Forte Energy NL Proposed Acquisition of Leo Mining and Exploration Ltd

 
TIDMFTE 
 
Proposed Acquisition of Leo Mining and Exploration Ltd 
 
 
                                                                                          Forte Energy NL 
 
 
11 July 2013 
 
                 Proposed Acquisition by Forte Energy of Leo Mining and Exploration Ltd 
 
 
Forte  Energy NL ("Forte Energy" or "the Company") (ASX/AIM: FTE) announces it has entered  into  a  non- 
binding  term  sheet  for  the  proposed acquisition ("the Proposed  Acquisition"),  of  Leo  Mining  and 
Exploration  Limited  ("Leominex"), (together "the Parties"). Leominex  is  an  unlisted  British  Virgin 
Islands  ("BVI") registered company which has interests in a portfolio of uranium and rare earth elements 
("REE")  assets in Africa which complement Forte Energy's existing projects. The Proposed Acquisition  is 
expected to create a diversified, larger scale Africa-focussed exploration and development company with a 
well-balanced  portfolio  of  uranium and REE assets, both of which feature in  Forte  Energy's  existing 
portfolio. 
 
It is anticipated that the Proposed Acquisition will be effected through a statutory merger under BVI law 
pursuant to which Forte Energy shall issue and allot to Leominex shareholders a total of 95 per  cent  of 
the  Company's  issued  share capital (equivalent to approximately 860 million  ordinary  shares  in  the 
capital  of  Forte Energy at the date of this announcement), as consideration for 100  per  cent  of  the 
issued share capital of Leominex. 
 
It  is  also  anticipated  that  two additional non-executive directors nominated  by  Leominex  will  be 
appointed  to  the  board of directors of Forte Energy following completion of the Proposed  Acquisition, 
expanding  the  Forte board from 4 directors to 6 directors. It is envisaged that any  new  non-executive 
directors would be appointed on similar terms as Forte Energy's existing non-executive directors. 
 
The Proposed Acquisition is subject to a number of conditions, including: 
 
    *   the  completion of final binding documentation (the "Final Agreements"), including a  merger 
        implementation agreement, voting undertakings from major shareholders of Leominex and a 
        relationship agreement among Forte Energy, Leominex and Mkango Resources Ltd. ("Mkango"), a 
        Canadian company listed on the TSX-Venture exchange in which Leominex holds an equity interest 
        of approximately 48 per cent; 
 
    *   obtaining applicable regulatory or securities exchange approvals; and 
 
    *   approval by the shareholders of each of Forte Energy, Leominex and Mkango. 
 
The Parties are in the process of negotiating the terms of the Final Agreements and notices convening the 
relevant shareholder meetings will be announced in due course by Forte Energy, Leominex and Mkango. 
 
The  Proposed  Acquisition has the support of significant shareholders of both Parties and  the  enlarged 
Forte  Energy's  market  capitalisation and enhanced asset base would position  it  well  to  execute  on 
strategic growth plans, including potential acquisition opportunities. In addition there are expected  to 
be significant synergies in technical expertise through the Proposed Acquisition. 
 
 
About Forte Energy 
Forte  Energy is an ASX and AIM listed emerging international exploration and development company with  a 
portfolio of uranium assets in the Republics of Mauritania and Guinea, West Africa.  While recent work by 
Forte  Energy has focussed on increasing its uranium resources, previous exploration work also  indicated 
potential for REEs.  Areva has a 7.1 per cent shareholding in Forte Energy. 
 
About Leo Mining and Exploration 
Leominex  is  a  private, BVI-registered company which has interests in a portfolio of  REE  and  uranium 
assets  in  Africa.  Leominex has a 48 per cent shareholding in Mkango, which owns 100 per  cent  of  two 
prospecting licenses covering a combined area of 1,751 sq km in southern Malawi.  Mkango's most  advanced 
stage  project  is  the Songwe Hill rare earth project where it has defined a significant  Indicated  and 
Inferred  REE  Mineral  Resource  Estimate.  In parallel with completion  of  environmental  studies  and 
metallurgical test work for the Songwe project, Mkango is also undertaking regional exploration for  REEs 
and  uranium  in  Malawi.  On  April  11,  2013, Mkango closed an oversubscribed  C$2.3  million  private 
placement.  Under the Proposed Acquisition, Forte Energy will become an indirect 48 per cent  shareholder 
of Mkango, which will continue to trade as an independent company. 
 
