Offer by Lucara Diamond Corp
04 Octobre 2010 - 8:00AM
UK Regulatory
TIDMAFD
RNS Number : 7621T
African Diamonds PLC
04 October 2010
4th October 2010
African Diamonds copper-fastens AK6 mine development, sheds risk and relaunches
exploration vehicle
- Lucara to acquire African Diamonds (AFD), valuing AFD at $82 million Cdn.
- Consideration of .80 of a Lucara share and 1 share in Botswana
Exploration plc for every 1 share in African Diamonds.
- Botswana Exploration is a new company with cash, exploration
opportunities in Botswana, and advanced stage licence applications in Zimbabwe
and Cameroon.
- Botswana Exploration will seek listings on AIM and the Botswana Stock
Exchange.
- Post transaction, AFD shareholders will hold 26.57% of Lucara. Lucara
has a 75% stake in the Mothae Diamond Mine in Lesotho and will own 100% of AK6.
- The transaction requires 75% approval at a Special Meeting of
shareholders.
- The African Diamonds board unanimously recommend the proposal.
African Diamonds (AFD) is pleased to announce that it has entered into an
implementation agreement with Lucara Diamond Corp. (Lucara) pursuant to which
Lucara will acquire all of the issued share capital of AFD by way of a Scheme of
Arrangement.
The consideration is .80 of a Lucara share plus 1share in Botswana Exploration
plc for every 1 share in AFD. This will give AFD shareholders 26.57% of Lucara
which will own 100% of AK6. Botswana Exploration will hold all of the interests
of AFD apart from AK6. These interests include cash, currently at US $2.9
million, exploration ground in Botswana, including AK8, AK9 and BK5, advanced
stage diamonds licence applications in the Marange area of Zimbabwe and licence
applications in Cameroon and indirect exposure to diamond plays in West Africa
and the DRC.
Lucara's shares are listed on the TSX-V and the intent is to list in Botswana.
The current market capitalisation of Lucara is $180 million Cdn.
Botswana Exploration will seek admission to AIM and a listing on the Botswana
Stock Exchange at the conclusion of the deal. Using the Lucara price and
Canadian dollar exchange rate at the close of business on October 1st and
imputing a director's valuation to Botswana Exploration of 7p per AFD share, the
offer values each AFD share at 51p. AFD currently has 100.4 million shares
issued and outstanding, giving the transaction a total value of $82 million Cdn.
This is a premium of 27% on October 1st closing price.
Lucara, as well as owning 60% of AK6 has a 75% interest in the Mothae diamond
project in Lesotho. Mothae is a high diamond value, large stone kimberlite
located 6.5km from the Letseng diamond mine in Lesotho. 100,000 tonnes out of a
700,000 tonnes bulk sampling programme have so far been processed. Lucara
report that diamonds from the previous bulk sampling campaign suggest a similar
diamond population to Letseng.
The transaction will be implemented by way of a scheme of arrangement in
accordance with Part 26 of the UK Companies Act of 2006.
A circular containing the terms of the Scheme of Arrangement is expected to be
posted to the AFD shareholders by October 31st. The detailed terms of the
transaction will be set out in the circular, which once posted to shareholders,
will also be available on AFD's website at www.afdiamonds.com. All shareholders
are urged to read the circular once it becomes available as it will contain
additional important information concerning the transaction. The implementation
agreement contains customary non-solicitation provisions.
The board of AFD unanimously recommend the proposal. Each director has entered
into irrevocable arrangements to vote their shares in favour of the proposal.
Subject to Lucara's right to match any offer, the board of AFD may terminate the
arrangement in favour of an unsolicited superior offer upon payment of a US $1
million break fee to Lucara.
John Teeling, Chairman, commented. "The logic of this deal is compelling.
Marrying AFD and Lucara will create a $240 million Cdn emerging diamond producer
controlling 2 new kimberlite diamond mines. The new company, with strong
financial backing, will be perfectly poised to exploit an expected gap in
diamond supply.
AFD shareholders win in three ways, they will hold an indirect stake in AK6 -
the 26.57% holding in Lucara is close to the stake in AK6 held prior to the
DeBeers takeout, they get 26.57% of the Lucara interest in the high diamond
value Mothae mine in Lesotho and they will get 100% of Botswana Exploration,
which will be an AIM/Botswana listed vehicle, holding all of the current AFD
exploration interests.
The track record of the Lundin Group, the backers of Lucara, in building
shareholder value is outstanding. The objective of the Lundin Group is to use
Lucara to build a mid tier diamond producer. The board of AFD endorse and
support this strategy.
The shareholders established AFD in 2001 as an early stage diamond prospector
and they will return to this with the creation of Botswana Exploration. With
some cash, good ground in Botswana and exciting opportunities in Zimbabwe and
Cameroon, this vehicle has great potential."
Further information:
African Diamonds Plc
John Teeling Tel: +353 1 8332833
James AH Campbell Tel: +27 83 457 3724
Finn Cap
Matthew Robinson, Corporate Finance Tel: +44 207 600 1658
Henrik Persson, Corporate Finance Tel: +44 207 600 1658
Joanna Weaving, Corporate Broking Tel: +44 207 600 1658
College Hill
Nick Elwes Tel: +44 (0) 20 7457
2020
www.afdiamonds.com
NOTE ON LUCARA
Lucara is a publicly traded reporting issuer based in Vancouver, Canada, with an
approximate market capitalization of $180 million Cdn. Lucara currently has
Cdn$47 million in cash and cash equivalents on hand.
Lucara's exploration and development consultants are highly regarded in the
diamond mining industry and Lucara possesses the in-house technical and
management team required to establish Lucara as a significant diamond producer
in Africa.
Lucara is a member of the Lundin Group of Companies, an internationally
recognised group of 12 publicly traded natural resource companies. The Lundin
Group of Companies was founded Adolf H. Lundin and today is led by his sons,
Lukas and Ian Lundin. The Lundin family have long been leaders in identifying
superior investment opportunities in the natural resource sector and have
produced consistent long-term results. In the process, they have developed a
loyal following among capital markets participants.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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