TIDMCRHL
RNS Number : 8953O
Creat Resources Holdings Ltd
17 October 2012
17 October 2012
Creat Resources Holdings Limited
("CRHL" or "the Company")
Proposed sale of the Company's mining assets and the proposed
approval of the Company's Investing Policy and
Notice of General Meeting
The board of Creat Resources Holdings Limited announces that on
17 October 2012, the Company and its wholly owned subsidiary ZZ
Exploration Pty Limited, entered into a conditional agreement (the
"Agreement") with Australian Hualong Pty Ltd (the "Purchaser") to
dispose of all the existing mining assets ("Mining Assets")
currently held by the Group in Tasmania, Australia together with
all associated plant and equipment (the "Sale") for a total
consideration of AUD$4million in cash (the "Consideration").
Due to the fundamental nature of the Sale, it is a requirement
of the AIM Rules that the Sale be approved by Shareholders at a
general meeting of the Company (the "General Meeting"). The Sale
will also result in the Company becoming an investing company,
within the meaning of the AIM Rules and the Company therefore
proposes to adopt an investing policy (the "Investing Policy").
Further details of the Sale and the Investing Policy are set out at
the bottom of this announcement.
A circular containing details of the Sale, the Investing Policy
and a notice of general meeting at which the resolutions will be
proposed to approve the Sale and the Investing Policy (the
"Resolutions") is expected to be posted to Shareholders in due
course (the "Circular"). The Circular will be available shortly on
the Company's website at www.creatresources.com.
The purpose of the Circular is to provide background on and set
out the reasons for the Sale, to explain why the directors of the
Company consider the Sale to be in the best interests of the
Company and its Shareholders as a whole and to set out the
Resolutions to be considered at the General Meeting.
The Proposed Sale is conditional on the approval of Shareholders
at the General Meeting, which is expected to be held at the offices
of Watson, Farley & Williams LLP, Units 1703-1707, One Pacific
Place, 88 Queensway, Hong Kong at 3 p.m. Hong Kong time (7 a.m.
London time, 6 p.m. Australian Eastern Standard time) on 13
November 2012.
For further information please visit www.creatresources.com or contact:Creat Resources Holdings Limited Tel: +61 3 6471 6228
Morris R. Hansen, Company Secretary
Daniel Stewart & Company Tel: +44 20 77766550
Paul Shackleton
Emma Earl
About Creat Resources Holdings Limited
CRHL is an early stage mining exploration company holding 4 Exploration Licences and 3 Retention
Licences covering 109 square kilometres around the mineral rich Zeehan area in western Tasmania.
CRHL is a major shareholder of Galaxy Resources Limited ("Galaxy") with an interest of 7.52%.
Galaxy is an Australian-based integrated lithium mining, chemicals and battery company listed
on the Australian Securities Exchange (Code: GXY) and is an S&P/ASX 300 Index Company. Galaxy
plans to be one of the world's largest lithium carbonate producers and is positioning itself
to be involved in every step of the lithium supply chain.
EDITED EXTRACTS FROM THE CIRCULAR
All defined terms used in this announcement shall have the
meaning given to them in the Circular unless otherwise defined
herein.
Background
The Company today announces the proposed sale of all of the
Group's mining and exploration licences around the mineral rich
Zeehan area in western Tasmania, Australia for AUD$4million in cash
(plus any applicable Australian goods and services tax which is
payable by the Purchaser).
Should the Sale complete, it will result in the Group having
divested of substantially all of its trading business and assets,
resulting in the Company being treated as an investing company for
the purposes of the AIM Rules. Accordingly it is a requirement of
the AIM Rules that the Sale be approved by Shareholders at a
General Meeting of the Company. The Sale is therefore conditional
on, amongst other things, the passing of a resolution to approve
the Sale.
The Mining Assets (together with associated plant and equipment
included in the Sale) have no significant attributable net book
valuein the Group's balance sheet. The Group will recognise a gross
receipt upon completion of the Sale of AUD$4.0m.
Subject to completion of the Sale, the bond deposits paid by the
Group to the relevant authorities in respect of the Mining Assets
will be refunded to the Group. This amount is expected to be
AUD$2.6m.
