| Mon 6 Oct 2008, 8:00 | | BRE - Braemore Resources Plc - Relationship Agreement Update Regarding |
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BRE
BRE
BRE - Braemore Resources Plc - Relationship Agreement Update Regarding
Major Shareholder
BRAEMORE RESOURCES PLC
(A company incorporated in England and Wales with Registration Number 5350550)
(South African registration number: 2008/013973/10)
Share code on the JSE Limited: BRE
Share code on AIM: BRR & ISIN: GB00B06GJQ01
("Braemore" or "the Company")
RELATIONSHIP AGREEMENT UPDATE REGARDING MAJOR SHAREHOLDER
Braemore Resources plc (JSE: BRE; AIM: BRR) announces that it has entered into
an agreement to further regulate the relationship between the Company and its
major shareholder, Atomaer Holdings Pty Ltd ("Atomaer"). The agreement removes
the potential for competition between the two companies and allows Braemore the
full benefit of a major shareholder who actively supports the Braemore business
strategy.
Key highlights of the agreement include:
- Braemore and Atomaer sign agreement to address potential areas of competition
and agree in principal to resolve overhang of Performance Shares
- Specified terms by which Braemore can acquire new nickel and PGM sulphide
projects from Atomaer
- Specified terms linking Atomaer`s shareholding in Braemore to its
representation on the Braemore board
Atomaer is the registered holder of 315 million ordinary shares, representing
approximately 40% of the ordinary shares in issue, and 305 million performance
shares of GBP0.001 each having the rights and restrictions set out in the
articles of association of the Company (the "Performance Shares"). Atomaer`s
contribution in the technological area of Braemore`s development work has been
significant, and a strong relationship has ensued. In the current economic
climate, the support of a major shareholder has been crucial in Braemore`s
ability to continue with its stated business model.
According to Braemore`s Chief Executive Officer, Leon Coetzer, "The agreement
clarifies the capital structure of the Company and the terms of conversion of
the Performance Shares, providing greater certainty to all shareholders. It
also provides Braemore with the benefit of a first right of refusal over the
acquisition of any interests and/or rights to nickel and/or platinum sulphide
projects acquired by an Atomaer Group Company on commercial terms. "
"Key to the agreement is that the performance shares are now linked to the
Leinster Nickel Sulphide Tailings Project and that Braemore and Atomaer have
agreed to negotiate in good faith the buyback of the Performance Shares; a
reinforcement of the on-going positive relationship between the two companies."
The key terms of the agreement are as follows:
- The company will adopt the new articles of association, subject to regulatory
and shareholder agreement
- The 305 million Performance Shares currently issued to Atomaer will only
convert into ordinary shares upon Braemore entering into an agreement with BHP
Billiton Nickel West Pty Limited for the exploitation of the Leinster Nickel
Sulphide Tailings Project.
- Braemore and Atomaer have agreed to negotiate in good faith the buyback of the
Performance Shares on commercial terms to remove any perceived overhang on
Braemore`s ordinary shares (subject to regulatory and shareholder approval, if
required) after completion of the order of magnitude economic evaluation and
engineering scoping studies as agreed to with BHP Billiton, expected to be
completed by early November 2008.
- Braemore will have a first right of refusal to acquire interests and rights in
each new Nickel and/or Platinum Sulphide Project acquired by any Atomaer Group
Company on commercial terms for as long as Atomaer is the registered holder of
30% or more of the issued ordinary shares of Braemore. This replaces the Nickel
Rights under the Share Sale Agreement dated 9 May 2005 and entered into between
Atomaer, Braemore and Braemore Nickel Pty Limited, which have been cancelled. In
addition, Braemore is to reimburse Atomaer for all costs incurred by Atomaer, up
to a maximum of A$300,000, in performing its obligations to Braemore in the
identification, investigation, evaluation, acquisition and offering of rights to
Pan Palladium Limited`s Grass Valley Project.
- For as long as Atomaer is registered holder of 30% or more of the issued
ordinary shares in the Company it will be entitled to appoint two directors to
the board of directors of Braemore. In order to ensure good corporate
governance, it has been agreed, amongst others, that a committee of directors of
the Company who are not directors of Atomaer be formed to take decisions
relating to matters involving an Atomaer Group Company.
- Project management functions previously performed by Atomaer will be
transferred to a Braemore Group Company.
- Atomaer has agreed to a restriction on competition with any Braemore Group
Company with respect to the smelting or refining of nickel and platinum group
metals. Further details of this restriction are set out in the Relationship
Agreement.
For further information, please contact:
Braemore Resources plc
Leon Coetzer
Chief Executive Officer
Tel: +27 11 875 6540
Qinisele Resources (Pty) Ltd
Advisor - SA
Dennis Tucker
Tel: +27 82 492 4957
Investec Bank (UK) Limited
Nomad and Joint broker - UK
Gerard Kisbey-Green
Tel: +44 20 7597 5167
Mirabaud Securities
Joint Broker - UK
Rory Scott
Tel: +44 207 878 3360
Parkgreen Communications
Investor Relations - UK
Sue Scott
Tel: +44 20 7933 8780
Russell and Associates
Investor Relations - SA
Charmane Russell
Tel: +27 11 880 3924
Johannesburg
6 October 2008
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 06/10/2008 08:00:01 Produced by the JSE SENS Department.
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