TIDMFAM
RNS Number : 2765X
FinnAust Mining PLC
20 February 2017
FinnAust Mining plc / EPIC: FAM / Market: AIM / Sector:
Mining
20 February 2017
FinnAust Mining plc ('FinnAust' or the 'Company')
Exercise of the Bluejay Option, Rule 9 Waiver, Change of Name to
Bluejay Mining plc and Notice of General Meeting
FinnAust Mining plc, the AIM and FSE listed company with
projects in Greenland & Finland, is pleased to announce that it
is the intention of the Company to exercise the option to acquire
82,560 shares of Bluejay Mining Limited ('Bluejay') (the 'Bluejay
Option') representing 39.63 per cent. of Bluejay that it does not
already own. Exercising the Bluejay Option will result in the
Company increasing its ownership in Bluejay and the Pituffik
Titanium Project ('Pituffik' or 'Pituffik Project') from 60.37 per
cent. to 100 per cent. Following the exercise of the Bluejay
Option, the Company intends to change its name to Bluejay Mining
plc. Exercising the Bluejay Option and the change of name is
conditional on Shareholder approval to be sought at a General
Meeting to be held by FinnAust, details of which are set out
below.
Highlights
-- FinnAust to increase interest in Bluejay to 100 per cent.
Bluejay is the 100 per cent. owner of the 150km(2) high grade
Pituffik Titanium Project located in North West Greenland. The
Pituffik Project comprises three main exploration target areas
across more than 80km of coastline historically proven to contain
large and high-grade accumulations of primary ilmenite, with mining
in Greenland envisaged to be achieved via a low capex dredging
operation.
-- The Pituffik Project has demonstrated the potential to be a
top percentile ilmenite project in terms of heavy mineral grade
with the maiden mineral resource targeted to be published in Q1
2017.
-- Advancing the Pituffik Project continues to be the Company's
primary focus. The near term strategy of the Company is the
delivery of a bulk sample during 2017 and larger scale production
in 2018.
-- The Directors believe that moving to 100% ownership of the
Pituffik Project will provide certainty of title and remove any
issues associated with joint venture partners.
-- The consideration for Bluejay was agreed in December 2015
with the number of shares to be issued pursuant to the Exercise of
the Bluejay Option agreed at the time the Company purchased its
initial interest in 60.37 per cent. of Bluejay (see RNS dated 9
December 2015).
-- Acquisition price of GBP594,393 to be satisfied by the issue
of 108,071,388 new Ordinary Shares to the Bluejay Vendors.
-- Recent placing of 76,428,572 Ordinary Shares at 7 pence to
raise GBP5.35m in December 2016 demonstrated strong support for the
Company and the Pituffik Project.
FinnAust Managing Director Rod McIllree said, "Pituffik has
proven its potential to be in the top percentile of ilmenite
projects in terms of heavy mineral grade. With a maiden mineral
resource targeted to be published in Q1 2017, a bulk sample due
later this year, and larger scale production targeted in 2018, we
believe the Project offers significant value upside. It is
therefore our intention, subject to shareholder approval, to
increase our interest in the Project to 100 per cent. by acquiring
the remaining 39.63 per cent. interest in Bluejay which we do not
currently own. Being the sole owner of Pittufik will ensure that
the Company benefits from maximum exposure to this highly
prospective asset and will also aid future development plans by
having a simplified ownership structure.
"Whilst we maintain additional assets in Finland, which offer
further upside to our company, our primary development focus is
undoubtedly on our portfolio of assets in Greenland. Accordingly,
we are proposing a change of name to BlueJay Mining plc. This
change is again subject to shareholder approval at a General
Meeting to be held in a few weeks time. We believe the proposed
change of name and exercise of the Bluejay Option will best
position our company for growth."
Notice of General Meeting
The Board of FinnAust announces a General Meeting of the Company
to be held at The Washington Mayfair Hotel, 5 Curzon Street,
London, W1J 5HE on 10 March 2017 at 10:00 a.m. for the purposes of
approving the exercise of the Bluejay Option.
The circular convening the General Meeting dated 20 February
2017 ('Circular') will be posted to shareholders today. Further
details of the Bluejay Acquisition (which constitutes a related
party transaction under the AIM Rules for Companies), Rule 9 Waiver
and Change of Name as extracted from the Circular are set out
below.
The Circular is available at www.finnaust.com
**S**
For further information, please visit www.finnaust.com or
contact:
FinnAust Mining +44 (0) 20 7907
Roderick McIllree plc 9326
------------------- -------------------- ----------------
FinnAust Mining +44 (0) 20 7907
Graham Marshall plc 9326
------------------- -------------------- ----------------
SP Angel Corporate +44 (0) 20 3470
Ewan Leggat Finance LLP 0470
------------------- -------------------- ----------------
SP Angel Corporate +44 (0) 20 3470
Laura Harrison Finance LLP 0470
------------------- -------------------- ----------------
St Brides Partners +44 (0) 20 7236
Elisabeth Cowell Ltd 1177
------------------- -------------------- ----------------
St Brides Partners +44 (0) 20 7236
Charlotte Page Ltd 1177
------------------- -------------------- ----------------
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Circular
Extracts from the Circular are set out below. The same
definitions apply throughout this announcement as are applied in
the Circular. A list of definitions is set out at the end of this
announcement.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Date of this document 20 February 2017
--------------------------------- ------------------
Last time and date of receipt 10.00 a.m. on 8
of Forms of Proxy March 2017
--------------------------------- ------------------
Ordinary Shares to begin trading On or around 8.00
under the new name and TIDM a.m on 13 March
2017
--------------------------------- ------------------
Admission of Consideration On or around 13
Shares March 2017
--------------------------------- ------------------
KEY STATISTICS
Number of Ordinary Shares as at the
date of this document 619,169,499
------------------------------------------ ---------------------
Consideration Shares to be issued
pursuant to the Exercise of the Bluejay
Option 108,071,388
------------------------------------------ ---------------------
Enlarged Issued Share Capital* 727,240,887
------------------------------------------ ---------------------
Consideration Shares as a percentage
of the Enlarged Issued Share Capital 14.86%
------------------------------------------ ---------------------
International Security Identification GB00BFD3VF20
Number (ISIN) of the Ordinary Shares
------------------------------------------ ---------------------
Legal Entity Identifier (LEI) 213800E9AEFEHFLOVJ19
------------------------------------------ ---------------------
Tradeable Instrument Display Mnemonic FAM
(TIDM)
------------------------------------------ ---------------------
New TIDM following the change of name JAY
------------------------------------------ ---------------------
*assuming no options or warrants are exercised between the date
of this document and Admission
PART I
LETTER FROM THE BOARD
1 Introduction
On 8 December 2015, the Company entered into a sale and purchase
agreement to conditionally acquire a 60.37 per cent. stake in
Bluejay Mining Limited, which holds the mineral resource
exploration licence for the Pituffik Project. Following receipt of
change of control consent from the Greenlandic authorities, the
acquisition of this majority stake in Bluejay was completed on 8
March 2016. Under the terms of the sale and purchase agreement the
Company was also granted an option to acquire the remaining 39.63
per cent. of Bluejay by way of the issue of 108,071,388 new
Ordinary Shares to the Bluejay Vendors, pro rata, to their
respective holdings in Bluejay.
It is the intention of the Company to exercise the Bluejay
Option which would result in FinnAust increasing its ownership of
Bluejay and the Pituffik Project to 100 per cent.
The issue by the Company of the Consideration Shares to the
Bluejay Vendors pursuant to the Exercise of the Bluejay Option
gives rise to certain considerations under the Takeover Code. The
issue of the Consideration Shares to the Bluejay Vendors requires
Independent Shareholder approval of the Waiver under Rule 9 of the
Takeover Code.
Approval of Shareholders other than Western Areas and the
Bluejay Vendors is therefore being sought, by means of the
Whitewash Resolution, to the Waiver, which the Panel has granted
subject to such approval of the Independent Shareholders being
obtained.
The purpose of this document is to provide Independent
Shareholders with further details of the Waiver and the Exercise of
the Bluejay Option.
Further details on the background to and terms of the Proposed
Transaction are set out below.
2 Background to and reasons for the Exercise of the Bluejay
Option
Bluejay is the 100 per cent. owner of the 150km(2) high grade
Pituffik titanium project located in North West Greenland. The
Pituffik Project comprises three main exploration target areas
across more than 80km of coastline historically proven to contain
large and high-grade accumulations of primary ilmenite, with mining
in Greenland envisaged to be achieved via a low capex dredging
operation.
