VANCOUVER, May 15, 2013 /CNW/ - Monument Mining Limited ("Monument Mining") and Central Australia Phosphate Limited ("CEN") are pleased to announce the signing of a binding Heads of Agreement
(the "Agreement") under which they have agreed, subject to the satisfaction of the
conditions detailed below, to establish a joint venture in respect of
CEN's phosphate projects at Arganara, Lucy Creek and Warrabri ("Phosphate Projects") ("Joint Venture").
Joint Venture to fund and support the continued exploration and
development of CEN's Phosphate Projects.
Under the Agreement, Monument Mining may earn an interest in up to 51%
of the Phosphate Projects for a total investment of A$8.8 million.
Details of the earn-in include:
upfront cash payment to CEN of A$1.5m to reimburse CEN for past
expenditures to earn a 10% participating interest;
further investment of A$7.3 million in the Phosphate Projects as
A$2.5 million commitment to earn a further 20% participating interest
within 12 months;
a right to spend an additional A$2.8 million to earn a further 12.5%
participating interest within 36 months; and
a right to spend an additional A$2.0 million to earn a further 8.5%
participating interest within 54 months.
CEN would then retain a 49% interest in the Phosphate Projects.
Monument Mining shall, after consultation with CEN, appoint the manager
of the Joint Venture.
CEN and Monument Mining have the right to receive the share of phosphate
product or other minerals recovered in proportion to their
Monument Mining is entitled to a right of first refusal to enter into
offtake sales contracts with CEN for CEN's share of phosphate product
or other minerals recovered, with the terms of such contracts to be
negotiated by the parties in good faith.
CEN to retain control and ownership of all CEN non phosphate projects.
The transaction with Monument Mining is subject to conditions precedent
including CEN shareholder approval. CEN's directors unanimously recommend shareholders vote in favour of the
relevant resolutions, in the absence of a superior proposal.
The Joint Venture
Under the Joint Venture, Monument Mining will make a total investment of
up to approximately $8.8 million, $7.3 million of which will be
invested in the Phosphate Projects, over a 4.5 year period to earn up
to a 51% participating interest. Subject to satisfaction of the
conditions noted below, Monument Mining will make an upfront cash
payment to CEN of $1.5 million to reimburse CEN for past expenditures
in return for an initial 10% participating interest. Monument Mining
has committed to spend an additional minimum of $2.5 million on
exploration within 12 months to earn a further 20% participating
interest. Under the earn-in arrangement, Monument Mining may
eventually acquire up to a 51% interest in the Phosphate Projects.
This material investment by Monument Mining in the Phosphate Projects,
including CEN's strategic Arganara phosphate project, is a strong
signal of support for CEN and has the potential to generate significant
value for shareholders, especially in an environment of global
population growth, increasing awareness of food security and fertiliser
The Arganara phosphate project is located approximately 300km northeast
of Alice Springs or approximately 1,200km south of Darwin and within
130km of the Darwin/Alice Springs rail line. In August 2012, CEN
announced a maiden JORC phosphate Inferred Resource of 310 million
tonnes at 15% P2O5 (using a 10% P2O5 cut-off).
CEN recently announced a new exploration potential estimate for the
mineralised phosphate corridor east of the existing Arganara Resource,
which clearly reinforces the potential of the Arganara phosphate
The Joint Venture will develop all of CEN's 100% owned tenements at
Arganara, Lucy Creek and Warrabri. In respect of CEN's earn in
arrangement with Fertoz Limited for EL26915 at Arganara, under the
Agreement, CEN agrees to use best endeavours to obtain the consent or
approval of Fertoz Limited to make arrangements such that EL 26915 is
treated as if it was within the scope of the Joint Venture.
CEN will retain control and ownership of all CEN's non phosphate
Under the Agreement:
1. Monument Mining has the right to acquire a 51% interest in the
Phosphate Projects as follows:
upfront cash payment to CEN of $1.5m to reimburse CEN for past
expenditures for a 10% participating interest in the Joint Venture;
minimum investment of $2.5 million in exploration over 12 months to earn
a further participating interest of 20%;
right to invest an additional $2.8 million to earn a further 12.5%
participating interest within 36 months; and
right to invest an additional $2.0 million to earn a further 8.5%
participating interest within 54 months.
CEN would then retain a 49% interest in the Joint Venture and Phosphate
2. Monument Mining shall, after consultation with CEN, appoint the manager
of the Joint Venture and direct the nature and extent of exploration
activities, including the preparation and execution of the work
programmes and annual budgets.
