ASX RELEASE
18 OCTOBER 2016 ASX CODE:KAS
OUR PRIME COMMODITY IS TIN
LME TIN PRICE (17/10/16)
USD 19,505 / t
(CASH BUYER)
ABOUT KASBAH
KASBAH IS AN AUSTRALIAN LISTED MINERAL EXPLORATION AND DEVELOPMENT COMPANY.
THE ATLAS TIN JOINT VENTURE (KASBAH 75%, TOYOTA TSUSHO CORP 20% AND NITTETSU MINING CO. LTD 5%) IS ADVANCING THE ACHMMACH TIN PROJECT IN THE KINGDOM OF MOROCCO TOWARDS PRODUCTION.
PROJECTS ACHMMACH TIN PROJECT (75% KAS) BOU EL JAJ TIN PROJECT (100% KAS)
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SHARES ON ISSUE:
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556 M
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UNLISTED OPTIONS:
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0.5 M
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CASH @ 30/06/16
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$1.2 M
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CAPITAL STRUCTURE
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WORLD BANK (IFC)
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17.7%
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AFRICAN LION GROUP
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15.7%
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THAISARCO
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5.6%
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TRAXYS
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5.3%
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MAJOR SHAREHOLDERS
CONTACTS
: + 61 8 9463 6651
: [email protected]
: www.kasbahresources.com
@kasbahresources
REGISTRATION OF SCHEME BOOKLET
AND
SUMMARY OF INDEPENDENT EXPERTS FINDINGS
Independent Expert concludes, in absence of a superior offer, Scheme is fair and reasonable to Shareholders and is therefore in the best interests of Kasbah Shareholders
Kasbah Resources Limited (Kasbah or the Company) is pleased to announce that the scheme booklet for the proposal by Asian Mineral Resources Limited (AMR) to acquire all of the ordinary shares in Kasbah by way of a scheme of arrangement (Scheme) has today (18 October 2016) been registered with the Australian Securities and Investments Commission (ASIC) (Scheme Booklet).
The Scheme Booklet, a personalised proxy form, election form and a notice convening a meeting of Kasbah shareholders will be despatched to Kasbah shareholders by Monday, 24 October 2016. A copy of the Scheme Booklet is attached to this announcement and will also be available on the Company's website at www.kasbahresources.com.
Independent Expert's Report and Board Recommendation
The Scheme Booklet contains a report by the independent expert, BDO Corporate Finance (WA) Pty Ltd (Independent Expert). The Independent Expert has concluded that, in the absence of a superior offer, the Scheme is fair and reasonable to Shareholders and is therefore in the best interests of Kasbah shareholders.
The Scheme Booklet discloses reasons to vote in favour of and against the Scheme as well as the risks associated with the Scheme. Kasbah shareholders should carefully read the Scheme Booklet (including the Independent Experts Report) in its entirety and the material accompanying it before deciding whether to vote in favour of the Scheme.
The Company will continue to keep shareholders updated on the status of the Scheme as the timetable progresses.
If you have any questions on the Scheme or require further information, please contact the Kasbah Shareholder Information Line on +61 1800 220 771 anytime between 9.00am and 5.00pm (WST) Monday to Friday.
Summary of Independent Expert's Findings
Kasbah is pleased to advise that the Independent Expert has completed its assessment of the Company's proposed transaction with AMR. The Independent Expert has considered the terms of the Scheme as outlined in the body of its report and has concluded that, in the absence of a superior offer, the Scheme is fair and reasonable to Shareholders. Therefore, in the absence of any superior offer, the Independent Expert concludes that the Scheme is in the best interests of Kasbah shareholders.
The Independent Expert assessed that:
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the value of Kasbah shares prior to the Scheme Implementation Agreement on a control basis as being in the range of 3.3c to 3.9c with a preferred value of 3.6c; and
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the value of 1.3 AMR shares and 0.4 AMR warrants following implementation of the Scheme and on a minority basis as being in the range of 2.9c to 4.1c with a preferred value of 3.5c.
The conclusion of the Independent Expert's assessment of the Scheme* is as follows:
"The above pricing indicates that in the absence of any other relevant information, and a superior offer, the Scheme is fair for the shareholders of Kasbah" and " In our opinion, the position of shareholders if the Scheme is approved is more advantageous than the position if the Scheme is not approved. Accordingly, in the absence of any other relevant information and/or a superior proposal, we believe that the Scheme is reasonable for Kasbah's shareholders."
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Refer to the Scheme Booklet for the further detail on the Independent Expert's findings.
A key consideration for the Independent Expert in the determination that approving the Scheme was more advantageous to Kasbah shareholders was that the Scheme provides the opportunity for funding the Achmmach Tin Project (the Project). Section 14.1.2 of the Independent Expert's Report explains the range of options Kasbah had previously independently evaluated, pursued and tested to achieve a financing solution for the larger, 1Mtpa Achmmach Tin Project, commenting as follows:
"Prior to entering into negotiations with AMR and Pala Investments Ltd. (Pala), Kasbah had made extensive efforts to obtain funding for the Achmmach Tin Project. Since 2013, Kasbah has, through the engagement of financial and corporate advisers, as well as through its own efforts, explored the following options:
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negotiated merger opportunities with entities that had potential interest in Kasbah;
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approached major capital funds in Australia who are actively involved in investing in and funding resource projects;
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approached existing major Kasbah shareholders to fund the Achmmach Tin Project;
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approached the Japanese partners of the Achmmach Tin Project to increase their project shareholding;
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approached debt financiers who are actively involved in lending to resource projects; and
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approached Pala to consider a direct investment in Kasbah instead of through AMR."
