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The board of Centurion Resources (LSE:CEN), the AIM quoted natural resource company has announced the proposed acquisition of the entire issued share capital of FinnAust Mining plc, an exploration company with extensive holdings in Finland.
The consideration for the Acquisition is £7.7 million and will be satisfied by the issue of the Consideration Shares. In addition, the Company has conditionally raised £3.4 million pursuant to the Placing to fund the development of FinnAust Mining’s highly prospective portfolio located in southern Finland. The Placing has been priced at 5 pence per share post a one for ten share consolidation which is equivalent to 0.5 pence per share pre the proposed transaction.
This represents a discount of 12.3% to the closing share price on 8 November 2013 when all irrevocable placing commitments were received. The tranasaction is a RTO under the AIM rules.
Highlights:
· The majority shareholder of FinnAust Mining, Western Areas Limited (“Western Areas”) is an ASX-listed Australian nickel producer with a market capitalisation in excess of AUD$500 million.
· Western Areas has committed £1.8 million of the £3.4 million Placing.
· Western Areas’ Managing Director & CEO, Dan Lougher and General Manager Commercial, Graham Marshall will join the board of the Company on Admission.
· On Admission the Board of the Company will consist of experienced directors with proven mine discovery success – Western Areas discovered through innovative exploration techniques two high grade nickel mines and is Australia’s third largest nickel producer.
· FinnAust Mining has extensive holdings covering approximately 4,710 sq km primarily targeting VMS, high-grade magmatic sulphide nickel-copper and Outokumpu type copper deposits.
· The FinnAust Exploration Rights are located in a prolific geological belt which includes the famous Outokumpu copper mine and other high-grade mines. The portfolio is primarily targeting three areas:
o Hammaslahti – Extensions to and structural repeats of the Hammaslahti mine sequence, FinnAust’s first drill campaign in 2012 intersected 3.4m @ 11.5% copper and 3 ppm gold down plunge.
o Outokumpu – Focussing on the copper belt famous for its high-grade deposits. Four targets identified for immediate drill testing between and adjacent to and along strike from the world famous Outokumpu copper mine 1908 – 1999 (42Mt @ 3.1% copper + credits from the whole belt).
o Enonkoski – Extensions and repeats of high-grade nickel-copper mineralisation discovered at the old Enonkoski mine which included a drill intercept of 15m @ 6.9% Nickel and 2.0% Copper.
· Previous significant expenditure on regional exploration and in-country set up has confirmed the wide spread occurrence of base metal sulphides, continuation of mineralogy along strike from producing and historically producing mines, in a range of different geological settings. Three high-priority primary areas (as set out above) now delineated amongst over 50 regional targets.
· High-impact 10,300m drill programme to commence post-transaction following 3 years of targeted geophysical work and initial exploratory drilling (inc 3.4m @ 11.5% copper and 3ppm gold at Hammaslahti).
· Work at Hammerslahti is ongoing with a geophysical crew due to be despatched to determine final drill hole locations within 14 days. It is expected that the drill rig will then arrive on site to commence drilling immediately following Admission with the aim of completing several holes before the Christmas holiday.
· Finland is rated the number No.1 mining jurisdiction (Fraser Institute Policy Potential Index (PPI), 2012/2013) with a highly active industry sustained by politically supportive and a stable EU political system with excellent regional infrastructure.
· In the last decade significant mineral discoveries in Finland include ASX listed Altona Mining Limited commissioning the Outokumpu Copper-Zinc-Gold Mine (directly adjacent to FinnAust Mining’s Outokumpu Project) and Anglo American plc’s significant nickel discovery at Sakatti in Northern Finland. Reportedly the largest high-grade nickel discovery in Europe with grades in excess of 4% and significant concentrations of Copper, Gold and Platinum.
Western Areas’ Managing Director, Dan Lougher, said, “Western Areas was pleased to deliver on its stated objective of listing its Finnish assets on the London AIM market. We believe our shareholders will be pleased to maintain exposure to the exciting drill targets we’ve identified for high grade copper and nickel in Finland.
“We have found a like minded and corporately sound party in Centurion for our Finnish exploration assets, where their leader Alastair Clayton has had considerable success in geological discoveries and corporate transactions over a number of years. FinnAust is now funded for the next 18 months and is self sufficient with an in country geological team which can solely focus on drilling the targets identified.”
Alastair Clayton, Executive Director of the Company, said, “This is a transformative transaction, changing us into a well funded, advanced exploration company with an extensive portfolio in a world class mining district. FinnAust Mining’s projects are located in a prolific geological belt, which includes the famous Outokumpu Copper mine and other high-grade nickel mines, and have already had many millions of Euros spent in advancing them to drill stage.
“Success requires significant technical abilities in geology and geophysics and we have a management team with a track record of exploring, discovering, financing, constructing and safely operating mines across the world. Our cornerstone shareholder, Western Areas, is an industry leading mining company whose foundations were built on exploration success, it having discovered and now operates two high grade nickel mines and is Australia’s third largest overall nickel producer. Our share register will be tightly held and highly motivated to deliver success.
“We already have a defined strategy including a high-impact 10,300m drill programme and we believe any given hole has the potential to be a game-changer. Accordingly we are pleased to advise that a geophysical crew will be despatched to the Hammerslahti project on or around 25 November to facilitate final drill hole determinations and enable drilling to commence immediately following Admission and before the Christmas break.
“This is an exciting time for the Company. Following approval of this transaction and Admission, the Enlarged Group will have over £3.4m in treasury, and an experienced in-country exploration team under the leadership of its Chief Operating Officer, Mr Urpo Kuronen supported by Western Areas’ technical team, all focussed on rapidly advancing the projects and generating a steady stream of news flow to our shareholders.”
The Acquisition constitutes a reverse takeover under the AIM Rules for Companies. As a result, the Company is seeking Shareholder approval for the Acquisition at the General Meeting, notice of which will be posted to Shareholders today along with the Admission Document. Resolutions will be proposed at the General Meeting to approve the Acquisition and effect, amongst other matters, the Share Consolidation, the Waiver, the Placing and the change of the Company’s name to FinnAust Mining plc. It is expected that Admission will take place on or around 2 December 2013 assuming the Resolutions are approved.