The Company currently has an interest in 60.37 per cent. of the
Pituffik Project via its existing shareholding in Bluejay. The
Company was focused on developing the Pituffik Project throughout
2016 and it continues to be the Company's primary focus. The
Pituffik Project has demonstrated the potential to be a top
percentile ilmenite project in terms of heavy mineral grade with
the maiden mineral resource targeted to be published in the first
quarter of 2017. FinnAust's near term strategy for the Pituffik
Project remains the delivery of a bulk sample during 2017 and
larger scale production in 2018.
Roderick McIllree and Gregory Kuenzel, both Directors of
FinnAust, are amongst the vendors of Bluejay. It is the opinion of
the Board that the Exercise of the Bluejay Option by the Company
will ensure Bluejay becomes a wholly owned subsidiary of the
Company and will mitigate any potential future conflicts of
interest which may arise as a result of Roderick McIllree's and/or
Gregory Kuenzel's interest in Bluejay.
The Directors believe that FinnAust moving to 100% ownership of
the Pituffik Project will provide certainty of title and remove any
issues associated with joint venture partners.
The consideration for Bluejay was agreed in December 2015 with
the number of new Ordinary Shares to be issued pursuant to the
Exercise of the Bluejay Option agreed at the time the Company
purchased its initial interest in 60.37 per cent. of Bluejay.
The recipients of a majority of the Consideration Shares, being
the Bluejay Vendors, consist of board members or consultants of the
Company and are the team members who are working to deliver the
Pituffik Project. The issue of the Consideration Shares to these
board members and senior managers is considered to further align
management and Shareholders' interests in increasing the value of
the Pituffik Project due to their shareholdings in Bluejay and the
Company.
If Bluejay had been fully consolidated into the Company's
accounts from 1 January 2015, the consolidated statement of income
of the Group for the year ended 30 June 2016 would have shown an
additional loss of GBP6,300 and revenue would have remained
unchanged. There would be no change to FinnAust's assets or
liabilities as Bluejay is already controlled by FinnAust and
therefore consolidated into the Group statement of financial
position.
Since the publication of the final results for the year ended 30
June 2016 the following key events have taken place:
-- On 13 July 2016 the Company raised GBP500,000 via the issue
and allotment of 10,000,000 new Ordinary Shares at 5 pence per
share;
-- On 5 September 2016 the Group proposed to acquire 100% of
Avannaa Exploration Limited ('Avannaa') for consideration of
GBP500,000 to be paid via the issue and allotment of new Ordinary
Shares, and on 5 January 2017 the Company successfully completed
the acquisition of Avannaa and issued 7,584,238 new Ordinary
Shares; and
-- On 8 December 2016 the Company raised GBP5,350,000, before
expenses by the issue and allotment of 76,428,572 new Ordinary
Shares at 7 pence per share.
3 Principal terms of the Bluejay Acquisition Agreement
On 8 December 2015, the Company entered into a sale and purchase
agreement, pursuant to which it conditionally agreed to acquire
125,788 shares of no par value each in Bluejay representing an
interest of 60.37 per cent. of Bluejay for a maximum purchase price
of GBP905,607, based on a total maximum valuation of Bluejay of
GBP1.5 million, to be satisfied by the issue of up to 164,655,885
new Ordinary Shares to the Bluejay Vendors, pro rata, to their
respective holdings in Bluejay as follows:
(a) the allotment and issue of the initial consideration shares,
namely, 123,900,000 new Ordinary Shares on the satisfaction of the
conditions (being the December 2015 Placing and obtaining the
change of control consent from the Greenlandic authorities in
respect of Bluejay in its capacity as the holder of the mineral
exploration permit for the Pituffik Project) of the Initial Bluejay
Acquisition, which occurred on 8 March 2016; and
(b) the allotment and issue of the deferred consideration
shares, namely, 40,755,885 new Ordinary Shares, subject to certain
conditions (being grant of mineral exploration permit to Bluejay
over the offshore Pituffik project area and the deferred shares not
triggering a mandatory offer pursuant to Rule 9 of the Takeover
Code), which occurred on 8 December 2016.
Under the terms of the Bluejay Acquisition Agreement, the
Company was also granted an option by the Bluejay Vendors to
acquire the remaining 39.63 per cent. of Bluejay for the sum of
GBP594,393 to be satisfied by the issue of 108,071,388 new Ordinary
Shares to the Bluejay Vendors, pro rata, to their respective
holdings in Bluejay. The expiry date of the Bluejay Option is 8
March 2020.
It is the Company's intention to exercise the Bluejay Option as
soon as possible. However, the issue of the Consideration Shares to
the Bluejay Vendors gives rise to certain considerations under the
Takeover Code. Approval of Shareholders other than Western Areas
and the Bluejay Vendors is therefore being sought, by means of the
Whitewash Resolution, to a waiver of this offer obligation (the
"Waiver"), which the Panel has granted subject to such approval of
the Independent Shareholders being obtained.
The purpose of this document is to provide Independent
Shareholders with further details of the Waiver and to explain why
SP Angel considers that the Waiver is in the best interests of both
the Company and the Independent Shareholders as a whole.
The Exercise of the Bluejay Option also constitutes a related
party transaction as defined by the AIM Rules for Companies.
Further information in relation to these matters is set out
below.
4 Takeover Code and Concert Party
The Takeover Code is issued and administered by the Panel. The
Takeover Code applies to all takeover and merger transactions,
however effected, where the offeree company is, inter alia, a
listed or unlisted public company incorporated in the United
Kingdom. The Company is such a company and Shareholders are
entitled to the protections afforded by the Takeover Code.
Under Rule 9 of the Takeover Code, any person who acquires an
interest (as defined in the Takeover Code) in shares which, taken
together with shares in which he and persons acting in concert with
him are already interested, carry 30 per cent. or more of the
voting rights in a company which is subject to the Takeover Code is
required to make a general offer to all the remaining shareholders
to acquire their shares.
Similarly, when any person, together with persons acting in
concert with him, is interested in shares which, in aggregate,
carry not less than 30 per cent. of the voting rights of a company
but does not hold shares carrying more than 50 per cent. of such
voting rights, a general offer will normally be required if any
further interest in shares is acquired by any such person, or any
person acting in concert with him, which increases the percentage
of shares carrying voting rights in which he is interested.
An offer under Rule 9 must be made in cash (or with a full cash
alternative) at a price not less than the highest price paid by the
person required to make the offer, or any person acting in concert
with him, for any interest in shares of the company during the 12
months prior to the announcement of the offer.
Rule 9 of the Takeover Code further provides, amongst other
things, that where any person who, together with persons acting in
concert with him holds over 50 per cent. of the voting rights of a
company, acquires an interest in shares which carry additional
voting rights, then they will not be required to make a general
offer to the other shareholders to acquire the balance of their
shares.
Under the Takeover Code, a concert party arises where persons
who, pursuant to an agreement or understanding (whether formal or
informal), co-operate to obtain or consolidate control (as defined
below) of a company or to frustrate the successful outcome of an
offer for a company. Control means holding, or aggregate holdings,
of shares carrying 30 per cent. or more of the voting rights of the
company, irrespective of whether the holding or holdings give de
facto control.
As set out in the December 2015 Circular, the Panel determined
that pursuant to the Initial Bluejay Acquisition, the Bluejay
Vendors are acting in concert with each other and Western Areas is
acting in concert with the Bluejay Vendors (the "Concert
Party").
As at the date of this document, Western Areas holds an interest
in 138,611,112 Ordinary Shares representing 22.39 per cent. of the
Existing Ordinary Shares and the Bluejay Vendors hold an interest
in 163,190,336 Ordinary Shares representing 26.36 per cent. of the
Existing Ordinary Shares. Therefore, in aggregate, the Concert
Party is interested in 301,801,448 Ordinary Shares which represents
48.74 per cent of the voting rights of the Company.
A table which sets out the current interests, interests
following completion of the Proposed Transaction and maximum
potential interests in the ordinary share capital of the Company
for each member of the Concert Party is set out in Part II of this
document.
Following completion of the Proposed Transaction, Western Areas
will have an interest in 138,611,112 Ordinary Shares which will
represent 19.06 per cent of the Enlarged Issued Share Capital and
the Bluejay Vendors will have an interest in 271,261,724 Ordinary
Shares which will represent 37.30 per cent of the Enlarged Issued
Share Capital. Therefore, in aggregate, the Concert Party will be
interested in 409,872,836 Ordinary Shares which will represent
56.36 per cent of the total voting rights of the Company.
Due to the Share Options, the maximum potential interest in the
Company of the Bluejay Vendors is 275,111,724 Ordinary Shares,
which would represent 37.63 per cent of the total voting rights of
the Company. The maximum potential interest of the Concert Party is
therefore 413,722,836 Ordinary Shares which would represent 56.59
per cent of the total voting rights of the Company.
