Gladstone Pacific Nickel Limited (ACN 104 261 887) ("GPNL" or "the Company") - Resource Development International Limited to acquire Gladstone Pacific Nickel Limited



    TORONTO, Aug. 8 /CNW/ -

    
    -   RDI to acquire GPNL by scheme of arrangement for scrip consideration
        of (pnds stlg)2.20 for each GPNL share, based on RDI's IPO share
        price.

    -   The proposed acquisition is conditional on RDI listing on the HKSE or
        the ASX and raising a minimum of A$1 billion in cash.

    -   Details of the timing of the proposed acquisition and the listing of
        RDI have yet to be determined, however, it is proposed that the
        acquisition and the listing would be completed by late 2008.

    -   If the GPNL scheme is approved, GPNL will become a 100% owned
        subsidiary of RDI. The assets of GPNL would form part of RDI's asset
        base.
    

    Scheme Implementation Agreement

    Further to its announcement on 30 July 2008 regarding the receipt of a
proposal for a merger, Gladstone Pacific Nickel Limited ("GPNL" or the
"Company") (AIM:GPN) announces that the non-associated Directors of the Board
have unanimously approved the entry into a Scheme Implementation Agreement
(SIA) with Resource Development International Limited ("RDI").
    The SIA signed today, 8 August 2008, provides for GPNL to propose a
scheme of arrangement (the GPNL Scheme) under which RDI will acquire all of
the shares in GPNL for scrip consideration of (pnds stlg)2.20 for each GPNL
share based on RDI's IPO share price.
    The value of GPNL shares on the AIM at market close, 7 August 2008 was
(pnds stlg)0.70.
    In addition to GPNL Shareholder and Court approval, the GPNL Scheme will
be dependent on certain conditions including:

    
    1.  approvals for RDI to list and have its shares quoted on the Hong Kong
        Stock Exchange ("HKSE") and/or Australian Securities Exchange ("ASX")
        being obtained on or before 31 March 2009 and a cash raising of at
        least US$1 billion; and

    2.  GPNL receiving a satisfactory independent expert's report.
    

    RDI may terminate the SIA if GPNL decides to pursue a competing proposal.
Either party may terminate the SIA if the GPNL Scheme is not effective before
31 March 2009.
    It is expected that the GPNL Scheme will satisfy the requirements for
scrip for scrip roll-over relief from Australian capital gains tax ("CGT")
under Subdivision 124-M.
    Following the GPNL Scheme, RDI will own 100% of GPNL.
    The GPNL Scheme participants will include all GPNL shareholders in
Australia and any other jurisdiction in which RDI shares may be issued without
unduly onerous regulatory requirements. Other foreign shareholders will have
their allocation of RDI shares sold as soon as practicable and the proceeds
(less brokerage, duty, taxes, expenses and other charges) paid to them.
    If required by the HKSE and/or the ASX to obtain approval to list, the
provision of RDI shares to GPNL Shareholders will be conditional upon them
first agreeing to any restrictions on the RDI Shares (and executing any
required documents).
    RDI must use its reasonable endeavours to investigate the possible
establishment of a share sale facility by which GPNL Shareholders who would
receive less than A$5,000 worth of RDI shares under the GPNL Scheme can elect
to sell the RDI shares they receive as soon as practicable after the GPNL
Scheme is effected, without brokerage being payable.
    RDI must also make an offer to GPNL option holders for their GPNL options
to be transferred or cancelled in consideration for either RDI options on
equivalent terms or a cash amount based on the value of the consideration
provided to GPNL shareholders and the terms of the options.

    RDI

    RDI is a company which has recently been formed to acquire substantial
iron ore, nickel, exploration and energy interests, including rights to
extract 20 billion tonnes of iron ore from the Balmoral tenements held by
Mineralogy Pty Ltd. RDI has appointed Macquarie Bank and UBS to manage a
proposed US$5 billion IPO and listing on the HKSE, which is being planned by
RDI for late 2008.
    RDI is currently controlled by Mr Clive Palmer. Mr Palmer holds 13.95% of
the shares in GPNL.

    Effect on EGM to be held on 14 August 2008

    On 22 July 2008, GPNL gave notice of an Extraordinary General Meeting
("EGM") to be held on 14 August 2008.
    Resolution 3 in the Notice of Meeting sent to shareholders on 22nd July
2008 was referred to in the announcement of the EGM as follows:

    
        "Shareholder approval is being sought for the introduction of an
        alternative event to trigger Mr Palmer's entitlement to a 25%
        interest in Marlborough Nickel Pty Ltd ("MPNL"). This possible future
        event being the making of an unconditional takeover bid or the
        completion of a takeover via a scheme of arrangement, by Resource
        Development International Limited, a Company associated with Mr
        Palmer and Mr Martino, at a minimum price of (pnds stlg)2.20."

