ELKEDRA PROCEEDS WITH URANIUM IPO- URAMET MINERALS LTD
April 23 2007 - 3:00AM
UK Regulatory
MEDIA RELEASE 23 APRIL 2007
ELKEDRA DIAMONDS PROCEEDS WITH SPIN-OFF OF
AUSTRALIAN URANIUM AND BASE METAL ASSETS
ELKEDRA TO HOLD 38.46% INTEREST IN NEW EXPLORATION IPO, URAMET MINERALS LIMITED
Australian-based diamond producer Elkedra Diamonds NL (ASX: EDN, AIM: EDN)
today announced that it will proceed with a proposed spin-off of its uranium
and base metal assets in the Northern Territory and Queensland through the
forthcoming IPO to raise up to A$7 million and planned ASX listing of newly
incorporated exploration company, Uramet Minerals Limited.
Elkedra has reached agreement to transfer a high-quality portfolio of uranium
and base metal prospects covering some 7,895km2 in the Georgina Basin to
Uramet. The decision to divest these assets is consistent with Elkedra's focus
as a growing diamond producer in South America following the successful
development and commissioning of its Chapada Project in Brazil last year.
Elkedra has been issued with 25 million shares in Uramet which, at the time of
listing, will be equivalent to 38.46% of the new company.
It is expected that Uramet's IPO prospectus will be lodged with the Australian
Securities and Investments Commission within the next fortnight and made
available in order to enable Uramet to conduct a proposed initial public offer
of 35,000,000 shares at 20 cents per share. The ASX listing is planned for
early June or sooner if the offer closes early. Any person wishing to acquire
shares in Uramet will need to complete the application form accompanying the
Prospectus.
All Elkedra shareholders who on the record date (being a date after lodgement
of Uramet's prospectus and which will be announced shortly) are either
registered with an Australian address or are foreign registered substantial
shareholders with an interest of 10% or more in Elkedra, will have a pro rata
priority entitlement to 8,750,000 shares (25%) of the total Uramet shares to be
offered under the prospectus.
Subject to obtaining the necessary approvals, Elkedra intends to make an in
specie distribution of its shareholding in Uramet to existing Elkedra
shareholders within 12 months of a successful ASX listing.
In addition, it is proposed that all shareholders on the Uramet share register
at a pre-determined date after listing will receive a one-for-three option with
a proposed strike price of 25 cents.
Elkedra has nominated two directors to the Board of Uramet, Mr Sam Randazzo,
who has been appointed as Uramet's non-executive Chairman, and Mr Don Best, who
joins the Uramet Board as a non-executive Director. Experienced mining and
exploration executive Mr Bill Hewitt has been appointed as Uramet's Managing
Director. Mining engineer Mr Richard Procter has also been appointed as a
non-executive Director.
Mr Randazzo, said the decision to transfer the uranium and base metal
exploration assets to a separately listed company reflected Elkedra's focus as
an international diamond company, while at the same time creating an
opportunity to unlock the value of its Australian exploration interests.
"Our management focus and resources are geared towards our existing diamond
operations at Chapada, in Brazil, together with an increasing exploration focus
within our broader tenement position at Chapada designed to increase our
resource base and develop new growth opportunities," he said.
"While we made the decision to transfer the bulk of our exploration assets,
comprising some prospective uranium and base metal projects, to Uramet, Elkedra
has retained the diamond rights on these tenements so we will be continuing
with our ongoing diamond exploration activities within Australia." Mr Randazzo
added.
"Through the priority offer and planned in specie distribution of Uramet shares
post listing, Elkedra shareholders will have the opportunity to participate in
the growth and future success of Uramet as a focused, well funded Australian
exploration company focused on uranium and base metal exploration," he said.
Uramet's exploration portfolio, located in the southern part of the Georgina
Basin, includes a large number of uranium targets and several lead-zinc
prospects, details of which will be set out in Uramet's IPO prospectus.
Uramet will also acquire from Elkedra a substantial collection of exploration
data which has been assimilated by Elkedra as part of Elkedra's diamond
exploration activities. It will share administrative and corporate support
functions with Elkedra, including the services of Elkedra's Chief Geologist, Dr
Wayne Taylor.
Mr Randazzo said the spin-off mechanism would create significant value for
Elkedra shareholders, with Elkedra's shareholding in Uramet having a value of
approximately $5 million at listing, equivalent to around 5 cents per Elkedra
share based on Elkedra's current issued share capital of 96.6 million shares.
- ENDS -
Released by: On behalf of:
Nicholas Read Mr Don Best
Read Corporate Executive Chairman
Telephone: (08) 9388-1474 Elkedra Diamonds NL
For further information contact
Sam Randazzo
Executive Director
Telephone: (08) 6380-2855
Web: www.elkedra.com.au
Background - Elkedra Diamonds NL
Elkedra Diamonds NL (ASX: EDN, AIM: EDN) is a focused international diamond
producer whose flagship asset is the 100%-owned Chapada Diamond Mine, South
America's largest diamond miner.
Chapada commenced production in June 2006 and has to date produced in excess of
16,000 carats of predominantly gem quality diamonds. The Project has recently
completed its production ramp-up phase to achieve targeted annualized
production levels of 30,000 carats. The average price achieved for all diamonds
sold since start up in late June 2006 is US$413 per carat.
Located near the town of Chapada dos Guimar�es in Mato Grosso State, the
Chapada tenements cover a total of around 291 km2 adjacent to existing
watercourses in the Casca Basin and are prospective for diamondiferous alluvial
gravel terraces. Mining activities are initially focused on the Quilombo and
Peba Lagoinha reserve areas, which represent less than 10% of the Company's
total tenement holding in the region.
The region is an established tourism and agribusiness centre, with good
infrastructure and excellent access from Cuiaba, the regional capital centre.
Gem quality diamonds have been recovered in the area by local miners for over
50 years. In the early 1980's Rio Tinto plc (Rio) conducted substantial
exploration in the area including drilling and bulk sampling of the current
Chapada Project resource area. However, Rio was seeking to establish a larger
project including dredging of the lower portions of the Casca Basin which was
subsequently restricted by construction of a new dam.
The project contains probable reserves of 5.4 million BCM of drill delineated
gravels at a grade of 0.05 carats per bcm giving the project a 9-year life
based on processing 600,000 bcm per annum.
The diamondiferous gravels, which average 1.3 metres in thickness, are located
beneath an average of 4.5 metres of sand overburden - with extraction using
conventional excavator and truck mining techniques. The gravel is clearly
visible, with no blasting required and minimal dilution expected.
The diamond recovery processing plant comprises screening, heavy media
separation, magnetic separation and X-ray sorting in a secure area. Magnetic
separation machines have been installed to remove the high limonite content of
the gravels, which impeded economic exploitation in the past using traditional
gravity techniques.
- ENDS -
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