Proposed Placing and Open Off

RNS Number : 0693O

Thor Mining PLC

23 June 2010

 

Not for release, publication or distribution, in whole or in part, in, into or from the United States or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction

THOR MINING PLC

Proposed Placing and Open Offer

Dated: 23 June 2010

The Directors of Thor Mining PLC ("Thor" or the "Company") (AIM, ASX: THR) the specialist metals company focused on gold and base metals projects and advancing tungsten-molybdenum projects in the Northern Territory of Australia are pleased to announce a proposed Placing of up to 200,000,000 New Shares at 0.7 pence per share and at AUD0.0 1225 per CDI with up to 100,000,000 free attaching Warrants and an Open Offer of up to 200,000,000 New Shares at 0.7 pence per share and at AUD0.01225 per CDI with up to 100,000,000 free attaching Warrants to Shareholders to raise up to £2.7 million.

It is proposed that Placing Letters will be distributed on Wednesday 23 June 2010 and the Circular will be posted to Shareholders on or about 2 July 2010 subject to ASX approval. .

The terms used in this announcement have the same meaning as in the Circular to Shareholders to be dated 25 June 2010.

Introduction

In order to give as many of its Security Holders as possible the opportunity to participate in the financing and to limit the dilutive effect of the Placing, the Board also resolved to make an Open Offer to Eligible Security Holders. The FSMA limits the amount which can be raised by way of an open offer to shareholders to the equivalent sterling amount of €2.5 million in any twelve month period, without requiring an approved prospectus to be produced in accordance with the Prospectus Rules. The issue of a prospectus under UK law would considerably increase the costs of the fundraising and it would take much longer to complete, as any such prospectus would require the prior approval of the UKLA.

The Placing and Open Offer include a free attaching Warrant for every two New Shares or two New CDIs subscribed for under the Placing or the Open Offer. For Australian and New Zealand purposes "Warrants" are the same as "options"; each Warrant being exercisable for a Share at 1.5p or a CDI at AUD0.02625 (as applicable) in accordance with the terms set out in the Circular.

In order to make the Offer available to Australian and New Zealand Security Holders, this document complies with the content requirements for a prospectus for continuously quoted securities under section 713 of the Australian Corporations Act. Eligible Security Holders that are Australian or New Zealand CDI holders may only apply for New CDIs under the Offer and a free attaching CDI Warrant for every two New CDIs applied for under the Placing and the Offer.

Background to and reasons for the Acquisition, the Placing and the Offer

At the end of March 2010, Thor held net cash of approximately £246,000. Following the placings in Australia in January 2010 and in May 2010 the Company raised approximately £230,000. Based on the Company's detailed budgets to 30 June 2011 the cost of the Acquisition, the scheduled exploration, the evaluation of the Dundas Project, and the other exploration projects the Company has budgeted between £1.0 million to £1.5 million, including working capital, general operational and administrative expenditures for the period through to 30 June 2011.

Information on the Dundas Project

Thor announced the acquisition of a 51% interest in a greenfields exploration project near Norseman in Western Australia on 22 April 2010. During the next year it has scheduled an active exploration program on the Tenements including surface sampling and drilling.

The three exploration licences E63/872, E63/1101 & E63/1102 making up the Dundas Project cover approximately 302 square kilometres (sq km) situated about 100km south east of Norseman, Western Australia.

The tenements comprising the Dundas Project are considered by the Directors to be highly prospective at a grass-roots level, for the discovery of gold, for the following reasons:

·           Geologically they lie within the Albany-Fraser Province, an area of more than 1,000 x 100km situated at the south eastern margin of the gold-rich Yilgarn Province;

·       The gold potential of the Albany-Fraser Province has been revolutionised in the past 5 years by the discovery of the +5 million ounce Tropicana gold deposit and numerous other gold occurrences of economic potential. Tropicana has been shown to be just one of a cluster of deposits and to extend for at least one kilometre down the dip of the enclosing strata or structure. Such is the prospectivity revealed by the Tropicana and subsequent discoveries that tenure over the entire belt has been secured by significant gold mining companies such as Anglogold, Dominion, and Teck-Cominco, and gold-focussed exploration entities;

