TIDMWAFM
RNS Number : 0699A
West African Minerals Corporation
21 December 2017
21 December 2017
For immediate release
West African Minerals Corporation
("WAFM", the "Group" or the "Company")
Proposed Disposal and Special Dividend
Change of Name
Notice of General Meeting
Summary
On 13 November 2017, the Company announced that it had decided
not to progress the Sanaga Project any further at this time and did
not intend to expend any further funds on the Company's iron ore
assets other than is strictly required to maintain the licences in
good standing and preserve value pending any prospective sale of
the assets. The Board has concluded its review of the disposal
options and proposes to dispose of all the Company's remaining iron
interests to Shareholders by way of the Special Dividend, subject
to Shareholder approval under the AIM Rules.
A circular setting out full details on the proposed Disposal and
Special Dividend is being published and sent to Shareholders today.
A copy of the Chairman's letter, risk factors and illustrative pro
forma statement of net assets in the Circular is set out in full
below in Parts I, II and III to this announcement without material
amendment or adjustment.
Special Dividend
The Board proposes to make an in specie distribution of its
entire holding of Ferrum Shares (Ferrum holds, indirectly, all the
Company's remaining Cameroon licences, including the Sanaga
Project) to Shareholders by way of the Special Dividend. The Board
believes the Special Dividend will enable Shareholders to share in
any future potential sale of the Sanaga Project or Ferrum
itself.
The Board proposes to make the Special Dividend to Shareholders
on the Record Date on the following basis:
For every Ordinary Share 1 Ferrum Share
The Special Dividend is conditional, inter alia, on approval by
Shareholders at the General Meeting to be held on 10 January 2018.
There can be no assurance at this time that Shareholders will
approve the Special Dividend.
The Special Dividend will be paid to Shareholders on the
register at the Record Date which is close of business on 10
January 2018. The issued share capital of Ferrum will be increased
immediately prior to the Special Dividend such that the number of
Ferrum Shares in issue will exactly match the number of Ordinary
Shares in issue on the Record Date (including any new Ordinary
Shares to be issued prior to the Record Date).
The Ferrum Shares will not directly (or indirectly through
Depositary Interests) be held in CREST. Share certificates in
respect of Ferrum Shares will be dispatched to Shareholders as soon
as is reasonably practical.
Company law in the British Virgin Islands provides that a
company may pay a dividend even if it does not have available
distributable profits as shown in its accounts (subject to certain
solvency requirements).
Ferrum will, as a result of the Special Dividend, cease to be
part of the Group. Ferrum will owe US$4,000,000 to WAFM. This
US$4,000,000 is made up of the written down value of all of the
existing loans to Ferrum and its subsidiaries together with a new
working capital loan of US$600,000 (GBP447,761) which is expected
to cover the basic working capital needs of Ferrum and the Sanaga
Project for the next 18 months following completion of the
Disposal. WAFM has attributed no recoverable value to this loan
balance as the Directors are unable to conclude that there is a
reasonable prospect of repayment. However, in the event that a
party sought to purchase the Sanaga Project, Ferrum or any of the
intermediate corporate entities, the loan would become repayable
upon demand. This means that in order for a holder of Ferrum Shares
to see or realise any value from their Ferrum Shares, any disposal
transaction involving the Sanaga Project would need to yield
proceeds in excess of US$4,000,000.
In the interim accounts for the period ended 30 September 2017
the Directors resolved that in light of: (i) the prevailing iron
ore price; (ii) the futures markets showing no signs of any near
terms recovery; and (iii) the intentions to table these proposals
for approval by shareholders, that it was prudent to write down the
carrying value of the investment in Ferrum and all associated loans
to a nominal value of GBP1.00.
AIM Rule 15
On completion of the Disposal, the Company would cease to own,
control or conduct all or substantially all, of its existing
trading business, activities or assets and, in accordance with AIM
Rule 15, the Disposal constitutes therefore a fundamental change of
business of the Company. Accordingly, the Special Dividend is
conditional, inter alia, on approval by Shareholders at the General
Meeting.
Following completion of the Disposal, the Company will become an
AIM Rule 15 cash shell and as such will be required to make an
acquisition or acquisitions which constitutes a reverse takeover
under AIM Rule 14 (including seeking re-admission as an investing
company (as defined under the AIM Rules)) on or before the date
falling six months from completion of the Disposal or be
re-admitted to trading on AIM as an investing company under AIM
Rule 8 (which requires the raising of at least GBP6 million in cash
via an equity fundraising on, or immediately before, re-admission)
failing which, the Company's Ordinary Shares would then be
suspended from trading on AIM pursuant to AIM Rule 40. Admission to
trading on AIM would be cancelled six months from the date of
suspension should the reason for the suspension not have been
rectified pursuant to AIM Rule 41.
As an AIM Rule 15 a cash shell, the Company would also have no
operating cash flow and would be dependent on its retained cash
balances for its working capital requirements.
