TIDMNYO
RNS Number : 1349X
Nyota Minerals Limited
17 February 2017
For immediate release
17 February 2017
Nyota Minerals Limited
("Nyota" or the "Company")
Notice of Extraordinary Meeting
Nyota Minerals Limited (ASX/AIM: NYO) has today published a
notice of Extraordinary General Meeting (Meeting) to be held at
5:30pm (Sydney time) on 21 March 2017 at the Offices of Norton Rose
Fulbright, Level 18, Grosvenor Place, 225 George Street, Sydney NSW
2000, Australia (Notice).
As announced on 3 January 2017, the Company has entered into a
conditional agreement to sell the Company's 70% interest in KEC
Exploration Pty Limited ACN 127 180 410 (KEC) (KEC Shareholding) to
Christopher Reindler (Purchaser), a minority shareholder in and
director of KEC (KEC Agreement).
Listing Rule 11.2 provides that where a company proposes to make
a significant change in the nature or scale of its activities which
involves the disposal of its main undertaking, it must first obtain
the approval of its shareholders. In addition, AIM Rule 15 provides
that where a disposal results in a fundamental change of business,
it must be conditional on obtaining the consent of shareholders at
a general meeting.
At this time, the KEC Shareholding is the Company's only asset
and accordingly is the Company's main undertaking for the purposes
of the Listing Rules and the AIM Rules. The Resolution seeks
Shareholder approval under Listing Rule 11.2 and AIM Rule 15 for
the Disposal on the terms and conditions set out in the KEC
Agreement.
The Notice is available from the Company's website at
www.nyotaminerals.com and the Explanatory Statement has been
reproduced below without material change or amendment.
Enquiries:
For further information please visit www.nyotaminerals.com or
contact:
Jonathan Morley-Kirk Nyota Minerals Limited + 44 7797 859986
jm-k@hotmail.co.uk
Michael Cornish Beaumont Cornish Limited +44 (0) 207 628 3396
James Biddle Nominated Advisor
Jeremy Woodgate Smaller Company Capital +44 (0) 20 3651 2912
EXPLANATORY STATEMENT
This Explanatory Statement has been prepared to provide
information which the Directors believe to be material to
Shareholders in deciding whether or not to pass the Resolution to
be proposed at the Meeting.
1. Resolution - DISPOSAL OF MAIN UNDERTAKING
1.1 General
As announced on 3 January 2017, the Company has entered into a
conditional agreement to sell the Company's 70% interest in KEC
Exploration Pty Limited ACN 127 180 410 (KEC) (KEC Shareholding) to
Christopher Reindler (Purchaser), a minority shareholder in and
director of KEC (KEC Agreement). The KEC Agreement is conditional
on the Company obtaining the approval of Shareholders, being the
purpose of the Resolution.
The Resolution seeks the approval of Shareholders for the
disposal of the Company's main undertaking on the terms set out in
the KEC Agreement (Disposal). A summary of the material terms of
the KEC Agreement is set out in Section 1.3 below.
1.2 Listing Rule 11.2 and AIM Rule 15
Listing Rule 11.2 provides that where a company proposes to make
a significant change in the nature or scale of its activities which
involves the disposal of its main undertaking, it must first obtain
the approval of its shareholders. In addition, AIM Rule 15 provides
that where a disposal results in a fundamental change of business,
it must be conditional on obtaining the consent of shareholders at
a general meeting.
At this time, the KEC Shareholding is the Company's only asset
and accordingly is the Company's main undertaking for the purposes
of the Listing Rules and the AIM Rules. The Resolution seeks
Shareholder approval under Listing Rule 11.2 and AIM Rule 15 for
the Disposal on the terms and conditions set out in the KEC
Agreement.
1.3 Background to the Disposal
KEC controls the various tenements in Italy that comprise the
Ivrea Nickel Project. As previously announced, the Ivrea Nickel
Project is still at a very early stage and will require substantial
capital investment to continue the exploration program and to
develop the tenements. The capital required is not currently
available to the Company.