·         Until the Tropicana discovery the Albany-Fraser Province was little explored for gold, its potential being hidden by perceived unfavourable geology, very poor outcrop, and, in part, burial under a veneer of younger sediment;

·         The Dundas Project is located within the general southerly strike extension of the most gold-rich part of the Yilgarn province, the Wiluna-Kalgoorlie-Norseman greenstone belt. This may impart an enhanced prospectivity to the section of the Albany-Fraser Province containing the package;

·         The Dundas Project is located in a part of the Albany-Fraser Province where the south westerly grain of the Province is displaced south-eastwards by about 50km. The overprint of a south-easterly structure appears to mimic elements of the Tropicana geology and may create opportunities for dilation of the rock sequence - a structural element generally favourable for mineralisation;

·         A limited program of surface geochemical exploration for base metals and gold has been carried out within E63/872, revealing gold anomalies comparable with those associated with gold mineralisation elsewhere in the belt. These are therefore drill-ready but as yet untested by drilling. The remaining Dundas Project tenements are unexplored for gold; and

·         A more extensive program of surface geochemical sampling conducted by Pan Australian Resources NL (Panaust) to the north and west of E63/1101, revealed similar anomalies. One of just three RAB drill holes drilled by Panaust into these anomalies reported a bottom-hole sample of 1.06 g/t gold, confirming the existence of gold mineralisation in the vicinity of the Tenements, thereby greatly increasing the prospectivity of the whole area.

·         Results received from an initial reconnaissance survey completed by • in April 2010 are encouraging. • the gold geochemical anomalies identified in E63/872 and identify four new areas of gold anomalisation to the west and north in E63/1102.

The exploration target and potential of the Dundas Project is one or more deposits of up to 1 million ounces of gold, of average grade 2-4 g/t gold, extractible by open cut mining with higher grade zones extending into the realm of potential underground mining. At the top end of possibilities would be a deposit of 'Tropicana' dimensions - +5 million ounces. It should be noted, however, these targets are conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if exploration of the Tenements will result in the determination of a mineral resource.

Details of the Placing

The Company proposes up to raise £1.35 million (or AUD2.30 million) before expenses through the proposed issue of the Placing Shares at the Placing Price with one free attaching Warrant for every 2 Placing Shares subscribed for. The expenses of the Placing are estimated to be between £145,000 and £224,000 dependant of the quantum of the placing proceeds. The Placing Shares will represent up to approximately 45 per cent of the Enlarged Share Capital(assuming no take up under the Offer) and up to approximately 31 per cent of the Enlarged Share Capital (assuming maximum take up under the Offer), and in each case assuming that no options or warrants are exercised prior to Admission. On a fully diluted basis, the Placing Shares and Placing Warrants will represent approximately 54.7 percent of the Enlarged Share Capital (assuming no take up under the Offer) and approximately 35.4 per cent of the Enlarged Share Capital (assuming maximum take up under the Offer). The Placing Price represents a discount of approximately 33 per cent to the closing mid-market price of 1.05pence per Existing Share on 21 June 2010, being the last dealing day prior to the publication of this document.

Pursuant to the terms of the Placing Agreement, Daniel Stewart, acting as agent for the Company, has conditionally agreed to use reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Placing Agreement is conditional upon, inter alia, Resolutions 1 and 2 being duly passed at the General Meeting and admission of the Placing Shares becoming effective on or before 8.00 a.m. on 28 July 2010 (or such later date as the Company and Daniel Stewart may agree, but in any event no later than 25 August 2010). The Placing Agreement contains provisions entitling Daniel Stewart to terminate the Placing Agreement at any time prior to Admission in certain circumstances. If this right is exercised, the Placing will not proceed. The Placing has not been underwritten and is not subject to clawback pursuant to the Offer. The Placing and the Offer are not inter-conditional.

The Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the Existing Shares and the Offer Shares, including the right to receive all dividends and other distributions declared on or after the date on which they are issued. The Placing Warrants will be issued on the terms set out in the Circular. It is expected that CREST accounts will be credited on the day of Admission and that share certificates and warrant certificates (where applicable) will be despatched within 14 days of Admission.