The Bluejay Vendors, in aggregate, will have a maximum potential
interest in more than 30 per cent. but less than 50 per cent. of
the voting rights of the Company following completion of the
Bluejay Acquisition. Each of the Bluejay Vendors will therefore be
prevented from acquiring any Ordinary Shares, other than through
the exercise of the Share Options, without incurring a further
obligation under Rule 9 to make a general offer.
Shareholders should note that the Concert Party currently holds
less than 50 per cent. of the voting rights of the Company. The
Concert Party will hold over 50 per cent. of the voting rights of
the Company when the Consideration Shares are issued. Following
completion of the Bluejay Acquisition, the Bluejay Vendors will not
be permitted to increase their maximum potential interests in the
voting rights of the Company through or between a Rule 9 threshold
without Panel consent. Western Areas will be able to increase its
interests in the voting rights of the Company, but will not be
permitted to cross the Rule 9 threshold (being 30 per cent or more
of the voting rights) without Panel consent.
Further background information in relation to the Bluejay
Vendors, Western Areas and the Waiver is set out in Part II of this
document.
5 Related Party Transaction
The Exercise of the Bluejay Option constitutes a related party
transaction as defined by the AIM Rules for Companies, due to the
fact that two of the Bluejay Vendors, being Gregory Kuenzel and
Roderick McIllree, are Directors of the Company. As a result of the
Proposed Transaction Gregory Kuenzel will receive 15,147,257 of the
Consideration Shares and Roderick McIllree will receive 37,477,556
of the Consideration Shares. In addition, Jeremy Whybrow, another
Bluejay Vendor, has been a substantial shareholder of the Company
in the last 12 months and he will receive 37,477,556 of the
Consideration Shares.
Graham Marshall, Non-Executive Chairman of the Company is not
deemed to be independent for the purpose of the Exercise of the
Bluejay Option as he is also an employee of Western Areas. There is
therefore, no independent director for the purpose of the related
party transaction as defined by the AIM Rules.
The Company's Nominated Adviser, SP Angel, considers that the
terms of the Exercise of the Bluejay Option and the Bluejay
Acquisition are fair and reasonable insofar as Shareholders are
concerned.
6 Change of Name
In order to better reflect the focus of the Company's
operations, it is proposed that the name of the Company be changed
to Bluejay Mining plc. The new TIDM will be JAY. The change of name
is conditional upon the Independent Shareholders approving the
Proposed Transaction and Resolution 5 being passed by Shareholders
at the General Meeting.
7 General Meeting
You will find at the end of this document a notice convening the
General Meeting to be held at 10:00 a.m. on 10 March 2017 at The
Washington Mayfair Hotel, 5 Curzon Street, London, W1J 5HE. The
Resolutions to be proposed at the General Meeting are as
follows:
Resolution 1 - Approval of the Proposed Transaction
This is an ordinary resolution proposing that the Exercise of
the Bluejay Option by the Company (which constitutes a related
party transaction as defined by the AIM Rules for Companies) be and
is hereby approved and that the directors of the Company be and are
hereby authorised to do all such things as any of them may consider
necessary or desirable to implement the Exercise of the Bluejay
Option.
Resolution 1 may only be voted on by Independent
Shareholders.
Resolution 2 - Whitewash Resolution
This is an ordinary resolution to approve the Waiver granted by
the Panel of the obligation that would otherwise arise on any of
the Bluejay Vendors to make a general offer to Shareholders
pursuant to Rule 9 of the Takeover Code as a result of the Exercise
of the Bluejay Option, the issue of the Consideration Shares to the
Bluejay Vendors and the exercise of Share Options.
Resolution 2 will be conducted by way of a poll and may only be
voted on by Independent Shareholders.
Resolution 3 - Section 551 authority
This is an ordinary resolution authorising the directors to
allot and issue new Ordinary Shares and grant rights to subscribe
for such shares up an aggregate nominal value of GBP500,000. The
authority will expire at the commencement of the next Annual
General Meeting following this meeting or 31 December 2017,
whichever is the earlier to occur.
Resolution 4 - Section 570 authority and dis-application of
Section 561(1)
This is a special resolution authorising the directors to issue
equity securities wholly for cash on a non-pre-emptive basis
pursuant to the authority conferred by resolution number 3 above.
This will allow the Board to allot shares without recourse to the
Shareholders so that it can move quickly from time to time as it
deems appropriate. This authority will expire at the commencement
of the next Annual General Meeting following this meeting or 31
December 2017, whichever is the earlier to occur.
Resolution 5 - Change of Name
This is a special resolution that, subject to the passing of
Resolutions 1 and 2, proposes to change the name of the Company to
Bluejay Mining plc.
8 Action to be taken
A Form of Proxy for use at the General Meeting is enclosed.
Please complete and sign the Form of Proxy and return it to the
Company's Registrars so as to arrive no later than 48 hours before
the time fixed for the General Meeting.
The return of the Form of Proxy will not, however, prevent you
from attending the General Meeting and voting in person should you
wish to do so.
9 Conflicts of interest
Certain Directors of the Company, namely Roderick McIllree and
Gregory Kuenzel, are Bluejay Vendors and as such have a personal
interest in the Exercise of the Bluejay Option. In addition, Graham
Marshall Non-Executive Chairman is an employee of Western Areas, a
member of the Concert Party and the Company's current largest
shareholder. As such Roderick McIllree, Gregory Kuenzel and Graham
Marshall (the "Conflicted Directors") are each deemed to have a
conflict of interest with regard to the Proposed Transaction.
In accordance with Rule 25.2 of the Takeover Code the Conflicted
Directors give no expression of their views on the Proposed
Transaction.
10 Recommendation
SP Angel considers that the terms of the Proposed Transaction
are fair and reasonable and in the best interests of the
Shareholders and the Company as a whole. In providing this opinion,
SP Angel has taken into account the Directors' commercial
assessment.
Accordingly, SP Angel recommends that Shareholders vote in
favour of the Resolutions to be proposed at the General
Meeting.
Yours faithfully
Graham Marshall
Non-Executive Chairman
PART II
ADDITIONAL INFORMATION IN RELATION TO THE WAIVER
1 Background
Under the Takeover Code a concert party arises where persons
who, pursuant to an agreement or understanding (whether formal or
informal), co-operate to obtain or consolidate control (as defined
below) of a company or to frustrate the successful outcome of an
offer for a company. Control means holding, or aggregate holdings,
of shares carrying 30 per cent. or more of the voting rights of the
company, irrespective of whether the holding or holdings give de
facto control.
As set out in the December 2015 Circular, the Panel determined
that pursuant to the Initial Bluejay Acquisition, the Bluejay
Vendors are acting in concert with each other and Western Areas is
acting in concert with the Bluejay Vendors. Together, Western Areas
and the Bluejay Vendors are referred to as the "Concert Party".
Western Areas was previously the subject of a waiver granted in
respect of Rule 9 and approved by Independent Shareholders on a
poll at the general meeting held on 29 November 2013. At that time
Western Areas held an interest in 67.8 per cent of the voting
rights of the Company.
Furthermore, as stated in the December 2015 Circular there was
no obligation under Rule 9 to make a general offer in respect of
the issue of new Ordinary Shares to either Western Areas or the
Bluejay Vendors pursuant to the December 2015 Placing nor the
Initial Bluejay Acquisition, as at that time Western Areas had an
interest in excess of 50 per cent. of the voting rights of FinnAust
and the Concert Party retained an interest in excess of 50 per
cent. of the voting rights of the Company following the completion
of the December 2015 Placing and the Initial Bluejay
Acquisition.
Western Areas held between 30 per cent. and 50 per cent. of the
voting rights of the Company and the Bluejay Vendors held an
interest in 29.99 per cent of the voting rights of the Company
following completion of the December 2015 Placing and the Initial
Bluejay Acquisition, therefore both Western Areas and the Bluejay
Vendors were unable to increase their interests in the voting
rights of the Company through or between a Rule 9 threshold without
Panel consent.
As at the date of this document, Western Areas holds an interest
in 138,611,112 Ordinary Shares representing 22.39 per cent. of the
Existing Ordinary Shares and the Bluejay Vendors hold an interest
in 163,190,336 Ordinary Shares representing 26.36 per cent. of the
Existing Ordinary Shares. Therefore, in aggregate, the Concert
Party is interested in 301,801,448 Ordinary Shares which represents
48.74 per cent of the voting rights of the Company.
On completion of the Exercise of the Bluejay Option the
Consideration Shares will be issued to the Bluejay Vendors. This
will result in the Bluejay Vendors being interested in 271,261,724
Ordinary Shares which will represent 37.30 per cent of the Enlarged
Issued Share Capital and total voting rights of the Company.
Therefore, in aggregate, the Concert Party will be interested in
409,872,836 Ordinary Shares which will represent 56.36 per cent of
the total voting rights of the Company.
