Horizonte Minerals Acquisition Of Teck Cominco Brasil S.A.

27th Jul 2010 07:30

TIDMHZM RNS Number : 9561P Horizonte Minerals PLC 27 July 2010 ? NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION, INCLUDING BUT NOT LIMITED TO THE UNITED STATES, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, CANADA OR JAPAN. Horizonte Minerals plc / Index: AIM / Epic: HZM / Sector: Mining Horizonte Minerals plc ("Horizonte" or the "Company") Acquisition of Teck Cominco Brasil S.A. GBP5.1 million Placing of 51,261,144 Ordinary Shares at 10 pence per Ordinary Share Application for Admission of Enlarged Share Capital to AIM and Notice of General Meeting Horizonte, the AIM quoted exploration and development company focussed on Brazil and Peru, is pleased to announce that it has entered into an agreement with leading Canadian mining company Teck Resources Limited ("Teck") for the purchase of its advanced Araguaia nickel project located in the Carajás mineral district of northern Brazil. The purchase is conditional, amongst other things, on shareholder approval. Proposed Transaction Highlights · Acquisition of Teck Cominco Brasil S.A., a wholly owned subsidiary of Teck, which owns 100 per cent. of the advanced Araguaia nickel project in the Carajás mineral district of northern Brazil · Acquisition constitutes a reverse takeover under the AIM Rules for Companies · The Directors believe that the combination of Teck's Araguaia project with Horizonte's Lontra project has the potential for a 100 million tonne resource with grades comparable to other world class projects in Brazil · Gross proceeds of the Placing of GBP5.13 million at a price of 10p per Ordinary Share to be used to fast-track the development of the combined nickel project. · Acquisition of the remaining 50 per cent. interest in the Lontra project not currently held by the Horizonte group · Memorandum of Understanding with Anglo Pacific Group Plc to grant an option over a 1.5 per cent. net smelter royalty subject to the payment to the Company of US$500,000 on signing of a definitive agreement and a further US$12.5 million upon completion of a positive Pre-Feasibility study · General Meeting to take place at 10am on 12 August 2010 Commenting on the transaction, Jeremy Martin, CEO of Horizonte said: "This is a transformational deal for Horizonte and takes the Company to the next level in terms of valuation. The consolidation of the Araguaia and Lontra nickel projects creates the potential for a 100 million tonne resource with grades comparable to other world-class projects in Brazil. The Company will be initiating an 8,000 metre resource drilling programme in the next few weeks, with the aim of delivering a JORC-compliant resource by the first quarter of 2011. "Horizonte now has two committed major mining partners: AngloGold Ashanti Limited, with a GBP5.3 million exploration alliance to generate and develop new gold targets in Brazil, and Teck, our new strategic 50 per cent. shareholder, with whom we look forward to working as we fast-track development at Araguaia towards production. "The successful fundraising of GBP5.13 million completed at a premium shows the strong support by our institutional investors in the new enlarged Company and in the value that has been created by this transaction." Alex Christopher, General Manager of New Ventures at Teck and a proposed director of Horizonte, said: "Teck shares the same vision as Horizonte in the development of the nickel projects and is keen to help create value for all shareholders of the enlarged Company." Transaction summary Horizonte has entered into a conditional agreement for the acquisition of the whole of the issued share capital of Teck Cominco Brasil S.A. ("Teck Brazil"). The Acquisition Agreement, which incorporates the terms of the Acquisition, was signed on 26 July 2010. The Company has also raised approximately GBP5.13 million (before expenses) through a conditional placing of approximately 51 million Placing Shares at 10 pence per Placing Share. The consideration for the Acquisition is to be satisfied by the issue, in aggregate, of such number of Ordinary Shares to Teck which will result in Teck holding 50 per cent. of the enlarged issued share capital of the Company on Admission. Due to the size of the Acquisition in relation to Horizonte, the Acquisition is classified as a reverse takeover of the Company by Teck under the AIM Rules for Companies and, as such, requires the approval