    The proposed alternative milestone for Mr Palmer's company, Dasines Pty
Ltd ("Dasines"), to convert its converting shares in Marlborough Nickel Pty
Ltd ("MNPL") to ordinary shares is contained in Resolution 3 of the Notice of
Meeting. The milestone, for a scheme of arrangement, has the following
conditions:

    -   Approval by a meeting of GPNL shareholders and by a court of
        competent jurisdiction under section 411(6) of the Corporations Act,
        of a scheme under which RDI will acquire all of the issued Shares in
        GPNL in which it does not already have a relevant interest in
        exchange for shares in RDI, at a value equal to or exceeding
        (pnds stlg)2.20 per GPNL share (which will be calculated according to
        a formula which values the RDI shares at their cash issue price under
        its intended IPO prospectus, converted to UK pounds sterling at the
        then prevailing exchange rate); and

    -   RDI raises at least US$1 billion in cash and RDI's shares are quoted
        on the Hong Kong Stock Exchange (or such other recognised stock
        exchange of a size and liquidity acceptable to GPNL); and

    -   The scheme is approved by a court of competent jurisdiction on or
        before 31 December 2008 or, at the absolute discretion of GPNL, a
        date no later than 90 days after 31 December 2008.
    

    If shareholders approve Resolution 3 and the GPNL Scheme meets all of the
above conditions, Mr Palmer would be entitled to convert the convertible
shares in MNPL held by Dasines into ordinary shares in MNPL. This would in
turn result in the completion of the acquisition of Dasines by GPNL, subject
to that transaction being approved by shareholders at the EGM by the approval
of resolution 2. Full details of these transactions are contained in the
Notice of Meeting and Explanatory Memorandum sent to shareholders.
    The GPNL shares issued to Mr Palmer would then participate in the GPNL
Scheme and be acquired by RDI, if the GPNL Scheme is approved.
    Shareholders should consider this information when deciding how to vote
on Resolution 3 and also refer to the information in section 3 of the
Explanatory Memorandum. Shareholders should also note that, even though RDI
has made this proposal, there is no certainty that the GPNL Scheme will be
approved or that a control transaction will occur.

    Review of GPNL Scheme

    GPNL intends to appoint an Independent Expert to advise on whether the
GPNL Scheme is in the best interests of all GPNL Shareholders. A copy of the
Independent Expert's Report will be included in the GPNL Scheme Booklet which
will be sent to shareholders before the meeting to approve the GPNL Scheme.
    The SIA requires RDI to provide assistance to GPNL to carry out due
diligence on RDI which GPNL will now commence.
    The non-associated directors committee formed to review the SIA,
comprising Mr John Downie, Mr Benjamin Hill and Mr James Henderson, have
considered the advantages and disadvantages of the RDI proposal. In the
absence of a superior proposal and subject to the results of the due diligence
and Independent Expert's Report, the committee unanimously recommend that the
GPNL shareholders vote in favour of the GPNL Scheme. Reasons for this include:

    
    -   The offer under the GPNL Scheme provides a substantial premium over
        the market price of GPNL shares. The offer is 3.14 times the AIM
        closing price of GPNL shares on 7 August 2008.

    -   The GPNL Scheme will remove the single asset risk and corporate
        structure which may have adversely impacted the share price of GPNL
        and its ability to grow and develop as a company.

    -   The GPNL Scheme will provide GPNL shareholders with exposure to a
        broader portfolio of assets with upside potential from other projects
        of RDI. Shareholders will maintain their exposure to the Marlborough
        Nickel Project.

    -   RDI will be more likely to offer increased diversity, scale and
        market liquidity.
    

    Next steps

    GPNL will now appoint an Independent Expert and commence preparation of
the Scheme Booklet. GPNL will also conduct due diligence on RDI and include
relevant information from that due diligence in the Scheme Booklet.
    Once approved by the Court, the Scheme Booklet will be dispatched to GPNL
shareholders.
    The GPNL Scheme will then require the approval of GPNL Shareholders and
the Court, together with satisfaction of other conditions customary for a
transaction of this nature. These conditions are included in the SIA, a
summary of which is attached as Annexure A to this announcement.

    Cancellation of GPNL's listing on AIM

    Should the implementation of the GPNL Scheme be successful, GPNL will
become a 100% owned subsidiary of RDI and it is the intention of the board of
RDI that they will cancel the admission of GPNL's securities to AIM on the
GPNL Scheme implementation date, expected at this stage to be during December
2008.

