TIDMSTI
RNS Number : 4850F
Stratex International PLC
18 May 2017
Stratex International plc / Index: AIM / EPIC: STI / Sector:
Mining
Stratex International plc
("Stratex" or the "Company")
Proposed Acquisition of Crusader Resources Limited
Stratex International plc, the AIM-quoted gold exploration and
development company is pleased to announce that it has signed a
non-binding Heads of Agreement ("Agreement" or "HoA") to acquire
the entire issued and to be issued share capital of ASX listed
Crusader Resources Limited ("Crusader") by way of an Australian
Scheme of Arrangement on a share exchange basis (the "Proposed
Transaction"). Any acquisition will be contingent on, inter alia,
the completion of successful due diligence, the agreement of
definitive offer documentation and court, regulatory and
shareholder approvals, and re-admission of Stratex's enlarged
issued share capital to trading on the AIM market of the London
Stock Exchange ("AIM").
Key Highlights:
-- Stratex has signed a non-binding Heads of Agreement to
acquire the entire issued and to be issued share capital of
Crusader. Listed on the Australian Stock Exchange (ASX:CAS),
Crusader is a specialised mineral producer focussed on precious
metals and bulk commodities in Brazil with more than 12 years of
experience of operating in the country;
-- Crusader has two advanced gold projects in Brazil, Borborema
and Juruena, with combined JORC-compliant resources of 2.7Moz Au,
as well as the Posse Iron Ore Mine;
-- Under the Agreement, Crusader shareholders will be entitled to receive 6.60 Stratex ordinary shares of 1 pence each ("Ordinary Shares") for every Crusader share held (the "Exchange Ratio") on the basis of deemed share prices of 1.56 pence for Stratex, which is a 15 day volume weighted average price ("VWAP") as of market close on 17 May 2017, and A$0.18 for Crusader, which values the total ordinary share capital of Crusader at approximately A$54.2 million (being equivalent to GBP31.1 million);
-- Immediately following the Proposed Transaction becoming
effective, Crusader shareholders would hold approximately 81.0% of
the enlarged company;
-- The Board considers the Proposed Transaction to be value
accretive for both companies' shareholders, and underpins Stratex's
vision of becoming a near-term gold production and exploration
company.
Commenting on the transaction, Stratex's Chief Executive
Officer, Marcus Engelbrecht, said: "We are delighted to have
entered into this Agreement with Crusader which, if successfully
implemented, will see Stratex acquire substantial and highly
prospective gold projects to add to our already exciting asset
portfolio. This development is aligned with our long-term strategy
of becoming a significant gold production, development and
exploration company, and we believe it has the potential to provide
significant value to our shareholders and take us a step closer to
operating highly deliverable gold mines."
Commenting on the transaction, Crusader's Chairman, Stephen
Copulos, said: "We are very pleased to be exploring joining forces
with Stratex as Marcus Engelbrecht and his team look to create a
pre-eminent mid-tier gold producer, developer and explorer. The
Proposed Transaction should, if implemented, provide for an uplift
in value for Crusader shareholders and with Stratex's existing cash
balance of over A$12 million, funding to progress the Borborema and
Juruena projects. The combined company will be able to leverage off
its significant balance sheet, strong portfolio of gold development
and exploration assets and highly regarded combined management team
to move forward to project development in the near-term."
About Crusader Resources Ltd
Crusader is a minerals exploration and mining company listed on
the Australian Securities Exchange. Crusader has explored,
developed and operated in Brazil for over 12 years; a country that
it believes is vastly underexplored and which offers high potential
for the discovery of world class mineral deposits within a
favourable taxation regime.
Borborema Gold Project
The Borborema Gold Project is located in the Seridó area of the
Borborema province in north eastern Brazil. It is 100% owned by
Crusader and consists of three mining leases covering a total area
of 29 km(2) plus freehold title to the property over the main
prospect area. The project benefits from existing on-site
facilities and excellent infrastructure and proximity to major
cities.
In 2012, Crusader reported a JORC-compliant, Measured, Indicated
and Inferred Resource of 2.43Moz @ 1.10 g/t Au, comprising a Proven
and Probable Ore Reserve of 1.61Moz @ 1.18 g/t Au (0.4 & 0.5
g/t cut-offs for oxide & fresh ore). The Mineral Resource
remains open in all directions.
Juruena Gold Project
The Juruena Gold Project is located in the highly prospective
Juruena--Alta Floresta Gold Belt of central Brazil that extends
east--west for more than 400km and has historically produced more
than 7Moz of gold from 40 known gold deposits. Juruena has been
worked by artisanal miners (garimpeiros) since the 1980's,
producing an estimated 500Koz of gold to date. Since acquiring 100%
of the project in 2014, Crusader has completed more than 15,000
meters of diamond and reverse circulation (RC) drilling leading to
a JORC-compliant Mineral Resource estimate of 1.3Mt @ 6.3 g/t for
261koz Au over three key prospects.
Posse
The 100%-owned Posse Iron Ore Mine is located 30 km from Belo
Horizonte within Brazil's world famous Iron Quadrilateral in Minas
Gerais state. When open-pit mining began in March 2013, Posse
contained an Indicated and Inferred Resource of 36Mt at 43.5%
Fe.
For further information about Crusader, please visit Crusader's
website at www.crusaderresources.com.
Details of the Heads of Agreement
The Agreement is, for the most part, non-binding and there is no
certainty that the parties will be able to agree the formal Scheme
Implementation Agreement, or that the Proposed Transaction will
proceed.
The HoA is binding in respect of the following material
provisions:
-- Exclusivity: The parties have entered into a binding 4 week
period of exclusivity (subject to customary fiduciary and other
carve outs) during which time they intend to conduct due diligence
and negotiate final offer documentation.
-- Cost reimbursement: If either party indicates it wishes to
proceed with the Proposed Transaction on substantially the same
terms as the HoA, and the other party decides not to proceed (other
than by virtue of discovery, through due diligence, of information
which, in the opinion of that party and acting reasonably, if
announced, would be likely to have a material adverse impact on the
fair value of the other party's shares), then the other party is
obliged to reimburse that party's reasonable external costs
incurred between the date of execution of the HoA and the date of
termination of discussions between the parties, capped at
A$500,000.
Other standard provisions such as governing law (Western
Australia), further action, and variations, are also binding.
Proposed Transaction Details
The Proposed Transaction, if implemented, will be structured as
a scheme of arrangement under the Corporations Act 2001 in
Australia ("Scheme") and will be subject to court, regulatory and
shareholder approvals (including Australian Foreign Investment
Review Body approval, if applicable). The Proposed Transaction will
also constitute a reverse takeover under the AIM Rules for
Companies and will require, inter alia, the approval of Stratex
shareholders and re-admission of Stratex's Ordinary Shares to
trading on AIM. It is also intended that Stratex would consider the
need to apply for a listing of depositary interests representing
Stratex shares ("Stratex CDIs") on the ASX. It is expected that
Stratex's Ordinary Shares will continue to trade on AIM.
Both Stratex and Crusader acknowledge that the Scheme will be
implemented through a Scheme Implementation Agreement which will
contain customary conditions, terms, representations, warranties,
and other conditions, as are typical for a transaction of this
nature.
In addition, should a final offer be made by Stratex, the
Proposed Transaction will be conditional upon, inter alia, the
independent expert engaged by Crusader for the purposes of the
Proposed Transaction providing a report to Crusader which concludes
that the Proposed Transaction is in the best interests of Crusader
shareholders.
Consideration
Crusader currently has 301.1 million shares in issue. Stratex
has 467.3 million Ordinary Shares in issue. On the basis of the
Exchange Ratio, Stratex intends to issue a total of 1,988.1 million
Ordinary Shares to Crusader shareholders as consideration for the
Proposed Transaction. Therefore, immediately following the
Transaction (and prior to any potential share consolidation or
equity raising, and assuming that Stratex issues no further
Ordinary Shares before the Proposed Transaction completes) there
will be approximately 2,455.4 million Stratex Ordinary Shares or
Stratex CDIs on issue.
The offer price of A$0.18 per Crusader share represents:
-- A premium of 56.5% over the closing price of Crusader Shares on 17 May 2017 of A$0.115;
-- A premium of 65.6% over the 15 day VWAP of Crusader Shares as
of market close on 17 May 2017 of A$0.109; and
-- A premium of 68.9% over the 30 day VWAP of Crusader Shares as
of market close on 17 May 2017 of A$0.107.
Further, Crusader has 44.5 million options ("Crusader Options")
in issue with various exercise prices and expiry dates. The
outstanding Crusader Options will be exchanged for options over
Stratex Ordinary Shares, issued on comparable terms. This will be
effected by either option cancellation deeds entered into between
Stratex and the holders of Crusader Options or a separate Crusader
Options scheme of arrangement, as may be agreed between the parties
in the Scheme Implementation Agreement.
Due Diligence
The parties and their representatives will immediately undertake
a targeted and confirmatory mutual due diligence on each other, and
their respective group companies, assets and operations.