3. CEN and Monument Mining have the right to receive the share of
phosphate product or other minerals recovered in proportion to their
4. Monument Mining entitled to a right of first refusal (but shall not be
obliged) to enter into offtake sales contracts with CEN for CEN's share
of phosphate product or other minerals recovered from the Phosphate
Projects. The terms and conditions of any such offtake are to be
negotiated by the parties in good faith.
Mr Robert Baldock, Chief Executive Officer and President of Monument
"Monument Mining is pleased to announce this investment proposal which
will see Monument Mining invest up to $8.8 million to further advance
the exploration and development of CEN's Phosphate Projects.
CEN's Phosphate Projects meet Monument Mining's longer-term strategic
objective of sourcing a large and stable supply of phosphate.
We are pleased that the directors of CEN have decided to unanimously
recommend our proposal to CEN shareholders, subject to no superior
proposal emerging and we look forward to developing a strong
relationship with CEN and a successful Joint Venture."
CEN Chairman Mr Robert Owen said:
"The signing of the Agreement with Monument Mining represents a
milestone for CEN and marks a significant step forward towards the
advancement of CEN's Phosphate Projects.
The board is pleased to recommend the Monument Mining investment
proposal to CEN shareholders in the absence of a superior proposal. The
value ascribed to the Phosphate Projects, the opportunity to retain at
least a 49% ongoing interest in the Phosphate Projects and the $1.5
million upfront cash payment are considered to be attractive against a
backdrop of uncertainty in global financial markets and your directors
believe this investment proposal to be in the best interests of CEN
shareholders in the absence of a superior proposal.
We are delighted to have secured Monument Mining as our business partner and look forward to a long and successful
Heads of Agreement
In addition to the primary terms of the Joint Venture set out above,
under the Agreement
the formation of the Joint Venture is subject to satisfaction of the
CEN shareholders approve the Joint Venture at a shareholder meeting
proposed to be held in late June ("Meeting");
CEN, Monument, the Central Land Council and any other relevant third
party with which CEN has entered into an agreement in respect of the
Phosphate Projects, have executed deeds of assumption pursuant to which
Monument covenants to observe, comply with and be bound by the terms of
the relevant agreement (if required pursuant to the terms of those
Any other approvals required under the ASX Listing Rules, CEN's
constitution and the Corporations Act have been obtained;
CEN must pay a break fee of $90,000 to Monument Mining if:
a majority of CEN shareholders do not vote in favour of the Joint
Venture proposal at the Meeting and either:
(i) a third party has acquired or subsequently acquires a relevant
interest (whether alone or together with any associate(s)) in more than
50% of CEN shares (and if that acquisition was pursuant to a takeover
bid, the bid has gone unconditional) and the proposed acquisition was
announced to ASX or notified to Monument Mining by CEN on or before the
date of the Meeting; or
(ii) CEN disposes of all, or substantially all, of its interests in the
Arganara phosphate project whether by way of sale, farm out, joint
venture or other arrangements and the proposed disposal was announced
to ASX or notified to Monument Mining by Central on or before the date
of the Meeting; or
Monument Mining terminates the Agreement due to breach of the Agreement
Monument Mining must pay a break fee of $90,000 to CEN if CEN terminates
the Agreement due to breach of the Agreement by Monument Mining;
notwithstanding the above, no break fee shall be payable (and any break
fee already paid must be reimbursed) if at any time Monument Mining or
any of its associates obtains voting power of 10% or more in CEN or
obtains an interest of 10% or more in the Arganara Phosphate project
whether by way of sale, farm out, joint venture or other arrangements;
subject to compliance with the board's fiduciary duties, until the
earlier of 15 September 2013 and the date of the Meeting, CEN:
must not solicit or participate in any negotiations or discussions in
relation to a competing proposal to the Joint Venture in respect of the
Phosphate Projects, or communicate to any person an intention to
undertake such activity, and must immediately notify Monument Mining if
it is approached by any person to engage in such activity;
must cease and shall not recommence any discussions or negotiations
relating to any completing proposal to the Joint Venture; and
must immediately notify Monument Mining if it receives notice of any
proposal by a third party to acquire a relevant interest in more than
50% of CEN's shares.
The Agreement executed today is a binding agreement which imposes
obligations on both Monument Mining and CEN to finalise and execute
formal transaction documentation to effect the arrangements outlined
The transaction is subject to CEN shareholder approval which is
currently anticipated to be sought in late June 2013. Relevant
documentation will be sent to CEN shareholders in the coming weeks.
