| Fri 29 Aug 2008, 17:00 | | KWR - Kiwara Plc - Terms Announcement for the specific issue of shares and |
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KWR
KWR
KWR - Kiwara Plc - Terms Announcement for the specific issue of shares and
option
KIWARA PLC
Share code on AIM: KIW & ISIN: GB0007702953
Share code on the JSE: KWR & ISIN: GB0007702953
(Incorporated in England)
(Registration number: 01760458)
("Kiwara" or "the Company")
TERMS ANNOUNCEMENT FOR THE SPECIFIC ISSUE OF SHARES AND OPTION
1. Introduction
Kiwara, subject to relevant conditions precedent, has entered into an agreement
with NAMF Nominees (Proprietary) Limited ("NAMF") ("NAMF Specific Issue
Agreement"), the terms of which include the issue to NAMF of 5,000,000 ordinary
shares of 1 pence each at a strike price of R3.00 per ordinary share ("Specific
Issue Shares") and the grant to NAMF of an option to subscribe for a further
2,500,000 ordinary shares of 1 pence each at a strike price of R4.00 per share
("NAMF Option") (collectively the "NAMF Specific Issue" or "the transaction").
The Specific Issue Shares and NAMF Option are deemed to be specific issues of
shares for cash in terms of section 5.51 and 5.53 of the JSE Limited ("JSE")
Listings Requirements respectively. In addition, the Specific Issue Shares and
NAMF Option constitute related party transactions in terms of section 10 of the
JSE Listings Requirements due to NAMF being a material shareholder in a
subsidiary of Kiwara.
2. The NAMF Specific Issue
The terms and conditions embodied in the NAMF Specific Issue Agreement are as
follows:
- Kiwara agrees to place 5,000,000 ordinary shares of 1 pence each with NAMF
at a strike price of R3.00 per ordinary share;
- Kiwara agrees to grant NAMF an option to subscribe for a further 2,500,000
ordinary shares of 1 pence each at a strike price of R4.00 per ordinary
share exercisable for a period of three years from the date of signing the
NAMF Specific Issue Agreement; and
- NAMF agrees to advance R15,000,000 to Kiwara for the Specific Issue Shares
and NAMF Option.
3. Conditions precedent
In terms of section 5.51 ,5.53 and 10 of the Listings Requirements, shareholder
approval, representing not less than three-fourths (75%) of the votes
exercisable by shareholders present and voting at a general meeting, either in
person or by proxy, and a fairness opinion is required for the NAMF Specific
Issue.
4. Rationale for the NAMF Specific Issue Agreement
Kiwara, through its subsidiary Kiwara Resources (Zambia) Ltd, holds the
majority interest in Kalumbila Minerals Ltd, which holds mineral Prospecting
Licence 267, covering part of the Kabompo Dome in North West Province of Zambia.
The focus of the Company`s exploration programme as set out in the Snowden
Competent Person`s Report dated 14th February 2008 (and which forms a part of
the Company`s JSE pre-listing statement dated Tuesday, 3 April 2008) is the
Kalumbila base metals target and Kawanga Uranium target, with other secondary
regional targets, including Kawako and Nyambwezu.
The Company`s stated objective is to produce an initial statement of inferred
Resources at Kalumbila this year. Ongoing work at Kalumbila suggests that the
copper mineralisation is more extensive than has previously been determined. It
is the Board`s opinion that this enlarged target requires further investigation
- representing an increase in the projected drilling in the identified copper
zone from a projected total of 7,100m and that such additional data may add to
the size of the stated Resource. While this would be expected to add value to
the asset, it will require additional funding to maintain an expanded
exploration programme. In addition, ongoing soil geo-chemistry and drill
reconnaissance at Kawako, a historic base metals target in the proximity of and
in a similar geological setting to Kalumbila, suggests that it too hosts both
nickel and copper mineralisation and justifies additional expenditure to fund
further exploration.
5. Financial effects
The table below sets out the unaudited pro forma financial effects of the NAMF
Specific Issue on Kiwara. The unaudited pro forma financial effects are
presented for illustrative purposes only and because of their nature may not
give a fair reflection of Kiwara`s results, financial position and changes in
equity after the NAMF Specific Issue has been effected. It has been assumed for
purposes of the pro forma financial effects that the NAMF Specific Issue took
place with effect from 1 April 2007 for income statement purposes and 31 March
2008 for balance sheet purposes. The directors are responsible for the
preparation of the unaudited pro forma financial effects.
