Issue of Equity
15 Octobre 2003 - 9:01AM
UK Regulatory
RNS Number:9120Q
Monterrico Metals PLC
15 October 2003
For Immediate Release: 07.00am, 15 October 2003
MONTERRICO METALS PLC
Placing and Open Offer
of 8,068,427 new Ordinary Shares of 10p each at 135p per share
Monterrico Metals plc ("Monterrico" or the "Company") today announces a proposed
placing and open offer to raise #10.9 million (before expenses).
HIGHLIGHTS
* Proposed placing and open offer to raise #10.9 million (before expenses)
* Proceeds to fund the feasibility study for the Rio Blanco Project
* Offer price at a substantial premium to float price in June 2002
* Placing and Open Offer underwritten by Collins Stewart Limited -
Nominated Adviser and Broker to the deal
Commenting on the fundraising, Chris Eager, Chief Executive said:
"Considerable progress has been made since our successful flotation: most
notably we have recently completed all the components of the pre-feasibility
studies for the Rio Blanco Project and are in the process of compiling the
final document. In addition, we should not forget the advances made at our other
prospects in Peru where we have signed 2 letters of agreement for drill
commitments at the Pico Machay and Conaviri gold prospects.
This fundraising will enable us to complete the definitive feasibility study of
the Rio Blanco Project and to allocate further financial resources to certain
other prospects."
For further information, please contact:
Monterrico Metals plc Tel: +44 (0) 207 448 5088
Chris Eager, Chief Executive Officer
Bankside Consultants Limited Tel: +44 (0) 207 444 4140
Keith Irons
Ambrian Partners Limited Tel: +44 (0) 208 528 1456
Richard Chase
Proposed Placing and Open Offer
Introduction
Monterrico Metals plc is intending to raise approximately #10.2 million (net of
expenses) by way of a Placing and Open Offer of 8,068,427 new Ordinary Shares.
The Placing and Open Offer is fully underwritten by Collins Stewart.
Background to, and reasons for, the Placing and Open Offer
The Company was admitted to trading on AIM in June 2002 and simultaneously
raised #3.0 million (before expenses) which was primarily used to finance the
pre-feasibility study for the Rio Blanco Project. In addition, the Company
raised a further #1.0 million (before expenses) in April 2003 which enabled it
to increase its interest in the Rio Blanco Project to 100 per cent. These
placings were carried out at 54 pence per share and 75 pence per share
respectively.
Considerable progress has been made since flotation in developing the Company's
mining assets.
In particular, Monterrico has:
* completed all components of the pre-feasibility studies for the Rio
Blanco Project;
* published an independent initial resource estimate of the Henry's
Hill prospect at the Rio Blanco Project;
* purchased from Torre International Holdings Inc., a company in the
Gitennes Exploration group, their interest in the Rio Blanco
Project which has enabled the Group to consolidate a 100 per cent.
interest in the project;
* entered into a letter agreement with Newmont Peru Limited
("Newmont") for the drilling and, if successful, subsequent
development of the Company's Conaviri gold interests; and
* entered into a letter agreement with Calipuy resources Inc. for the
drilling and, if successful, subsequent development of the
Company's Pico Machay gold interests.
The Company has now completed all the components of the pre-feasibility studies
for which the majority of funds raised at the time of flotation, in June 2002,
were earmarked. It was disclosed at that time that, the Company would require
further equity funding to progress to the full feasibility study and hence the
reason for this Placing and Open Offer.
The Rio Blanco Project
Introduction
The Rio Blanco Project, the Company's principal asset, is a copper-molybdenum
porphyry located in northern Peru covering an area of some 6,472 hectares.
Several prospective target areas have been identified within the limits of the
concessions, of which the Henry's Hill area is the most advanced.
Resource estimate
The Company has conducted extensive resource definition drilling at the Rio
Blanco Project. Based on the results of this programme, an independent estimate,
previously announced by the Company, shows that Henry's Hill contains combined
(indicated and inferred) resources as set out in the table below:
cut-off combined resource indicated resource inferred resource
(% copper) tonnes ('000) grade tonnes grade tonnes grade
(%) ('000) (%) ('000) (%)
0.70 176,700 0.98 161,000 0.98 15,700 0.98
0.50 662,200 0.69 476,300 0.72 185,900 0.63
0.30 1,071,700 0.58 723,100 0.61 348,600 0.52
The resource at Henry's Hill includes higher-grade material within this larger
mineralised envelope containing 65 million tonnes grading 1.26 per cent. copper.
Furthermore, the Henry's Hill target remains open in several directions and a
follow-up programme of drilling is designed to test the continuity and
extensions of the copper mineralisation in order to further quantify and
possibly amplify the resource potential.
Pre-feasibility studies - preliminary conclusions
The Directors have commissioned independent consultants to carry out
pre-feasibility studies for the Henry's Hill prospect at the Rio Blanco Project.
