Body of announcement:
Shaw River Resources (ASX:SRR) Completes Acquisition of 75.5% Interest in Namibian Manganese Project
- Acquisition of a 75.5% interest in the Otjozondu Manganese Project in Namibia completed
- Maiden Resource Estimate is expected by March 2011
- Feasibility study is expected to begin in March 2011
- Shaw River well funded post acquisition to progress manganese portfolio, including drilling
over the coming months in Australia, Ghana and Namibia, with over $6.0million cash
- Shaw River’s major shareholder’s Atlas Iron and OM Holdings demonstrate strong support
Shaw River Resources Limited (“Shaw River” or “the Company”) (ASX Code: SRR) is pleased to announce that it has completed the acquisition of a 75.5% interest in the Otjozondu Manganese Project in Namibia (“Otjo”). The Company will now commence Reserve drilling and a feasibility study on this near-term manganese development project.
The settlement of this acquisition follows the completion of an extensive due diligence program,
shareholder approval and receipt of approvals from Namibian authorities for the transaction.
Shaw River’s Managing Director,Mr Vincent Algar said: “By securing this near term manganese production opportunity, we provide Shaw River shareholders with the opportunity become part of global manganese production as early as 2012. Shaw River will join the very select ranks of ASX listed manganese producers including BHP Limited, Mineral Resources Limited and OM Holdings Limited.”
“Shaw River thanks its major shareholders, Atlas Iron Limited and OM Holdings Limited, for their support,” Mr Algar added. “This support demonstrates the potential our shareholders see in the Otjo project and Otjo’s potential to transform the Company into a significant manganese producer and explorer.”
Progress at Otjo will be swift within the first six months of ownership with Shaw River focusing on the following
- Outlining a maiden JORC resource at Otjo in the March 2011 quarter,
- Commencing a feasibility study which is expected by completed in October 2011,
- 10,000m of additional drilling to expand the resource base, with a resource/reserve upgrade
expected in July 2011.
The Company’s timeline is aggressive and will see Otjo deliver considerable shareholder wealth with Shaw River targeting commencing manganese production in 2012.
Shaw River will continue its strategy to progress its advanced manganese projects in Australia and Ghana, with drill programmes planned in both countries over the coming months.
Payment of Consideration
The payment of the up-front consideration (i.e. excluding royalty) to the four unrelated vendors has been made. The payment includes:
- Payment of US$5,130,000 in cash funded through the placement to Atlas Iron Limited and OM
Holdings Limited (the placement to major shareholders is detailed below);
- The issue to the vendors of:
- 31,495,417 Shaw River shares (subject to 12 month escrow);
- 2,053,114 Atlas shares via a loan from Atlas which will be repaid within 5 months; and
- 45 million unlisted 5 year Shaw River options exercisable at A$0.20 each.
Placement to Major Shareholders and Loan
Shaw River’s two largest shareholders maintained their respective shareholdings through a placement at the same time as the consideration was paid to the vendors of the Otjo project. The issue of 42.2 million Shares to Atlas and OM was approved by Shareholders at a General Meeting on 21 January 2011.
The structure of the consideration ensures Shaw River is well funded to progress immediate activity across its manganese project portfolio, including Otjo. Shaw River has maintained a cash position of over $6.0 million following the acquisition.
Please see the Appendix 3B ASX announcement in relation to the consideration and the placement above released today.
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