Due to the Share Options, the maximum potential interest in the
Company of the Bluejay Vendors is 275,111,724 Ordinary Shares,
which would represent 37.63 per cent of the voting rights of the
Company. The maximum potential interest of the Concert Party
therefore is 413,722,836 Ordinary Shares which would represent
56.59 per cent of the voting rights of the Company.
2 Current interests and maximum potential interests in the
voting rights of the Company of the Concert Party
Details of the current interests, interests following completion
of the Proposed Transaction and maximum potential interests in the
ordinary share capital of the Company for each member of the
Concert Party are set out in the table below:
No. of Interest Percentage No. of Maximum Maximum
Shareholder Interest Percentage Consideration in Ordinary interest Share potential potential
name in interest Shares Shares on in voting Options** interest percentage
Ordinary in completion rights in Ordinary interest
Shares Ordinary of the on Shares in voting
as at the Shares Proposed completion rights
date of as at Transaction of the
this the date Proposed
Circular of this Transaction
Circular
-------------- ------------ ------------ -------------- ------------ ------------ ---------- ------------ -----------
Shaun
Bunn 17,089,886 2.76% 11,443,696 28,533,582 3.92% - 28,533,582 3.90%
-------------- ------------ ------------ -------------- ------------ ------------ ---------- ------------ -----------
Gregory
Kuenzel* 23,108,125 3.73% 15,147,257 38,255,382 5.26% 3,600,000 41,855,382 5.73%
-------------- ------------ ------------ -------------- ------------ ------------ ---------- ------------ -----------
Roderick
McIllree* 57,100,222 9.22% 37,477,556 94,577,778 13.01% - 94,577,778 12.94%
-------------- ------------ ------------ -------------- ------------ ------------ ---------- ------------ -----------
Garth
Palmer 9,291,881 1.50% 6,525,323 15,817,204 2.17% 250,000 16,067,204 2.20%
-------------- ------------ ------------ -------------- ------------ ------------ ---------- ------------ -----------
Jeremy
Whybrow 56,600,222 9.14% 37,477,556 94,077,778 12.94% - 94,077,778 12.87%
-------------- ------------ ------------ -------------- ------------ ------------ ---------- ------------ -----------
Bluejay
Vendors
Total 163,190,336 26.36% 108,071,388 271,261,724 37.30% 3,850,000 275,111,724 37.63%
-------------- ------------ ------------ -------------- ------------ ------------ ---------- ------------ -----------
Western
Areas 138,611,112 22.39% - 138,611,112 19.06% - 138,611,112 18.96%
-------------- ------------ ------------ -------------- ------------ ------------ ---------- ------------ -----------
Concert
Party
Total 301,801,448 48.74% 108,071,388 409,872,836 56.36% 3,850,000 413,722,836 56.59%
-------------- ------------ ------------ -------------- ------------ ------------ ---------- ------------ -----------
Other
Shareholders 317,368,051 51.26% - 317,368,051 43.64% - 317,368,051 43.41%
-------------- ------------ ------------ -------------- ------------ ------------ ---------- ------------ -----------
TOTAL 619,169,499 100.00% 108,071,388 727,240,887 100.00% 3,850,000 731,090,887 100.00%
-------------- ------------ ------------ -------------- ------------ ------------ ---------- ------------ -----------
*Director of the Company, ** subject to the approval of the
Waiver being received, and at the discretion of the option holder
the Share Options can be exercised immediately
3 Waiver
The Company applied to the Panel for a waiver of Rule 9 of the
Takeover Code in order to permit the Exercise of the Bluejay Option
by the Board without triggering an obligation on the part of the
Bluejay Vendors to make a general offer to Shareholders. The Panel
has agreed, subject to the approval of Independent Shareholders on
a poll vote, to waive the requirement for the Bluejay Vendors to
make a general offer to all Shareholders where such an obligation
would arise as a result of the issue of the Consideration Shares or
the exercise of the Share Options.
4 Further details on the Bluejay Vendors
The current interests of each of the Bluejay Vendors in the
share capital of Bluejay are set out in the table below along with
the number of Consideration Shares that they will receive on
completion of the Exercise of the Bluejay Option.
Name Shareholding Percentage Number of consideration
in Bluejay shareholding Shares (to
in Bluejay be issued on
a pro rata
basis)
-------------------- ------------- -------------- ------------------------
Shaun Bunn 8,740 4.19% 11,443,696
-------------------- ------------- -------------- ------------------------
Gregory Kuenzel* 11,575 5.56% 15,147,257
-------------------- ------------- -------------- ------------------------
Roderick McIllree* 28,630 13.74% 37,477,556
-------------------- ------------- -------------- ------------------------
Garth Palmer 4,985 2.39% 6,525,323
-------------------- ------------- -------------- ------------------------
Jeremy Whybrow 28,630 13.74% 37,477,556
-------------------- ------------- -------------- ------------------------
TOTAL 82,560 39.63%* 108,071,388
-------------------- ------------- -------------- ------------------------
*The remaining 60.37% of Bluejay (being 125,788 shares) is
already owned by the Company.
Biographies for the Bluejay Vendors are set out below.
a. Shaun Bunn
Mr. Bunn is a mining executive with over 30 years of experience
in exploration, mining, processing and project development. Shaun
has a BSc and GDip in Metallurgy from WA School of Mines, and an
MBA from Deakin University. Shaun has managed mining projects
through all stages of development, from grass roots exploration,
feasibility studies, financing, construction, commissioning and
operations.
b. Gregory Kuenzel
Mr. Kuenzel is Non-Executive Director of the Company. He joined
the Board of the Company on 30 June 2010. Greg holds a Bachelor of
Business Degree and is an associate of the Institute of Chartered
Accountants in England and Wales. Greg has many years of experience
in providing accounting and corporate advice across various
industry sectors including mining and resource development in the
UK, USA and Australia. Greg is the Managing Director of AIM quoted
Georgian Mining Corporation.
c. Roderick McIllree
Mr. McIllree is the Managing Director of FinnAust. He joined the
Board of the Company on 8 December 2015, having been appointed as
non-board interim Chief Executive officer in July 2015. Rod has
more than 20 years of experience operating in both the resources
and financial sectors. Having worked initially as an exploration
geologist for global mining houses he migrated to the financial /
advisory side of the industry where he worked extensively as a
mining analyst, then later as a corporate adviser to listed
exploration and mining companies with projects across a broad
spectrum of commodities and countries, including Greenland.
d. Garth Palmer
Mr. Palmer is the Company Secretary of FinnAust. He holds a
Bachelor of Commerce Degree and is a member of the Institute of
Chartered Accountants in England & Wales. Garth began his
career at Horwath Chartered Accountants in Perth (now part of BDO)
in the audit and corporate services division before moving to
KPMG's audit and risk advisory team. Mr Palmer works with AIM
quoted companies, predominantly within the mining and resources
industries, providing corporate and financial consulting services.
Garth is the Finance Director of AIM quoted SigmaRoc plc.
e. Jeremy Whybrow
Mr. Whybrow holds a Bachelor degree from the Curtin University
of Technology and has over 15 years of experience in the minerals
industry. Jeremy has worked for companies such as Sons of Gwalia
Ltd, PacMin Ltd, Teck Australia Ltd, Mount Edon Gold Mines Ltd and
Croesus Mining NL. His experience was mainly in the operational
environment and includes significant exposure to exploration and
mining operations, project evaluation and feasibility studies.
Jeremy also has extensive international exploration experience
having worked in China, Africa and the Philippines as well as
numerous localities in Australia. As a founding director of
Greenland Minerals and Energy Ltd, Jeremy was instrumental in
conducting the exploration programs that have seen the Kvanefjeld
project in Greenland emerge as the world's largest resource of rare
earth elements.
5 Further information regarding Western Areas
Western Areas Limited, incorporated in Australia on 24 December
1999 with registered number 091049357, was listed on the Australian
Securities Exchange in July 2000 and currently has a market
capitalisation in excess of AUS$710 million. Its registered office
is Level 2, 2 Kings Park Road, West Perth WA 6005, Australia.
Western Areas is a leading Australian nickel producer. Production
is built around two of the highest grade underground nickel mines
in the world, Flying Fox and Spotted Quoll, both within Western
Area's Forrestania project area in Western Australia.
Western Areas is deemed to be acting in concert with the Bluejay
Vendors.
6 Responsibility statements and consent
The Company accepts responsibility for the information contained
in this document. To the best of the knowledge and belief of the
Company, the information contained in this document is in
accordance with the facts and does not omit anything likely to
affect the import of such information.
The Conflicted Directors accept responsibility for the
information contained in this document save for the Recommendation
in paragraph 10 of Part I. To the best of the knowledge and belief
of the Conflicted Directors (each of whom has taken all reasonable
care to ensure that such is the case), the information contained in
this document is in accordance with the facts and does not omit
anything likely to affect the import of such information.