It should be noted that both Stratex and Crusader regularly
review a range of opportunities to enhance their businesses through
acquisitions, joint ventures and other combinations with companies,
in line with their stated objectives and there can be no certainty
at this point in time that the Proposed Transaction will
proceed.
* * ENDS * *
For further information please visit
www.stratexinternational.com, email info@stratexplc.com, or
contact:
Stratex International Tel: +44 (0) 20 7830 9650
Plc
Marcus Engelbrecht / Claire Bay
Crusader Resources Ltd Tel: +61 (0) 8 9320 7500
Paul Stephen / Rob Smakman
Grant Thornton UK LLP Tel: +44 (0) 20 7383 5100
(Nominated Adviser to
Stratex)
Philip Secrett / Samantha Harrison / Daniel Bush
Hannam & Partners (Advisory) Tel: +44 (0) 20 7907 8500
LLP
(Broker to Stratex)
Andrew Chubb / Neil Passmore
Camarco Tel: +44 (0) 20 3757 4980
Gordon Poole / Nick Hennis
Notes to Editors:
Since listing in 2006, Stratex has discovered more than 2.2Moz
of gold and 7.09Moz of silver, as well as 186,000 tonnes of copper.
The Company owns 15% of a copper-gold project at feasibility stage
and an exciting exploration project in Senegal. The Company also
has significant interests in Goldstone Resources Ltd, Thani Stratex
Resources Ltd and Tembo Gold Corp. for their exploration projects
in Ghana, Djibouti and Egypt, and Tanzania respectively.
Important information
This announcement is for information purposes only and not
intended to, and does not, constitute or form part of any offer,
invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any
securities whether pursuant to this announcement or otherwise.
The release, publication or distribution of this announcement in
jurisdictions outside the United Kingdom may be restricted by law
and therefore persons into whose possession this announcement comes
should inform themselves about, and observe such restrictions. Any
failure to comply with such restrictions may constitute a violation
of the securities law of any such jurisdiction.
Hannam and Partners (Advisory) LLP ("H&P"), which is
authorised and regulated in the United Kingdom by the FCA, , are
acting exclusively as financial adviser to Stratex and no one else
in connection with the matters described in this announcement. In
connection with such matters, H&P, its affiliates and their
respective directors, officers, employees and agents will not
regard any other person as their client, nor will they be
responsible to any other person other than Stratex for providing
the protections afforded to clients of H&P or for providing
advice in connection with the matters described in this
announcement or any matter referred to herein.
Grant Thornton UK LLP ("Grant Thornton") which is authorised and
regulated in the United Kingdom by the FCA is acting as nominated
adviser for Stratex and is not advising any other person, and
accordingly will not be responsible to anyone other than Stratex
for providing the protections afforded to customers of Grant
Thornton or for providing advice in relation to the matters
described in this announcement.
Overseas shareholders
The release, publication or distribution of this announcement in
jurisdictions outside the United Kingdom may be restricted by law
and therefore persons into whose possession this announcement comes
should inform themselves about, and observe such restrictions. Any
failure to comply with such restrictions may constitute a violation
of the securities law of any such jurisdiction. It is the
responsibility of each such person to satisfy himself as to the
full observance of the laws of the relevant jurisdiction in
connection therewith, including the obtaining of any governmental
or other consents which may be required to be observed and the
payment of any taxes or fees in such jurisdictions.
Cautionary Note Regarding Forward-Looking Statements
This announcement contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and
applicable securities laws, including, without limitation, as it
relates to a potential merger between Crusader and Stratex, as well
as certain expectations with respect to the same. Forward-looking
statements can, but may not always, be identified by the use of
words such as "may", "will", "potential", "intend", "would",
"objective" and similar references to future periods or the
negatives of these words and expressions. These statements, other
than statements of historical fact, are based on management's
current expectations, assumptions and estimates, which it believes
are reasonable, but which are subject to a number of risks and
uncertainties that could cause actual results and outcomes to
differ materially, including risks associated with the entry into
and consummation of a potential merger, ability to realise expected
synergies and successfully integrate the companies in the event of
a merger or other transaction, market and economic conditions,
business prospects or opportunities, future plans and projections,
technological and business developments, and regulatory trends and
changes. Other applicable risks and uncertainties include those
identified in filings and documents that Crusader and Stratex have
made and may make publicly available. Investors are cautioned not
to put undue reliance on forward-looking statements. Any
forward-looking statement speaks only as of the date hereof, and
neither Crusader nor Stratex undertake any obligation to correct or
update any forward-looking statement, whether as a result of new
information, future events or otherwise, except as required by
applicable law.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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