Proposed Board change
Andrew Gutmann has informed the Board that he intends to step
down as a director with effect from the conclusion of the General
Meeting on the basis that the Company is now embarking on a new
direction. We thank Andrew for his support to date.
Future strategy and change of name
Following the distribution of the Ferrum Shares and the making
of the working capital loan to Ferrum, WAFM will have cash
resources of approximately GBP2.1 million.
Should Shareholders approve the Proposals, the Board intends to
seek acquisition opportunities in the life sciences and
biotechnology sector. The Board's current intention is that on
completion of an acquisition in this new sector, the Board will
seek admission of the Company's issued share capital to the
standard listing segment of the Official List and to trading on the
main market for listed securities of the London Stock Exchange and
to simultaneously cancel trading of its issues share capital on
AIM.
In light of the proposed new business activity the Board
proposes to change the name of the Company to OKYO Pharma
Corporation, subject to Shareholder approval at the General
Meeting.
General Meeting
The Notice convening the General Meeting of the Company to be
held at the offices of Cooley (UK) LLP, Dashwood, 69 Old Broad
Street, London EC2M 1QS, United Kingdom at 10.00 a.m. on 10 January
2018 at which the Resolutions will be proposed is being posted
today.
Recommendation
The Directors are unanimously in favour of the Proposals, which
they consider are in the best interests of Shareholders.
Accordingly, the Directors unanimously recommend Shareholders to
vote in favour of the Resolutions. The Directors have no interests
in the Ordinary Shares. Certain Shareholders have undertaken to
vote in favour of all the Resolutions in respect of their own
shareholdings which amount in aggregate to 116,087,103 Ordinary
Shares, representing 30.45% of the Company's issued share
capital.
For further information contact:
West African Minerals Corporation Willy Simon +44 (0)20 7382 8300
Roland Cornish
Beaumont Cornish Limited (Nominated Adviser) Michael Cornish +44 (0)20 7628 3396
Beaufort Securities Limited (Broker) Jon Belliss +44 (0)20 7382 8300
Further information is available on the Company's website:
www.westafricanminerals.com
This announcement is inside information for the purposes of
Article 7 of Regulation 596/20014.
Forward looking statements
Certain statements in this Document constitute "forward-looking
statements". Forward-looking statements include statements
concerning the plans, objectives, goals, strategies and future
operations and performance of the Company and the assumptions
underlying these forward-looking statements. The Company uses the
words "anticipates", "estimates", "expects", "believes", "intends",
"plans", "may", "will", "should", and any similar expressions to
identify forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other
important factors that could cause the Company's actual results,
performances or achievements to be materially different from any
future results, performances or achievements expressed or implied
by such forward-looking statements. Such forward-looking statements
are based on numerous assumptions regarding present and future
business strategies and the environment in which the Company will
operate in the future. These forward-looking statements speak only
as at the date of this Document. The Company is not obliged, and
does not intend, to update or to revise any forward-looking
statements, whether as a result of new information, future events
or otherwise except to the extent required by any applicable law or
regulation. All subsequent written or oral forward-looking
statements attributable to the Company, or persons acting on behalf
of the Company, are expressly qualified in their entirety by the
cautionary statements contained throughout this Document. As a
result of these risks, uncertainties and assumptions, a prospective
investor should not place undue reliance on these forward-looking
statements.
Financial data
Certain figures contained in this Document, including financial,
statistical and operating information, have been subject to
rounding adjustments. Accordingly, in certain circumstances, the
sum of the numbers in a column or row in a table contained in this
Document may not conform exactly to the total figure given for that
column or row.
PART I
LETTER FROM THE CHAIRMAN OF WEST AFRICAN MINERALS
CORPORATION
Dear Shareholder
Proposed Disposal and Special Dividend, change of name and
Notice of General Meeting
1. Introduction
This Document sets out details of the proposed Disposal of the
Company's holding of Ferrum Shares by way of the Special Dividend,
following completion of which, the Company will become an AIM Rule
15 cash shell. The purpose of this Document is to provide you with
the background to and to explain why the Directors consider the
Proposals to be in the best interests of the Company and its
Shareholders as a whole and why they recommend that Shareholders
should vote in favour of the Resolutions to be proposed at the
General Meeting.
A notice convening a General Meeting for 10.00 a.m. on 10
January 2018, at the offices of Cooley (UK) LLP, Dashwood, 69 Old
Broad Street, London EC2M 1QS, United Kingdom to consider the
Resolutions, is set out at the end of this Document.
Andrew Gutmann has informed the Board that he intends to step
down as a director with effect from the conclusion of the General
Meeting on the basis that the Company is now embarking on a new
direction. We thank Andrew for his support to date.
2. Background
The Company was re-admitted to AIM in January 2012 with the
objective of developing its iron ore exploration assets in Cameroon
and Sierra Leone. In August 2015, the Company announced that it had
completed its withdrawal from Sierra Leone and had sold its
subsidiary owning all of the Group's Sierra Leone licences for a
nominal consideration. The Company's remaining assets are its
Cameroon licences, comprising mainly the Sanaga Iron Ore Project
located near the Port of Douala, Cameroon (the "Sanaga Project"),
and cash at bank and on hand which amounted to approximately
GBP2.67 million as at 30 September 2017.
On 12 May 2017, the Company announced the results of a scoping
study on the Sanaga Project which had been prepared by Royal
Haskoning DHV in accordance with The JORC Code (2012) ("Scoping
Study"). The anticipated costs of progressing the Sanaga Project to
the production stage were estimated in the Scoping Study at between
US$194 million to US$298 million (dependent upon methodology of ore
delivery).
While the Board's plan was to examine opportunities to
commercialise the Sanaga Project, commercial viability and, more
importantly, the ability to raise sufficient equity or debt capital
for the development phase will in the Board's view remain very
challenging in current market conditions in the junior iron ore
development sector. The Scoping Study was based on a long term
forecast of 69% concentrate (CFR China) of US$112 / tonne and
estimated operating costs per concentrate tonne at between US$76.55
and US$82.2. This compares to the current spot price for 62%
concentrate of US$67.46 / tonne (against a 52 week range of
US$62.28 / tonne to US$89.62 / tonne), and, even taking account of
the premium of US$15-20 that 69% fe concentrates can command,
current iron ore prices remain substantially below the long term
price of US$112 / tonne used in the Scoping Study.
The Board concluded that while ultimately the Sanaga Project may
be developed, it is difficult to have any visibility as to if and
when this might be possible, and without which, there is almost no
immediate prospect of re-building shareholder value. Furthermore,
given the ongoing costs of operating a listing on AIM, there is a
risk that over time the Company's current cash balances will simply
be depleted by general expenses. Accordingly, on 13 November 2017,
the Company announced that it had decided not to progress the
Sanaga Project any further at this time and did not intend to
expend any further funds on the Company's iron ore assets other
than is strictly required to maintain the licences in good standing
and preserve value pending any prospective sale of the assets.
The Board has concluded its review of the disposal options and
announced earlier today the proposed disposal of all the Company's
remaining iron interests to Shareholders by way of the Special
Dividend, subject to Shareholder approval under the AIM Rules.
Should Shareholders approve the Proposals, following the
completion of the Disposal, the Company will become an AIM Rule 15
cash shell, following which the Board intends to seek acquisition
opportunities in the life sciences and biotechnology sector. The
Board's current intention is that on completion of an acquisition
in this new sector, the Board will seek admission of the Company's
issued share capital to the standard listing segment of the
Official List and to trading on the main market for listed
securities of the London Stock Exchange and to simultaneously
cancel trading of its issued share capital on AIM.
3. The Special Dividend
The Board proposes therefore to make an in specie distribution
of its entire holding of Ferrum Shares (Ferrum holds, indirectly,
all the Company's remaining Cameroon licences, including the Sanaga
Project) to Shareholders by way of the Special Dividend. The Board
believes the Special Dividend will enable Shareholders to share in
any future potential sale of the Sanaga Project or Ferrum
itself.
The Board therefore proposes to make the Special Dividend to
Shareholders on the Record Date on the following basis:
For every Ordinary Share 1 Ferrum Share
The Special Dividend is conditional, inter alia, on approval by
Shareholders at the General Meeting to be held on 10 January 2018.
There can be no assurance at this time that Shareholders will
approve the Special Dividend.
The Special Dividend will be paid to Shareholders on the
register at the Record Date which is close of business on 10
January 2018. The issued share capital of Ferrum will be increased
immediately prior to the Special Dividend such that the number of
Ferrum Shares in issue will exactly match the number of Ordinary
Shares in issue on the Record Date (including any new Ordinary
Shares to be issued prior to the Record Date).
The Ferrum Shares will not directly (or indirectly through
Depositary Interests) be held in CREST. Share certificates in
respect of Ferrum Shares will be dispatched to Shareholders as soon
as is reasonably practical.
Company law in the British Virgin Islands provides that a
company may pay a dividend even if it does not have available
distributable profits as shown in its accounts (subject to certain
solvency requirements).
Ferrum will, as a result of the Special Dividend, cease to be
part of the Group. Ferrum will owe US$4,000,000 to WAFM. This
US$4,000,000 is made up of the written down value of all of the
existing loans to Ferrum and its subsidiaries together with a new
working capital loan of US$600,000 (GBP447,761) which is expected
to cover the basic working capital needs of Ferrum and the Sanaga
Project for the next 18 months following completion of the
Disposal. WAFM has attributed no recoverable value to this loan
balance as the Directors are unable to conclude that there is a
reasonable prospect of repayment. However, in the event that a
party sought to purchase the Sanaga Project, Ferrum or any of the
intermediate corporate entities, the loan would become repayable
upon demand. This means that in order for a holder of Ferrum Shares
to see or realise any value from their Ferrum Shares, any disposal
transaction involving the Sanaga Project would need to yield
proceeds in excess of US$4,000,000.
In the interim accounts for the period ended 30 September 2017
the Directors resolved that in light of: (i) the prevailing iron
ore price; (ii) the futures markets showing no signs of any near
terms recovery; and (iii) the intentions to table these proposals
for approval by shareholders, that it was prudent to write down the
carrying value of the investment in Ferrum and all associated loans
to a nominal value of GBP1.00.
Further information on the tax consequences of the Special
Dividend are set out in Section 10 below.
4. Further information on Ferrum
As explained above, in order to provide Ferrum with working
capital as a stand-alone entity to maintain its licences in good
standing and preserve value pending any prospective sale of the
assets for up to a further 18 months, Ferrum's cash balances on
completion of the Special Dividend will initially amount to
US$600,000, which will be funded from the Company's current cash
balances of GBP2.67 million.
Ferrum is incorporated in the British Virgin Islands. The Ferrum
Board will initially comprise Willy Simon and members of local
management as directors. Ferrum will adopt new articles of
association prior to the General Meeting which will provide certain
protections to the ongoing shareholders in Ferrum and in
particular:
-- to include provisions equivalent to the UK Takeover Code to ensure equality of treatment of shareholders;
-- to require the holding of an annual general meeting; and
-- requiring the directors to circulate accounts to shareholders.
Ferrum's new articles of association will be posted to the
Company's website in advance of the General Meeting at
www.westafricanminerals.com/content/investor-centre/corporate-documents.
5. AIM Rule 15
On completion of the Disposal, the Company would cease to own,
control or conduct all or substantially all, of its existing
trading business, activities or assets and, in accordance with AIM
Rule 15, the Disposal constitutes therefore a fundamental change of
business of the Company. Accordingly, the Special Dividend is
conditional, inter alia, on approval by Shareholders at the General
Meeting.
Following completion of the Disposal, the Company will become an
AIM Rule 15 cash shell and as such will be required to make an
acquisition or acquisitions which constitutes a reverse takeover
under AIM Rule 14 (including seeking re-admission as an investing
company (as defined under the AIM Rules)) on or before the date
falling six months from completion of the Disposal or be
re-admitted to trading on AIM as an investing company under AIM
Rule 8 (which requires the raising of at least GBP6 million in cash
via an equity fundraising on, or immediately before, re-admission)
failing which, the Company's Ordinary Shares would then be
suspended from trading on AIM pursuant to AIM Rule 40. Admission to
trading on AIM would be cancelled six months from the date of
suspension should the reason for the suspension not have been
rectified pursuant to AIM Rule 41.
As an AIM Rule 15 a cash shell, the Company would also have no
operating cash flow and would be dependent on its retained cash
balances for its working capital requirements.
6. Illustrative pro-forma net assets
An illustrative pro forma of net assets of the Company as at 30
September 2017 to show the impact of the Proposals is set out in
Part III of this Document.
7. Future strategy, change of name and redomicile
Following the distribution of the Ferrum Shares and the making
of the working capital loan to Ferrum, WAFM will have cash
resources of approximately GBP2.1 million.
Should Shareholders approve the Proposals, the Board intends to
seek acquisition opportunities in the life sciences and
biotechnology sector. The Board's current intention is that on
completion of an acquisition in this new sector, the Board will
seek admission of the Company's issued share capital to the
standard listing segment of the Official List and to trading on the
main market for listed securities of the London Stock Exchange and
to simultaneously cancel trading of its issues share capital on
AIM. The Board is actively involved in the appraisal of
opportunities.
In light of the proposed new business activity the Board
proposes to change the name of the Company to OKYO Pharma
Corporation, subject to Shareholder approval at the General
Meeting.
WAFM is currently incorporated and registered in the British
Virgin Islands. Following completion of the Disposal, the Board
plans to re-domicile the Company to Guernsey, subject to the
appropriate approvals to do so.
8. Irrevocable undertakings
The Company has received irrevocable undertakings from
Shareholders in respect of 116,087,103 Ordinary Shares representing
in aggregate 30.45% of the Company's issued share capital to vote
in favour of the Resolutions.
9. CREST and Depositary Interests
Shares of most UK companies cannot be held and transferred
directly into the CREST system. CREST is a paperless settlement
system allowing securities to be transferred from one person's
CREST account to another without the need to use share certificates
or written instruments of transfer. Shareholders who wish to hold
and transfer Ordinary Shares in uncertificated form may do so
pursuant to a Depositary Interest arrangement established by the
Company.
Depositary Interests facilitate the trading and settlement of
shares in non-UK companies into CREST. The Ordinary Shares are not
themselves admitted to CREST. Instead the Depositary issues
Depositary Interests in respect of the Ordinary Shares. The
Depositary Interests are independent securities constituted under
English law that may be held and transferred through CREST.
Depositary Interests have the same international security
identification number (ISIN) and tradeable instrument display
mnemonic (TIDM) as the underlying Ordinary Shares. The Depositary
Interests are created and issued pursuant to a deed poll with the
Depositary, which governs the relationship between the Depositary
and the holders of the Depositary Interests.