Publishe Pro forma
d
Scenario 13 Scenario 24
Before After Change6 After Change6
NAMF NAMF (%) NAMF (%)
Specific Specific Specific
Issue1 Issue Issue
Basic loss per (0.08) (0.18) (125.0) (0.19) (137.5)
share (pence)
Diluted loss (0.08) (0.18) (125.0) (0.19) (137.5)
per share
(pence)
Headline loss (0.08) (0.18) (125.0) (0.19) (137.5)
per share
(pence)
Diluted (0.08) (0.18) (125.0) (0.19) (137.5)
headline loss
per share
(pence)
NAV per share 8.92 9.43 5.7 9.20 3.1
(pence)
Tangible NAV 0.78 1.65 111.5 1.30 66.7
per share
(pence)
Number of 160,485, 167,985, 4.7 165,485, 3.1
ordinary 010 010 010
shares in
issue
Weighted 111,815, 119,315, 6.7 116,815, 4.5
average number 611 611 611
of ordinary
shares in
issue
Diluted 112,527, 120,027, 6.7 117,527, 4.4
weighted 988 988 988
average number
of ordinary
shares in
issue
Notes:
1. The "Before NAMF Specific Issue" financial information is based on Kiwara`s
published audited results for the year ended 31 March 2008.
2. The "After NAMF Specific Issue" pro forma information is presented under
two scenarios. Both scenarios incorporate the issue of the 5,000,000
ordinary shares to NAMF and include the transaction costs related to the
NAMF Specific Issue. Under scenario 1, the NAMF Option is exercised,
whereas in scenario 2 it is not. The income statement has been adjusted for
an IFRS 2 charge of GBP131,137 relating to the NAMF Option, as calculated
using a binomial model. The transaction costs relating to the NAMF Specific
Issue have been written off against share premium. It has been assumed that
all cash received has been applied for the purpose as stated in paragraph 4
above as at 1 April 2007 and accordingly no interest income has been
provided for on the cash received.
3. Scenario 1 presents the case where the NAMF Option is exercised on 1 April
2007.
- EPS, diluted EPS, HEPS and diluted HEPS are adjusted for the exercise
of options at 1 April 2007.
- NAV and TNAV are adjusted to include the cash received from:
i. the specific issue of the 5,000,000 ordinary shares at R3.00 per
share; and
ii. the exercise of the specific option grated in respect of
2,500,000 ordinary shares at R4.00 per share.
4 Scenario 2 presents the case where the NAMF Option is not exercised in
2007.
- EPS and HEPS are calculated using the original weighted average number
of ordinary shares as published for the period to 31 March 2008
adjusted for the 5,000,000 Specific Issue Shares at 1 April 2007.
- NAV and TNAV are calculated using the original number of ordinary
shares in issue as published at 31 March 2008 adjusted for the
5,000,000 Specific Issue Shares at 1 April 2007.
5. An exchange rate of R16.139/GBP, being the closing exchange rate on 31
March 2008, has been used in this pro forma analysis, except in the
determination of the IFRS 2 charge on the NAMF Option, where an exchange
rate of R15.251/GBP was used, being the closing exchange rate on the option
grant date.
6. The percentage change has been calculated on rounded numbers.
7. Documentation relating to the general meeting
A circular containing full details of the transaction and general meeting will
be posted to shareholders in due course.
London
29 August 2008
Investment Bank and Sponsor:
Investec Bank Limited
For further information, please contact:
Kiwara Plc
Colin Bird, Chairman
Tel: +44 (0)207 581 4477
Peter Vivian-Neal, Chief Executive Officer
Tel: +260 (0) 211 293899
Investec Bank Limited, Johannesburg
Robert Smith / Gavin Hall
Tel: +27 (0) 11 286 7326
Investec Bank (UK) Limited, London
Gerard Kisbey-Green / Jan Bosch
Tel: +44 (0) 20 7597 5000
Bishopsgate Communications
Nick Rome
Tel: +44 (0)20 7562 3366
Date: 29/08/2008 17:00:01 Produced by the JSE SENS Department.
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