As previously disclosed it is the Board's intention to take the
Company in a strategically different direction which has led to the
Company announcing that it is looking to acquire the operator of a
technology platform, BigDish Ventures Limited (BigDish), via a
reverse takeover transaction. As part of this strategic shift away
from minerals, the Board had resolved not to contribute further
cash to the expansion of the original tenements and to seek a buyer
of the Company's interest, failing which it would consider
relinquishing its interest in the licenses.
Other than its interests in the Ivrea Nickel Project licences,
KEC has not traded and all exploration and administrative
expenditure has been incurred by the Company.
1.4 Summary of the KEC Agreement
The KEC Agreement, dated 29 December 2016, provides for initial
cash consideration of EUR20,000 payable by the Purchaser to the
Company immediately following approval of the Disposal by
Shareholders where such approval is obtained after 1 March 2017.
The Purchaser has agreed that the Company has no further obligation
to pay or incur any costs in relation to the tenements other than
the following payments: (1) a contribution of EUR12,500 towards the
KEC tenement licence renewal fee on execution of the KEC Agreement;
and (2) a further contribution of EUR7,500 towards the Galerno
Licence renewal fee.
The Company will retain a 3% Net Smelter Return (NSR) payable to
the Company on future sales from the Ivrea Nickel Project. The NSR
is calculated as 3% of the net revenue from the Ivrea Nickel
Project calculated as the gross value of metal and non-metal
products less transportation and refining costs. Additionally the
KEC Agreement provides that the Purchaser may buy back the
Company's right to the NSR for $200,000 in the first two years and
$400,000 in the third and fourth years following execution of the
KEC Agreement.
The Disposal will not have any impact on the capital structure
of the Company.
1.5 Financial impact of the Disposal
As at 30 June 2016 (the date of the Company's last audited
financial statements), the carrying value of KEC amounted to $Nil,
and expenditure on the Ivrea Nickel Project amounted to $287,500,
in the Company's accounts.
As noted above, the Company will receive cash consideration of
EUR20,000 for the Disposal but will be required to contribute
EUR7,500 towards the Galerno Licence renewal fee in addition to the
EUR12,500 towards the KEC tenement licence renewal fee that the
Company has already paid on execution of the KEC Agreement.
Consequently the Disposal will have a neutral effect on the
Company's immediate financial position.
The Company will share in any upside from development and
commercialisation of the Ivrea Nickel Project through the NSR.
However, there is no guarantee that the Ivrea Nickel Project will
be commercialised by its owners following the Disposal. The Company
may also receive further proceeds should the Purchaser choose to
buy back the Company's right to the NSR in the first four years
following the date of the KEC Agreement. Any proceeds from the NSR
or from the buy back of the Company's right to the NSR will be used
to provide additional working capital for the Company. Given the
highly contingent and speculative nature of any payment being
received by the Company through the NSR, or as a result of the
Purchaser's buy back right, the Directors recommend that
Shareholders do not place any significance on the Company receiving
these payments in considering how to vote on the Resolution.
1.6 Advantages and disadvantages of the Disposal
The Board considers the following to be some of the advantages
of the Disposal:
i. on completion of the Disposal the Company will have no
further obligation to pay for or incur any costs in relation to the
tenements (other than as described above);
ii. in the absence of any funding for KEC there are no available
funds to support KEC under the Company's continuing ownership to
continue trading any further;
iii. the Board has been unable to secure any alternative offers for KEC;
iv. the NSR provides the Company with the potential (but no
guarantee) to receive further consideration should the Ivrea Nickel
Project develop to production;
v. the Board does not believe that there is any immediate
prospect of a material improvement in market conditions in the
junior early stage nickel exploration sector or investor sentiment;
and
vi. the Disposal enables the Company to make a clean break from
the Ivrea Nickel Project and enables the Board to focus on new
projects, including the proposed BigDish acquisition (see section
1.12 below for further details).
The Board considers the following to be some of the
disadvantages of the Disposal:
i. the Disposal will be the sale of the Company's last existing mineral exploration asset;
ii. on completion of the Disposal the Company will have no
assets other than its cash reserves and will have no assets capable
of generating revenue, either now or in the future; and
iii. while the Company is focussed on new projects, including
the proposed BigDish acquisition, such projects are likely to be
highly conditional and there is no guarantee that any alternative
projects that are being pursued will successfully complete.