Ordinary Shares represented by Depositary Interests are held on
bare trust for the holders of the Depositary Interests. Each
Depositary Interest is treated as one Ordinary Share for the
purposes of determining eligibility for dividends, issues of bonus
stock and voting entitlements. In respect of any cash dividends,
the Company will put the Depositary in funds for the payment and
the Depositary will transfer the money to the holders of the
Depositary Interests. In respect of any bonus stock, the Company
will allot any bonus stock to the Depositary who will issue such
bonus stock to the holder of the Depositary Interest (or as such
holder may have directed) in registered form.
In respect of voting, the Depositary will cast votes in respect
of the Ordinary Shares as directed by the holders of the Depositary
Interests which the relevant Ordinary Shares represent.
10. Taxation
General
For United Kingdom resident Shareholders, the receipt of Ferrum
Shares as a part of the Proposals will be treated as a distribution
for tax purposes. The value of a Shareholder's dividend receipt
will be equal to the market value on the Record Date of the Ferrum
Shares received by them. For the reasons explained in Section 3
above, the Board consider the value of the Special Dividend to be
nominal and have reached that conclusion having taken advice from
its legal advisers. There can be no assurance however, that the
market value will not exceed the Board's estimate of the market
value. Shareholders should seek appropriate advice in respect of
the Proposals outlined and how this affects their personal tax
position.
This Section 10 contains a general outline of the taxation
implications of the payment of the Special Dividend for certain
Shareholders that are tax resident in the United Kingdom. This does
not constitute tax advice. This Document does not take into account
Shareholders' individual investment objectives, financial situation
or needs. This Document is not a complete analysis of all taxation
laws which may apply in relation to the Proposals for Shareholders.
All Shareholders should consult with their own independent taxation
advisers regarding the taxation implications of participating in
the Proposals given the particular circumstances which apply to
them.
Special rules may apply to certain Shareholders such as (but not
limited to) tax exempt organisations, listed investment companies,
insurance companies, superannuation funds, banks, Shareholders who
hold their shares as trading stock or persons who have (or are
deemed to have) acquired their shares by virtue of an office or
employment or persons who are treated as holding their shares as
carried interest. This outline does not address any of the above
circumstances or special rules.
This outline relates solely to matters governed by, and should
be interpreted in accordance with, the laws of the United Kingdom
as in force and as interpreted at 9.00 a.m. (GMT) on the date of
this Document. Future amendments to taxation legislation or its
interpretation by the courts or the taxation authorities may take
effect retrospectively and/or affect the conclusions drawn. This
outline does not take into account or anticipate changes in the law
(by legislation or judicial decision) or practice (by ruling or
otherwise) after that time.
The outline below is intended to apply only to Shareholders who
(i) are resident in (and only in) and, in the case of individuals,
domiciled in, the United Kingdom for United Kingdom tax purposes
and to whom split-year treatment does not apply, (ii) hold their
Ordinary Shares and their Ferrum Shares as investments (other than
under an individual savings account or self-invested personal
pension) and (iii) are the beneficial owner of their Ordinary
Shares and any dividends paid on them.
UK resident corporation taxpayers
A corporate Shareholder resident (for tax purposes) in the
United Kingdom will be liable to UK corporation tax (the current
corporation tax rate is 19%) on the market value of any dividend
received unless the dividend falls within one of the exempt
classes. This will depend upon the circumstances of the particular
Shareholder and therefore the Shareholder should seek independent
professional advice on the issue. Shareholders within the charge to
United Kingdom corporation tax which are 'small companies' for the
purposes of United Kingdom taxation of dividends will not generally
be exempt from United Kingdom tax on the Special Dividend receipt.
Other Shareholders within the charge to United Kingdom corporation
tax will not be subject to tax on the Special Dividend so long as
the Special Dividend falls within an exempt class and certain
conditions are met and the Shareholder has not elected for
dividends not to be exempt. For example, dividends paid on shares
that (i) do not carry any present or future preferential right to
dividends or to assets on a winding-up and (ii) are ordinary shares
and not redeemable, and dividends paid to a person holding less
than 10% of the issued share capital of the payer (or any class of
that share capital), are generally dividends that fall within an
exempt class.
UK resident individual taxpayers
Individual Shareholders resident (for tax purposes) in the
United Kingdom will be subject to dividend income tax on the market
value of the Special Dividend received. UK resident and domiciled
individuals will receive a dividend allowance in the form of a 0%
tax rate on the first GBP5,000 of dividend income per year. This
dividend allowance will reduce to GBP2,000 per year for dividends
received on or after 6 April 2018. Dividend receipts in excess of
this allowance will be taxed at the rates of 7.5% for basic rate
income tax payers, 32.5% for higher rate income tax payers, and
38.1% for additional rate income tax payers. Dividend income is
treated as the top slice of the total income chargeable to United
Kingdom income tax.
United Kingdom stamp duty and SDRT
No United Kingdom stamp duty or SDRT should be payable by the
Shareholders in respect of the distribution of Ferrum Shares to
them as a result of the Special Dividend.