Whilst Kasbah had previously received non-binding, indicative debt offers to fund the 1Mtpa Achmmach Tin Project from a range of International financiers, the ability to raise the required equity funding on its own was uncertain given the size of the required capital raising relative to the Company's market capitalisation. The equity hurdle in conjunction with the prevailing challenging market conditions of the last 3 years effectively prevented any of the above options from being realised.
The Kasbah Board believes the Scheme provides the foundation and catalyst to reduce the funding uncertainty and achieve development and mining of the Achmmach Tin Project.
AMR is backed by a significant cornerstone investor in Pala who has already provided an interim A$1.0 million loan facility to Kasbah for working capital purposes and transaction costs and made a commitment to provide its pro rata share of any equity raising in relation to the Achmmach Tin Project.Pala is a supportive shareholder and has shown its commitment to AMR in the past when it provided a short-term bridging facility to assist AMR in its temporary working capital requirements as a result of an unexpected delay in Ban Phuc Nickel Mine's nickel concentrate shipping schedule.
These factors, plus Pala's broader external financial network and demonstrated track record of successfully arranging project financing in the recent past is described in section 6.3 of the Independent Experts report.
Kasbah Chairman Mr Rod Marston stated:
"Kasbah's prime objective is to get the Achmmach Tin Project financed and into construction and with Pala's external financial network, their successful history of project financing and AMR's mine development team, the timing to production of the Achmmach Tin Project could be significantly reduced.
In addition the merger could catalyse new investment and financing interest from other parties who see broader investment appeal in the larger, more diversified entity which has Pala as its cornerstone investor."
AMR Chairman Mr Jim Askew stated:
"AMR, together with the support of Pala, will bring the financial strength and skills required to develop Achmmach. The AMR team has demonstrated its mine development ability at Ban Phuc. This team is now ready to apply its considerable skills and experience to the Achmmach Tin Project to unlock the significant value of this resource for the benefit of all shareholders."
Pala Vice President Mr Martyn Buttenshaw stated:
"With a robust medium-term outlook for tin, this is the ideal time to bring the Achmmach Tin Project on-line. As such, it is Pala's intention, subject to AMR board approval of a decision to mine, to assist AMR by committing to provide our pro-rata share of the equity funding required to construct the Achmmach Tin Project .
With the Achmmach Tin Project in production, AMR will become one of a few listed primary tin producers and become a long term investment proposition for Pala based upon the development of a larger scale, multi-asset tin and base metal company that offers product, geographical diversity and outstanding growth prospects for all shareholders."
Reasons to Support the Scheme
The Board of Kasbah believes that AMR, with Pala providing a key component of the funding solution and its involvement in other recent successful project financings, can increase the certainty of development of the Achmmach Tin Project. With the Achmmach Tin Project as the prime operating asset in the new enlarged company and nickel exploration opportunities proximate to the Ban Phuc Nickel Mine in Vietnam, both Kasbah and AMR shareholders stand to benefit from the future growth opportunities in tin and base metals.
Most importantly in this process, all Kasbah shareholders will be able to participate in the combined company's funding requirements as it seeks to capitalise on the immediate and longer term opportunities across a broader range of commodities.
With a view to the potential of the larger combined company, bolstered with a more diverse shareholder base and a strong cornerstone investor such as Pala, the Board of Kasbah unanimously recommends that Kasbah shareholders vote in favour of the proposed Scheme, in the absence of a superior offer. Each Director intends to vote in favour of the Scheme with respect to any shares they hold or control, in the absence of a superior offer.
Scheme Meeting
The meeting of shareholders to approve the Scheme (Scheme Meeting), will be at 10.00am (WST) on Wednesday 23 November 2016 at BDO, The Hay Room, 38 Station Street Subiaco, Western Australia 6008.
The Scheme Meeting has been convened so that Kasbah shareholders can consider and, if thought fit, agree to the proposal by Asian Mineral Resources Limited to acquire all of the ordinary shares in Kasbah by way of a Scheme under the Corporations Act 2001 (Cth). If the Scheme is implemented, Kasbah shareholders will receive:
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0.13 AMR share CHESS Depositary Interests (CDIs) and 0.04 AMR warrant CDIs per Kasbah share held, with each CDI representing a beneficial interest in 10 AMR shares or 10 AMR warrants (as applicable); or
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if so elected, 1.3 AMR shares and 0.4 AMR warrants per Kasbah share held.
Each shareholder's vote is important to determining whether or not the Scheme proceeds. All shareholders registered as at 4.00pm (WST) on 21 November 2016 will be entitled to vote at the Scheme Meeting, and are encouraged to do so.
Kasbah shareholders do not need to attend the Scheme Meeting in person to vote, as their vote can be made by proxy by completing the personalised proxy form enclosed in the Scheme Booklet mailed to shareholders. All proxy forms must be received by the Company's share registry by no later than 10.00am (WST) on 21 November 2016 in accordance with the directions set out in the proxy form.
The Company will continue to keep shareholders updated on the status of the Scheme as the timetable progresses.
If you have any questions on the Scheme or require further information, please contact the Kasbah Shareholder Information Line on +61 1800 220 771 anytime between 9.00am and 5.00pm (WST) Monday to Friday.
On behalf of the Board
Wayne Bramwell Managing Director
For further information please visit: www.kasbahresources.com
Or email: [email protected]
Or follow us on Twitter: @kasbahresources