| Mon 16 May 2011, 7:18 | | GDO - Gold One International Limited - Media Release |
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GDO
GDO
GDO - Gold One International Limited - Media Release
Gold One International Limited
(Previously BMA Gold Limited)
Registered in Western Australia under the Corporations Act, 2001 (Cth) with
registration number ACN: 094 265 746
(Registered in South Africa as an external company with registration number
2009/000032/10)
ISIN: AU000000GDO5
Share Code on the ASX/JSE: GDO
OTCQX International: GLDZY
("Gold One" or the "company")
CASH OFFER TO GOLD ONE SHAREHOLDERS OF A$0.55 PER SHARE
TRANSFORMATIONAL TRANSACTION FOR GOLD ONE AND INTRODUCTION OF A STRATEGIC
PARTNER WITH A MINIMUM CAPITAL INJECTION OF A$150 MILLION
- Offer of A$0.55 (ZAR4.08*) for Gold One shareholders wishing to exit
- Represents a premium of 27.9% above the latest closing share price and
25.1% above the 30-day VWAP
- Consortium of Chinese investors to become long term strategic partner and
value investor
- Consortium has already secured 17.7% of Gold One from African Global -
Capital (SA) (Pty) Limited
- Consortium intends to secure a stake of 60% to 75% in Gold One
- Capital injection of at least A$150 million (ZAR1.1 billion*)
- onsortium participation enhances access to Asian capital markets
- Gold One to be an active participant in the consolidation of the global
gold industry
- Transaction is recommended by the Gold One Board of Directors
Gold One is pleased to announce that the company has invited a Consortium of
Chinese investors to become Gold One`s long term strategic partner and major
shareholder.
The parties have signed a Transaction Implementation Agreement outlining a
proposed investment which will cement the partnership, combining Gold One`s
solid operating platform and its strong, experienced management team with the
Consortium`s substantial financial resources and international business
experience.
Gold One`s announcement today of a series of interdependent transactions marks
the beginning of a transformational period for the company. Through these
transactions, Gold One will continue to position itself as an active participant
in the consolidation of the African and the global gold mining industry. New
capital of at least A$150 million (ZAR1.1 billion*) will be injected into Gold
One by the Consortium, which is aiming to secure a 60% to 75% shareholding in
the company.
Gold One has developed a clear and achievable strategy to increase its scale and
production capacity and, complementary to this strategy, identified the
Consortium as a unique investment partner to strengthen Gold One`s acquisition
capabilities. Gold One`s management is focused on securing value accretive
opportunities and announced such an opportunity on 28 April 2011: the
acquisition of Rand Uranium for US$250 million.
As announced on 21 April 2011, the Consortium, comprising Baiyin Non-Ferrous
Group Co Limited ("Baiyin") (60%), the China-Africa Development Fund ("CADF")
(30%) and Long March Capital Group (10%), has already agreed to acquire nearly
18% of Gold One via its purchase of Gold One shares previously held by African
Global Capital (SA) (Pty) Limited through Navada Trading (Pty) Limited. The
Consortium has entered into the transaction through a special purpose vehicle,
BCX Gold Investment Holdings Limited ("BidCo"). Gold One`s current listings on
the ASX and the JSE will be maintained, with the possibility of a future listing
on the Hong Kong Securities Exchange.
As part of the interdependent transaction structure, the Consortium, via BidCo,
will make a cash offer to all Gold One shareholders at A$0.55 (ZAR4.08*) per
Gold One share allowing those shareholders who wish to exit the opportunity to
do so in a clean and value accretive manner. The A$0.55 cash offer per share
represents a premium of 27.9% to the latest ASX closing price (on 12 May 2011),
and a 25.1% premium to the 30-day volume weighted average price ("VWAP") on the
ASX. The offer price also represents a premium of 21.9% to the latest closing
price (on 12 May 2011), and a 27.1% premium to the 30-day VWAP on the JSE.
Gold One President and CEO Neal Froneman comments: "We are extremely excited
about this opportunity for Gold One to form a strategic partnership with the
Consortium, which is led by a Fortune Global 500 Chinese corporation. We have
been in dialogue with our future partners for some time and they have visited
our operations on a number of occasions. We share a common vision, and have a
similar culture and ambition for Gold One. In addition, we have identified many
areas where we can leverage off our complementary skills. I am confident that
this partnership will create long term value for those Gold One shareholders who
elect to remain invested in Gold One, while also providing an attractive
opportunity for Gold One shareholders who elect to accept the Consortium`s offer
to realise the value of their Gold One holding."
Baiyin Chairman Li Peixing says: "As part of our going global strategy, Baiyin
has been seeking opportunities to invest in precious metals assets, in
particular in Africa. We identified Gold One as a well managed gold company with
a quality portfolio of resources, offering significant growth prospects and a
strong and dedicated team. Our investment strategy focuses on securing companies
with high quality resources, low cash costs, and experienced operational teams
that can deploy our capital effectively. We think Gold One is such a company.
The Consortium will commit substantial financial and technical support to assist
Gold One to realise its strategy of expanding its African portfolio of assets,
and subsequently, international assets."