The studies included investigations into:
* baseline environmental monitoring;
* social and sustainable development programmes;
* mineral resource estimates from diamond drilling;
* metallurgical testwork; and
* process options, design and costing;
These studies considered four process options for copper extraction. The
preferred scenario is to build a 10 million tonnes per annum copper concentrator
to produce in excess of 90,000 tonnes per annum of copper over a 20 year mine
life. The pre-feasibility estimate of the capital requirement is approximately
US$190 million and an operating cost estimate of 50 cents per pound of copper
produced. This route was demonstrated to have the best balance between
technical risk and financial return.
Based on the preliminary findings of these independent reports, the Directors
are confident that, based on current copper prices, the Rio Blanco Project has
the potential to be developed into an economic copper mining operation.
Accordingly, the Directors propose to complete a definitive feasibility study
within the next 18 months.
Use of proceeds
The net proceeds from the Placing and Open Offer (amounting to approximately
#10.2 million) will predominantly be used to fund the feasibility study for the
Henry's Hill prospect which forms part of the Rio Blanco Project. The main
areas of expenditure will be:
* resource definition drilling;
* metallurgical testwork;
* infrastructure planning;
* engineering design; and
* environmental and socio-economic impact studies.
In addition approximately #0.5 million will be used towards advancing additional
prospects and #1.0 million will be used to fund the continuing overheads of the
Company.
Details of the Placing and Open Offer
The Company is proposing to raise approximately #10.2 million net of expenses,
by way of a Placing and Open Offer of 8,068,427 Offer Shares. The Placing and
Open Offer is being underwritten by Collins Stewart.
The Open Offer is made by Collins Stewart on behalf of Monterrico Metals plc.
Qualifying Shareholders may subscribe for Offer Shares pro rata to their
shareholdings on the Record Date on the basis of:
2 Offer Shares for every 3 existing Ordinary Shares
held at the close of business on the Record Date at a price of 135p per share.
Fractional entitlements to Offer Shares will be aggregated and allotted to
Placees under the Placing for the benefit of the Company. The Offer Shares must
be paid for in full on application, which must be lodged not later than 5
November 2003. To the extent that the Offer Shares are not taken up under the
Open Offer they will fall to be allotted to Placees under the Placing.
Qualifying Shareholders should be aware that the Open Offer is not a rights
issue and that Offer Shares not applied for under the Open Offer will be
allotted to Placees under the Placing for the benefit of the Company. The
Application Form is not a document of title and cannot be traded or (save to
satisfy bona fide market entitlements) transferred.
The Offer Shares will, when issued, rank pari passu in all respects with the
Existing Issued Ordinary Shares, including the right to receive all dividends
and other distributions declared, made or paid on or after, or by reference to a
record date on or after, the date of their issue and will be issued free of all
liens, charges and encumbrances.
Application will be made for the Offer Shares to be admitted to trading on the
Alternative Investment Market of the London Stock Exchange ("AIM"). It is
expected that Admission will become effective and dealings in the Offer Shares
will commence on AIM on 10 November 2003.
Availability of the Prospectus
Copies of the Prospectus are available free of charge from the Company's
registered office and at the offices of Collins Stewart Limited, during normal
business hours on any weekday (Saturdays, Sundays and public holidays excepted)
and will remain available for at least one month after Admission.
Extraordinary General Meeting
An extraordinary general meeting of the Company has been convened for 11.00 am
on 7 November 2003. Full details of this are to be found in the Prospectus.
Directors' intentions
Christopher Eager and James Mancuso have irrevocably committed not to take up
their rights under the Open Offer in respect of their own shareholdings,
equivalent to a total of 1,401,666 Offer Shares, representing 17.38 per cent. of
the Company's existing issued share capital. Raymond Angus has irrevocably
committed to take up 20,000 Offer Shares and not to take up his remaining
entitlement to 788,333 Offer Shares. Frederic Haller has irrevocably committed
to take up all of his entitlement (amounting to 61,728 Offer Shares) and has
been allocated 370,370 Offer Shares in the Placing, of which 296,296 are subject
to clawback.
Recommendation
Your Directors consider that the Placing and Open Offer is in the best interests
of the Company and the Shareholders taken as a whole. Accordingly, your
Directors unanimously recommend you to vote in favour of the Resolutions to be
proposed at the Extraordinary General Meeting. The Directors have irrevocably
undertaken to vote in favour of the Resolutions in respect of their own
beneficial holdings of 3,407,593 Ordinary Shares held at the date of this
document representing approximately 28.16 per cent. of the Company's issued
ordinary share capital.
Timetable 2003
Record Date for the Open Offer close of business on 13 October
Latest time and date for splitting
(to satisfy bona fide market claims only) 3.00 pm on 3 November
Latest time and date for receipt of Forms of Proxy 11.00 am on 5 November
Latest time and date for receipt of Application Forms
and payment in full under the Open Offer 3.00 pm on 5 November
Extraordinary General Meeting 11.00 am on 7 November
Dealings on AIM expected to commence 8.00 am on 10 November
CREST member accounts credited 10 November
Expected date of despatch of definitive certificates 17 November
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOENKPKKDBDKQKD