Announcement out
Western Metals to acquire advanced
UK Copper-Zinc development opportunity
Western Metals Ltd (ASX:WMT, WMTO) is pleased to announce that it has signed a Term Sheet to acquire 100% of the advanced Parys Mountain copper-zinc Project on the island of Anglesey in North Wales from Anglesey Mining plc (LSE:AYM), a UK based mining company listed on the London Stock Exchange (http://www.angleseymining.co.uk ).
The transaction is subject to a maximum 120 day due diligence and on successful completion Western Metals will sign a formal sale agreement and pay Anglesey Mining AUD$7.6m in a combination of cash and shares. On the completion of a successful bankable feasibility study or 3 years whichever is earliest, Western Metals will make a final payment of AUD$21.5m in a combination of cash and shares. Further details of the agreement are set out below.
The proposed Parys Mountain acquisition reflects the Company’s stated objective of securing an advanced exploration and development opportunity with early cash flow potential.
The Parys Mountain region has been one of Britain’s biggest producers of copper, reportedly yielding in excess of 300,000 tonnes of metal before mining ceased in the early 20th Century.
The Project has had significant modern exploration, definition and infrastructure established. The key aspects of this work include:
Activity
Amount
Surface Drilling
60,400 metres
Underground Drilling
10,800 metres
Shaft Sunk
300 metres
Underground Development
900 metres
Pilot Processing Plant
800 tonnes
Exploration / Development Expenditure
~ AUD$29 million
The Project has current planning approvals for a 1,000 tonne per day operation and enjoys strong community and government support.
Western Metals’ Managing Director George Bauk said Parys Mountain offers an outstanding opportunity for Western Metals to achieve its aim of becoming a significant metals producer.
“We have consistently stated our intention to acquire a high quality asset with near-term production potential that will complement our portfolio of world-class exploration assets” he said. “We believe Parys Mountain represents just such an opportunity.”
ASX Announcement
10 April 2008
Western Metals intends to fast-track work programmes including drilling to establish JORC compliant resources and concurrently proceed with a formal feasibility study. Current project schedules estimate completion within 2 years at a cost of AUD$12 - $15m.
Mr Bauk said Western Metals’ management team possessed the extensive project development and operating expertise needed to quickly and successfully advance the Parys Mountain Project whilst also maintaining an aggressive exploration strategy in the Company’s other projects in Tanzania, Queensland and the Americas.
“We have the team and the cash to take this Project on immediately,” he said.
Further details on the Project and Term Sheet are attached.
The key commercial terms in relation to the transaction are as follows:
•
Western Metals to pay Anglesey Mining a deposit of AUD$270,000 on the execution of the agreed Term Sheet.
•
Western Metals to conduct up to a 120 day due diligence process on the Project.
•
Upon completion of the due diligence to Western Metals’ satisfaction, Western Metals and Anglesey Mining to execute a formal sale agreement in relation to the Project subject to necessary shareholder approvals.
•
Upon execution of the formal sale agreement, Western Metals to make an initial payment to Anglesey Mining and acquire 100% of the Project. The initial payment will consist of:
o
AUD$2,675,000 in cash; plus
o
AUD$4,690,000 in Western Metals shares valued on a 10 day VWAP up to the date falling 3 days prior to the Initial Payment (Western Metals has retained the option to make this payment in shares, cash or a combination).
•
Western Metals to conduct a bankable feasibility study on the Project which will involve minimum expenditure of AUD$3,250,000 during the first 15 months of the feasibility study with a further minimum spend of AUD$3,250,000 required such that AUD$6,500,000 is expended within 24 months.
•
Upon the completion of a successful bankable feasibility study and a decision to commence commercial mining operations or 3 years from the date of the sale agreement, whichever is the earlier, Western Metals will make a deferred payment to Anglesey Mining of:
o
AUD$4,360,000 in cash; plus
o
AUD$17,141,000 in Western Metals shares valued on a 10 day VWAP up to the date falling 3 days prior to the Deferred Payment (Western Metals has retained the option to make this payment in shares, cash or a combination).
•
If Western Metals does not elect to complete the transaction, 100% of the Project will be returned to Anglesey Mining.
The total consideration for the acquisition of 100% of the Parys Mountain Project is AUD$29,136,000.
As noted above, this transaction is subject to:
1.
A due diligence process over a period of 120 days being completed to Western Metals’ satisfaction; and
2.
Any approvals required by either party.