    Further information

    This announcement is available on GPNL's website
    www.gladstonepacific.com.au.

    Information on GPNL:

    Gladstone Pacific Nickel Limited is an Australian mining development
company presently undertaking an Integrated Definitive Feasibility Study
("IDFS") for the Gladstone Nickel Project ("GNP"). The company's vision is to
build a major long-life nickel cobalt refinery at the deepwater Port of
Gladstone, in Central Queensland, Australia, treating abundant high grade
nickel laterite ores from New Caledonia and other south-west Pacific islands,
underpinned by beneficiated ores from its own Marlborough deposits. The
Project has the potential to be one of the largest of its type in the world
producing some 126,000 tpa nickel (8 -10% of global nickel demand) and
10,400 tpa of cobalt metal from its first two stages.

    This news release includes certain statements that may be deemed
"forward-looking statements". All statements in this news release, other than
statements of historical facts, that address future exploration drilling,
exploration activities and events or developments that the Company expects,
are forward looking statements. Although the Company believes the expectations
expressed in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and
actual results or developments may differ materially from those in
forward-looking statements. Factors that could cause actual results to differ
materially from those in forward-looking statements include metal prices,
exploration success, continued availability of capital and financing, and
general economic, market or business conditions.


    Annexure A - Key terms of the Scheme Implementation Agreement.

    Introduction

    Gladstone Pacific Nickel Limited ("GPNL") and Resource Development
International Limited ("RDI") entered into the Scheme Implementation Agreement
(SIA) on 8 August 2008 which sets out the terms and the parties' respective
obligations in connection with the implementation of a scheme of arrangement
under part 5.1 of the Corporations Act (the "Scheme"). An outline of the key
terms of the SIA (other than those discussed in detail in the announcement) is
set out below.

    
    -------------------------------------------------------------------------
    1.  Conditions

        The Scheme will not become effective unless each of the following
        conditions precedent are satisfied or waived in the manner set out in
        the SIA before 31 March 2009 (Sunset Date).

        (a)   The Independent Expert gives a report to GPNL.

        (b)   GPNL Shareholders approve the Scheme at the Scheme Meeting (or
              at any adjournment or postponement of it at which the Scheme is
              to be voted on) by the requisite majorities under the
              Corporations Act.

        (c)   The Court approves the Scheme under section 411(4)(b) of the
              Corporations Act.

        (d)   No temporary restraining order, preliminary or permanent
              injunction or other order issued by any court of competent
              jurisdiction or other legal restraint or prohibition preventing
              the consummation of the Scheme is in effect at 8:00 am on the
              last day on which the Court hears the application for an order
              under section 411(4)(b) approving the Scheme (Second Court
              Date).

        (e)   Either:

              (i)   the Listing Committee of the HKSE grants the listing of,
                    and permission to deal in, RDI's share capital (subject
                    to such conditions as may be imposed by the HKSE and any
                    other condition which is agreed by RDI and GPNL (each
                    acting reasonably)); or

              (ii)  conditional only on the implementation of the Scheme and
                    other customary conditions imposed by ASX and any other
                    condition which is agreed by RDI and GPNL (each acting
                    reasonably), ASX approving RDI for admission to the ASX
                    official list and RDI Shares for official quotation on
                    ASX,

              and RDI would as a result of that listing or quotation, if it
              were completed, raise at least US$1 billion in cash.

        (f)   All Regulatory approvals are granted or obtained, on terms
              reasonably acceptable to RDI and GPNL (each acting reasonably),
              and those regulatory approvals are not withdrawn, cancelled or
              revoked.

    -------------------------------------------------------------------------
    2.  Conduct of Business

        GPNL gives undertakings about conducting its business in the ordinary
        course, preserving its business and not entering into certain
        material transactions without the approval of RDI.

    -------------------------------------------------------------------------
    3.  Parties' Obligations

    3.1 GPNL Obligations

        (a)   GPNL must take necessary steps to implement the Scheme,
              including commissioning the Independent Expert's Report,
              preparing the Scheme Booklet and making necessary applications
              to the Court.

        (b)   GPNL must cause its directors, subject to their fiduciary
              obligations, to unanimously recommend the Scheme and not
              withdraw that recommendation other than because of a material
              adverse change in RDI (Board Recommendation).

    3.2 RDI's Obligations

        (a)   RDI must make the offer for options described in the
              announcement.

        (b)   RDI must provide information for the Scheme Booklet, apply for
              listing and quotation of its shares, enter into a Deed Poll in
              favour of GPNL Shareholders regarding its obligations under the
              Scheme and, on the Scheme becoming effective, provide the
              Scheme consideration to GPNL Shareholders.

    -------------------------------------------------------------------------
    4.  Exclusivity

    4.1 No shop, No talk

        Until the Sunset Date or the Scheme becoming effective (Exclusivity
        Period), GPNL must ensure that neither it nor its directors,
        officers, employees, agents or advisers:

        (a)   directly or indirectly solicit, invite, facilitate, encourage
              or initiate any enquiries, negotiations or discussions, or
              communicate any intention to do any of these things, with a
              view to obtaining any expression of interest, offer or proposal
              from any other person in relation to a competing proposal; or

        (b)   negotiate or enter into, continue or participate in
              negotiations or discussions with any other person regarding a
              competing proposal, even if the competing proposal was not
              directly or indirectly solicited, initiated or encouraged by
              GPNL or the other person has publicly announced its competing
              proposal.

    4.2 Notification of approaches

        During the Exclusivity Period, GPNL must promptly notify RDI in
        writing of:

        (a)   any approach, inquiry or proposal made to, and any attempt to
              initiate negotiations or discussions with GPNL or any of its
              representatives with respect to any bona fide competing
              proposal (whether unsolicited or otherwise); and

        (b)   any request for information relating to GPNL or any of their
              businesses or operations or any request for access to GPNL's
              books or records, which GPNL has reasonable grounds to suspect
              may relate to a current or future competing proposal.

        The notice must include reasonable details including details of the
        competing proposal and the person making the approach.

    4.3 Fiduciary exception

        Nothing in the Exclusivity or Board Recommendation provisions:

        (a)   prevents GPNL from taking or refusing to take any action with
              respect to a bona fide proposal in relation to a competing
              proposal (which was not encouraged, solicited or invited,
              facilitated or initiated contrary to the no shop obligations);
              or

        (b)   requires GPNL to comply with the Exclusivity or Board
              Recommendation obligations,

        to the extent that taking or refusing to take any action would, in
        the reasonable opinion of the GPNL Board, be likely to involve a
        breach of the duties of the directors of GPNL. The reasonable opinion
        of the GPNL Board must be based on a written opinion from its
        external legal advisers.

    4.4 Matching right

        If, at any time during the Exclusivity Period, GPNL receives a
        proposal in relation to a bona fide superior proposal then:

        (a)   GPNL must give RDI a confidential notice in writing of that
              fact and that notice must provide all details of the superior
              proposal, including details of the proposed acquirer;

        (b)   GPNL will not, until the end of the next Business Day, enter
              into any legally binding agreement with respect to the superior
              proposal and RDI may at any time until the end of the next
              Business Day put forward a counterproposal;

        (c)   if RDI does provide a counterproposal, the GPNL Board must
              review it in good faith and in compliance with its fiduciary
              and statutory duties, to determine whether the counterproposal
              is more favourable to GPNL Shareholders; and

        (d)   if the GPNL Board determines that the counterproposal is more
              favourable then the parties will amend the SIA accordingly or
              make an announcement and pursue any new transaction in good
              faith, and not enter into any legally binding agreement
              referred to in (b) for 2 Business Days.

    -------------------------------------------------------------------------
    5.  Representations, warranties and indemnities

    5.1 Representations and warranties

        The parties give representations and warranties in a form usual for
        an agreement of this nature including warranties to the effect that
        their respective due diligence information is complete, accurate and
        not misleading.

    5.2 Indemnities

        Each party indemnifies the other in respect of losses or claims
        arising as a result of a breach of the representation and warranties.

    -------------------------------------------------------------------------
    6.  Termination

        The SIA may be terminated at any time:

        (a)   before or after the Second Court Date, by either party, if a
              Condition cannot be satisfied and it is not waived by its date
              for satisfaction;

        (b)   after the Sunset Date, by either party, if the Scheme has not
              become effective by that date;

        (c)   by RDI if at any time before the Second Court Date GPNL decides
              to pursue a competing proposal; or

        (d)   before the Second Court Date if there is a material breach of
              the SIA by the other party which is not remedied within 5
              Business Days (and at least 2 Business Days before the Second
              Court Date) of being notified of the breach.
    





For further information:

For further information: John Downie, Chief Executive Officer, Gladstone
Pacific Nickel Ltd: Tel: +61 7 3231 7100; Fiona Owen, Grant Thornton UK LLP,
Tel: +44 207 383 5100; Simon Rothschild/Keith Irons, Bankside Consultants:
Tel: +44 207 367 8888

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Gladstone Pacific Nickel Ltd.

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