Leominex  also holds approximately 8 per cent of the shares in Signet Mining Services Ltd., a  Niger  and 
Chad  focussed  uranium  exploration and development company, with  seven  100  per  cent  owned  uranium 
exploration  licences  in Niger covering approximately 1,664 sq km and four 100 per  cent  owned  uranium 
exploration licences in Chad covering approximately 413.2 sq km. The Licenses in Niger are located within 
and close to the Tim Mersoi basin which is home to world class uranium mines and deposits. 
 
Following the Proposed Acquisition, Mkango and Signet Mining Services Ltd will continue to be managed  by 
their respective Boards and management teams.  Apart from the above mentioned additions to the Board, the 
executive management team of Forte Energy will remain as it is currently. 
 
Leominex  has 55 shareholders with its largest two shareholders being William Dawes and Alexander  Lemon, 
each  with a shareholding of approximately 17 per cent in Leominex, and who would each indicatively  hold 
around  8  per  cent  of  the  expanded  Forte Energy share capital  after  completion  of  the  Proposed 
Acquisition. 
 
Commenting on the proposed transaction, Mark Reilly, Managing Director of Forte Energy, said: 
 
"The  proposed  transaction to acquire Leominex would create an African focussed uranium and  rare  earth 
explorer  and  developer with an enhanced portfolio of project interests and the technical expertise  and 
financial  strength  to  advance its assets towards production. In addition, the combined  business  will 
benefit  from deeper technical expertise and a Board with experience in developing and building  numerous 
projects." 
 
 
For further information contact: 
 
Mark Reilly                                      Geoff Nash/Ben Thompson 
Managing Director                                Elizabeth Johnson (broking) 
Forte Energy NL                                  finnCap 
Tel: [phone]                         Tel: [phone] 
 
 
Bobby Morse/Cornelia Browne                      Stuart Laing 
Louise Hadcocks                                  RFC Ambrian Ltd 
Buchanan                                         (AIM Nominated Adviser to the Company) 
Tel: [phone]                        Tel: [phone] 
 
 
Forte Energy NL 
 
Australia                                        United Kingdom 
 
Suite 3, Level 3                                 3C Princes House 
1292 Hay Street                                  38 Jermyn Street 
West Perth WA 6005                               London SW1Y6DN 
Ph: [phone]                           Ph: [phone] 
Fax: [phone]                          Fax: [phone] 
Email: [e-mail]                   Email: [e-mail] 
Web: www.forteenergy.com.au 
 
About Forte Energy 
 
 
Forte  Energy  is  an  Australian-based minerals company focussed on the exploration and  development  of 
uranium  and associated bi-products in Mauritania and Guinea in West Africa. The Company has an extensive 
pipeline  of  assets and total JORC resources of 76.8Mt @ 266ppm U3O8for 44.9Mlbs contained U3O8  (100ppm 
cut-off). 
 
Its  flagship assets are the A238 prospect (23.4Mlbs U3O8) and the Bir En Nar project (2.06Mlbs U3O8)  in 
Mauritania, and the Firawa Project in Guinea (19.5Mlb U3O8). 
 
Forte Energy U3O8 JORC resources (all at a 100ppm cut-off): 
 
Project              Resource Category         M tonnes         ppm U3O8           Contained U3O8 Mlbs 
A238*                         Inferred             45.2              235                          23.4 
Bir En Nar                   Indicated              0.5              886                           1.0 
                              Inferred              0.8              575                           1.0 
Firawa                        Inferred             30.3              295                          19.5 
Total                        Indicated              0.5              886                           1.0 
                              Inferred             76.3              262                          43.9 
                                 Total             76.8              266                          44.9 
 
        * A238NW Anomaly included in the A238 Inferred Resources 
 
The  Company  is  quoted on the Australian Stock Exchange (ASX: FTE) and AIM market of the  London  Stock 
Exchange (AIM: FTE). For more information, visit www.forteenergy.com.au 
 
Note: 
The information in this report that relates to the reporting of Mineral Resources is based on information 
compiled  or  reviewed by Mr. Galen White, who is a Fellow of the Australasian Institute  of  Mining  and 
Metallurgy (FAusIMM). Mr White is the Principal Geologist of CSA Global (UK) Ltd. CSA Global have an  on- 
going  role  as geological consultants to Forte Energy NL. Mr. White has sufficient experience  which  is 
relevant to the style of mineralisation and type of deposit under consideration and to the activity which 
he  is  undertaking to qualify as a Competent Person as defined in the 2004 Edition of the  'Australasian 
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. White consents to the 
inclusion  in  this report of the matters based on his information in the form and context  in  which  it 
appears. 
 
 
 
Forte Energy NL