Details of the Offer

The Company considers it important that where reasonably practicable Security Holders have an opportunity to participate in the fundraising on equivalent terms and conditions to the Placing. Accordingly the Company is proposing to raise up to approximately £1.35 million (or AUD2.30 million) (before expenses) by way of the Offer. The Offer includes one free attaching Warrant for every 2 Offer Shares subscribed.

For Australian and New Zealand purposes, "Warrants" are the same as "options", with each Warrant exercisable for a Share at 1.5p or a CDI at AUD0.02625 (as applicable).

The Offer has been structured such that the maximum amount that can be raised by the Company under the Offer will ensure that the Company's fund raisings have not exceeded the sterling equivalent of €2.5 million during the preceding twelve month period. This maximum limit has been set to ensure that the Company is not required to produce an approved prospectus pursuant to section 85 of FSMA. The issue of a prospectus would considerably increase the costs of the fundraising and it would take much longer to complete, as any such prospectus would require the prior approval of the UKLA. Based on a £:€ exchange rate of 0.837, this means that the maximum amount which can be raised under the Offer is approximately £1,400,000 (or AUD2,383,000).

On and subject to the terms and conditions of the Offer, the Company invites Eligible Security Holders to apply for the Offer Shares at the Offer Price. Eligible Security Holders that are Australian or New Zealand CDI holders may only apply for New CDIs under the Offer and one free attaching CDI Warrant.

If the Offer proceeds, every Eligible Security Holder that makes a valid application for a Marketable Parcel of New Shares or New CDIs under the Offer will receive an allocation. If the Offer is over-subscribed, applications will be scaled back on a pro-rata basis according to security holdings in the Company.

The Offer Price represents a discount of approximately 33per cent to the closing mid-market price of 1.05 pence per Existing Share on 21 June 2010 and a discount of approximately 18 per cent to the closing market price of AUD0.015 per CDI on 21 June 2010, being the last dealing day prior to the publication of this document.

Neither the Placing nor the Offer is underwritten.

Admission to AIM

Application will be made to the London Stock Exchange for the New Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the New Shares will commence on AIM at 8.00 a.m. on 28 July 2010

Admission to ASX

Application will be made to ASX within seven days following the date of this document for official quotation of New CDIs and CDI Warrants on the ASX.

Quotation of the CDI Warrants on the ASX is conditional on the CDI Warrants meeting ASX's requirements for quotation of a new class of securities. This includes, amongst other things, there being a minimum of 100,000 CDI Warrants on issue, with at least 50 holders with a Marketable Parcel. If quotation is not granted, the CDI Warrants will not be traded on the ASX.

It is expected that trading of the New CDIs and CDI Warrants (if admitted for quotation) will commence on ASX at 10:00 a.m. (AEST) on 28 July 2010.

Effect of the Placing and the Offer on the Company

Principal Effect

The principal effect of the Placing and Offer on the Company, assuming that the Placing and the Offer is fully subscribed will be that:

(a)     cash reserves will increase from approximately £246,000 to approximately £2.7 million (or AUD4.6 million), taking into account deductions for the expenses of the Placing and the Offer; and

(b)     the number of Shares in issue in the capital of the Company will increase from 243,223,763 to 643,223,763 (inclusive of those Shares that correspond to CDIs) and the number of Warrants will increase from 5,000,000 to 205,000,000 (inclusive of CDI Warrants).

Effect on financial position

A pro-forma statement of net assets of the group as at 20 July 2010 has been prepared for illustrative purposes only. This statement of net assets of the group has not been audited or reviewed. The pro-forma statement of net assets of the group has been prepared on the same basis and using the same accounting policies as the Company accounts for the year ended 30 June 2009 and the half-year ended 31 December 2009. The pro-forma statement of net assets of the group has been prepared on the basis that the Placing and Offer are fully subscribed and there have been no material movements in assets and liabilities of the Company between 31 March 2010 and 20 July other than:

·           the issue of 200,000,000 Placing Shares at 0.7 pence each or AUD0.01225 each per New CDI to raise £1.35 million (or AUD2.30 million) under the Placing;

·           the issue of 200,000,000 Offer Shares at 0.7 pence or AUD0.01225 each per New CDI to raise £1.35 million (or AUD2.30 million) under the Offer;

·           the placing of 10,000,000 Shares and 5,000,000 Warrants on 26 May 2010;

·           the Acquisition (involving a payment of AUD100,000 to the Vendors and the acquisition of a 51% interest in the Dundas Project); and

·           expenses of the Placing and the Offer of approximately £224,000.