Western Metals to acquire advanced
UK Copper-Zinc development opportunity
Western Metals Ltd (ASX:WMT, WMTO) is pleased to announce that it has signed a Term Sheet to acquire 100% of the advanced Parys Mountain copper-zinc Project on the island of Anglesey in North Wales from Anglesey Mining plc (LSE:AYM), a UK based mining company listed on the London Stock Exchange (http://www.angleseymining.co.uk ).
The transaction is subject to a maximum 120 day due diligence and on successful completion Western Metals will sign a formal sale agreement and pay Anglesey Mining AUD$7.6m in a combination of cash and shares. On the completion of a successful bankable feasibility study or 3 years whichever is earliest, Western Metals will make a final payment of AUD$21.5m in a combination of cash and shares. Further details of the agreement are set out below.
The proposed Parys Mountain acquisition reflects the Company’s stated objective of securing an advanced exploration and development opportunity with early cash flow potential.
The Parys Mountain region has been one of Britain’s biggest producers of copper, reportedly yielding in excess of 300,000 tonnes of metal before mining ceased in the early 20th Century.
The Project has had significant modern exploration, definition and infrastructure established. The key aspects of this work include:
Activity
Amount
Surface Drilling
60,400 metres
Underground Drilling
10,800 metres
Shaft Sunk
300 metres
Underground Development
900 metres
Pilot Processing Plant
800 tonnes
Exploration / Development Expenditure
~ AUD$29 million
The Project has current planning approvals for a 1,000 tonne per day operation and enjoys strong community and government support.
Western Metals’ Managing Director George Bauk said Parys Mountain offers an outstanding opportunity for Western Metals to achieve its aim of becoming a significant metals producer.
“We have consistently stated our intention to acquire a high quality asset with near-term production potential that will complement our portfolio of world-class exploration assets” he said. “We believe Parys Mountain represents just such an opportunity.”
ASX Announcement
10 April 2008
Western Metals intends to fast-track work programmes including drilling to establish JORC compliant resources and concurrently proceed with a formal feasibility study. Current project schedules estimate completion within 2 years at a cost of AUD$12 - $15m.
Mr Bauk said Western Metals’ management team possessed the extensive project development and operating expertise needed to quickly and successfully advance the Parys Mountain Project whilst also maintaining an aggressive exploration strategy in the Company’s other projects in Tanzania, Queensland and the Americas.
“We have the team and the cash to take this Project on immediately,” he said.
Further details on the Project and Term Sheet are attached.
The key commercial terms in relation to the transaction are as follows:
•
Western Metals to pay Anglesey Mining a deposit of AUD$270,000 on the execution of the agreed Term Sheet.
•
Western Metals to conduct up to a 120 day due diligence process on the Project.
•
Upon completion of the due diligence to Western Metals’ satisfaction, Western Metals and Anglesey Mining to execute a formal sale agreement in relation to the Project subject to necessary shareholder approvals.
•
Upon execution of the formal sale agreement, Western Metals to make an initial payment to Anglesey Mining and acquire 100% of the Project. The initial payment will consist of:
o
AUD$2,675,000 in cash; plus
o
AUD$4,690,000 in Western Metals shares valued on a 10 day VWAP up to the date falling 3 days prior to the Initial Payment (Western Metals has retained the option to make this payment in shares, cash or a combination).
•
Western Metals to conduct a bankable feasibility study on the Project which will involve minimum expenditure of AUD$3,250,000 during the first 15 months of the feasibility study with a further minimum spend of AUD$3,250,000 required such that AUD$6,500,000 is expended within 24 months.
•
Upon the completion of a successful bankable feasibility study and a decision to commence commercial mining operations or 3 years from the date of the sale agreement, whichever is the earlier, Western Metals will make a deferred payment to Anglesey Mining of:
o
AUD$4,360,000 in cash; plus
o
AUD$17,141,000 in Western Metals shares valued on a 10 day VWAP up to the date falling 3 days prior to the Deferred Payment (Western Metals has retained the option to make this payment in shares, cash or a combination).
•
If Western Metals does not elect to complete the transaction, 100% of the Project will be returned to Anglesey Mining.
The total consideration for the acquisition of 100% of the Parys Mountain Project is AUD$29,136,000.
As noted above, this transaction is subject to:
1.
A due diligence process over a period of 120 days being completed to Western Metals’ satisfaction; and
2.
Any approvals required by either party.