Information on the Mining Assets
CRHL holds three retention licences and four exploration
licences situated in the mineral rich area around Zeehan in western
Tasmania, Australia covering a total of 109 square kilometres.
All tenement licences are currently up to date and in good
standing. There has been minimal exploration carried out during the
current fiscal year due to funding constraints and no drilling has
occurred since January 2012. Basic geologic and environmental
remedial work is ongoing to meet various governmental requirements
and keep the tenements in good standing. Due to recent funding
constraints, the Company's efforts have been concentrated in
seeking a joint venture or sale arrangement for the tenements.
Background to and reasons for the Sale
CRHL was admitted to trading on AIM on 6 March 2007 with an
initial focus on zinc, lead and silver deposits in Western
Tasmania, Australia. Since then, it has been the Company's stated
objective to pursue a strategy of acquisitions and other
transactions that have resulted in the expansion and
diversification of its mining operations both within and outside
Australia, including the acquisition of a significant interest in
Galaxy Resources, an Australian-based global lithium company with
lithium production facilities, hard rock mines and brine assets in
Australia, China, Canada and Argentina. Further information
relating to Galaxy Resources can be found at
www.galaxyresources.com.au.
For some time, Creat Group, as a 52.95 per cent. Shareholder,
has made repeated attempts to attract additional investors and
capital to the Company in order to further develop its exploration
activities in relation to the Mining Assets. To date, no
significant additional investment has been secured for the Group
(other than loans and investment from Creat Group) and, as such,
the Company remains dependant upon the financial support of Creat
Group. However, due to certain constraints placed over Creat Group,
particularly the foreign exchange controls of the PRC Government,
the Company can no longer rely on the Creat Group as a source of
funding.
In light of the challenges outlined above, the continuation of
the current financial and economic uncertainty and the related
adverse effect on the prices of globally traded commodities
(including zinc, lead and precious metals which have experienced
significant downwards pressure in the last 12 months), the Board
has concluded that the Sale is in the best interest of
Shareholders.
Principal terms and conditions of the agreement
Under the terms of the Agreement, the Company has agreed to sell
and Australian Hualong has agreed to buy, the Mining Assets
(together with all plant and equipment on site).
The consideration for the Sale is AUD$4m in cash (plus any
applicable GST which is to be paid by Australian Hualong). Under
the terms of the Agreement, the Group received a refundable deposit
of AUD$0.2m (excluding GST) on 27 July 2012 from Australian
Hualong. In the event that completion of the Sale does not occur,
this amount is to be repaid (without any interest or penalties) to
Australian Hualong within 30 days of Australian Hualong requesting
repayment.
Australian Hualong will pay a further refundable deposit of
AUD$0.2m (excluding GST) within 3 business days of entering into
the Agreement. The remaining balance of the consideration of
AUD$3.6m (excluding GST) will be payable upon receipt by Australian
Hualong of an application for transfer to Australian Hualong of the
Mining Assets which is expected to occur on or before 28th November
2012 ("Exchange"). These amounts are to be held by the Group's
solicitor, until completion of the Sale, and will be refundable to
Australian Hualong in the event that completion of the Sale does
not occur.
The completion of the Sale is conditional upon, inter alia, the
passing of an ordinary resolution at the General Meeting; all
necessary regulatory, governmental or statutory approvals in
relation to the acquisition of the Mining Assets by Australian
Hualong being granted (including any approval required from the
Foreign Investment Review Board in Australia) and registration of
Australian Hualong as the holder of the Mining Assets. Indications
are that these conditions will be satisfied within three months
following Exchange, however Shareholders should be aware that there
can be no guarantee of this. Further announcements will be made in
due course to update Shareholders in respect of Exchange and
Completion.
Subject to completion of the Sale, Australian Hualong will be
required to lodge its own bonds in respect of the Mining Assets
with the relevant authorities. The current bond deposits in respect
of the Mining Assets will then be refunded to the Group. The total
amount to be refunded to the Group is expected to be approximately
AUD$2.6m, and is in addition to the purchase price payable by
Australian Hualong in relation to the Sale.