Taxation of capital gains on future disposal of the Ferrum
Shares
An individual Shareholder who is resident in the United Kingdom
(for tax purposes) may be liable to capital gains tax on his/her
disposal of Ferrum Shares. An individual who is temporarily
resident outside the UK (for tax purposes) may be liable on his or
her return to the UK to capital gains tax on any gains realised
while he or she was abroad. A UK resident corporate Shareholder may
be liable to corporation tax on chargeable gains on the disposal of
any of its Ferrum Shares.
11. General Meeting
There is set out at the end of this Document a notice convening
the General Meeting of the Company to be held at the offices of
Cooley (UK) LLP, Dashwood, 69 Old Broad Street, London EC2M 1QS,
United Kingdom at 10.00 a.m. on 10 January 2018.
The business of the General Meeting is as follows:
1. to approve the Disposal and Special Dividend; and
2. to approve the change of name of the Company to OKYO Pharma Corporation.
Resolution 1: Approval of the Disposal and the Special
Dividend
Resolution 1 is proposed on the basis that the Special Dividend
is a transaction constituting a "disposal resulting in a
fundamental change of business" for the purposes of Rule 15 of the
AIM Rules.
Accordingly Resolution 1 seeks shareholder approval for the
Disposal in accordance with Rule 15 of the AIM Rules and payment of
the Special Dividend, as a final dividend.
Resolution 2: Change of Name
That in light of the proposed new business activity we propose
and seek shareholder approval to change the name of the Company to
OKYO Pharma Corporation.
12. Action to be taken
Shareholders will find enclosed with this Document a Form of
Proxy and a Form of Instruction for use at the General Meeting.
Whether or not you intend to be present at the General Meeting, you
are requested to complete, sign and return: (i) your Form of Proxy
for holders of Ordinary Shares to Computershare Investor Services
(Jersey) Limited, c/o Computershare Investor Services PLC, The
Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom or
send by fax 00 44 870 703 6116, as soon as possible but, in any
event, so as to be received no later than 10.00 a.m. on 8 January
2018 or 48 hours prior to the time fixed for the General Meeting;
or (ii) your Form of Instruction for holders of Depositary
Interests to Computershare Investor Services PLC, The Pavilions,
Bridgwater Road, Bristol BS99 6ZY, United Kingdom or send by fax to
00 44 870 703 6116, as soon as possible but, in any event, so as to
be received no later than 4.00 p.m. on 5 January 2018 or 72 hours
prior to the time fixed for the General Meeting.
The completion and return of a Form of Proxy or a Form of
Instruction will not preclude you from attending the meeting and
voting in person should you wish to do so. Shareholders should,
however, contact Computershare Investor Services PLC in advance to
confirm what identity documents they should bring with them and to
complete a form of representation (available on request from
Computershare Company Nominees Limited) if they wish to attend and
vote in person.
13. Recommendation
The Directors are unanimously in favour of the Proposals, which
they consider are in the best interests of Shareholders.
Accordingly, the Directors unanimously recommend Shareholders to
vote in favour of the Resolutions. The Directors have no interests
in the Ordinary Shares. As described at Section 7 above, certain
Shareholders have undertaken to vote in favour of all the
Resolutions in respect of their own shareholdings which amount in
aggregate to 116,087,103 Ordinary Shares, representing 30.45% of
the Company's issued share capital.
Yours sincerely
Willy Simon
Non-Executive Chairman
PART II
RISK FACTORS
Shareholders should carefully consider all of the information in
this Document including the risks below. The Board has identified
these risks as material risks, but additional risks and
uncertainties not presently known to the Board, or that the Board
consider immaterial, may also adversely affect the Company. If any
or a combination of the following risks materialise, the Company's
business, financial condition and/or performance could be
materially adversely affected. In any such case the market price of
the Ordinary Shares could decline or the value of the Ferrum Shares
could reduce.
The following risk factors should not be considered in any order
of priority. The Company's future performance might be affected by
changes in market conditions and legal, regulatory and tax
requirements.
PART A - RISK RELATING TO THE COMPANY
AIM Rule 15 Deadlines
In accordance with AIM Rule 15, the Disposal constitutes a
fundamental change of business of the Company. On Completion, the
Company would cease to own, control or conduct all or substantially
all, of its existing trading business, activities or assets.
Following completion of the Disposal, the Company will become an
AIM Rule 15 cash shell and as such will be required to make one or
more acquisitions which constitute a reverse takeover under AIM
Rule 14 (including seeking re-admission as an investing company (as
defined under the AIM Rules)) on or before the date falling six
months from completion of the Disposal or be re-admitted to trading
on AIM as an investing company under the AIM Rules (which requires
the raising of at least GBP6 million) failing which, the Ordinary
Shares would then be suspended from trading on AIM pursuant to AIM
Rule 40. Admission to trading on AIM would be cancelled six months
from the date of suspension should the reason for the suspension
not have been rectified.
Any failure therefore in completing one or more acquisitions
which constitute a reverse takeover under AIM Rule 14 (including
seeking re-admission as an investing company (as defined under the
AIM Rules)) will result in the cancellation of the Shares from
trading on AIM.
