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PGL - Pallinghurst - Receipt Of 26,845,017 Further Shares In Jupiter Mines Ltd
Pallinghurst Resources Limited
Registration Number: 47656
(Incorporated in Guernsey)
ISIN: GG00B27Y8Z93
BSX share code: PALLRES
JSE share code: PGL
("PRL" or the "Company")
RECEIPT OF 26,845,017 FURTHER SHARES IN JUPITER MINES LTD
Summary
The Company is pleased to announce that its steel feed joint venture partner,
AIM-listed Red Rock Resources plc ("RRR") has met the conditions for the
transfer of certain manganese tenements to ASX-listed mining explorer Jupiter
Mines Limited ("Jupiter"), which will result in PRL receiving a further
26,845,017 shares in Jupiter for no additional consideration. Further background
to the transaction and the details of the "manganese option" can be found in the
Company`s press release dated 10 March 2009, entitled "Acquisition By The
Company And Red Rock Resources plc of an Interest in Jupiter Mines Limited".
Jupiter transaction announced on 10 March 2009
A summary of the impact on the Company of the first stage of the Jupiter
acquisition transaction, whereby the Company initially vended 11,671,175 Mindax
Limited ("Mindax") shares and AUD1 million into Jupiter in exchange for
47,339,148 Jupiter shares, the "manganese option" and the "Mount Alfred bonus
option" (both as described below) on 30 March 2009, is as follows:
Number of US$/ Amount
shares AUD AUD rate (AUD)
price on 30
per March Amount
share 2009 (US$)
on 30
March
2009
Fair value of
assets acquired
on 30 March 2009
Issue of Jupiter 47,339,148 0.10 1.44194 4,733,915 3,283,018
shares
Fair value of
consideration
contributed
on 30 March 2009
Mindax Limited 11,671,175 0.365 1.44194 4,259,979 2,954,339
shares
Cash 1.44194 1,000,000 693,510
Total 5,259,979 3,647,849
Fair value loss on (526,064) (364,831)
initial transfer
of Mindax shares
and AUD1m cash
in exchange for
Jupiter shares on
30 March 2009
The indicative amounts for the fair value of assets acquired and fair value of
consideration per the 10 March 2009 announcement were based on the relevant
Jupiter and Mindax share prices and US$/ AUD rate on 9 March, the date the
transaction went unconditional. The actual transaction calculation is based on
the share prices and US$/ AUD rate on 30 March 2009, the date of the completion
of the transaction.
Receipt of 26,845,017 further shares in Jupiter on 1 September 2009
As part of the Jupiter transaction announced on 10 March 2009, within two years,
the Company could receive a further 26,845,017 Jupiter shares and RRR a further
54,155,579 Jupiter shares, if certain manganese tenements were granted to RRR
and unencumbered title to those tenements were transferred from RRR to Jupiter
(the "manganese option").
The terms of the manganese option have now been met, and the Company has
received the 26,845,017 additional shares in Jupiter on 1 September 2009 for no
further consideration.
A summary of the fair value gain to the Company as a result of the issue of the
new Jupiter shares is as follows:
Number of AUD US$/AUD Amount Amount
shares price rate on (AUD) (US$)
per 31
share August
2009
Fair value of further
assets acquired on 1
September 2009
Issue of 26,845,017 0.185 1.1897 4,966,328 4,174,437
further Jupiter
shares
Fair value of 1.1897 - -
consideration
contributed on
1 September
2009
Fair value gain 4,966,328 4,174,437
on assets
acquired on 1
September 2009
As part of the transaction terms, the new Jupiter shares are being held in
escrow for a period of twelve months from the issue date.
Net fair value gain on the Jupiter acquisition
The net fair value gain on the Jupiter acquisition at 1 September 2009 is
therefore US$3,809,733 based on the excess of the fair value of total
consideration received in both stages of the transaction, less the fair value of
total consideration paid.
Amount Amount
(AUD) (US$)
Fair value of Jupiter shares acquired on 30 4,733,915 3,283,018
March 2009
Fair value of further Jupiter shares 4,966,328 4,174,437
acquired on 1 September 2009
Total fair value of assets acquired 9,700,243 7,457,455
Mindax Limited shares on 30 March 2009 4,259,979 2,954,339
Cash contributed at 30 March 2009 1,000,000 693,510
(No further consideration at 1 September - -
2009)
Total fair value of consideration 5,259,979 3,647,849
contributed
Net fair value gain on Jupiter transaction 4,440,264 3,809,606
at 1 September 2009
Pro forma effects of the transaction on the Company:
The impact of the net fair value gain on the Jupiter transaction of US$3,809,606
on certain key elements of the Company`s financial information from the most
recent published financial statements (at 31 December 2008) is illustrated
below:
Extracts from Extracts from 31 Difference
31 December December 2008 accounts
2008 audited including impact of
accounts new Jupiter shares
(US$) (US$) (US$)
Loss per share (0.19) (0.17) 0.02
Headline loss (0.19) (0.17) 0.02
per share
NAV per share 0.65 0.67 0.02
Tangible NAV per 0.65 0.67 0.02
share
Number of Share 247,232,484 247,232,484 247,232,484
in issue
The table is the responsibility of the Directors of the Company.
Unrealised fair value gain on 47,339,148 Jupiter shares acquired in March 2009
Shareholders should also note that there is a significant unrealised fair value
gain associated with the 47,339,148 shares issued to the Company by Jupiter on
10 March 2009. The cost of these shares is US$3,283,018, whereas the current
fair value of these shares is US$7,361,303. The current unrealised fair value
gain is US$3,382,220, and the unrealised foreign exchange gain is US$696,065.
As these unrealised gains are not directly related to the transaction to acquire
shares, these impacts have not been included in the pro forma effects table
above.
Further outstanding Jupiter transaction terms- the Mount Alfred bonus option
In addition, as part of the original terms of the Jupiter transaction, within
two years, the Company and RRR could still be issued, in equal proportions, up
to an additional 180 million Jupiter shares depending on the amount of saleable
direct shipping hematite ore resource certified to be existing on Tenement
E29/581, known as the Mount Alfred Project (the "Mount Alfred bonus option"),
subject to a minimum of ten million tonnes.
Current holding in Jupiter by PRL and its associated companies
Following receipt of shares in return for meeting the terms of the manganese
option, PRL will own 92,899,165 shares, approximately 28.91% of the issued share
capital of Jupiter. RRR own a further 28.97%.
The Company further announced on 1 July 2009 that, subject to approval by
Jupiter shareholders, a Pallinghurst co-investor, Posco Australia (Pty) Ltd
("POSCO") has agreed to invest AUD7.81 million in Jupiter in exchange for
48,000,000 new shares, or 12.99%.
The injection will dilute the ownership interest of PRL to 25.15%, and RRR to
25.21%. Assuming the POSCO equity injection receives approval by Jupiter
shareholders at the General Meeting to be held on 21 September, the Company,
POSCO and RRR will therefore jointly control 63.35% of Jupiter.
Comment from PRL`s CEO:
Pallinghurst CEO Arne H. Frandsen said: "We were always confident that the terms
of the manganese option would be met; nonetheless, this is clearly excellent
news for shareholders, and is in line with PRL`s strategic objectives. We now
look forward to Jupiter fulfilling its potential and becoming a significant iron
ore producer."
For further information please contact:
Arne H. Frandsen +44 778 752 1871
Guernsey
JSE sponsor: Investec Bank Limited
1 September 2009
Date: 01/09/2009 16:42:31 Supplied by www.sharenet.co.za
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