REG - Central Asia Metals - Proposed acquisition of Lynx Resources Limited <Origin Href="QuoteRef">CAML.L</Origin> - Part 14
22/09/2017 07:08
- Part 14: For the preceding part double click ID:nRSV5104Rm
unaudited interim financial information was prepared.
28.7 Related Party Transactions
The transactions or arrangements entered into between members of the Enlarged Group and its related parties are summarised
in:
● the Lynx Group Historical Financial Information set out in this announcement; and
● the notes to CAML's interim results for the six months to 30 June 2017 and its annual consolidated accounts for each
of the financial years ending 31 December 2016, 31 December 2015 and 31 December 2014 (each of which is available at
www.centralasiametals.com).
28.8 Employees
On Readmission, the Enlarged Group is expected to have a total of full time employees with 11 in the United Kingdom, 356 in
Kazakhstan, 683 in Macedonia and 2 in Chile.
28.9 Miscellaneous
● The total costs and expenses (including possible contingent costs estimated at US$23 million) payable by the Enlarged
Group in connection with or incidental to the Acquisition, Placing, Admission and Readmission, including governmental fees,
commissions, AIM fees, professional fees, consulting and investor relation services and the costs of printing and
distribution are currently expected to amount to up to US$44.2 million (excluding applicable VAT). Further information
relating to these costs and expenses is provided in the Unaudited Pro Forma Statement Of Net Assets Of The Enlarged Group
as set out in section 27 of this announcement.
● The gross proceeds expected to be raised by the Company Placing are approximately US$153.5 million.
● Save as disclosed in this announcement, the Company had no principal investments for each financial year covered by
the historical financial information (which is available at www.centralasiametals.com) and there are no principal
investments in progress and there are no principal future investments on which the Board has made a firm commitment.
"1985 Act" the UK Companies Act 1985
"A-integrated Permit" A-integrated environmental permit no. 11-3677/5 dated 25 October 2016 issued by the Macedonian Ministry of Environment and Physical Planning to the Rudnik SASA DOOEL
"Acquisition" the proposed acquisition by CAML of the entire issued share capital of Lynx Resources Limited pursuant to the terms of the Acquisition Agreement
"Acquisition Agreement" the agreement dated 22 September 2017 between, amongst others, CAML, the Purchaser and the Sellers relating to the sale and purchase of the entire issued share capital of Lynx Resources Limited
"Acquisition Conditions" the conditions to the completion of the Acquisition being, inter alia, the Resolutions being passed at the Extraordinary General Meeting and Admission
"Act" the UK Companies Act 2006
"Admission" the admission of the Company Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules
"AGM" the Company's Annual General Meeting
"AIM" the AIM market of the London Stock Exchange
"AIM Rules" the AIM Rules for Companies and the AIM Rules for Nominated Advisers published by the London Stock Exchange from time to time
"AIM Rules for Companies" the AIM Rules for Companies as published by the London Stock Exchange from time to time including the AIM Note for Mining and Oil and Gas Companies
"AIM Rules for Nominated Advisers" the AIM Rules for Nominated Advisers as published by the London Stock Exchange from time to time
"Aksu-Esil" the Company's business partner in Kazakhstan
"Articles" the articles of association of the Company, as amended from time to time
"Audit Committee" the audit committee established by the Board
"Banks" J.P Morgan Securities plc, Peel Hunt LLP and Mirabaud Securities Limited
"Board" the board of directors of CAML from time to time
"Business Day" any day (other than a Saturday or Sunday) on which clearing banks in the City of London are open for business
"Company" or "CAML" Central Asia Metals PLC, a company incorporated in England and Wales under the Companies Act 1985 with registered number 05559627
"Company Placing" the proposed placing of the Company Placing Shares by Peel Hunt LLP, J.P. Morgan Securities plc and Mirabaud Securities Limited at the Placing Price pursuant to the Placing Agreement
"Company Placing Shares" new Ordinary Shares to be issued by the Company pursuant to the Company Placing
"Competent Body" the Kazakhstasn Ministry of Industry and New Technologies (previously the Ministry of Energy and Mineral Resources)
"Completion" completion of the Acquisition pursuant to the terms of the Acquisition Agreement
"Copper Bay" the development project at Chañaral Bay, in the Atacama region of Chile
"Consideration Shares" new Ordinary Shares to be subscribed for by Orion pursuant to the Acquisition Agreement
"CPRs" or "Competent Person's Reports" the Kazakh Competent Person's Report and the Macedonian Competent Person's Report