The Bluejay Vendors accept responsibility for the information
relating to them contained in this document. To the best of the
knowledge and belief of the Bluejay Vendors (each of whom has taken
all reasonable care to ensure that such is the case), the
information contained in this document for which the Bluejay
Vendors are responsible is in accordance with the facts and does
not omit anything likely to affect the import of such
information.
Western Areas accepts responsibility for the information
relating to it contained in this document. To the best of the
knowledge and belief of Western Areas (which has taken all
reasonable care to ensure that such is the case), the information
contained in this document for which Western Areas is responsible
is in accordance with the facts and does not omit anything likely
to affect the import of such information.
SP Angel Corporate Finance LLP, which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority,
has given and has not withdrawn its written consent to the issue of
this document with the references to its name in the form and
context in which they appear.
7 Intentions of the Concert Party
The Bluejay Vendors have each confirmed to the Company that they
are not proposing, following any increase in their percentage
interests in Ordinary Shares or voting rights as a result of the
Proposed Transaction or any potential exercise of Share Options, to
seek any change in the general nature of the Company's
business.
The Bluejay Vendors have also each confirmed that they have no
intention to make any changes regarding the future of the Company's
business, the locations of the Company's places of business and the
continued employment of its employees and management (and those of
its subsidiaries) as a result of any increase in their percentage
interests in Ordinary Shares or voting rights as a result of the
Proposed Transaction or any potential future exercise of Share
Options nor will there be any redeployment of the fixed assets of
the Company as a result of such an increase. The Bluejay Vendors
intend that the Company remains quoted on AIM.
8 Interests and dealings in relevant securities
Definitions:
For the purpose of this paragraph:
"acting in concert" has the meaning attributed to it in the
Takeover Code;
"arrangement" includes any indemnity or option arrangements, and
any agreement or understanding, formal or informal, of whatever
nature, relating to relevant securities which may be an inducement
to deal or refrain from dealing;
"connected person" has the meaning attributed to it in section
252 of the Companies Act 2006;
"control" means a holding, or aggregate holdings, of shares
carrying 30 per cent. or more of the voting rights attributable to
the share capital of a company which are currently exercisable at a
general meeting, irrespective of whether the holding or aggregate
holding gives de facto control;
"dealing" or "dealt" includes the following:
the acquisition or disposal of relevant securities, of the right
(whether conditional or absolute) to exercise or direct the
exercise of voting rights attached to relevant securities, or of
general control of relevant securities;
the taking, granting, acquisition, disposal, entering into,
closing out, termination, exercise (by either party) or variation
of an option (including a trade option contract) in respect of any
relevant securities;
subscribing or agreeing to subscribe for relevant
securities;
the exercise or conversion of any relevant securities carrying
conversion or subscription rights (whether in respect of new or
existing securities);
the acquisition of, disposal of, entering into, closing out,
exercise (by either party) of any rights under, or variation of, a
derivative referenced, directly or indirectly, to relevant
securities;
entering into, terminating or varying the terms of any agreement
to purchase or sell relevant securities; and
any other action resulting, or which may result, in an increase
or decrease in the number of relevant securities in which a person
is interested or in respect of which he has a short position;
"derivative" includes any financial product whose value in whole
or in part is determined directly or indirectly by reference to the
price of an underlying security;
"disclosure date" means 17 February 2017, being the latest
practicable date prior to the posting of this document;
"disclosure period" means the period commencing on 20 February
2016, being the date 12 months prior to the date of the posting of
this document and ending on the disclosure date;
being "interested" in relevant securities includes where a
person:
owns relevant securities;
has a right (whether conditional or absolute) to exercise or
direct the exercise of the voting rights attaching to relevant
securities or has general control of them;
by virtue of any agreement to purchase, option or derivative,
has the right or option to acquire relevant securities or call for
their delivery or is under an obligation to take delivery of them,
whether the right, option or obligation is conditional or absolute
and whether it is in the money or otherwise; or
is party to any derivative whose value is determined by
reference to their price and which results, or may result, in his
having a long position in them;
"relevant securities" includes:
shares and any other securities carrying voting rights;
equity share capital (or derivatives referenced thereto);
securities carrying conversion or subscription rights (including
traded options);
"short position" means any short position (whether conditional
or absolute and whether in the money or otherwise) including any
short position under a derivative, agreement to sell or any
delivery obligation or right to require any other person to
purchase or take delivery.
The Concert Party's interest in the Company at the disclosure
date
As at the disclosure date, Western Areas holds an interest in
138,611,112 Ordinary Shares representing 22.39 per cent. of the
Existing Ordinary Shares and the Bluejay Vendors hold an interest
in 163,190,336 Ordinary Shares representing 26.36 per cent. of the
Existing Ordinary Shares. In total, the Concert Party holds an
interest in 301,801,448 Ordinary Shares representing 48.74 per
cent. of the Existing Ordinary Shares as at the disclosure
date.
Dealings in relevant securities
(a) The dealings by Bluejay Vendors in Ordinary Shares during
the disclosure period were as follows:
Name Description No. of Ordinary Price per Date of
of dealing Shares Ordinary transaction
Share
------------- ------------------ ---------------- ----------- -------------
Shaun Bunn Issue of 4,315,647 n/a 8 December
new Ordinary 2016
Shares by
the Company
as deferred
consideration
for the
Initial
Bluejay
Acquisition
in accordance
with the
terms of
the Bluejay
Acquisition
Agreement
------------- ------------------ ---------------- ----------- -------------
Gregory Issue of 5,712,334 n/a 8 December
Kuenzel new Ordinary 2016
Shares by
the Company
as deferred
consideration
for the
Initial
Bluejay
Acquisition
in accordance
with the
terms of
the Bluejay
Acquisition
Agreement
------------- ------------------ ---------------- ----------- -------------
Roderick Issue of 14,133,537 n/a 8 December
McIllree new Ordinary 2016
Shares by
the Company
as deferred
consideration
for the
Initial
Bluejay
Acquisition
in accordance
with the
terms of
the Bluejay
Acquisition
Agreement
------------- ------------------ ---------------- ----------- -------------
Garth Palmer Issue of 2,460,830 n/a 8 December
new Ordinary 2016
Shares by
the Company
as deferred
consideration
for the
Initial
Bluejay
Acquisition
in accordance
with the
terms of
the Bluejay
Acquisition
Agreement
------------- ------------------ ---------------- ----------- -------------
Jeremy Issue of 14,133,537 n/a 8 December
Whybrow new Ordinary 2016
Shares by
the Company
as deferred
consideration
for the
Initial
Bluejay
Acquisition
in accordance
with the
terms of
the Bluejay
Acquisition
Agreement
------------- ------------------ ---------------- ----------- -------------
Shaun Bunn On market 300,000 6.45 pence 19 September
disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Shaun Bunn On market 100,000 5.4 pence 18 August
disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Shaun Bunn On market 200,000 5.37 pence 17 August
disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Shaun Bunn Acquisition 300,000 5.0 pence 13 July
of new Ordinary 2016
Shares in
a placing
for cash
------------- ------------------ ---------------- ----------- -------------
Shaun Bunn On market 75,000 5.0 pence 26 May
disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Shaun Bunn On market 150,000 5.0 pence 25 May
disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Shaun Bunn On market 350,000 5.0 pence 24 May
disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Jeremy On market 400,000 5.5 pence 17 May
Whybrow disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Garth Palmer On market 100,000 5.25 pence 16 May
disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Garth Palmer On market 100,000 5.00 pence 13 May
disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Garth Palmer On market 150,000 3.90 pence 12 April
disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Jeremy On market 300,000 3.8 pence 11 April
Whybrow disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Jeremy On market 300,000 3.52 pence 8 April
Whybrow disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Garth Palmer On market 300,000 3.55 pence 8 April
disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Jeremy Off market 3,125,000 2.0 pence 8 March
Whybrow disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Jeremy Off market 1,345,549 2.0 pence 8 March
Whybrow disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Jeremy Off market 250,000 2.0 pence 8 March
Whybrow disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Jeremy Off market 250,000 2.0 pence 8 March