Subject to the satisfaction of the conditions noted above, the Joint
Venture will be formed and this will trigger payment by Monument Mining
of the initial earn in amount of $1.5 million to CEN.
The approvals of the respective boards of Monument Mining and CEN have
been obtained to implement the transaction, subject only to
satisfaction of the conditions noted above.
CEN is being advised by Gresham Advisory Partners as financial adviser
and Gilbert + Tobin as legal adviser.
Monument Mining is being advised by ICS Advisory as financial adviser
and Hardy Bowen and DuMoulin Black LLP as legal advisers.
CEN shareholder information
The directors of CEN continue to recommend that CEN shareholders REJECT the takeover offer for CEN received from Rum Jungle Resources Limited
("Rum Jungle Offer"). To REJECT the Rum Jungle Offer you should simply DO NOTHING and TAKE NO ACTION in relation to all documents sent to you by Rum Jungle.
If you have any questions in relation to the proposed transaction,
please contact the CEN Shareholder Information Line on 1800 336 109
from within Australia or +61 1800 336 109 from overseas.
About Monument Mining
Monument Mining Limited is an established Canadian gold producer, listed
on the TSX Venture Exchange and the Frankfurt Stock Exchange
(TSX-V:MMY, FSE:D7Q1), that owns and operates the Selinsing Gold Mine
in Malaysia. Its experienced management team is committed to growth and
is advancing several exploration and development projects in Malaysia,
including the advanced-stage Mengapur Polymetallic Project. Sourcing a
large and stable supply of phosphate rock is a core component of
Monument's longer term strategic objectives for the Mengapur
Polymetalic Project and Monument more broadly. The Company employs 320
people in Malaysia and is committed to the highest standards of
environmental management, social responsibility, and health and safety
for its employees and neighbouring communities.
Central Australian Phosphate is an exploration company focussed on
exploration in the Northern Territory, with a portfolio consisting of
the Aileron Project, Arganara Project, Lucy Creek Project, Westmoreland
Project and the Warrabri Project.
The information in this announcement that relates to CEN exploration
results, background to the project, future work, comments on the
resource estimates and economic potential of the estimated resource is
based on information compiled by Mr Andrew Johnstone, who is a Member
of the Australian Institute of Geoscientists. Mr Johnstone 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 Johnstone, who is an officer
of the Company, consents to the inclusion in this announcement of the
matters based on his information in the form and context in which it
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking information and
forward-looking statements about Monument and CEN (together referred to
herein as "forward-looking statements"). Forward-looking statements are
statements that are not historical facts and include statements
regarding the schedule and completion of various steps in the Joint
Venture proposal. Forward-looking statements are based on the
opinions, assumptions and estimates of management considered reasonable
at the date the statements are made, and are inherently subject to a
variety of risks and uncertainties and other known and unknown factors
that could cause actual events or results to differ materially from
those projected in the forward-looking statements. These risks and
certain other factors include: CEN and Monument's expectations
regarding the Joint Venture proposal, the response of CEN shareholders
to the Joint Venture proposal, regulatory requirements applicable to
the Joint Venture proposal, and other factors that may be beyond the
control of CEN and Monument. Forward-looking statements are subject to
known and unknown risks, uncertainties and other factors that may cause
the actual results, level of activity, performance or achievements of
CEN and Monument to be materially different from those expressed or
implied by such forward-looking statements, including the risks factors
listed above, other risks inherent in the mining industry and other
risks described in the management discussion and analysis of the CEN
and Monument. Although CEN and Monument have attempted to identify
important factors that could cause actual results to differ materially
from those contained in forward-looking statements, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove to
be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward- looking statements.
Neither CEN nor Monument undertake to update any forward-looking
statements, except as required by applicable securities laws.
1 For more information, please refer to CEN's announcement dated 4 April
2013. The potential quantity and grade of the exploration target is
conceptual in nature. There has been insufficient exploration to
define a JORC mineral resource and it is uncertain if further
exploration will result in the determination of a mineral resource.
SOURCE: Monument Mining Limited
For further information:
Monument Mining Limited
President and CEO
CFO and Corporate Secretary
Tel: +1604 638 1661 (Vancouver)
Media (for Monument Mining)
Financial & Corporate Relations
Tel: +61 2 8264 1000 (Sydney)
Financial & Corporate Relations
Tel: +61 2 8264 1003 (Sydney)
Central Australian Phosphate
Tel: +61 2 9262 4235 (Sydney)
Gresham Advisory Partners
Tel: +61 8 9486 7077 (Perth):