"CREST" the computerised settlement system (being the relevant system as defined in the CREST Regulations) to facilitate the transfer of title of shares in uncertificated form operated by Euroclear
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/3755), as amended
"Directors" or "Board" The directors of the Company and any duly constituted committee of the board of directors from time to time
"Debt Financing" or "Debt Financing Agreement" The agreement described in paragraph section 28.4 of this announcement
"Employee Benefit Trust" the Central Asia Metals Limited Employee Benefit Trust adopted by the Board on 6 August 2010
"Enlarged Group" the Group following completion of the Acquisition
"Enlarged Share Capital" the issued share capital of the Company immediately following Readmission as enlarged by the Company Placing (assuming all of the Company Placing Shares are allotted) and the Consideration Shares
"Euroclear" Euroclear UK & Ireland Limited
"Excluded Territories" Australia, Canada, Dubai International Financial Centre, Guernsey, Jersey, Japan, Malaysia, New Zealand, Singapore, Switzerland, The Republic of South Africa and the United States and any jurisdiction where the availability of the Placing would breach any applicable laws or regulations and "Excluded Territory" shall mean any of them
"Existing Ordinary Shares" the existing ordinary shares of US$0.01 each in the capital of the Company
"Executive Directors" Nicholas Clarke, Nigel Robinson and Gavin Ferrar
"Existing Shareholders" Shareholders in the Company as at the date of the Admission Document
"Extraordinary General Meeting" the extraordinary general meeting of the Company to be held at 21 Tudor Street, London EC4Y 0DJ at 11.00 a.m. on 11 October 2017
"FCA" the Financial Conduct Authority of the United Kingdom
"FSMA" the Financial Services and Markets Act 2000 of the United Kingdom, as amended or supplemented from time to time
"GKZ (Republic of Kazakhstan)" the Committee for Geology and Subsoil Use of the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan (previously known as the Committee for Geology and Subsoil Protection of the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan prior to 28 October 2004)
"Group" the Company and its subsidiaries
"IFRS" International Financial Reporting Standards
"Independent Board" the Board save for Mr. Kenges Rakishev
"Issue" the Ordinary Shares to be offered pursuant to the Company Placing and the Consideration Shares
"Issue Price" the price at which Consideration Shares are to be issued pursuant to the Acquisition
"Joint Bookrunners" J.P. Morgan Securities plc and Peel Hunt LLP
"Kazakh Competent Person's Report" as described in section 24 of this announcement, a fully copy of which is available on the Company's website, www.centralasiametals.com
"KCC" Kounrad Copper Company LLP, in which the Group has a 100 per cent. interest
"Kounrad Contract" The contract for exploration and development of copper out of the technical mineral generations of the Kounrad Mine entered into by the MEMR and Saryarka dated 20 August 2007, as amended
"Kounrad JOA" the agreement between Sary Kazna LLP and Saryarka originally dated 6 September 2007, as amended and dated 16 August 2010
"Kounrad Project" the construction and operation of a 10,000 tonnes per annum commercial copper SX-EW plant at the Kounrad mine in accordance with the Kounrad JOA
"Kyoto Protocol" The Kyoto Protocol to the United Nations Framework Convention on Climate Change adopted on 11 December 1997
"Lead Managers" J.P. Morgan Securities plc, Peel Hunt LLP and Mirabaud Securities Limited
"LME" the London Metal Exchange
"London Stock Exchange" London Stock Exchange plc
"Lynx Group" Lynx Resources and the Lynx Subsidiaries
"Lynx Europe" limited liability company incorporated in Macedonia with company registration number 7048998 and its registered seat at St. Cyril and Methodius str. No. 52b/1-18, Skopje, Republic of Macedonia
"Lynx Metals" Lynx Metals Limited
"Lynx Mining" limited liability company incorporated in Bermuda with registration number 50422 and its registered office at Canon's Court, 22 Victoria Street, Hamilton HM 12, Bermuda
"Lynx Resources" limited liability company incorporated in Bermuda with registration number 50388 and its registered office at Canon's Court, 22 Victoria Street, Hamilton HM 12, Bermuda
"Lynx Subsidiaries" Lynx Mining, Lynx Europe and Rudnik SASA DOOEL
"Macedonian Competent Person's Report" as described in section 25 of this announcement, a fully copy of which is available on the Company's website, www.centralasiametals.com
"MEMR" Ministry of Energy and Mineral Resources of Kazakhstan
"Memorandum" the memorandum of association of the Company, as amended from time to time
"Minerals Law" the Law on Mineral Resources 2012 (Official Gazette of the Republic of Macedonia no. 136/2012; 25/2013; 93/2013; 44/2014; 160/2014; 129/15; 192/15; 39/16; 53/16; 120/16 and 189/16), as amended from time to time