Identifying a suitable target
The Company will be dependent upon the ability of the Board to
identify suitable acquisition targets. There is no guarantee that
the Company will be able to acquire an identified opportunity at an
appropriate price, or at all, as a consequence of which resources
might have been expended fruitlessly on investigative work and due
diligence.
Limited current funds
As an AIM Rule 15 cash shell the Company would also have no
operating cash flow and would be dependent on its current cash
balances for its working capital requirements.
Market conditions
Market conditions may have a negative impact on the Company's
ability to make one or more acquisitions which constitute a reverse
takeover under AIM Rule 14. There is no guarantee that the Company
will be successful meeting the AIM Rule 15 deadline as described
above.
Costs associated with potential acquisition or acquisitions
The Company expects to incur certain third party costs
associated with the sourcing of one or more suitable acquisitions.
The Company can give no assurance as to the level of such costs,
and given that there can be no guarantee that negotiations to
acquire any given target business will be successful, the greater
the number of deals that do not reach completion, the greater the
likely impact of such costs on the Company's performance, financial
condition and business prospects.
Future financing
The only sources of financing currently available to the Company
are its current cash at hand and any potential future issue of
additional equity capital or shareholder loans. The Company's
ability to raise further funds will depend on the success of
existing and acquired investments. The Company may not be
successful in procuring the requisite funds on terms which are
acceptable to it (or at all) and Shareholders' holdings of Ordinary
Shares may be materially diluted in due course by subsequent equity
issues.
PART B - RISKS RELATING TO FERRUM
Ferrum's future financing
Ferrum's cash balances on completion of the Disposal will amount
to US$600,000. There can be no assurance that these funds will be
sufficient for Ferrum to maintain its licences in good standing and
preserve value pending any prospective sale of the assets prior to
any sale of Ferrum or its licences to a third party. In the event
that such funds are insufficient, and if Ferrum is unable to raise
any additional capital, then Ferrum may have to cease trading and
there would be no prospect of any return to shareholders. As a
private company, Ferrum may also have limited access to additional
funds should they be required.
Dilution
Should Ferrum raise additional funds as a private company by way
of an issue of Ferrum Shares, Shareholders' interests in Ferrum may
be materially diluted at such time.
No liquidity in Ferrum Shares
While the Ferrum Shares will remain freely transferrable, there
will be no formal market mechanism enabling Shareholders to trade
their Ferrum Shares and, furthermore, no other recognised market or
trading facility will be available to enable trading of the Ferrum
Shares. It may be difficult for Shareholders to determine the
market value of their investment in Ferrum at any given time.
Limited regulatory oversight
The levels of transparency and corporate governance within
Ferrum will be less stringent than that for a company quoted on AIM
as the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply to Ferrum. Shareholders will no longer be afforded the
protections given by the AIM Rules, including the requirement to be
notified of certain events, and otherwise in relation to
substantial transactions, reverse takeovers, related party
transactions and fundamental changes in the Company's business.
PART C - RISKS RELATING TO THE SPECIAL DIVID
Taxation
Whilst the Company has taken professional advice as to the tax
consequences of the dividend for Shareholders and the value of that
dividend for tax purposes, it is possible that relevant tax
authorities in which Shareholders are tax resident may seek to
challenge the nominal value that has been attributed to it by the
Directors. Accordingly, if any tax authority were to successfully
challenge the value of the dividend, a Shareholder may become
liable to pay tax on an asset which is illiquid and no readily
realisable. Given that the purpose of the Disposal is to completely
separate the Company on an ongoing basis from its past history, the
Company will not use its limited resources in challenging any
action or valuation imposed by any tax authority outside of the
British Virgin Islands.
The above taxation considerations are non-exhaustive and
Shareholders should seek their own independent advice when
assessing the likely impact of the Special Dividend on them.
PART III
ILLUSTRATIVE PRO FORMA STATEMENT OF NET ASSETS
The following table sets out a pro forma statement of net assets
of the Company, illustrating the effect on the Company of the
proposed Disposal as if it had taken place as at 30 September 2017,
the date of the last published unaudited interim financial
statements of for the Company. The pro forma statement of net
assets is illustrative only and, because of its nature, may not
reflect the actual financial position of the Company following
completion of the Special Dividend.
30 September Adjustments Pro forma
2017 to reflect following
disposal(1)(2) the disposal
(unaudited)
GBPGBP GBPGBP GBPGBP
Assets
Property, plant and
equipment 42,518 (42,518) 0
Loan to former subsidiary - 447,761 447,761
Total non-current assets 42,518 405,243 447,761
---------------- ---------------- --------------
Current Assets
Cash and cash equivalents 2,666,675 (447,761) 2,218,914
Trade and other receivables 167,257 - 167,257
Total Current assets 2,833,932 (447,761) 2,386,171
---------------- ---------------- --------------
Total Assets 2,876,450 (42,518) 2,833,932
================ ================ ==============
Equity
Share premium 66,192,355 (63,583,523) 2,608,832
Foreign currency translation
reserve (10,479) - (10,479)
Retained deficit (63,541,005) 63,541,005 -
---------------- ---------------- --------------
Shareholders' equity 2,640,871 (42,518) 2,640,871
---------------- ---------------- --------------
Liabilities
Trade and other payables 235,579 - 235,579
Total equity and liabilities 2,876,450 (42,518) 2,833,932
================ ================ ==============
(1) Adjustments have been made to reflect a new working capital
loan to Ferrum in the sum of US$600,000 (GBP447,761) and an
associated disposal of property, plant and manufacturing in the
legal ownership of entities the subject of the disposal.