Whybrow disposal 2016
of Ordinary
Shares
------------- ------------------ ---------------- ----------- -------------
Shaun Bunn Issue of 13,119,788 n/a 8 March
new Ordinary 2016
Shares by
the Company
as consideration
for the
Initial
Bluejay
Acquisition
in accordance
with the
terms of
the Bluejay
Acquisition
Agreement
------------- ------------------ ---------------- ----------- -------------
Gregory Issue of 17,365,791 n/a 8 March
Kuenzel new Ordinary 2016
Shares by
the Company
as consideration
for the
Initial
Bluejay
Acquisition
in accordance
with the
terms of
the Bluejay
Acquisition
Agreement
------------- ------------------ ---------------- ----------- -------------
Roderick Issue of 42,966,685 n/a 8 March
McIllree new Ordinary 2016
Shares by
the Company
as consideration
for the
Initial
Bluejay
Acquisition
in accordance
with the
terms of
the Bluejay
Acquisition
Agreement
------------- ------------------ ---------------- ----------- -------------
Garth Palmer Issue of 7,481,051 n/a 8 March
new Ordinary 2016
Shares by
the Company
as consideration
for the
Initial
Bluejay
Acquisition
in accordance
with the
terms of
the Bluejay
Acquisition
Agreement
------------- ------------------ ---------------- ----------- -------------
Jeremy Issue of 42,966,685 n/a 8 March
Whybrow new Ordinary 2016
Shares by
the Company
as consideration
for the
Initial
Bluejay
Acquisition
in accordance
with the
terms of
the Bluejay
Acquisition
Agreement
------------- ------------------ ---------------- ----------- -------------
Shaun Bunn Acquisition 529,451 2.0 pence 8 March
of new Ordinary 2016
Shares in
a placing
for cash
------------- ------------------ ---------------- ----------- -------------
Jeremy Acquisition 4,470,549 2.0 pence 8 March
Whybrow of new Ordinary 2016
Shares in
a placing
for cash
------------- ------------------ ---------------- ----------- -------------
Jeremy Acquisition 1,000,000 2.0 pence 4 March
Whybrow of new Ordinary 2016
Shares in
a placing
for cash
------------- ------------------ ---------------- ----------- -------------
(b) The dealings by Western Areas in Ordinary Shares during the
disclosure period were as follows:
Description No. of Ordinary Price per Date of transaction
of dealing Shares Ordinary Share
------------------ ---------------- ---------------- --------------------
Disposal of 45,000,000 7.0 pence 8 December
Ordinary Shares 2016
by way of
a vendor placing
------------------ ---------------- ---------------- --------------------
Acquisition 5,000,000 2.0 pence 8 March 2016
of new Ordinary
Shares in
a placing
for cash
------------------ ---------------- ---------------- --------------------
(c) The dealings by SP Angel in Ordinary Shares during the
disclosure period were as follows:
Description No. of Ordinary Price per Date of transaction
of dealing Shares Ordinary Share
-------------------- ---------------- ---------------- --------------------
Grant of warrants 2,165,357 n/a 8 December
over Ordinary 2016
Shares exercisable
at 7 pence
per share
until 14 December
2021.
-------------------- ---------------- ---------------- --------------------
On market 1,584,244 4.54 pence 3 May 2016
disposal of
Ordinary Shares
-------------------- ---------------- ---------------- --------------------
Issue of new 481,928 2.075 pence 15 April 2016
Ordinary Shares
by the Company
in lieu of
fees due
-------------------- ---------------- ---------------- --------------------
Grant of warrants 625,000 n/a 15 April 2016
over Ordinary
Shares exercisable
at 2 pence
per share
until 15 April
2021.
-------------------- ---------------- ---------------- --------------------
Issue of new 1,102,316 2 pence 4 March 2016
Ordinary Shares
by the Company
in lieu of
fees due
-------------------- ---------------- ---------------- --------------------
Grant of warrants 1,000,000 n/a 4 March 2016
over Ordinary
Shares exercisable
at 2 pence
per share
until 4 March
2017.
-------------------- ---------------- ---------------- --------------------
Grant of warrants 1,000,000 n/a 4 March 2016
over Ordinary
Shares exercisable
at 4 pence
per share
until 4 March
2018.
-------------------- ---------------- ---------------- --------------------
Grant of warrants 1,000,000 n/a 4 March 2016
over Ordinary
Shares exercisable
at 6 pence
per share
until 4 March
2019.
-------------------- ---------------- ---------------- --------------------
As at the date of this document, SP Angel did not hold any
Ordinary Shares, but has an interest in warrants to subscribe for
Ordinary Shares as follows:
Grant date Expiry date Exercise price No. of Ordinary
per Ordinary Shares
Share
--------------- --------------- ---------------- ----------------
4 March 2016 4 March 2017 2 pence 1,000,000
--------------- --------------- ---------------- ----------------
4 March 2016 4 March 2018 4 pence 1,000,000
--------------- --------------- ---------------- ----------------
4 March 2016 4 March 2019 6 pence 1,000,000
--------------- --------------- ---------------- ----------------
15 April 2016 15 April 2021 2 pence 625,000
--------------- --------------- ---------------- ----------------
8 December 14 December
2016 2021 7 pence 2,165,357
--------------- --------------- ---------------- ----------------
Save as disclosed in this document, as at the disclosure date,
neither the Bluejay Vendors, their immediate families, any related
trust and any connected persons and any persons acting in concert
with the Bluejay Vendors (including, without limitation, Western
Areas, any subsidiary or associated company of Western Areas or any
pension fund of Western Areas or any of its subsidiaries or
associated companies, any person whose investments are managed on a
discretionary basis by a fund manager connected with the Bluejay
Vendors, any connected adviser of the Bluejay Vendors and any
person controlling, controlled or under the same control as such
connected adviser) had any interest in or a right to subscribe for,
or had any short position in relation to, any relevant FinnAust
securities, nor had any such person dealt in any relevant FinnAust
securities during the disclosure period.
Save as disclosed in this document, as at the disclosure date,
neither the Bluejay Vendors, their immediate families or related
trusts or anyone acting in concert with any of the Bluejay Vendors
(including Western Areas) had borrowed or lent any relevant
FinnAust securities (save for any borrowed shares which have either
been on-lent or sold) or dealt in relevant securities during the
disclosure period nor owns or is interested in any relevant
securities (whether by interests, rights to subscribe or short
positions).
Save as disclosed in this document, at the disclosure date:
none of the Directors (including any members of their respective
immediate families, related trusts or connected persons) had any
interest in or a right to subscribe for, or has any short positions
in relation to any relevant securities of the Company;
no person acting in concert with the Company had any interest
in, or right to subscribe for, or had any short position in
relation to any relevant securities of the Company; and
none of the Directors (including any members of their respective
immediate families, related trusts or connected persons) nor any
person acting in concert with the Company nor the Company had
borrowed or lent any relevant securities of the Company, save for
any borrowed shares which have either been on-lent or sold.
Material contracts
The Bluejay Acquisition Agreement is the only material contract
that has been entered into by the Company or its subsidiaries in
the last two years. The material contract summary is given
below.
On 8 December 2015, the Company entered into a sale and purchase
agreement, pursuant to which it conditionally agreed to acquire
125,788 shares of no par value each in Bluejay representing an
interest of 60.37 per cent. of Bluejay for a maximum purchase price
of GBP905,607, based on a total maximum valuation of Bluejay of
GBP1.5 million, to be satisfied by the issue of up to 164,655,885
new Ordinary Shares to the Bluejay Vendors, pro rata, to their
respective holdings in Bluejay as follows:
(a) the allotment and issue of the initial consideration shares,
namely, 123,900,000 new Ordinary Shares on the satisfaction of the
conditions (being the December 2015 Placing and obtaining the
change of control consent from the Greenlandic authorities in
respect of Bluejay in its capacity as the holder of the mineral
exploration permit for the Pituffik Project) of the Initial Bluejay
Acquisition, which occurred on 8 March 2016; and
(b) the allotment and issue of the deferred consideration
shares, namely, 40,755,885 new Ordinary Shares, subject to certain
conditions (being grant of mineral exploration permit to Bluejay
over the offshore Pituffik project area and the deferred shares not
triggering a mandatory offer pursuant to Rule 9 of the Takeover
Code), which occurred on 8 December 2016.
Under the terms of the Bluejay Acquisition Agreement, the
Company was also granted an option by the Bluejay Vendors to
acquire the remaining 39.63 per cent. of Bluejay for the sum of
GBP594,393 to be satisfied by the issue of 108,071,388 new Ordinary
Shares to the Bluejay Vendors, pro rata, to their respective
holdings in Bluejay. The expiry date of the Bluejay Option is 8
March 2020.
Directors' service contracts
A summary of the service contract entered into with the Company
by each Director is set out below. None of the Directors' service
contracts have been amended in the last six months.
Graham Marshall
On 12 November 2013 the Company entered into a letter of
appointment with Mr Marshall whereby he agreed to act as
non-executive director of the Company for a nominal fee of GBP1 per
annum terminable by either party giving two months' prior written
notice. There have been no subsequent changes to Mr Marshall's
terms of appointment.
