Moly Mines Offer to Acquire Gulf Alumina
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 09/22/16 --
The Board of Moly Mines Limited (ASX: MOL) ("Moly") is pleased to announce that it has entered into an Offer Implementation Agreement ("Implementation Agreement") with Gulf Alumina Limited ("Gulf"), under which it is proposed that Moly will acquire all the issued ordinary shares in Gulf (the "Offer"). The Offer will be extended to all ordinary shares in Gulf which are issued as a result of exercise of Gulf options.
Gulf shareholders who accept the Offer will receive a combination of A$0.46 cash plus 1.4 Moly options ("Moly Options") for each Gulf share they hold.
Strategic Rationale for the Offer
The proposed acquisition provides Moly with the ideal opportunity to develop a low-cost mining operation at Skardon River and position itself as a leading independent supplier of low temperature Direct Shipping Ore ("DSO") bauxite into the expanding seaborne Asian markets.
(1) In the absence of a superior proposal.
The Offer
The Offer will be made by way of a private, contractual offer from Moly to each Gulf shareholder. Each offer will be made on the same terms to each Gulf shareholder.
The Board of Directors of Gulf have unanimously recommended to all Gulf shareholders that they ACCEPT the Offer, in the absence of a superior proposal.
The Moly Options issued to Gulf shareholders who accept the Offer will not be quoted on the ASX and will be exercisable at A$0.16 expiring on the date that is 3 years after the issue date.
The Offer is conditional on:
A summary of the key terms of the Implementation Agreement is contained in the Annexure to this announcement.
Under the Implementation Agreement, Gulf has agreed to various exclusivity arrangements with Moly for a period of 6 months. These arrangements include 'no talk' and 'no shop' obligations, and Gulf must notify Moly if it receives a competing proposal. Gulf has also granted Moly a right to provide a matching or superior proposal if Gulf receives a competing proposal.
In connection with the Offer, Moly has agreed to provide Gulf with a A$1.9 million unsecured loan facility to assist Gulf meet general working capital requirements during the Offer period. Interest is payable on amounts drawn under the loan facility at 8% p.a. A summary of the key terms of the loan facility is contained in the Annexure to this announcement.
In addition, Moly has entered into Pre-Offer Agreements with Gulf shareholders representing 55.6% of the issued capital of Gulf, requiring those Gulf shareholders to accept the Offer in respect of all their shares held (including any shares issued resulting from the exercise of their Gulf options (if any)) in the absence of a superior proposal. Each Director of Gulf who has a relevant interest in Gulf shares has entered into a Pre-Offer Agreement. A summary of the key terms of the Pre-Offer Agreements is contained in the Annexure to this announcement.
Moly will fund the cash portion of the Offer from its existing cash balance.
Indicative Timetable for implementing the Offer and Moly shareholder meeting
The timetable set out above is indicative only and may, subject to the ASX Listing Rules and any laws, be varied by Moly in its sole discretion.
Moly will be required to re-comply with Chapters 1 and 2 of the ASX Listing Rules before ASX will reinstate quotation of its shares on ASX.
If the Offer terminates or is otherwise unsuccessful, and Moly is unable to complete another transaction which enables Moly to re-comply with Chapters 1 and 2 of the ASX Listing Rules by 23 April 2017, ASX has advised Moly that it will be removed from the ASX Official List.
About Gulf Alumina
Gulf is an Australian unlisted public company with 45 shareholders which was established in 2004 to develop bauxite deposits for export to China's rapidly expanding merchant alumina refining markets.
Skardon River Project
The Skardon River project has been the subject of extensive exploration and economic studies over the past five years which resulted in Gulf undertaking a DFS in 2015. The results of the studies highlighted the potential for commercial extraction of DSO bauxite ore.
The bauxite occurs as a laterally extensive horizontal layer ranging from 0.5 to 4.0m thickness, directly below a relatively thin surface soil profile generally less than 1.0m thick. The bauxite has developed as a result of weathering and comprises a high percentage of "Gibbsitic" bauxite which is the key type of bauxite feed for "low temperature" alumina refineries many of which are located on the east coast of China. The DFS considers a mine operation based on free-dig mining of bauxite using front end loader; transport of bauxite by haul trucks between 5 and 15km to the wharf loading and stockpiling facility; transhipment down the Skardon River using self-propelled barges to the ocean going vessels located off-shore for shipment to the customer.
The current mining leases within the Skardon River Project include existing infrastructure and improvements comprising of an airstrip, port wharf, haulage and access roads, as well as civil works associated with the village services and power distribution. The DFS proposes that there will be upgrading of the infrastructure to accommodate the proposed mining and shipment operation.
Moly will provide additional information relating the work completed by Gulf at Skardon River in the coming weeks and in the Prospectus to be lodged in late October.
To view Figure 1 Skardon River Project tenement location and photos of existing infrastructure:
Environmental Approvals
Proposed amendments to the existing Environmental Authority ("EA") at Skardon River required Gulf to submit a full EIS in late 2015. Following an extensive public consultation period, the Queensland Government (DEHP) approved the EIS and has issued draft Conditions for review prior to final approval of the EA.
Commonwealth approval under the EPBC Act has progressed in line with the bilateral agreement between the Commonwealth and Queensland governments. Final approval for the Skardon River Project is currently being determined by the Minister for the Environment.
Importantly, these approvals cover key project requirements including mining of the bauxite resource, upgrades to the existing infrastructure such as the wharf and port facilities, haulage and transhipment operations.
Bauxite Market
Moly believes, on the basis of analysis of reports by industry experts and commissioned by Moly, that there is growing demand for seaborne bauxite in China as local resources are depleted. Moly believes that Gulf is well positioned to take advantage of this increased demand especially in light of recent bans on the DSO exports from Malaysia, Indonesia and the Philippines.
Moly intentions if the Offer is successful
If the Offer is successful, Gulf will become a subsidiary of Moly and Moly will control the composition of Gulf's Board of Directors.
No changes are presently contemplated to the Board or senior management of Moly as a consequence of the Offer.
Upon completion of the Offer, Moly intends to continue to pursue the necessary project development activities required to progress the Skardon River Project into production as soon as possible.
Effect on Moly if the Offer is successful
If Moly acquires 100% of Gulf under the Offer, the combined group is expected to have pro forma total consolidated assets of A$88.5 million(2) and pro forma total equity interests of A$71.8 million(3).
The transaction is not expected to have any material impact on Moly's consolidated annual revenue until such time as production commences at the Skardon River Project. Moly's budgeted expenditure, exclusive of any acquisition costs, for the 12 months to 30 June 2017 is A$4.02 million. The combined group is expected to have pro forma budgeted expenditure of A$12.72 million over the same period(4), an increase of approximately A$8.7 million.
Effect on the total issued capital of Moly if the Offer is successful
As mentioned above, in addition to A$0.46 cash per Gulf share, Gulf shareholders who accept the Offer will also receive 1.4 Moly Options for each Gulf share they hold.
The following table summarises the expected changes to the capital structure of Moly if the Offer is successful:
(5) Includes Gulf options which remain subject to Gulf shareholder approval
No funds will be raised under the Offer.
Additional information about the companies is available on the Moly and Gulf websites (see and )
Yours sincerely
For and on behalf of the Board of Moly Mines Limited
Graeme Kininmonth, Chief Executive Officer
Disclaimer
This announcement has been prepared by Moly. However, no representation or warranty expressed or implied is made as to the fairness, accuracy, correctness, completeness or adequacy of any statements, estimates, opinions or other information contained in these materials. To the maximum extent permitted by law, Moly, and its directors, officers, employees and agents disclaims liability for any loss or damage which may be suffered by any person (including because of negligence or otherwise) through the use (directly or indirectly) or reliance on anything contained in or omitted from this announcement.
This announcement may include forward looking statements about Moly or Gulf. To the extent that this announcement contains forward looking information, the forward looking information is subject to a number of risk factors, including those generally associated with the bauxite industry. Any such forward looking statement also inherently involves known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements to be materially greater or less than estimated. These factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which Moly and Gulf operate or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation. Any such forward looking statements are also based on current assumptions which may ultimately prove to be materially incorrect. Readers should not rely on this announcement as a forecast by Moly.
Information about Gulf
The information in this announcement about Gulf, including resource and reserve data, is based on information published by Gulf and accessible on its website. Moly has not verified this information. Gulf is an ASX unlisted public company. The disclosure obligations of Gulf are less onerous than those of listed company and, accordingly, Moly shareholders are encouraged not to place undue reliance on the information about Gulf in this announcement. Moly does not, except as required by law, make any representation or warranty, express or implied, as to the accuracy or completeness of this information.
ANNEXURE
Summary of key terms of Offer Implementation Agreement
Contacts:
Moly Mines Limited
Graeme Kininmonth
Chief Executive Officer
+61 8 9429 3300
Moly Mines Limited
Natalie Frame
Investor Relations
+1 416 371 7541
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Datum: 22.09.2016 - 11:25 Uhr
Sprache: Deutsch
News-ID 496388
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