"Nominated Adviser" Peel Hunt LLP
"Non-Executive Directors" Nigel Hurst-Brown, Robert Cathery, David Swan, Roger Davey, Kenges Rakishev and Nurlan Zhakupov
"Official List" the Official List of the United Kingdom Listing Authority
"OPEC" Organisation of Petroleum Exporting Countries
"Options" Share options awarded under the Option Plan
"Option Plan" the Central Asia Metals plc Share Option Plan adopted by the Board in October 2011
"Ordinary Shares" ordinary shares in the issued share capital of the Company from time to time
"Paris Agreement" the Paris Agreement under the United Nations Framework Convention on Climate Change which came into force on 4 November 2016
"Panel" the Panel on Takeovers and Mergers in the UK
"Placees" any person that has agreed to subscribe for and/or acquire (as applicable) Placing Shares
"Placing" the proposed Company Placing and the Selling Shareholder Placing
"Placing Agreement" the agreement dated 22 September 2017 between the Company, the Directors, Peel Hunt LLP, J.P. Morgan Securities and Mirabaud Securities Limited pursuant to which Peel Hunt LLP, J.P. Morgan Securities plc and Mirabaud Securities Limited agree to procure subscribers for the Company Placing Shares
"Placing Price" the price at which Ordinary Shares are offered pursuant to the Placing
"Placing Shares" the Company Placing Shares and the Selling Shareholder Placing Shares
"Proposals" the Acquisition and the Company Placing
"Purchaser" CAML MK Limited, a wholly owned subsidiary of the Company
"Readmission" admission of the Enlarged Share Capital to trading on AIM
"Registrar" Computershare Investor Services PLC
"Regulation S" Regulation S promulgated under the US Securities Act
"Resolutions" the resolutions to be proposed at the Extraordinary General Meeting, each a "Resolution", as described in section 13 of this announcement
"Remuneration Committee" the remuneration committee established by the Board
"Rudnik SASA DOOEL" Rudnik SASA DOOEL Makedonska Kamenica, a limited liability company incorporated in Macedonia with company registration number 6006094 and its registered seat at Rudarska Street No. 28, Makedonska Kamenica, Republic of Macedonia
"Sale Shares" the entire issued share capital of Lynx Resources
"Saryarka" the National Company Social and Entrepreneurial Corporation Joint Stock Company, a Kazakh government entity
"Sary Kazna" Sary Kazna LLP, a wholly owned subsidiary of the Company
"Selling Shareholder" CBH Europe Limited
"Selling Shareholder Placing" the proposed placing of the Selling Shareholder Placing Shares by Peel Hunt LLP and J.P. Morgan Securities plc at the Placing Price pursuant to an agreement between the Joint Bookrunners and the Selling Shareholder
"Selling Shareholder Placing Shares" the Existing Ordinary Shares to be sold by the Selling Shareholder pursuant to the Selling Shareholder Placing
"Sellers" Orion Co-Investments III L.P. and Fusion Capital AG
"Shareholder" a person recorded in the Company's register of shareholders as a holder of Ordinary Shares
"Shareholder Participation Agreement" the agreement described in section 19 of this announcement
"Shareholding" a holding of Ordinary Shares
"Share Capital" the Group's total issued share capital prior to Admission and/or Readmission taking place
"Silver Purchase Agreement" the silver purchase agreement described in section 23.3.2 of this announcement
"SASA Mine" means the zinc, lead and silver mine which is located near the town of Makedonska Kamenica, in the Northeast part of Macedonia's Osogovo Mountain Massif and is currently owned by Lynx Resources Limited
"SASA Project" the mining project in relation to the SASA Mine, as described in section 21.3 of this announcement
"Solway Sellers" Solway Industries Ltd and Solway Industries EESTI AS
"SRK" SRK Consulting (UK) Limited
"Stage 1 Expansion" the initial expansion of the Kounrad Project which involved enhancing the throughput and copper plating capacity of the processing plant
"Stage 2 Expansion" the expansion of the Kounrad Project which comprised building electricity and pipeline infrastructure to connect Western Dumps to the existing SX-EW plant and constructing a pipeline to Lake Balkash in order to extract water for processing at Kounrad in the future
"Subsidiary" as defined in section 1159 of the Act
"Subsoil Law" the Law of the Republic of Kazakhstan dated 27 January 1996 "On Subsoil and Subsoil Use" as amended
"Substantial Shareholder" a Shareholder holding ten per cent. or more of the Enlarged Share Capital
"Takeover Code" means The City Code on Takeovers and Mergers issued and administered by the UK Panel on Takeovers and Mergers, as amended, modified or supplemented from time to time
"Taxes Act" the Income and Corporation Taxes Act 1988 of the United Kingdom, as amended
"Third Party Offtake Agreements" the offtake agreements described in section 23.3.2 of this announcement, save for the Silver Purchase Agreement.