Roderick McIllree
On 8 December 2015 the Company entered into a service agreement
with Mr McIllree whereby he agreed to act as an executive director
of the Company for a fee of GBP6,666.67 per calendar month
terminable by either party giving six months' prior written notice.
There have been no subsequent changes to Mr McIllree's service
agreement.
Gregory Kuenzel
On 12 November 2013 the Company entered into a letter of
appointment with Mr Kuenzel whereby he agreed to act as
non-executive director of the Company for a fee of GBP1,000 per
calendar month terminable by either party giving three months'
prior written notice. There have been no subsequent changes to Mr
Kuenzel's terms of appointment.
Additional disclosures required by the Takeover Code
Save as disclosed in this document, none of the Directors have
any interest, direct or indirect, in any assets which have been or
are proposed to be acquired or disposed of by, or leased to, the
Company.
No agreement, arrangement or understanding (including any
compensation arrangement) exists between the Bluejay Vendors or
Western Areas and any of the Directors, recent directors,
Shareholders or recent shareholders of the Company, or any person
interested or recently interested in the Ordinary Shares, having
any connection with or dependence upon the Proposed
Transaction.
There is no agreement, arrangement or understanding whereby the
legal and/or beneficial interest in any Ordinary Share held by or
to be issued to any member of the the Concert Party pursuant to the
Bluejay Acquisition or the future exercise of Share Options will be
transferred to any other person.
In the event the Proposed Transaction is approved at the General
Meeting, the members of the Concert Party will not be restricted
from making an offer for the Company.
9 Middle market quotation
The following table sets out the closing middle market
quotations for an Ordinary Share in FinnAust for the first business
day of each of the six months immediately preceding the date of
this document and for 17 February 2017 (being the latest
practicable date prior to the publication of this document):
Date Price per Ordinary Share
(pence)
------------------ -------------------------
17 February 2017 7.625
------------------ -------------------------
1 February 2017 6.950
------------------ -------------------------
3 January 2017 7.075
------------------ -------------------------
1 December 2016 7.775
------------------ -------------------------
1 November 2016 6.450
------------------ -------------------------
3 October 2016 7.000
------------------ -------------------------
1 September 2016 5.125
------------------ -------------------------
Source: Bloomberg
10 Information incorporated by reference
Your attention is drawn to the following documents (or parts
thereof) that are incorporated by reference into this document:
Information incorporated Document reference Page number(s)
by reference in such
document
------------------------------------------------------------------------ --------------------------- ---------------
Annual Report and Accounts
for FinnAust Mining
plc for the year ended
30 June 2016 (available
for viewing on the FinnAust
website at http://www.titanium.gl/documents/corporate-documents/160630
-FinnAust-Mining-Plc-Accounts.pdf Consolidated income
) statement 15
Consolidated statement
of comprehensive income 16
Consolidated statement
of financial position 14
Consolidated statement
of changes in equity 17
Consolidated statement
of cash flows 19
Notes to the financial
statements 20
Independent auditor's
opinion 13
---------------------------------------------------------------------------------------------------- ---------------
Annual Report and Accounts
for FinnAust Mining
plc for the year ended
30 June 2015 (available
for viewing on the FinnAust
website at http://www.titanium.gl/documents/corporate-documents/FinnAu Consolidated income
stMiningPlcAccounts150630FINAL.pdf) statement 13
Consolidated statement
of comprehensive income 14
Consolidated statement
of financial position 12
Consolidated statement
of changes in equity 15
Consolidated statement
of cash flows 17
Notes to the financial
statements 18
Independent auditor's
opinion 11
---------------------------------------------------------------------------------------------------- ---------------
Any Shareholder, person with information rights or other person
to whom this document is sent may request a copy of each of the
documents set out above in hard copy form. Hard copies will only be
sent where valid requests are received from such persons. Requests
for hard copies are to be submitted to the Company Secretary at the
Company's registered office, 47 Charles Street, London W1J 5EL or
by calling +44 (0)203 006 0266. All valid requests will be dealt
with as soon as possible and hard copies mailed by no later than
two business days following such request.
The documents incorporated by reference into this document have
been incorporated in compliance with Rule 24.15 of the Takeover
Code. Except as set forth above, no other portion of these
documents is incorporated by reference into this document.
11 Documents on display
Copies of the following documents will be available for
inspection during normal business hours on any weekday (Saturdays,
Sundays and public holidays excepted) at the offices of the
Company, 47 Charles Street, London, W1J 5EL from the date of this
document until one month following the date of the General
Meeting.
(a) the Memorandum and Articles of the Company;
(b) the financial information on the Company referred to in
paragraph 13 above;
(c) the service contracts and letters of appointment of each of
the Directors;
(d) the written consent of SP Angel Corporate Finance LLP
referred to in paragraph 6.5 above; and
(e) the Bluejay Acquisition Agreement.
These documents will also be available from the Company's
website www.finnaust.com.
PART III
PRINCIPAL RISKS AND UNCERTAINTIES
The risks and uncertainties described below are the material
risk factors facing the Group which are currently known to the
Directors and should be read in conjunction with the other
information contained in this document.
Additional risks and uncertainties not presently known or
currently deemed immaterial may also have a material adverse effect
on the Group's business, results of operations or financial
condition. If any or a combination of the following risks
materialise, the Group's business, financial condition, operational
performance and share price could be materially and adversely
affected to the detriment of the Group and the Shareholders. No
inference ought to be drawn as to the order in which the following
risk factors are presented as to their relative importance or
potential effect. The risks are not presented in any order of
priority nor are they exhaustive.
No representation is or can be made as to the future performance
of the Company and there can be no assurance that the Company will
achieve its objectives.
Exploration risks
The exploration and mining business is controlled by a number of
global factors, principally supply and demand which in turn is a
key driver of global mineral prices; these factors are beyond the
control of the Group. Exploration is a high-risk business and there
can be no guarantee that any mineralisation discovered will result
in proven and probable reserves or go on to be an operating mine.
At every stage of the exploration process the projects are
rigorously reviewed to determine if the results justify the next
stage of exploration expenditure ensuring that funds are only
applied to high priority targets.
The principal assets of the Group comprising the mineral
exploration licences are subject to certain financial and legal
commitments. If these commitments are not fulfilled the licences
could be revoked. They are also subject to legislation defined by
the Government; if this legislation is changed it could adversely
affect the value of the Group's assets.
Economically viable mining
The exploration and development of natural resources involves
significant financial risks over a prolonged period of time, which
even if there is a combination of careful evaluation, experience
and knowledge may not be eliminated. While discovery of a natural
resource may result in substantial rewards, few properties that are
explored are ultimately developed into economically viable
operating mines. Major expenditure may be required to establish
reserves by drilling and in constructing mining and processing
facilities at a site, and it is possible that even preliminary due
diligence will show adverse results, leading to abandonment of
projects. It is impossible to ensure that preliminary feasibility
studies or definitive feasibility studies on the Group's projects
will result in a profitable mining operation.
Acquisition, retention and conversion of licences, permits and
other regulatory approvals
The ability of the Group to develop and exploit natural
resources depends on its continued compliance with the obligations
of its current exploration rights and the Group's ability to
convert exploration opportunities into production and/or mining
licences. The Group depends on licences whose grant and renewal are
subject to the discretion of the relevant governmental authorities
and cannot be assured.
Weather conditions
It may not be possible to fully insure against adverse weather
conditions and should such events occur liabilities may arise which
could reduce or eliminate any future profitability, result in
increasing costs or the loss of the Group's assets and a decline in
the value of the Ordinary Shares.
Dependence on key personnel
The Group and Company is dependent upon its executive management
team and various technical consultants. Whilst it has entered into
contractual agreements with the aim of securing the services of
these personnel, the retention of their services cannot be
guaranteed. The development and success of the Group depends on its
ability to recruit and retain high quality and experienced staff.
The loss of the service of key personnel or the inability to
attract additional qualified personnel as the Group grows could
have an adverse effect on future business and financial
conditions.
Uninsured risk
The Group, as a participant in exploration and development
programmes, may become subject to liability for hazards that cannot
be insured against or third party claims that exceed the insurance
cover. The Group may also be disrupted by a variety of risks and
hazards that are beyond control, including geological, geotechnical
and seismic factors, environmental hazards, industrial accidents,
occupation and health hazards and weather conditions or other acts
of God.
Funding risk
The only sources of funding currently available to the Group are
through the issue of additional equity capital in the parent
company or through bringing in partners to fund exploration and
development costs. The Company's ability to raise further funds
will depend on the success of the Group's exploration activities
and its investment strategy. The Company may not be successful in
procuring funds on terms which are attractive and, if such funding
is unavailable, the Group may be required to reduce the scope of
its exploration and development activities or relinquish some of
the exploration licences held for which it may incur fines or
penalties.