The capital injection of A$150 million from the Consortium, through BidCo making
an initial subscription for shares in Gold One, will significantly bolster the
company`s balance sheet. The subscription price represents a 7.0% discount to
the latest closing price and a 9.1% discount to the 30-day VWAP of Gold One
shares on the ASX, and a discount of 11.4% to the latest closing price and a
7.6% discount to the 30-day VWAP on the JSE.
The Consortium may subscribe for up to an additional 188.7 million shares in
Gold One at A$0.53, should the initial subscription by the Consortium and
acceptances of the A$0.55 per Gold One share cash offer not result in the
Consortium achieving an aggregate interest of 60% in Gold One`s ordinary share
capital in issue on a fully diluted basis.
The offer and the share issues are recommended by the Gold One Board of
Directors, in the absence of a superior proposal, and are subject to the opinion
of an independent expert.
Transaction Rationale
- Continued participation in existing Gold One business. Gold One`s current
mining operations are in ramp up and as the company continues to deliver on
key milestones, it is anticipated that further shareholder value will be
created. Those shareholders who wish to remain involved in Gold One`s
future successes have the option to do so.
- Participation in future consolidation. The Consortium intends to use Gold
One as its listed vehicle for the future consolidation of high quality
mining assets throughout Africa and globally. Shareholders who elect to
retain their holdings in the company will be able to participate in the
benefits of accretive acquisitions.
- Ownership in a company with a supportive major shareholder. The Consortium
shares Gold One`s vision and desire to grow through acquisition and
anticipates that, with a majority holding in Gold One, it will be able to
provide access to low cost funding for such organic and acquisitive growth,
as required.
- Financial support: The Consortium is a financially strong anchor
shareholder for Gold One, that will provide funding support of at least
A$150 million immediately upon implementation of the transaction. The
Consortium also has access to substantial long term debt and equity capital
to fund Gold One`s operational expansion and accretive acquisitions at a
competitive cost.
- Prominence of the Consortium members in Asia: The prominence of the CITIC
Group (formerly the China International Trust and Investment Corporation)
and CADF`s parent, the China Development Bank, in Asia will provide new
potential opportunities for Gold One to access Asian capital markets at
lower costs than currently possible.
- Continuity: the Consortium is supportive of, and will retain in full, the
current management of Gold One as well as Gold One`s South African
subsidiaries` full black economic empowerment structures.
- Attractive value realisation. The offer is considered a material uplift in
value for Gold One shareholders as is evidenced by the premium that the
offer price represents to the latest closing price of Gold One shares on
both the ASX and JSE. The offer price further represents an attractive
realisation of Gold One shareholders` investment, being made at a price
higher than the trading price on both the ASX and the JSE since Gold One`s
listing on 18 May 2009.
- Cash consideration. The Consortium is providing a cash consideration to
those Gold One shareholders who wish to realise the value of their
shareholding at the offer price.
Advisers
Gold One`s transaction advisers are Macquarie Capital Advisers Limited and
Hartleys Limited. Gold One`s Australian legal counsel is Blake Dawson and its
South African legal counsel is Edward Nathan Sonnenbergs.
The Consortium`s corporate adviser is Rand Merchant Bank, a division of
FirstRand Bank Limited. Its Australian legal adviser is Mallesons Stephen Jaques
and its South African legal counsel is Edward Nathan Sonnenbergs.
* Average exchange rate of ZAR7.42390:A$1
ENDS
Parktown, Johannesburg
16 May 2011
Sponsor
Macquarie First South Advisers (Pty) Limited
Issued by Gold One International Limited
www.gold1.co.za
Neal Froneman
President and CEO
+27 11 726 1047 (office)
+27 83 628 0226 (mobile)
neal.froneman@gold1.co.za
Mark Wheatley
Chairman
+61 2 9963 6400 (office)
+61 417 688 539 (mobile)
mark.wheatley@gold1.com.au
Ilja Graulich
Investor Relations
+27 11 726 1047 (office)
+27 83 604 0820 (mobile)
ilja.graulich@gold1.co.za
Carol Smith
Investor Relations
+27 11 726 1047 (office)
+27 82 338 2228 (mobile)
carol.smith@gold1.co.za
Derek Besier
Farrington National Sydney
+61 2 9332 4448 (office)
+61 421 768 224 (mobile)
derek.besier@farrington.com.au
Sean Chilvers
Macquarie First South Advisers
+27 11 583 2283 (office)
+27 83 280 4101 (mobile)
sean.chilvers@macquarie.com
Grey Egerton-Warburton
Hartleys
+61 8 9268 2851 (office)
+61 417 355 165 (mobile)
grey_warburton@hartleys.com.au
On behalf of the Consortium:
Clement Kwong
Long March Capital
+86 108 515 1966 (office)
+86 1860 218 9000 (mobile)
clement@longmarchcapital.com
Craig Forbes
Rand Merchant Bank
+27 11 282 1156 (office)
+27 72 237 2001 (mobile)
craig.forbes@rmb.co.za
About Gold One
Gold One is a gold producer listed on the financial markets operated by the ASX
Limited and the JSE Limited, issuer code GDO. Its flagship operation is the
newly built shallow Modder East mine on the East Rand, some 30 kilometres from
Johannesburg. Modder East is the first new mine to be built in the region in 28
years and distinguishes itself from most of the other gold mines in South Africa
owing to its shallow nature (300 metres to 500 metres below surface). To date
Modder East has provided direct employment opportunities for over 1,100 people.
Gold One also owns the nearby existing Sub Nigel mine, which is used primarily
as a training centre in the build-up of Modder East to full production. Gold
One`s other projects and targets include Ventersburg in the Free State
Goldfields, the Tulo concession in Mozambique and the Etendeka greenfield
project in Namibia. Gold One has an issued share capital of 807,664,732 shares.
Background on the Consortium
The bidder is a consortium of investors comprising Baiyin (60%), the CADF (30%)
and Long March (10%), acting through BidCo. The government of the People`s
Republic of China ("PRC") is the beneficial owner of Baiyin and the CADF.
Baiyin was founded in 1954 and is a large scale mining and smelting group based
in the Gansu Province, which is in West China. It is one of China`s earliest
large-scale state owned copper-sulphur production and mining enterprises and was
restructured in November 2008. The company is currently owned by the Gansu
Province government (47%) and CITIC Group (41%.1 via CITIC Guoan Group and 3.7%
directly). All of Baiyin`s current shareholders are beneficially owned by the
government of the PRC. Baiyin`s operates across the complete industry chain
including chemical industry, science, technology and trade integration.
CADF is a wholly owned subsidiary of the China Development Bank Corporation
("CDB"). The CDB is a majority state-owned bank dedicated to strengthening the
competitiveness of the PRC and improving the living standards of its people. The
CDB`s major shareholders are:
- the PRC Ministry of Finance ("MOF") - 51.3%
- Central Huijin Investment Limited - 48.7%.
CADF is the first equity fund in China to focus specifically on direct
investments from China to Africa and has a target size of US$ 5 billion. Since
its inception, CADF has made investments in a variety of sectors in over 20
African countries.
The MOF is a regulatory government body that falls under the state council; it
is responsible for the state`s fiscal and taxation policies.
Huijin is a wholly state-owned company incorporated in accordance with the PRC`s
company law. Huijin is responsible for equity investments made in key state-
owned financial institutions, as authorised by the state council.
Long March is an investment management and advisory firm incorporated in the
British Virgin Islands and focussed on the investment and management of Chinese
capital in foreign resources companies and properties. It is jointly owned by
Messrs Alex Yao and Clement Kwong.
The principals of Long March have over 60 years of combined private equity
investment and merger and acquisition advisory experience, and have collectively
managed capital investments of over US$ 1 billion, and completed investments and
advisory assignments involving more than US$ 5 billion in aggregate. Long March
has a strong network of relationships in the Chinese mining and consumer
sectors, among state financial institutions and leading state-owned enterprises,
and in the Hong Kong capital markets.
The Consortium`s bid vehicle is BCX Gold Investment Holdings Ltd, a company
registered in the British Virgin Islands.
Forward-Looking Statement
This release includes certain forward-looking statements and forward-looking
information. All statements other than statements of historical fact included in
this release including, without limitation, statements regarding future plans
and objectives of Gold One International Limited are forward-looking statements
(or forward-looking information) that involve various risks, assumptions and
uncertainties. There can be no assurance that such statements will prove to be
accurate and actual values, results and future events could differ materially
from those anticipated in such statements. Important factors could cause actual
results to differ materially from Gold One`s expectations. Such factors include,
among others: the actual results of exploration activities; actual results of
reclamation activities; the estimation or realisation of mineral reserves and
resources; the timing and amount of estimated future production; costs of
production; capital expenditures; costs and timing of the development of Modder
East and new deposits; availability of capital required to place Gold One`s
properties into production; the ability to obtain or maintain a listing in South
Africa, Australia, Europe or North America; conclusions of economic evaluations;
changes in project parameters as plans continue to be refined; future prices of
gold and other commodities; possible variations in ore grade or recovery rates;
failure of plant, equipment or processes to operate as anticipated; accidents;
labour disputes and other risks of the mining industry; delays in obtaining
governmental approvals, permits or financing or in the completion of development
or construction activities, economic and financial market conditions; political
risks; Gold One`s hedging practices; currency fluctuations; title disputes or
claims limitations on insurance coverage. Although Gold One has attempted to
identify important factors that could cause actual results to differ materially,
there may be other factors that cause results not to be as anticipated,
estimated or intended.
Any forward-looking statements in this release speak only at the time of issue.
There can be no assurance that such statements will prove to be accurate as
actual values, results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Gold One does not undertake to update
any forward-looking statements that are included herein, or revise any changes
in events, conditions or circumstances on which any such statement is based,
except in accordance with applicable securities laws and stock exchange listing
requirements.
Date: 16/05/2011 07:18:01 Produced by the JSE SENS Department.
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