African Aura Mining Inc - Stellar Diamonds Update
/NOT FOR DISTRIBUTION IN THE
TSX-V: AUR AIM: AAAM
"West African Diamonds plc ("WAD" or the "Company") Proposed Acquisition of Stellar Diamonds Limited Placing to raise (pnds stlg)5.0 million Posting of Admission Document Notice of General Meeting
Further to the announcement made on
The Acquisition will constitute a reverse takeover of the Company under the AIM Rules and requires the prior approval of the Company's existing shareholders. If the resolutions are passed, it is expected that readmission of the Company (as enlarged by the Acquisition) to AIM will take place and that trading in its shares will commence on
RBC Capital Markets and Astaire Securities have completed a successful placing for the Company to raise gross proceeds of (pnds stlg)5.0 million (the "Placing"), conditional on completion of the Acquisition and the readmission. The Placing was led by RBC Capital Markets and included Astaire Securities as joint Broker. The Company has appointed RBC Capital Markets as its Nominated Adviser and Joint Broker with effect from today and Astaire Securities shall continue to act as Joint Broker.
The Placing will comprise an offer of new ordinary shares of 5p each ("the Placing Shares") to institutional and other investors. A total of 25,000,000 Placing Shares will be issued at 20p per share (taking into account a proposed 5 for 1 consolidation of the existing ordinary share capital).
A circular and notice convening a general meeting of the Company to be held at midday on
Rationale for the Acquisition
- Corporate and Operational Synergies: The Company will have a number of opportunities to harness corporate and operational synergies, thus allowing the operational cost base per carat to be reduced. - Accelerated Growth Strategy: Revenue streams from two producing alluvial mines will reduce financial risk, increase cashflow and will enhance growth possibilities. - Strong Project Pipeline: The Company will have four high grade kimberlite projects at various stages of development. - Strong Management Team: the Proposed Board has significant experience in the West African mining industry and a proven track record of developing mines.
Use of Proceeds
The proceeds from the Placing will be utilised to capitalise existing producing mines, accelerate its production ramp up, and advance key kimberlite development and exploration projects.
Principal terms of the Acquisition
Under the terms of the Acquisition Agreement, the Company has agreed to acquire the entire issued and to be issued share capital of Stellar for a consideration equating to approximately three times the value of WAD, represented by an approximate 75:25 split of the share capital in the enlarged group prior to the issue of Placing Shares - 75 per cent. being attributable to consideration shares to be allotted to Stellar shareholders and 25 per cent. being attributable to ordinary shares currently held by WAD shareholders.
Prior to the Placing but assuming the share consolidation has taken place, a total of 53,598,496 consideration shares will be issued and allotted to the shareholders of Stellar on the basis of 1.005 new ordinary shares in the Company for each Stellar share.
Based on the number of Existing Ordinary Shares in issue as at the date of this announcement (being 89,947,519) and the mid-market price of 3.875p per Existing Ordinary Share on
Completion of the Acquisition Agreement is conditional, inter alia, upon approval of the Acquisition and certain other matters by WAD shareholders and the Placing Agreement becoming unconditional (save as for admission).
John Teeling, Chairman, commented:
"This is a good deal for WAD shareholders and the board is pleased to support it. The enlarged group will be on a stronger financial footing due the placing and the cashflow from two producing mines. The West African diamond mining industry is underdeveloped and fragmented. Stellar Diamonds will be well positioned to exploit opportunities in the area".
"We are extremely pleased to have progressed with the Acquisition and Placing and look forward to working together with the WAD team to create value for all shareholders."
Copies of the Admission Document are available on the Company's website (www.westafdiamonds.com) or from RBC Capital Markets, 71
Luis da Silva, President & CEO African Aura commented on the announcement:
"We are extremely pleased to have progressed with the reverse takeover of WAD. Achieving a listing on an international exchange for Stellar Diamonds is a key first step in African Aura's strategy to create a more transparent structure and to unlock additional value for our shareholders. We believe that Stellar Diamonds is well positioned to become a leading West African diamond producer, in one of the world's most prospective diamond regions. We remain confident in our investment in the company and the value that the transaction adds and will maintain a 31.8% interest in a listed mining company through our shareholding in Stellar Diamonds following completion of the transaction."
Copies of the Admission Document are also available on the African Aura website: www.african-aura.com
About African Aura Mining Inc.
African Aura is an established African exploration and development company listed on the TSX-V (AUR) and London's AIM (AAAM). African Aura is focused on the development of world-class gold and iron ore deposits in highly prospective, under explored countries of sub-Saharan
African Aura's assets include the New Liberty gold deposit and the Putu iron ore project, both in
Forward-looking Statements
This press release includes certain forward-looking statements. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding the future plans and objectives of African Aura, are forward-looking statements that involve various known and unknown risks and uncertainties as well as other factors. Such forward-looking statements are subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including delays in obtaining or failure to obtain required regulatory approvals. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Any forward-looking statements speak only as of the date hereof and, except as may be required by applicable law, African Aura disclaim any obligation to update or modify such forward-looking statements, either as a result of new information, future events or for any other reason.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.
For further information: Enquiries: African Aura Mining Inc.: Luis da Silva, President & CEO, Tel: +44 (0) 20 7299 4212; Stellar Diamonds Ltd.: Karl Smithson, CEO, Tel: +44 (0) 77 837 07971; Evolution Securities Limited: Simon Edwards, Chris Sim, Neil Elliot, Tel: +44 (0) 20 7071 4300; Pelham Bell Pottinger: Charles Vivian, James MacFarlane, Tel: +44 (0) 20 7337 1500
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