Financial Risks
The Group's operations expose it to a variety of financial risks
that can include market risk (including foreign currency, price and
interest rate risk), credit risk, and liquidity risk. The Group has
a risk management programme in place that seeks to limit the
adverse effects on the financial performance of the Group by
monitoring levels of debt finance and the related finance costs.
The Group does not use derivative financial instruments to manage
interest rate costs.
Shareholding of the Concert Party
Should the Proposed Transaction be approved by Independent
Shareholders, over 50 per cent. of the Enlarged Issued Share
Capital will be controlled by the Concert Party. As long as the
Concert Party owns a majority of the Ordinary Shares it will be
able to, among other things, propose and pass without support from
Independent Shareholders all ordinary resolutions of the Company
including, but not limited to, the election and removal of
directors, proposed amendments to the Articles, which govern the
rights attaching to the Ordinary Shares, and approval of
acquisitions or disposals of significant subsidiaries or assets or
other significant corporate transactions required to be subject to
majority shareholder consent. The Concert Party will also be able
to control or exert significant influence on all of the Company's
policy decisions and its strategic direction. Independent
Shareholders will benefit from minority shareholder protection to
the extent prescribed under English law.
DEFINITIONS
The following words and expressions apply throughout this
document unless the context requires otherwise:
"Admission" admission of the Consideration
Shares to trading on
AIM becoming effective
in accordance with the
AIM Rules for Companies;
------------------------------ -----------------------------------
"Admission Document" the Company's AIM admission
document dated 12 November
2013;
------------------------------ -----------------------------------
"AIM" a market of that name
operated by the London
Stock Exchange;
------------------------------ -----------------------------------
"AIM Rules" together, the AIM Rules
for Companies (including
the Note for Mining and
Oil & Gas Companies)
and the AIM Rules for
Nominated Advisers;
------------------------------ -----------------------------------
"AIM Rules for Companies" the AIM Rules for Companies
published by the London
Stock Exchange as amended
from time to time;
------------------------------ -----------------------------------
"AIM Rules for Nominated the AIM Rules for Nominated
Advisers" Advisers published by
the London Stock Exchange
as amended from time
to time;
------------------------------ -----------------------------------
"Articles" the articles of association
of the Company as at
the date of this document;
------------------------------ -----------------------------------
"Bluejay" Bluejay Mining Limited,
a company incorporated
in the British Virgin
Islands with registered
number 1662564;
------------------------------ -----------------------------------
"Bluejay Acquisition" the proposed acquisition
by the Company of 82,560
shares of no par value
each representing an
interest in 39.63 per
cent. of Bluejay, which
is not already owned
by the Company;
------------------------------ -----------------------------------
"Bluejay Acquisition the sale and purchase
Agreement" agreement entered into
on 8 December 2015 by
the Company and the Bluejay
Vendors setting out the
terms of the acquisition
of Bluejay;
------------------------------ -----------------------------------
"Bluejay Option" the option granted to
the Company pursuant
to the terms of the Bluejay
Acquisition Agreement
whereby the Company was
granted the right to
acquire the remaining
39.63 per cent. of Bluejay
that it does not already
own from the Bluejay
Vendors to be satisfied
by the issue of the Consideration
Shares;
------------------------------ -----------------------------------
"Bluejay Vendors" the vendors of Bluejay,
being Roderick McIllree,
Jeremy Whybrow, Gregory
Kuenzel, Garth Palmer
and Shaun Bunn;
------------------------------ -----------------------------------
"Board" or "Directors" the directors of the
Company whose names are
set out on page 2 of
this document;
------------------------------ -----------------------------------
"Company" or "FinnAust" FinnAust Mining plc,
a company incorporated
in England and Wales
with registered number
05389216;
------------------------------ -----------------------------------
"Concert Party" Western Areas and the
Bluejay Vendors;
------------------------------ -----------------------------------
"Conflicted Directors" certain directors of
the Company, being Roderick
McIllree, Gregory Kuenzel
and Graham Marshall are
deemed to have a conflict
of interest for the purposes
of the Takeover Code
with regard to the Proposed
Transaction;
------------------------------ -----------------------------------
"Consideration Shares" 108,071,388 new Ordinary
Shares which will be
issued to the Bluejay
Vendors to satisfy the
consideration due in
respect of the Exercise
of the Bluejay Option;
------------------------------ -----------------------------------
"December 2015 Placing" the placing of new shares
for cash undertaken by
the Company in December
2015, which was conditional
upon completion of the
Initial Bluejay Acquisition,
further details of which
are set out in the circular
dated 8 December 2015;
------------------------------ -----------------------------------
"Enlarged Issued Share the issued ordinary share
Capital" capital of the Company
as enlarged by the issue
of the Consideration
Shares;
------------------------------ -----------------------------------
"Exercise of the Bluejay the proposed exercise
Option" of the Bluejay Option
by the Company, which
will result in the Bluejay
Acquisition;
------------------------------ -----------------------------------
"Existing Ordinary Shares" the 619,169,499 Ordinary
Shares in issue at the
date of this document;
------------------------------ -----------------------------------
"Form of Proxy" the form of proxy for
use by Shareholders in
connection with the General
Meeting, which is enclosed
with this document;
------------------------------ -----------------------------------
"General Meeting" the general meeting of
the Company which is
to be held at 10:00 a.m.
on 10 March 2017 at The
Washington Mayfair Hotel,
5 Curzon Street, London,
W1J 5HE, notice of which
is set out at the end
of this document;
------------------------------ -----------------------------------
"Group" the Company and its subsidiaries;
------------------------------ -----------------------------------
"Independent Shareholders" the Shareholders other
than the Bluejay Vendors
and Western Areas;
------------------------------ -----------------------------------
"Initial Bluejay Acquisition" the acquisition by the
Company of 125,788 Bluejay
shares of no par value
each representing an
interest in 60.37 per
cent. of Bluejay, which
completed on 8 March
2016;
------------------------------ -----------------------------------
"London Stock Exchange" the London Stock Exchange
plc;
------------------------------ -----------------------------------
"Notice of General Meeting" the notice of the General
Meeting, which begins
on page 35 of this document;
------------------------------ -----------------------------------
"Ordinary Shares" ordinary shares of 0.01
pence each in the capital
of the Company;
------------------------------ -----------------------------------
"Panel" the UK Panel on Takeovers
and Mergers;
------------------------------ -----------------------------------
"Pituffik Mineral Exploration the exploration licence
Permit" held by Bluejay with
licence number 2015/08
which covers an area
of approximately 150
square kilometres (including
the expansion granted
by the Self Rule Government
of Greenland in July
2016 to cover the shallow
marine environment);
------------------------------ -----------------------------------
"Pituffik Project" the mineral resource
exploration project covered
by the Pituffik Mineral
Exploration Permit, south
of Qaanaaq in North West
Greenland;
------------------------------ -----------------------------------
"Proposed Transaction" together, the Exercise
of the Bluejay Option,
the Bluejay Acquisition
and the Waiver;
------------------------------ -----------------------------------
"Resolutions" the resolutions to be
proposed at the General
Meeting as set out in
the Notice of General
Meeting;
------------------------------ -----------------------------------
"Rule 3" rule 3 of the Takeover
Code;
------------------------------ -----------------------------------
"Rule 9" rule 9 of the Takeover
Code;
------------------------------ -----------------------------------
"Share Options" options to acquire Ordinary
Shares previously granted
by the Company to Gregory
Kuenzel and Garth Palmer;
------------------------------ -----------------------------------
"Shareholder(s)" holders of Ordinary Shares;
------------------------------ -----------------------------------
"SP Angel" SP Angel Corporate Finance
LLP, the Rule 3 adviser
and nominated adviser
and broker to the Company;
------------------------------ -----------------------------------
"Takeover Code" the UK City Code on Takeovers
and Mergers (as amended
from time to time); and
------------------------------ -----------------------------------
"TIDM" tradeable instrument
display mnemonic;
------------------------------ -----------------------------------
"Waiver" the waiver which has
been granted by the Panel,
conditional upon the
approval by the Independent
Shareholders of the Whitewash
Resolution on a poll,
of the obligations to
make a mandatory offer
for the entire issued
and to be issued share
capital of the Company
not already held by the
Concert Party which might
otherwise be imposed
on the Concert Party
under Rule 9, as a result
of the issue of the Consideration
Shares to the Bluejay
Vendors pursuant to the
Exercise of the Bluejay
Option;
------------------------------ -----------------------------------
"Western Areas" Western Areas Limited,
a company incorporated
in Australia with registered
number 091049357; and
------------------------------ -----------------------------------
"Whitewash Resolution" Resolution 2 set out
in the Notice of General
Meeting, which relates
to the Waiver.
------------------------------ -----------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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