(2) A capital reduction has been effected offering the retained
deficit against share premium.
Appendix I
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of this Document 21 December
2017
Latest time and date for receipt 10.00 a.m.
of Forms of Proxy for General Meeting on
8 January
2018
Latest time and date for receipt 4.00 p.m. on
of Forms of Instruction for General 5 January
Meeting 2018
General Meeting 10.00 a.m.
on
10 January
2018
Expected ex-date 7.00 a.m. on
11 January
2018
Record Date for the Special Dividend Close of business
on
10 January
2018
Expected distribution of Ferrum Shares Late January
2018
(Note 3)
Notes
1. References to times in this Document are to London time unless otherwise stated.
2. If any of the above times or dates should change, the revised
times and/or dates will be notified to Shareholders by an
announcement on an RNS (and posted on the Company's website at
www.westafricanminerals.com) in accordance with the Company's
articles of association.
3. Subject to local arrangements in the British Virgin Islands.
APPIX II
DEFINITIONS
In this Document, the following expressions have the following
meanings unless the context otherwise requires:
"AIM" the market of that name operated
by the London Stock Exchange
"AIM Rules" the AIM Rules For Companies whose
securities are admitted to trading
on AIM, as published by the London
Stock Exchange from time to time
"Board" or the directors of the Company
"Directors"
"CGT" capital gains tax
"CREST" the relevant system (as defined
in the Uncertificated Securities
Regulations 2001) in respect of
which Euroclear UK & Ireland Limited
is the operator (as defined in those
regulations)
"Depositary" Computershare Investor Services
PLC of The Pavilions, Bridgwater
Road, Bristol BS99 6ZY
"Depositary the interests representing Ordinary
Interests" Shares issued through the Depositary
"Disposal" the proposed disposal of the Ferrum
Shares by means of the Special Dividend
"Document" this document, containing details
of the Proposals
"FCA" the Financial Conduct Authority
"Ferrum" Ferrum Resources Limited, a wholly-owned
subsidiary of WAFM
"Ferrum Shares" the ordinary shares of no par value
in the capital of Ferrum
"Form of Instruction" the form of instruction for use
in connection with the General Meeting
(or any adjournment thereof) enclosed
with this Document
"General Meeting" the general meeting of the Company
convened for 10.00 a.m. on 10 January
2018 (or any adjournment thereof),
notice of which is set out at the
end of this Document
"Group" the Company and the subsidiaries
and subsidiary undertakings, from
time to time
"London Stock London Stock Exchange PLC
Exchange"
"Nominated Beaumont Cornish Limited, the Company's
Adviser" nominated adviser in accordance
with the AIM Rules
"Notice of the notice of General Meeting set
General Meeting" out at the end of this Document
or "Notice"
"Ordinary Shares" ordinary shares of no par value
in the capital of the Company
"Proposals" the proposals set out in this Document,
whereby Shareholders are being asked
to consider, and if thought fit,
approve: (i) the Disposal; (iii)
the Special Dividend; and (iii)
a change of the name of the Company
to OKYO Pharma Corporation
"Qualifying those Shareholders whose names appear
Shareholders" on the Register on the Record Date
"Record Date" close of business on 10 January
2018
"Register" the register of members of the Company
"Resolutions" the resolutions to be proposed at
the General Meeting as set out in
the Notice of General Meeting at
the end of this Document
"Reverse Takeover" has the meaning given to it in Rule
14 of the AIM Rules
"Sanaga Project" the iron ore project located near
the Port of Douala, Cameroon
"SDRT" Stamp Duty Reserve Tax
"Shareholders" holders of Ordinary Shares
"Special Dividend" the distribution of Ferrum Shares
to Shareholders on the Record Date
"WAFM" or "the West African Minerals Corporation,
Company" a company incorporated in the British
Virgin Islands with registered number
1415559
"GBP" pound sterling, being the lawful
currency for the time being of the
United Kingdom
"US$" the United States dollar, being
the lawful currency for the time
being of the United States of America
Throughout this Document, the exchange rate of GBP1:US$1.34 has
been used unless otherwise stated.
All references to legislation in this Document are to the
legislation of England and Wales unless the contrary is indicated.
Any reference to any provision of any legislation shall include any
amendment, modification, re-enactment or extension thereof. Words
imparting the singular shall include the plural and vice versa, and
words imparting the masculine gender shall include the feminine or
neutral gender.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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