Principal terms and conditions of the Offer

Eligible Security Holders may participate in the Offer on and subject to the terms and conditions set out in the Circular and the accompanying Application Form.

Eligible Security Holders in the UK that hold Shares may apply for any whole number of Shares at the Offer Price, with one free attaching Warrant (known as "options" in Australia and New Zealand).

Eligible Security Holders that are Australian or New Zealand CDI holders may apply for any whole number of New CDIs at the Offer Price, with one free attaching CDI Warrant

Applications must be for a minimum of £500/AUD850 and thereafter in multiples of £100/AUD170. Applicants may apply for any number of Offer Shares or New CDIs provided that an applicant's shareholding or CDI holding (as applicable), when taken alone, or together with the shareholding or CDI holding (as applicable) of those of persons acting in concert (as defined in the City Code) with that applicant, must not exceed 29.9 per cent of the Enlarged Share Capital.

If the Offer proceeds, every Eligible Security Holder that makes a valid application for a Marketable Parcel under the Offer will receive an allocation. If the Offer is over-subscribed, applications will be scaled back on a pro-rata basis according to security holdings in the Company.

The Offer Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Shares and the Placing Shares, including in respect of the right to receive all dividends and other distributions declared, made or paid after the date of their issue. The allotment and issue of the Offer Shares will be made upon and be subject to the terms and conditions set out in the Circular and in the Application Form. The free attaching Share Warrants will be issued on the terms and conditions set out in the Circular.

The New CDIs issued under the Offer will, when issued and fully paid rank pari passu in all respects with the Existing CDIs, including in respect of the right to receive all dividends and other distributions declared, made or paid after the date of their issue. The free attaching CDI Warrants will be issued on the terms and conditions set out in the Circular.

Eligible Security Holders will only be entitled to participate in the Offer in accordance with the procedure set out below in the Circular and the Application Form.

Use of proceeds

Subject to the Placing Agreement becoming unconditional and not being terminated in accordance with its terms. Assuming full subscription the Placing will raise approximately £1.35 million before expenses payable by the Company. Assuming full subscription under the Offer, the Offer will raise a further £1.35 million before expenses payable by the Company. The Company intends to use the net proceeds of the Placing and Offer (amounting to approximately £2.5 million, assuming full subscription) to fund exploration and evaluation of the Dundas Project, continued evaluation of the Molyhil tungsten and molybdenum project, ongoing exploration of the Harts Range base metals project, evaluation of new exploration opportunities and for the general working capital requirements of Thor.

Based on current forecasts, the Directors believe that, assuming full subscription, the Placing proceeds alone will be sufficient to undertake the proposed exploration projects and for the Company's general working capital requirements for at least the next 12 months.

Based on a minimum spend required to keep the core projects comprising Dundas, Harts Range, and Molyhil, in good standing along with basic working capital requirements whilst allowing sufficient exploration to advance the exploration and evaluation of those projects for the period to 30 June 2011 the Company requires the Placing and Offer to raise combined total of at least circa £0.59 million before expenses. The Directors believe that based on this the minimum spend budget to 30 June 2011 this will be sufficient to meet minimum exploration and working capital requirements for at least the next 12 months.

The Directors believe that further fund raisings will be required as the Dundas Project develops through its various stages.

The Circular will be posted to Shareholders on 2 July 2010

Placing Letter were distributed to potential Placees on 23 July 2010.

Security Holders approval

For the Placing and the Offer to proceed, Security Holders approval is required to:

(a)        give the Directors the authority to allot the Offer Shares and the Offer Warrants and specifically dis-apply the pre-emption rights in respect thereof; and

(b)        give the Directors the authority to allot the Placing Shares and the Placing Warrants and specifically dis-apply the pre-emption rights in respect thereof.

