| Thu 4 Jan 2007, 11:03 | | ANO - ARQ- Anooraq - Anooraq Settlement With Pelaw |
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JSE ARQ
ANOORAARQ
ANO - ARQ- Anooraq - Anooraq Settlement With Pelawan & Finalization Of Anooraq
Capital Structure
Anooraq Resources Corporation
(Incorporated in British Columbia, Canada)
(Registration number 10022-2033)
(JSE share code: ARQ ISIN: CA03633E1088)
(TSXV share code: ARQ ISIN: CA03633E1088)
(AMEX share code: ANO ISIN: CA03633E1088)
(`Anooraq` or `the Company`)
Anooraq Settlement With Pelawan & Finalization Of Anooraq Capital Structure
January 2, 2007, Vancouver, BC -- Anooraq Resources Corporation ("Anooraq" or
the "Company") announces that it has finalized a settlement agreement with its
controlling Black Economic Empowerment ("BEE") shareholder, Pelawan Investments
(Pty) Ltd ("Pelawan") ("The Settlement Agreement"). The Settlement Agreement
relates to a potential material deemed dilutive financing to have occurred in
Anooraq by December 31, 2006 as a result of the Company not having (a) completed
an equity financing of C$98.4 million and (b) concluded a Material Transaction
by December 31, 2006, as described in the Anooraq News Release of November 15,
2005.
If the parties had failed to reach The Settlement Agreement, and based on an
assumed weighted average share price for Anooraq of C$ 1.25 at December 31,
2006, the Company would have been obliged to issue to Pelawan an additional 74
million common shares in discharge of its obligations under the original Reverse
Take Over transaction (the "RTO") entered into between the parties and concluded
on September 30, 2004. This deemed dilutive financing, against no corresponding
inflow of funds, would have resulted in a significant decrease in the net asset
value per share in Anooraq. This has been avoided.
The salient terms of The Settlement Agreement are as follows:
Anooraq will issue to Pelawan 36 million common shares ("Adjustment
Consideration Shares"), representing a 50% reduction in the number of Adjustment
Consideration Shares due to Pelawan under the original RTO transaction terms.
The Adjustment Consideration Shares will be issued by Anooraq to Pelawan by no
later than 15 business days after December 31, 2006.
In addition, the Company will issue to Pelawan warrants for the purchase of 167
million common shares in Anooraq ("BEE Warrants"). The BEE Warrants are valid
for a period of 2 years to December 31, 2008. The strike price of the BEE
Warrants are the higher of (i) C$1.35 per BEE Warrant in respect of BEE Warrants
exercised on or before December 31, 2007 or C$1.48 per BEE Warrant Share in
respect of BEE Warrants exercised after December 31, 2007 or(ii) a price per BEE
Warrant Share that is 50% less than the Anooraq common share price payable by
arms length parties under an equity financing undertaken by the Company that
either raises an amount of at least C$98,400,000 or is undertaken pursuant to a
Material Transaction (a "Concurrent Financing").
From the date of issue of the Adjustment Consideration Shares to Pelawan in (a)
above or as a result of the exercise of any of the BEE Warrants up to the
closing date of the Concurrent Financing, the common shares issued to Pelawan
pursuant thereto will be subject to a lock up arrangement and Pelawan will not
be entitled to dispose of any of these shares, save for the exemption referred
to in (d) below. After the closing date of the Concurrent Financing, the
disposal of such shares shall remain subject to the original lock up agreement
entered into between Pelawan and Anooraq under the terms of the original RTO
transaction ("the BEE Lock Up"). For further information on the BEE Lock Up see
the Company`s August 16, 2004 Management Information Circular at www.sedar.com
, accessible from the Investor Centre on the Company`s
website.
Anooraq has agreed to grant Pelawan an exemption to the BEE Lock Up for the
purposes of facilitating Pelawan`s financing of the exercise of the BEE
Warrants. In the event that Pelawan exercises any BEE Warrants Pelawan shall, in
its sole discretion, be entitled to dispose that number of common shares up to
25% (or such greater amount as is required to facilitate the financing of the
exercise of the BEE Warrants) of the aggregate common shares issued to Pelawan
pursuant to such exercise, provided that all of the proceeds received by Pelawan
from such disposal shall be applied by Pelawan to support the financing of the
exercise of the BEE Warrants and reasonable expenses related to such exercise.
On the occurrence of a Concurrent Financing, Pelawan shall be obliged to
exercise the BEE Warrants to ensure, at a minimum, that Anooraq retains its
status as a 52% controlled BEE company, in compliance with undertakings given by
Pelawan and the Company in favour of the South African Reserve Bank and Anglo
Platinum Limited.
In commenting on The Settlement Agreement:
Ron Thiessen, President and CEO of Anooraq said:
"I am pleased that we have achieved this settlement in terms of the historical
obligations under the RTO; it resolves overhanging issues for the Company,
provides certainty to our capital structure, creates opportunity for future
equity financings and still maintains our status as a Black Economic Empowerment
company under South African legislation.
Developments have taken longer than originally anticipated in respect to our
assets in South Africa, but we are gaining momentum with our partner, Anglo
Platinum, and moving forward on our original goals. This settlement with Pelawan
creates a strong foundation for Anooraq and I look forward to continuing and
improving this momentum into the new year."
Tumelo Motsisi, deputy CEO and MD of Anooraq and Executive Chair of Pelawan
said:
"The Settlement Agreement is a balanced solution and creates a good platform for
both Pelawan and Anooraq to achieve our stated objective of becoming a
significant black controlled, independent and operational PGM producer in South
Africa."
ISSUED ON BEHALF OF THE BOARD OF DIRECTORS OF ANOORAQ BY
Tumelo Motsisi
Managing Director and Deputy CEO
For further details on Anooraq and its properties in South Africa, please visit
the Company`s website at www.anooraqresources.com
or contact:
Investor Services
Vancouver, Canada
Phone: (604) 684-6365
Toll free: (within North America)
1-800-667-2114
Phumzile Langeni
Executive Director, Investor Relations
Johannesburg, South Africa
Phone: +2711 883 0831
or +2783 745 5834
4 January 2007
Sponsor to the company
BDO QuestCo (Pty) Ltd
Date: 04/01/2007 11:03:08 Produced by the JSE SENS Department.
