| Wed 17 Dec 2008, 7:36 | | TEL - Teal - Proposed Acquisition of Teal Minorities and the Formation of a |
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TEL
TEL
TEL - Teal - Proposed Acquisition of Teal Minorities and the Formation of a
Joint Venture With Vale
TEAL Exploration & Mining Inc.
Corporate Access Number: 31403
ISIN: CA8781511099
(Incorporated in Yukon, Canada on 1 June 2005)
SA Company Registration Number: 2006/003229/10
JSE share code: TEL
JSE short name: TEAL
Wednesday, 17 December, 2008
PROPOSED ACQUISITION OF TEAL MINORITIES AND THE FORMATION OF A JOINT VENTURE
WITH VALE
Wednesday, December 17, 2008: TEAL Exploration & Mining Incorporated ("TEAL")
has entered into a definitive agreement with African Rainbow Minerals Limited
("ARM") and Companhia Vale do Rio Doce ("Vale") relating to the proposed
acquisition of all of the outstanding common shares of TEAL not already owned by
ARM, pursuant to a court approved plan of arrangement (the "Arrangement") at a
price of C$3.00 per common share.
The cash purchase price will be funded by way of an equity investment by Vale
into the consolidated operations of TEAL.
TEAL has also been informed that concurrently with the Arrangement, ARM intends
to form a 50:50 joint venture with Vale for the future development and operation
of TEAL`s assets. These assets include exploration and development programs for
copper and cobalt in Zambia and the Democratic Republic of Congo, as well as a
gold exploration program in Namibia. ARM currently holds approximately 65% of
TEAL and proposes to establish this joint venture through a series of inter-
conditional transaction steps.
The offer price represents a premium of: (i) 400% over the closing price, which
was C$0.60, of the TEAL shares on the Toronto Stock Exchange ("TSX") on December
12, 2008; (ii) 831% over the 30-day volume weighted average price of the TEAL
shares on the TSX for the period ended December 12, 2008; and (iii) 123% over
the 120-day volume weighted average price of the TEAL shares on the TSX for the
period ended December 12, 2008.
The Board of Directors of TEAL established a committee of directors independent
of ARM (the "Independent Committee"), comprised of George Jones (Chair), Norman
Hardie and Murray Hitzman, to evaluate the proposed transaction and make a
recommendation to the TEAL Board of Directors. The Independent Committee
retained CIBC World Markets as its independent financial advisor to prepare a
formal valuation of TEAL`s shares. CIBC World Markets established a valuation
range of C$1.73 to C$3.06 per TEAL common share. CIBC World Markets also
delivered an opinion to the Independent Committee that the consideration to be
received by the shareholders of TEAL other than ARM (the "Minority
Shareholders") pursuant to the Arrangement is fair, from a financial point of
view, to the Minority Shareholders.
The Independent Committee unanimously recommended that the full Board of
Directors approve the transaction, authorize TEAL to enter into the Arrangement
Agreement, and recommend that the Minority Shareholders vote in favour of the
Arrangement. Following the receipt of the recommendation of the Independent
Committee, the Board of Directors of TEAL (other than certain directors
abstaining due to their relationship with ARM) unanimously recommended that
shareholders vote in favour of the Arrangement.
Completion of the transaction is subject to a number of conditions, including
receipt of certain regulatory approvals, as well as approval at a meeting of the
shareholders of TEAL by (i) two-thirds of the votes cast by holders of TEAL
shares in attendance at the meeting by person or by proxy, and (ii) a majority
of the votes cast by Minority Shareholders. The Arrangement is also subject to
approval by the Supreme Court of the Yukon Territory at a hearing to consider
the fairness of the Arrangement.
The Arrangement Agreement includes customary exclusivity and non-solicitation
covenants and matching rights, and provides for the payment by TEAL to Vale of a
break fee of approximately C$2.5 million in certain circumstances.
TEAL currently expects that the special meeting of shareholders to consider the
Arrangement will be held in February 2009. Prior to the special meeting, TEAL
will mail to all shareholders, before the end of January 2009, a management
information circular containing further information about the proposed
transaction, including the full text of the formal valuation referred to above.
Shareholders are encouraged to review these documents in their entirety. If the
Arrangement is approved at the special meeting of TEAL shareholders and all
other conditions precedent to the Arrangement are satisfied or waived, as
applicable, TEAL currently expects to complete the Arrangement prior to March
30, 2009.
Fasken Martineau DuMoulin LLP is acting as counsel to TEAL and McMillan LLP is
acting as counsel to the Independent Committee in connection with the
transaction.
