (Director), Age: 52
Martin Groak is a chartered accountant with an economics degree from London
University. He is multi-lingual with an extensive background in international
financial management. His main business experience has been in the metals,
logistics and energy sectors. He was formerly Finance Director of the Primary
Industries Group and is currently a director of Marker Management Services Ltd.
He is also a director GMS and SGM.
Perry Dellelce (Canadian) (Secretary), Age: 40
Mr Dellelce has been a partner with the law firm Wildeboer Rand Thomson Apps &
Dellelce, LLP since 1993. He is also a director of Bolivar Gold Corp.
Miguel de la Campa (Spanish) (Director), Age: 59
Mr Miguel de la Campa has been President, Chief Operating Officer and a director
of Bolivar Gold Corp. since September 2002. From September 1993 to October 2001,
Mr de la Campa's principal occupation was as Executive Director of Bolivar
Goldfields Ltd (now Bluepoint Data Storage Inc.). He is also a director of GMS
and SGM.
Neil Woodyer (British) (Director), Age: 60
MrWoodyer founded Endeavour Financial Corporation in 1988 and has been its
Managing Director since inception, where he is responsible for directing
advisory mandates and investment-related services.
7 Tax
A guide to the general tax position of Shareholders under UK law and Inland
Revenue practice is set out in the Circular.
On application by the Company, the Inland Revenue has given clearances under
Section 707 Income & Corporation Taxes Act 1988(ICTA 1988) and Section 138
Taxation of Chargeable Gains Act 1992 that they are satisfied the Proposals
would not result in the application of Section 703(E) ICTA 1988 and are being
effected for bonafide commercial reasons and not as part of a scheme or
arrangement for the avoidance of UK Capital Gains Tax or Corporation Tax. Such
clearances cannot confirm that the Proposals will constitute a scheme of
reconstruction and will not give rise to a capital distribution because in
accordance with UK law, that can only be determined by an inspector of taxes
after the Proposals have been given effect. However, in accordance with long
standing practice, if the Inland Revenue had taken the view that in this case
the Proposals do not constitute a scheme of reconstruction or will give rise to
a capital distribution, they would have mentioned that. The clearances are
silent on the point, but acknowledge that long standing practice has been
followed.
8 Directors' intentions
Undertakings to vote in favour of the Resolution have been received from each of
the Directors who hold Ordinary Shares. Accordingly 2,750,000 Ordinary Shares
(in aggregate), which as at 28 November 2003 represents approximately 1 per
cent. of the issued share capital of the Company, will be voted in favour of the
Resolution.
9 Extraordinary General Meeting
A notice convening the Extraordinary General Meeting to be held at 11.00 a.m. on
23 December 2003 at the offices of Charles Russell, 8-10 New Fetter Lane, London
EC4A 1RS has been sent out to shareholders. Implementation of the Proposals is
conditional upon, and requires the passing of, the Resolution.
The Resolution will, if passed:-
(a) approve the Amalgamation.
(b) approve the Capital Reduction;
(c) amend the Articles of Association of the Company; and
(d) approve the declaration of the dividend and approve the satisfaction of the
dividend by the
Distribution.
10 Additional Information
Additional information is contained in the Circular. FRI commissioned the Micon
Report to provide information on the GMS Group's assets for the beneft of its
shareholders. The Micon Report is publicly available for view on the
www.sedar.com website under the name Full Riches Investments Limited. A copy of
the Micon Report will also be available for inspection as set out in the
Circular.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Latest time & date for receipt of forms of 11.00am on 21 December
proxy for the EGM 2003
Extraordinary General Meeting 11.00a.m. on 23
December 2003
Special meeting of the shareholders of FRI to on or about 6 January
approve, 2004
inter alia, the Amalgamation
Expected date of Court Order approving the by mid February 2004
Capital Reduction
Expected date of receipt of certificate of by end February 2004
registration
of the Court Order
Expected date of posting of Admission by end February 2004
Document for NewCo
Expected date of Admission by end February 2004
Extraordinary General Meeting to be held at 11.00 a.m. on 23 December 2003 at
Charles Russell, 8-10 New Fetter Lane, London EC4A 1RS
This information is provided by RNS
The company news service from the London Stock Exchange
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