"Traxys" Traxys Europe SA
"Trustee" Ogier Employee Benefit Trustee Limited
"Trust Deed" a Trust deed between the Company and the Trustee dated 16 December 2009
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland
"US" or "USA" the United States of America, its territories and possessions, any State of America and the District of Columbia
"US Person" has the meaning given in Regulation S
"US Securities Act" United States Securities Act of 1933, as amended
"Wardell Armstrong" or "WAI" Wardell Armstrong International Limited, the Company's independent technical consultant
GLOSSARY OF TECHNICAL TERMS
"Adit" A horizontal or sub-horizontal underground development providing access to underground workings from surface
"Anode" An electrode through which conventional current flows into a polarised electrical device
"ASL" Above sea level
"Barren" Of rock or vein material containing no minerals of value
"Base metals" Any of the more common and more chemically active metals, e.g., lead, copper
"C1 cash costs" A Wood Mackenzie industry definition of the costs incurred on a per unit basis at each processing stage from mining through to recoverable metal delivered to market, less net by-product credits
"Category C2" A GKZ resource and reserve category. These reserves are based on a loose exploration grid, with limited data. The limits of the orebody are defined by extrapolation within known geological structures, and from comparison with other similar deposits in the
vicinity. The grade and mineral properties of the orebody are determined from core samples and comparison with similar mineral deposits in the area
"Category P1" A GKZ resource and reserve category. P resources are estimated for mineralisation outside of the limits defined in the C2 category. The outer limits of P1 resources are determined indirectly by extrapolating from similar known mineral deposits in the area.
P1 is the main source from which C2 reserves can be increased
"Cathode" An electrode from which a conventional current leaves a polarised electrical device
"Chalcopyrite" The mineral sulphide of iron and copper, CuFeS
"Concentrate" A metal-rich product resulting from a mineral enrichment process such as gravity concentration or flotation, in which most of the desired mineral has been separated from the waste material in the ore
"Copper" or "Cu" A soft, malleable and ductile metal with very high thermal and electrical conductivity, chemical symbol Cu
"Copper cathode" A cathode-a 50 to 80 kg copper plate-is produced in an electrolytic refining process. The saleable end product from the Kounrad operation. The primary raw material for the copper wire industry
"Cut-off grade" The grade below which material within an orebody does not contain sufficient value to justify extraction
"Decline" A spiral tunnel that is typically developed from surface to an orebody in underground mining and may be used to transport ore
"Definitive Feasibility study" A comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental and other relevant factors are considered in sufficient detail so that it could reasonably serve as the basis for a final
decision by a financial institution to finance the development of the deposit for mineral production. In a Feasibility Study the declaration of Ore Reserves would be expected and the economic viability of the mineral deposit could be demonstrated with sole
reliance on the depletion of the Ore Reserves without inclusion of Mineral Resources. In parallel to the development of the Feasibility Study it is normally expected that an Environmental and Social Impact Study would have been completed. Typical
contingencies included within the capital expenditure estimate range between 10 per cent. and 15 per cent. and accuracy ranges are typically ±15 per cent.
"Diamond drilling" Drilling method which obtains a cylindrical core of rock by drilling with an annular bit impregnated with diamonds
"Dilute sulphuric acid" A strong acid with formula, H2SO4. The leaching chemical used to irrigate the Kounrad dumps
"Dilution" The contamination of ore with barren or low grade bearing wall rock in mining. The assay of the ore after mining is frequently lower than when sampled in place. The proportion of waste that is contained in the Run-of-Mine ore delivered to the metallurgical
processing plant
"Dip" The angle of descent of a tilted bed or geological feature relative to the horizontal plane
"Dredging" A method of extracting material, usually carried out in shallow water. Proposed extraction technique for Copper Bay
"Drive" A horizontal underground tunnel
"Dump leach" Similar to heap leach except ore is not stacked. Copper extraction process at Kounrad
"EA" Environmental Assessment
"EIA" Environmental Impact Assessment
"Electrolysis" The passing of a direct current (DC) through a substance that is dissolved in a suitable solvent, resulting in the separation of materials. Process used to produce copper cathode at Kounrad
"Electrolyte" Copper rich solution produced from the solvent extraction process at Kounrad
"ESIA" Environmental and Social Impact Assessment
"Exploration" Process of evaluating mineral potential
"Facies" An assemblage or association of minerals reflecting the environment and conditions or origin of the rock
"Fault" The mass of rock underlying the mineral deposit or reef or the underlying side of an orebody or stope
"Flotation" A mineral processing technique used to separate mineral particles in a slurry, by causing them to selectively adhere to a froth and float to the surface
"Footwall" The mass of rock underlying the mineral deposit or reef
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