Listing of Bushveld and Greenhills on AIM

RNS Number : 0161Z

Obtala Resources Limited

09 March 2012

 



9 March 2012

Obtala Resources Limited

("Obtala" or the "Company")

(AIM: OBT)

Listing of Bushveld and Greenhills Investments on AIM

The Board of Obtala Resources Limited, the natural resources investment and development company, is pleased to announce that Bushveld Minerals Limited ("BMN") (BMN.L) today announced the proposed admission of its shares to the AIM market of the London Stock Exchange plc ("AIM") ("Admission"). BMN is a new holding company which will acquire the entire share capital of both Bushveld Resources Limited ("BRL") and Greenhills Resources Limited ("GRL"), in each of which the Company will acquire, prior to Admission, a 50 per cent. interest.  

Highlights:

·    Gross proceeds raised by BMN of approximately £5.6 million at a successful placing price of 20 pence per share (the "Placing Price")

·    Obtala's interest post Admission will be 46.0 cent. of the issued share capital of BMN, valued at approximately £26.1 million at the Placing Price

·    In excess of 600 million tonnes of iron ore independently reported by MSA in their JORC compliant report from a 4.5km strike length. 18km of  strike length is to be explored.  

A select group of institutional and private investors will subscribe for shares in BMN at the Placing Price and Admission to AIM is expected to commence on 23 March 2012. Following Admission, Obtala will hold approximately 46.0 per cent. of the issued share capital of BMN.

Description of the assets

BMN's primary project is the Bushveld Iron Ore Project and BMN has an interest in the Mokopane Tin Project. The Bushveld Iron Ore Project comprises two licences covering 7,409 hectares where a JORC compliant open-castable resource in excess of 600 million tonnes has been established from a 4.5 km strike length. Further drilling along the strike is expected to substantially add to the resource on the basis that there is up to 18 km of total strike length to be explored.

The Mokopane Tin Project consists of one licence covering 13,422 hectares of open-castable disseminated tin resource. The Company has explored one target and plans to drill at a further four targets. The Company has JORC resource in excess of 5,000 tonnes of tin and is looking to expand the resource base by undertaking a drilling programme on the three other targets in that licence area, and one target in a licence area that is under application. In the longer term, the Company intends to expand the resource base by acquiring further projects.

Details of the transaction

Following the acquisition by the Company of a 50 per cent. interest in the issued share capital of BRL and GRL (as set out below), BMN will acquire the entire issued share capital of each of BRL and GRL in exchange for new ordinary shares in the capital of BMN ("BMN Ordinary Shares").

Holdings in BMN on Admission to AIM

Shareholder	Holdings	%
Obtala	130,485,100	46.0
VML Resources Limited (1)	32,640,000	11.5
Mineral Wealth International Limited (1)	83,979,450	29.6
VM Investment Company (Pty) Limited(2)	8,160,000	2.9
Blackrock Investment Management	20,000,000	7.1

Notes:

1.    Oak Nominees Limited will hold the shares of both VML Resources Limited  and Mineral Wealth International  Limited

2.    VMI is controlled by Fortune Mojapelo and Anthony Viljoen both of whom are Directors of BMN

The value of the BMN Ordinary Shares held by Obtala at the Placing Price will be approximately £26.1 million.

Strategy

Following Admission, BMN intends to focus on further exploration and development of each project. It is BMN's intention to establish strong iron ore and tin operations comprising attractive deposits with the potential for rapid development. The Directors of BMN intend to continue to identify and evaluate other possible opportunities for the acquisition of iron ore and tin projects in Africa where appropriate.

Completion of previous agreements

Prior to Admission, Obtala will complete the acquisition of its 50% interest in BRL and the subscription for its 50% interest in GRL as previously announced on 7 March 2011 and 23 February 2011 respectively.

The terms of these two agreements have changed however, with the key differences as outlined below:

Consideration for BRL will be satisfied prior to Admission via the issue of 11,949,378 new ordinary shares of 1p each in the Company ("Ordinary Shares") at 57 pence per share representing a value of approximately US$11 million (£6.8m). The US$0.5 million cash consideration for BRL as announced on 7 March 2011 has been waived.

The subscription for GRL has been reduced from US$4 million to US$3.75 million of which US$3.5 million has already been advanced by way of a loan to GRL in order to progress various projects. Upon completion of the subscription, a further US$0.25 million will be paid by Obtala to GRL. BMN will repay $3.75 million through the issue of 10,485,100 ordinary shares and payment of £280,912 to Obtala on Admission to AIM.

Lock in arrangements

Obtala will undertake to BMN and to Fox-Davies Capital Limited that it will not dispose of any BMN Ordinary Shares for a period of 12 months following Admission and, other than through BMN's broker so as to preserve an orderly market, it will not sell any BMN Ordinary Shares for the period of 12 months thereafter.

Issue of equity

Prior to Admission, 11,949,378 new Ordinary Shares will be issued to Mineral Wealth International Limited, the vendor of the shares in BRL (representing 5 per cent. of the Company's existing issued share capital). Application has been made for admission of the new Ordinary Shares to trading on AIM.  It is expected that admission of these shares will take place and that trading will commence on AIM at 8.00 a.m. on 16 March 2012.

For the purposes of the Disclosure and Transparency Rules, the Company's total issued share capital following Admission will comprise 250,129,352 Ordinary Shares with one voting right per share. The Company has no shares in treasury. The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company, under the Disclosure and Transparency Rules.

Francesco Scolaro, Chairman of Obtala, commented: "I am very pleased to announce the impending admission to the market of BMN. Since announcing our partnership in early 2011, BMN, together with Obtala, has advanced the knowledge and level of understanding of both the iron ore and tin projects considerably. The BMN projects are ideally located in one of the most advanced mining regions in the world, with the iron ore project in particular having the potential to grow into a world class asset. This admission highlights what an attractive investment this has represented for Obtala's shareholders. BMN is led by an experienced management team which has a clearly defined strategy and work plan to further develop both projects and the company"

Obtala Resources Limited Francesco Scolaro - Chairman Simon Rollason - Managing Director www.obtalaresources.com	[phone]
Macquarie Capital (Europe) Limited (Nomad and Broker)
Steve Baldwin	[phone]
Nicholas Harland
Threadneedle Communications
Beth Harris	[phone]

 

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