of Shareholders. The Company has also entered into an agreement to acquire the 50 per cent. interest in the Lontra project not currently held by the Horizonte group by virtue of the acquisition from Quantom Holdings Limited of 50 per cent. of the capital of Lontra Empreendimentos e Participaçoes Ltda (a newly incorporated Brazilian company into which the Lontra mineral concessions are being transferred pursuant to a pre-sale reorganisation). In consideration, Horizonte will issue to Quantom 10,000,000 ordinary shares. This agreement will result in Horizonte owning and controlling 100 per cent. of Lontra alongside its 100 per cent. ownership of Araguaia. The Araguaia Nickel Project Summary The combined Araguaia and Lontra projects will comprise 11 licences and licence applications across 73,000 hectares with eight significant mineralised zones. The Directors believe this will enable Horizonte to work towards delineating a resource in excess of 100Mt of nickel laterite with economic grades in a region with established infrastructure. The combined project area lies within the Araguaia mobile belt, approximately 200km southeast of the Carajas mineral province and 80km to the south of Xstrata's Serra da Tapa deposit. The area is serviced by good infrastructure with access by tar sealed and all weather dirt roads. Araguaia is an advanced exploration stage nickel project owned and explored to date by Teck through its wholly owned subsidiary, Teck Brazil. It is located directly to the south east of Lontra. Teck has completed 10,314m of drilling in 492 drill holes at Araguaia resulting in the grassroots discovery of a significant zone of mineralisation. The Araguaia mobile belt is a significant new nickel province. Major mining companies are already present in the region with Xstrata plc's Serra da Tapa nickel resource containing an Inferred Resource of 73Mt grading 1.56 per cent.nickel. Horizonte Summary Horizonte is an exploration and development company with a portfolio of gold, silver, and base metal projects in Brazil and Peru. Horizonte is focused on the discovery and development of new mineral projects which it aims to develop through joint-ventures with major mining companies. Notice of General Meeting The General Meeting to approve the Transaction will take place at 10am on 12 August 2010. Notice of the General Meeting is included in the Admission Document. The Admission Document and Notice of General Meeting, together with a Form of Proxy, have today been posted to Shareholders and can be accessed on the Company's website: www.horizonteminerals.com. Admission Statistics +---------------------------------------------------------+---------------+ | Placing Price | 10 pence | +---------------------------------------------------------+---------------+ | Number of Existing Ordinary Shares | 59,019,096 | +---------------------------------------------------------+---------------+ | Number of Placing Shares | 51,261,144 | +---------------------------------------------------------+---------------+ | Number of Consideration Shares being issued to Teck | 123,280,240 | | pursuant to the Acquisition (being a subtotal of the | | | Existing Ordinary Shares, the Quantom Shares, the | | | Broker Shares and the Placing Shares) | | +---------------------------------------------------------+---------------+ | Number of Ordinary Shares in issue immediately | 246,560,480 | | following Admission | | +---------------------------------------------------------+---------------+ | Market capitalisation on Admission at the Placing Price | GBP24,656,048 | +---------------------------------------------------------+---------------+ | Expected additional proceeds from anticipated sale to | US$500,000 | | Anglo Pacific Group of option to acquire net smelter | | | royalty | | +---------------------------------------------------------+---------------+ | ISIN Code | GB00B11DNM70 | +---------------------------------------------------------+---------------+ | AIM Symbol | HZM | +---------------------------------------------------------+---------------+ Expected Timetable of Principal Events +----------------------------------------------------------+------------+ | Despatch of the Admission Document | 27 July | | | 2010 | +----------------------------------------------------------+------------+ | Latest time and date for receipt of forms of proxy | 10 a.m. on | (MORE TO FOLLOW) Dow Jones Newswires July 27, 2010 02:30 ET (06:30 GMT)