Stone Resources Limited - Agreement to Acquire A1 Minerals Limited
August 12 2011 - 12:58PM
PR Newswire (Canada)
VANCOUVER, Aug. 12, 2011 /CNW/ -- VANCOUVER, Aug. 12, 2011 /CNW/ -
Stone Resources Limited (TSX-V: SRH) ("Stone" or the "Company")
announced today that it has entered into a subscription agreement
(the "Agreement") to acquire majority control of A1 Minerals
Limited ("A1"), a mining company incorporated in Australia and
listed on the Australian Securities Exchange ("ASX"). The Agreement
provides for the subscription by Stone of (i) 89,730,000 ordinary
shares of A1 ("A1 Shares") at an issue price of A$0.025 per share
(the "Private Placement"); and (ii) a A$12,000,000 redeemable
convertible note (the "Convertible Note" and together with the
Private Placement, the "Subscription"). The Convertible Note bears
interest at 5% per annum, is convertible by Stone at A$0.035 per A1
Share if exercised within 12 months of issuance or at A$0.06 per A1
Share thereafter, is repayable 24 months after issuance, and will
be secured by a first-ranking fixed and floating charge. Upon
completion of the Private Placement, Stone will own 30.9% of the
outstanding A1 Shares, and upon conversion of the Convertible Note,
Stone will own 61.4% of the outstanding A1 Shares (assuming full A1
Shareholder participation in the Share Purchase Plan ("SPP")
described below and the issue of A1 Shares to Stone to maintain its
30.9% shareholding following completion of the SPP, also as
described below). Total proceeds of the Subscription to A1 will be
up to A$14,243,250 (up to A$15,361,139 if funds raised from the
issue of A1 Shares to maintain Stone's shareholding at 30.9% are
included). Completion of the Private Placement and the Convertible
Note must occur simultaneously, provided that at the option of
Stone, subject to compliance with the Australian Corporations Act,
the ASX Listing Rules and having obtained conditional approval from
the TSX Venture Exchange ("TSXV"), Stone may waive the conditions
to the Private Placement and subscribe at an interim date for
30,000,000 A1 Shares, representing 13.00% of the issued and
outstanding A1 Shares, with the balance of the A1 Shares issuable
in the Private Placement to be delivered at closing of the
Subscription. A1 owns a gold exploration and production mineral
project in the Laverton region of Western Australia. Additional
information relating to A1 and the mineral project is available
under A1's profile on the ASX website. A1 has agreed not to enter
into any discussions with third parties in relation to any similar
proposal subject to standard fiduciary carve outs. The Agreement
provides that, subject to the completion of the Subscription, A1
will conduct a share purchase plan in Australia, providing existing
A1 shareholders with the opportunity to subscribe for new A1 Shares
at a price of A$0.025 per A1 Share, up to a maximum of A$2,500,000.
To the extent that A1 Shares offered under the SPP are not
subscribed for by A1 shareholders, Stone may (subject to prior A1
shareholder approval) elect to subscribe for such A1 Shares. On
completion of the SPP, Stone may (subject to prior A1 shareholder
approval), by written notice to A1, require A1 to issue to Stone
that number of A1 Shares, at an issue price of A$0.025 per A1
Share, that results in Stone owning 230.9% of the A1 Shares.
Pursuant to the Agreement, following completion of the Private
Placement, Stone will be entitled to appoint two directors to the
board of A1. Upon conversion of all or part of the Convertible Note
into A1 Shares, Stone's representation on the A1 board shall be
increased commensurate with its shareholding in A1, and Stone shall
accordingly be entitled to appoint majority of the directors to the
board of A1 upon full conversion of the Convertible Note into A1
Shares. A1 will use the proceeds of the Subscription and the SPP to
discharge all its external debt obligations, for working capital
purposes or such other purposes as consented to by Stone. Stone
intends to fund the Subscription from the proceeds of its
previously announced private placement, which has been
conditionally approved by the TSXV. Completion of the Subscription
is subject to various conditions, including approval by the
shareholders of A1, and obtaining conditional approval from the
TSXV. Should Stone be unable to obtain conditional approval for the
Subscription from the TSXV, the Agreement provides that Stone shall
transfer and assign all its rights, benefits, obligations and
liabilities of and under the Agreement to a nominee, Stone Mining
Limited, which will be under no legal obligation to obtain TSXV
approval. It is expected that Stone would be compensated by Stone
Mining Limited for all reasonable and necessary expenses and costs
incurred by Stone in respect of the Subscription prior to such
assignment. About Stone Resources Limited Stone Resources Limited
(TSX-V: SRH) is a company incorporated in Bermuda and listed on the
TSXV in Canada. The Company is involved with mineral resources
exploration and development in Tanzania. Stone plans to expand and
develop its business using its effective team of experts in
exploration, geology, metallurgy, mine engineering, law and
finance. Cautionary Statement on Forward-Looking Statements The
information in this document contains certain forward-looking
statements with respect to acquisition activities of the Company,
based on assumptions about future courses of action. Although
management has a reasonable basis for the conclusions drawn, risk
factors and uncertainties may cause actual results to differ
materially from those currently anticipated in such statements.
These risks and uncertainties relate to such factors as the ability
of the Company and A1 to successfully conclude the Subscription,
negotiate definitive agreements, obtain the consent of A1
shareholders, and receive requisite approvals including that of the
TSXV. In view of these uncertainties we caution readers not to
place undue reliance on these forward-looking statements.
Statements made in this document are made as of the date hereof and
the Company disclaims any intention or obligation to update or
revise any statements made herein, except in accordance with
applicable securities laws. Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release. To view this news release in
HTML formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/August2011/12/c3508.html
p Kelei Xinbr/ Vice-President and Corporate Secretarybr/ +1 (604)
303-9070 /p
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