Strategy of the Company following the sale and Investing
Policy
Following completion of the Sale, the Group will have no
operational activities. However, CRHL will continue to hold its
real estate assets, being the registered office of the Company, as
well as plant and equipment not related to the tenement licenses in
Zeehan, Australia, through it's subsidiary companies. It is
envisaged that these assets will be leased, either to Australian
Hualong and/or other interested mineral exploration firms operating
in the area.
The Company's sole investment following the Sale will be its
7.52 per cent. strategic investment in Galaxy Resources. The
Company will therefore be classified as an investing company in
accordance with Rule 15 of the AIM Rules following completion of
the Sale. The Group will retain cash balances of approximately
AUS$3.7m after paying certain expenses relating to the Sale. In
addition, the Company is expected to receive a refund of AUD$2.6m
from the relevant authorities which to date has been held as a bond
deposit in relation to the Mining Assets for the purposes of any
necessary environmental remediation.
The Group's accounts for the year ended 30 June 2012 are being
audited and will be published soon, however, the negative equity
position of the Group has further deteriorated since the last
reporting period. Therefore, part of the proceeds of the Sale will
be applied to the payment of debts as they fall due and to working
capital. In parallel with the above, in order to maximise returns
to Shareholders and in compliance with the AIM Rules, the Company
will look into new investment opportunities. Therefore, it is
intended that part of the proceeds of the Sale will be applied to
new investment opportunities. The Board has been informed by Creat
Group, as the major creditor and major shareholder of the Company,
that, subject to relevant regulatory approval, Creat Group will
continue to support the Company in further investments which are
considered to have good potential.
Investing Policy
Global demand for lower end resources is expected to remain
sluggish due to the global economic environment and in combination
with tighter environmental regulations, this has resulted in
increased mining costs. Accordingly, the Directors consider that
only resources or commodities with higher commercial value are
likely to result in commercially viable investment opportunities.
As such, the Directors' main investment criteria are as
follows:
-- Companies or assets focused on commodities with high
commercial value and / or other resources with special
characteristics rather than traditional resources;
-- Investment opportunities where the Company does not only
contribute financially but can also utilise its management
experience and the substantial connections of its holding company,
Creat Group;
The Directors will consider investment opportunities in both
high risk early stage assets and companies as well as lower risk
investments in more mature assets and companies, seeking a higher
expected rate of return where the risk is expected to be
higher.
The Directors will consider investments that will result in
either minority or majority holdings in private or publically
listed companies.
These criteria are not intended to be exhaustive. However the
Company may make an investment which does not fulfil all the
investment criteria if the Directors believe that it is in the
interests of Shareholders as a whole to proceed with such an
investment. An investment constituting a reverse takeover under the
AIM Rules will be conditional on the approval of Shareholders in a
general meeting and will require the publication of an admission
document.
As a result of the proposed Sale and in accordance with Rule 15
of the AIM Rules, the investing policy must be approved by
Shareholders in general meeting and the Company must implement the
investing policy within 12 months of its approval, otherwise
trading in the Ordinary Shares on AIM will be suspended in
accordance with Rule 40 of the AIM Rules. If following suspension
of trading in the Ordinary Shares in accordance with Rule 40 of the
AIM Rules, the Ordinary Shares have not been re-admitted to trading
within six months, the admission of the Ordinary Shares to trading
on AIM will be cancelled.
Notice of General Meeting
The Sale is conditional on the approval of the Shareholders at
the General Meeting to be held at the offices of Watson, Farley
& Williams LLP, Units 1703-1707, One Pacific Place, 88
Queensway, Hong Kong at 3 p.m. Hong Kong time (7 a.m. London time)
on 13 November 2012. At the General Meeting the Resolutions will be
proposed as ordinary resolutions to approve the Sale and the
Investing Policy. The Resolutions will require passing by a simple
majority of Shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
DISGGGWPUUPPGUM
Creat Res Ld (LSE:CRHL)
Historical Stock Chart
From May 2024 to Jun 2024
Creat Res Ld (LSE:CRHL)
Historical Stock Chart
From Jun 2023 to Jun 2024
