Forte Energy NL Proposed Acquisition of Leo Mining and Exploration Ltd
July 11 2013 - 1:27AM
UK Regulatory
TIDMFTE
Proposed Acquisition of Leo Mining and Exploration Ltd
Forte Energy NL
11 July 2013
Proposed Acquisition by Forte Energy of Leo Mining and Exploration Ltd
Forte Energy NL ("Forte Energy" or "the Company") (ASX/AIM: FTE) announces it has entered into a non-
binding term sheet for the proposed acquisition ("the Proposed Acquisition"), of Leo Mining and
Exploration Limited ("Leominex"), (together "the Parties"). Leominex is an unlisted British Virgin
Islands ("BVI") registered company which has interests in a portfolio of uranium and rare earth elements
("REE") assets in Africa which complement Forte Energy's existing projects. The Proposed Acquisition is
expected to create a diversified, larger scale Africa-focussed exploration and development company with a
well-balanced portfolio of uranium and REE assets, both of which feature in Forte Energy's existing
portfolio.
It is anticipated that the Proposed Acquisition will be effected through a statutory merger under BVI law
pursuant to which Forte Energy shall issue and allot to Leominex shareholders a total of 95 per cent of
the Company's issued share capital (equivalent to approximately 860 million ordinary shares in the
capital of Forte Energy at the date of this announcement), as consideration for 100 per cent of the
issued share capital of Leominex.
It is also anticipated that two additional non-executive directors nominated by Leominex will be
appointed to the board of directors of Forte Energy following completion of the Proposed Acquisition,
expanding the Forte board from 4 directors to 6 directors. It is envisaged that any new non-executive
directors would be appointed on similar terms as Forte Energy's existing non-executive directors.
The Proposed Acquisition is subject to a number of conditions, including:
* the completion of final binding documentation (the "Final Agreements"), including a merger
implementation agreement, voting undertakings from major shareholders of Leominex and a
relationship agreement among Forte Energy, Leominex and Mkango Resources Ltd. ("Mkango"), a
Canadian company listed on the TSX-Venture exchange in which Leominex holds an equity interest
of approximately 48 per cent;
* obtaining applicable regulatory or securities exchange approvals; and
* approval by the shareholders of each of Forte Energy, Leominex and Mkango.
The Parties are in the process of negotiating the terms of the Final Agreements and notices convening the
relevant shareholder meetings will be announced in due course by Forte Energy, Leominex and Mkango.
The Proposed Acquisition has the support of significant shareholders of both Parties and the enlarged
Forte Energy's market capitalisation and enhanced asset base would position it well to execute on
strategic growth plans, including potential acquisition opportunities. In addition there are expected to
be significant synergies in technical expertise through the Proposed Acquisition.
About Forte Energy
Forte Energy is an ASX and AIM listed emerging international exploration and development company with a
portfolio of uranium assets in the Republics of Mauritania and Guinea, West Africa. While recent work by
Forte Energy has focussed on increasing its uranium resources, previous exploration work also indicated
potential for REEs. Areva has a 7.1 per cent shareholding in Forte Energy.
About Leo Mining and Exploration
Leominex is a private, BVI-registered company which has interests in a portfolio of REE and uranium
assets in Africa. Leominex has a 48 per cent shareholding in Mkango, which owns 100 per cent of two
prospecting licenses covering a combined area of 1,751 sq km in southern Malawi. Mkango's most advanced
stage project is the Songwe Hill rare earth project where it has defined a significant Indicated and
Inferred REE Mineral Resource Estimate. In parallel with completion of environmental studies and
metallurgical test work for the Songwe project, Mkango is also undertaking regional exploration for REEs
and uranium in Malawi. On April 11, 2013, Mkango closed an oversubscribed C$2.3 million private
placement. Under the Proposed Acquisition, Forte Energy will become an indirect 48 per cent shareholder
of Mkango, which will continue to trade as an independent company.
Leominex also holds approximately 8 per cent of the shares in Signet Mining Services Ltd., a Niger and
Chad focussed uranium exploration and development company, with seven 100 per cent owned uranium
exploration licences in Niger covering approximately 1,664 sq km and four 100 per cent owned uranium
exploration licences in Chad covering approximately 413.2 sq km. The Licenses in Niger are located within
and close to the Tim Mersoi basin which is home to world class uranium mines and deposits.
Following the Proposed Acquisition, Mkango and Signet Mining Services Ltd will continue to be managed by
their respective Boards and management teams. Apart from the above mentioned additions to the Board, the
executive management team of Forte Energy will remain as it is currently.
Leominex has 55 shareholders with its largest two shareholders being William Dawes and Alexander Lemon,
each with a shareholding of approximately 17 per cent in Leominex, and who would each indicatively hold
around 8 per cent of the expanded Forte Energy share capital after completion of the Proposed
Acquisition.
Commenting on the proposed transaction, Mark Reilly, Managing Director of Forte Energy, said:
"The proposed transaction to acquire Leominex would create an African focussed uranium and rare earth
explorer and developer with an enhanced portfolio of project interests and the technical expertise and
financial strength to advance its assets towards production. In addition, the combined business will
benefit from deeper technical expertise and a Board with experience in developing and building numerous
projects."
For further information contact:
Mark Reilly Geoff Nash/Ben Thompson
Managing Director Elizabeth Johnson (broking)
Forte Energy NL finnCap
Tel: +44 (0) 203 3849555 Tel: +44 (0)207 220 0500
Bobby Morse/Cornelia Browne Stuart Laing
Louise Hadcocks RFC Ambrian Ltd
Buchanan (AIM Nominated Adviser to the Company)
Tel: +44 (0) 207 466 5000 Tel: +61 (0) 8 9480 2506
Forte Energy NL
Australia United Kingdom
Suite 3, Level 3 3C Princes House
1292 Hay Street 38 Jermyn Street
West Perth WA 6005 London SW1Y6DN
Ph: +61 (0)8 9322 4071 Ph: +44 (0)203 3847474
Fax: +61 (0)8 9322 4073 Fax: +44 (0)207 2878387
Email: info@forteenergy.com.au Email: info@forteenergy.co.uk
Web: www.forteenergy.com.au
About Forte Energy
Forte Energy is an Australian-based minerals company focussed on the exploration and development of
uranium and associated bi-products in Mauritania and Guinea in West Africa. The Company has an extensive
pipeline of assets and total JORC resources of 76.8Mt @ 266ppm U3O8for 44.9Mlbs contained U3O8 (100ppm
cut-off).
Its flagship assets are the A238 prospect (23.4Mlbs U3O8) and the Bir En Nar project (2.06Mlbs U3O8) in
Mauritania, and the Firawa Project in Guinea (19.5Mlb U3O8).
Forte Energy U3O8 JORC resources (all at a 100ppm cut-off):
Project Resource Category M tonnes ppm U3O8 Contained U3O8 Mlbs
A238* Inferred 45.2 235 23.4
Bir En Nar Indicated 0.5 886 1.0
Inferred 0.8 575 1.0
Firawa Inferred 30.3 295 19.5
Total Indicated 0.5 886 1.0
Inferred 76.3 262 43.9
Total 76.8 266 44.9
* A238NW Anomaly included in the A238 Inferred Resources
The Company is quoted on the Australian Stock Exchange (ASX: FTE) and AIM market of the London Stock
Exchange (AIM: FTE). For more information, visit www.forteenergy.com.au
Note:
The information in this report that relates to the reporting of Mineral Resources is based on information
compiled or reviewed by Mr. Galen White, who is a Fellow of the Australasian Institute of Mining and
Metallurgy (FAusIMM). Mr White is the Principal Geologist of CSA Global (UK) Ltd. CSA Global have an on-
going role as geological consultants to Forte Energy NL. Mr. White has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which
he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. White consents to the
inclusion in this report of the matters based on his information in the form and context in which it
appears.
Forte Energy NL
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