Anglo Pacific signs MOU with

RNS Number : 0172Q

Anglo Pacific Group PLC

27 July 2010

 

News Release

27^th July 2010

Anglo Pacific Group plc signs a Memorandum of Understanding with Horizonte Minerals plc for an option to acquire a royalty on the Araguaia and Lontra Nickel Projects in Brazil

Anglo Pacific Group plc ("Anglo Pacific") (LSE: APF) (TSX: APY) is pleased to announce that it has signed a Memorandum of Understanding ("MOU") with Horizonte Minerals plc ("Horizonte") (AIM: HZM) for Anglo Pacific to acquire an option to purchase a Net Smelter Royalty ("NSR") on all revenues from the advanced exploration stage Araguaia and Lontra Nickel Projects ("Araguaia Project") in Brazil. The MOU is subject to contract and due diligence.

Under the MOU, Anglo Pacific will pay to Horizonte the sum of US$500,000 in exchange for an option to acquire a 1.5% NSR from the Araguaia Project. The US$500,000 will be netted off from the agreed exercise payment of US$13 million if the option is exercised in due course.

The MOU provides for an option with the following terms:-

·        Maturity date - six years from the date of signature of legally binding documentation.

·        Call terms - can be exercised by Anglo Pacific following notice given by Horizonte upon delivery of a JORC or NI 43-101 compliant pre-feasibility study on the Araguaia Project that confirms the project's economic viability. 

·        Exercise period - the earlier of 120 days from receipt of the pre-feasibility study, or the maturity date.

·        Exercise payment - US$13 million from Anglo Pacific to Horizonte, less the US$500,000 as noted above.

The NSR would be at a rate of 1.5% on production up to 30,000tpa - reduced by 0.02% for every 1,000 tpa above this rate of production, but never reducing below 1.1%. The NSR would be payable on all revenue from the Araguaia Project (defined by licence areas).

Horizonte has recently announced the acquisition of the Araguaia Nickel Project from Teck Resources Limited ("Teck").  After the acquisition Teck will control approximately 50% of Horizonte's outstanding share capital.  The Araguaia Nickel Project is located adjacent to Horizonte's Lontra Nickel Project and when combined will comprise 11 licence applications across 73,000 hectares with eight significant mineralised zones.

Anglo Pacific is a diversified commodities royalty company whose strategy is to expand its mineral royalty interests in low-cost, long-life mining assets. Anglo Pacific achieves this through both direct acquisition and investment in projects at the development and production stage. Anglo Pacific's policy is to pay a substantial proportion of these royalties to shareholders as dividends.

For further information:

Anglo Pacific Group plc                                                                              [phone]

Peter Boycott, Chairman

Matthew Tack, Finance Director

Liberum Capital                                                                                          [phone]

Chris Bowman

Ellen Francis

Scott Harris                                                                                                [phone]

Stephen Scott

James O'Shaughnessy

Website:                                                                                             www.anglopacificgroup.com

Important notice

This news release contains forward-looking statements based on assumptions and reflects Anglo Pacific's expectations, estimates and projections of future events as of the date of this release. Forward-looking statements include, without limitation, statements regarding the performance, prospects, opportunities, priorities, targets, goals, objectives, strategies, growth and outlook of Anglo Pacific. Often, but not always, forward-looking statements can be identified by the use of words such as "expects", "anticipates", "plans", "believes", "estimates", "seeks", "intends", "targets", "projects", "forecasts", or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Forward-looking statements are based upon certain material factors and assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions and analyses made by Anglo Pacific in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. Also, forward-looking statements involve known and unknown risks, uncertainties and other factors that are beyond the Company's control and which may cause the actual results, performance or achievement to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such material factors and assumptions and risks and uncertainties include, among others, those described in the Company's annual information form dated as at June 29, 2010 (available on Anglo Pacific's website and at www.sedar.com), which is available at www.sedar.com, which are incorporated by reference into this release and qualify any and all forward-looking statements made in this release.

Although Anglo Pacific has attempted to identify factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that actual results will be consistent with these forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements herein relate only to events or information as of the date on which the statements are made and, except as specifically required by law, Anglo Pacific undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise.

 

END

 

 

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