Security Holder approval will also be sought for the purposes of ASX Listing Rule 7.1, so that the Placing Shares, Placing Warrants and Offer Shares and Offer Warrants are not counted towards the Company's 15% placement capacity and under ASX Listing Rule 10.11 so that Directors can participate in the Placing and the Offer.

If the Placing and the Offer become unconditional (and the maximum amount is raised under the Offer), the proceeds thereof will provide the Company with funding of approximately £2.7 million (approximately £2.5 million after expenses).

If both Resolutions 1 and 2 set out in the Notice of General Meeting are not passed by Security Holders and/or the Placing and the Offer do not become unconditional, then the Directors believe it is unlikely that the Company would be able to secure sufficient funding from other sources in the current economic climate to move forward with work leading to a loss of assets and/or substantial additional dilution for existing Security Holders.

Security Holder approval will be sought for the issue and allotment of the 45,000,000 Stage One Option Shares upon exercise of the Stage One Option. If approval is not obtained, the Company will not be able to exercise the Stage One Option (or any of the other Dundas Options granted to the Company) and the Company will not be able to acquire any additional interest in the Dundas Project. Should this occur, the Company's interest will remain at 51% and it will form a joint venture with the Vendors in respect of the future exploration of the Dundas Project.

Security Holder approval will also be sought to ratify the placement of 16,666,667 Shares in February 2010 ("February Placement") and the placement of 10,000,000 Shares and 5,000,000 Warrants in May 2010. If approval is not obtained, the Company's 15% placement capacity under ASX Listing Rule 7.1 will not be refreshed, which may restrict the Company's ability to issue securities or seek funding by way of capital raisings over the next 12 months.

General Meeting

Notice of a General Meeting to be held at 11.00 a.m. on 22 July 2010 at the offices of Daniel Stewart & Company Plc, Becket House, 36 Old Jewry, London EC2R 8DD, to approve the Resolutions for the above purposes, as well as a further resolution to dis-apply section 561(1) of the Act generally, is set out in the Circular. The Placing and the Offer are conditional upon Resolutions 1 and 2 being passed at the General Meeting.

Recommendation

The Directors consider that the Placing and the Offer will promote the success of the Company for the benefit of its Security Holders as a whole. Accordingly, the Directors (other than Trevor Ireland in relation to Resolution 4 and each of the Directors other than Trevor Ireland in relation to Resolution 6) respectively unanimously recommend that you vote in favour of the Resolutions as set out in the Notice of General Meeting, as they intend so to do in respect of their own beneficial holdings (which amount in aggregate to 46,650,054 Ordinary Shares, representing approximately 19 per cent of the Existing Shares).

The Directors intend to participate in the Placing by subscribing for in aggregate 1,632,654 Placing Shares. The Directors intend to participate in the Offer by subscribing for in aggregate 10,653,066 Offer Shares.

As all of the Directors are participating in the Placing and the Offer and thus there are no independent Directors, Daniel Stewart, the Company's nominated adviser, has reviewed the terms on which the Directors are participating in the Placing and the Offer and on the grounds that they are participating on the same terms as all the other Placees and Eligible Security Holders, consider such terms to be fair and reasonable insofar as shareholders are concerned.

Enquiries:

Mick Billing		+ 61 (0)414 741 007		Thor Mining PLC	Executive Chairman
Laurie Ackroyd	[phone]		Thor Mining PLC		CFO/Company Secretary
John Simpson		+ 44 (0)20 7776 6550		Daniel Stewart & Company Plc	Nominated Adviser

Updates on the Company's activities are regularly posted on Thor's website www.thormining.com, which includes a facility to register to receive these updates by email.

The distribution of this announcement in jurisdictions in or into certain jurisdictions may be restricted by the laws of those jurisdictions ("Restricted Jurisdictions"). Accordingly, copies of this announcement and all other documents relating to the Placing and Open Offer are not being, and must not be, released, published, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving such documents (including, without limitation, nominees, trustees and custodians) should observe these restrictions. Failure to do so may constitute a violation of the securities laws of any such jurisdiction.

 

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