--ends--
Sponsor:Investec Bank Limited
NOTES:
INFORMATION ABOUT TEAL: TEAL is incorporated under the laws of the Yukon, Canada
and its common shares are listed on the TSX and the JSE Limited ("JSE"). The
common shares of the Corporation trade under the symbol "TL" on the TSX and
"TEL" on the JSE. TEAL is a mineral development and exploration company with
development projects and exploration areas in Namibia, Zambia, Mozambique and
the DRC, and it also has a portfolio of base and precious metal development
projects and complementary exploration areas. TEAL has targeted specific
projects: the Konkola North Copper project in Zambia; the Otjikoto Gold Project
in Namibia; and the Kalumines Copper-Cobalt Project in the DRC.
ADDITIONAL TEAL INFORMATION CAN BE FOUND AT: www.tealmining.com
INFORMATION ABOUT ARM: ARM is a niche, diversified South African mining company
with excellent long-life, low cost operating assets in key commodities. An
integral part of ARM`s business is the forging of partnerships with major
players in the resource sector, bringing to ARM access to markets and value-
generating growth opportunities, while ARM`s "We do it better" management style
brings an entrepreneurial flair to the businesses it manages and is invested in.
ARM in its current form was formed in May 2004, to explore, develop, operate and
hold significant interests in the South African and African mining industry.
ADDITIONAL ARM INFORMATION CAN BE FOUND AT: www.arm.co.za
INFORMATION ABOUT VALE: Vale, headquartered in Brazil, is the second-largest
metals and mining company in the world. Vale is the world`s largest producer of
iron ore and pellets, key raw materials for the steel industry, and one of the
largest producers of nickel, which is used to produce stainless steel,
batteries, special alloys, chemicals and other products. Vale also produces
copper, manganese, ferroalloys, bauxite, alumina, aluminum, coal, cobalt, PGMs,
among other raw materials important to the global industrial sector. Investment
in the copper business is an important part of Vale`s growth strategy. Vale
already operates a copper mine in Brazil, Sossego, and has copper production
associated with its nickel operations in Canada. It is currently developing
copper projects in Salobo, in Brazil, and Tres Valles, in Chile, and is studying
several initiatives that could enable Vale to reach an annual production
capacity of one million metric tons over the next five to seven years.
ADDITIONAL VALE INFORMATION CAN BE FOUND AT: www.vale.com
Caution Regarding Forward-Looking Statements
This press release does not constitute or form part of any offer to sell or
invitation to purchase any securities or solicitation of an offer to buy any
securities, pursuant to the Arrangement or otherwise.
This press release contains forward-looking statements with respect to the
Arrangement and the transactions contemplated thereby, including the proposed
business combination of TEAL and ARM, TEAL`s financial condition, results of
operations, business, prospects, plans, objectives, goals, strategies, future
events, capital expenditures, and exploration and development efforts. Words
such as "anticipates", "expects", "intends", "plans", "forecasts", "projects",
"budgets", "believes", "seeks", "estimates", "could", "might", "should", and
similar expressions identify forward-looking statements. These statements
include comments regarding: operations and synergies of the combined entity, the
establishment and estimates of mineral reserves and mineral resources,
production, production commencement dates, production costs, grade, processing
capacity, potential mine life, feasibility studies, development costs, capital
and operating expenditures, exploration, and the closing of certain transactions
including acquisitions.
Although TEAL believes that the plans, intentions and expectations reflected in
these forward-looking statements are reasonable, TEAL cannot be certain that
these plans, intentions or expectations will be achieved. Forward-looking
statements involve numerous assumptions, known and unknown risks and
uncertainties, of both a general and specific nature, that could cause actual
results to differ materially from those suggested by the forward-looking
statements or contribute to the possibility that predictions, forecasts or
projections will prove to be materially inaccurate. These risks include, but are
not limited to, the following: (a) a material and adverse change in the
anticipated tax treatment of the Arrangement; (b) the inability of the Company
to obtain: (i) all required regulatory approvals and necessary consents, (ii)
approval of the Arrangement by the Supreme Court of the Yukon Territory, and
(iii) approval of the Arrangement by the Minority Shareholders; (c) a failure
by the Company to complete the necessary pre-Arrangement corporate
reorganizations; (d) the occurrence of a material adverse change in regard to
the Company or its business; and (e) the occurrence of any other event, change
or other circumstances that could give rise to the termination of the
Arrangement agreement, or the delay of consummation of the Arrangement or
failure to complete the Arrangement for any other reason. TEAL disclaims any
intention or obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise. TEAL
cautions that the list of risks and assumptions set forth or referred to above
is not exhaustive.
For further details contact:
Julian Gwillim (VP: Investor Relations and Corporate Development) on +27 82 4524
389 (SA); or julian@tealmining.com
SPONSOR:
Investec Bank Limited
Date: 17/12/2008 07:36:21 Produced by the JSE SENS Department.
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