1.7 Timetable
The only condition to completion of the Disposal is the Company
obtaining shareholder approval in accordance with the terms of the
Resolution. If Shareholders approve the Disposal at the Meeting it
is expected that the Disposal will be completed within two weeks
following the passing of the Resolution.
1.8 No changes to the Board
There will be no change to the composition of the Board as a
result of the Disposal.
1.9 Consequences of the Disposal and the current suspension
If Shareholders approve the Resolution the effect of the
Disposal will be that, on completion of the Disposal, the Company
will cease to own, control or conduct all, or substantially all, of
its existing trading business, activities or assets and would
therefore become an AIM Rule 15 cash shell (Rule 15 Cash Shell).
Pursuant to the AIM Rules, a Rule 15 Cash Shell must make an
acquisition or acquisitions which constitute a Reverse Takeover
under AIM Rule 14 (including seeking re-admission as an Investing
Company (as defined under the AIM Rules)) within six months,
failing which AIM will suspend trading in the Rule 15 Cash Shell's
ordinary shares pursuant to AIM Rule 40 (Rule 15 Deadline). If the
Rule 15 Cash Shell fails to make an acquisition or acquisitions
that constitute a reverse takeover under AIM Rule 14 (including
seeking re-admission as an Investing Company (as defined under the
AIM Rules)) within a further six months of the Rule 15 Deadline,
the Rule 15 Cash Shell's ordinary shares will be cancelled from
trading on AIM.
Similarly, under the Listing Rules if an entity is not able to
make an announcement of its intention to acquire a new business
within six months of completing the disposal of its main
undertaking under Listing Rule 11.2, ASX will generally exercise
its discretion under the Listing Rules to suspend quotation of the
ordinary securities of the entity at the end of that six month
period. Suspension will continue until the entity makes an
announcement acceptable to ASX about its future activities.
Shareholders should note however that the Company has already
announced (on 15 November 2016) that pursuant to a letter of
intent, the Company and BigDish are working towards an agreement
whereby the Company would acquire 100% of BigDish subject, inter
alia, to a number of material conditions. As the possible
acquisition of BigDish would, should it proceed, be a Reverse
Takeover under the AIM Rules and a back-door listing for the
purposes of the ASX Listing Rules, trading in the Company's shares
on ASX and AIM has already been suspended from 15 November 2016.
Under AIM Rule 41, the London Stock Exchange will cancel the
admission of a Company's shares from trading on AIM where these
shares have been suspended from trading for six months (Rule 41
Deadline).
Accordingly, the Company must by 15 May 2017 (being the Rule 41
Deadline) satisfy the re-admission requirements of ASX and as
applicable AIM (including re-compliance with Chapters 1 and 2 of
the Listing Rules and the publication of an AIM Admission Document)
or otherwise confirm that the acquisition is not proceeding,
failing which the Shares will otherwise be cancelled from trading
on AIM.
If the Company announces before the Rule 41 Deadline that it is
not proceeding with the BigDish acquisition, subject to further
consultation with ASX and AIM, the Shares may recommence trading on
AIM and ASX. In such circumstances, the Company would then be
subject to the Rule 15 Deadline which, for these purposes would be
six months from the date of the Disposal.
1.10 Consequences of the Disposal not proceeding
If Shareholders do not approve the Disposal then the Company
will remain liable for future costs and licence renewal fees with
respect to the Ivrea Nickel Project. The Company considers that it
has insufficient working capital to cover these future costs. While
the Company is able to make a request to its current lender to
drawdown the remaining balance of its GBP200,000 loan this in
itself will not be sufficient to cover the future costs that will
be incurred in connection with the Ivrea Nickel Project, as well as
the ongoing costs of the Company. In this circumstance, the Company
will need to undertake a further capital raising in order to meet
its obligations. There is no guarantee that any further capital
raising would be successful which would lead to the Company being
in default of its obligations under the Ivrea Nickel Project
licence arrangements and could potentially lead to the
relinquishment of the licences for nil consideration and, subject
to any valid alternative transactions, to the winding up of KEC as
soon as possible.
1.11 Related party matters
As the Purchaser, Christopher Reindler, is a director of KEC he
is a related party and the proposed Disposal is a related party
transaction for the purposes of Rule 13 of the AIM Rules. As
previously announced, the Directors, having consulted with the
Company's nominated adviser, consider that the Disposal is fair and
reasonable insofar as Shareholders are concerned. In reaching this
conclusion the Directors have taken into account the factors
outlined above in section 1.6 (Advantages and disadvantages of the
Disposal).
1.12 Future intentions of the Company
As stated above, on 15 November 2016, the Company announced the
potential acquisition of BigDish which would amount to a reverse
takeover under the AIM Rules and a back-door listing under the
Listing Rules. The potential acquisition is subject to a number of
material conditions, including completion of due diligence by both
parties, documentation, funding and compliance with all regulatory
requirements, including the AIM Rules, Listing Rules and
Shareholder approval.
The Company is in the process of working through the various
regulatory hurdles and preparing the documentation necessary for
Shareholders to consider, and if thought fit, approve, the
acquisition of BigDish, but it is not guaranteed that the
transaction will proceed.
If the Company completes the acquisition of BigDish by 15 May
2017 and the Shares are re-admitted to quotation on ASX and trading
on AIM, the requirements of the AIM Rules and Listing Rules as
outlined in section 1.9 should be satisfied. However, if the
acquisition of BigDish does not complete by 15 May 2017, the
quotation of the Shares on ASX will remain suspended. In addition,
unless the Company otherwise confirms that the acquisition is not
proceeding, trading in the Shares on AIM will also remain suspended
and the Shares may be cancelled from trading in accordance with the
AIM Rules and Listing Rules as outlined in section 1.9.
1.13 Board recommendation
The Board unanimously recommends that Shareholders vote in
favour of the Resolution.
Glossary
$ means Australian dollars.
AIM means a market of that name operated by the London Stock
Exchange.
AIM Rules means the listing rules for AIM.
ASX means ASX Limited (ACN 008 624 691) or the financial market
operated by ASX Limited, as the context requires.
Board means the current board of directors of the Company.
Chair means the chair of the Meeting.
Company means Nyota Minerals Limited (ACN 060 938 552).
Corporations Act means the Corporations Act 2001 (Cth).
CREST means the Certificateless Registry for Electronic Share
Transfer which is the central securities depository for markets in
the United Kingdom.
Depositary Interest means a unit of beneficial ownership of a
Share.
DI Holder means a registered holder of a Depositary
Interest.
Directors means the current directors of the Company.
Disposal means the sale of the Company's main undertaking on the
terms set out in the KEC Agreement.
Explanatory Statement means the explanatory statement
accompanying the Notice of Meeting.
Form of Instruction means the form of instruction accompanying
this Notice of Meeting provided to holders of Depositary
Interests.
Galerno Licence means the exploration licence covering a portion
of the Ivrea gabbroic complex.
GMT means Greenwich Mean Time as observed in London,
England.
Ivrea Nickel Project means the nickel-copper mining project
located in the Piemonte region of northwest Italy.
KEC means KEC Exploration Pty Limited (ACN 127 180 410).
KEC Agreement means the conditional agreement between the
Company and the Purchaser for sale of the Main Asset.
Listing Rules means the Listing Rules of ASX.
Meeting means the extraordinary general meeting of the Company
convened by the Notice of Meeting.
Notice of Meeting means this notice of meeting including the
Explanatory Statement, Proxy Form and Form of Instruction.
NSR means Net Smelter Return.
Proxy Form means the proxy form accompanying the Notice of
Meeting provided to holders of Shares.
Purchaser means Christopher Reindler.
Resolution means the resolution set out in the Notice of
Meeting.
Share means a fully paid ordinary share in the capital of the
Company.
Shareholder means a registered holder of a Share and / or a
Depositary Interest.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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