23/10/2007 - 10:04

Centaurus acquires Brazilian explorer for $3.3m

23/10/2007 - 10:04


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West Perth-based gold and base metals explorer Centaurus Resources Ltd will acquire Brazilian mineral exploration and development firm San Greal Resources Pty Ltd through a scrip issue worth around $3.3 million, the company has announced.

West Perth-based gold and base metals explorer Centaurus Resources Ltd will acquire Brazilian mineral exploration and development firm San Greal Resources Pty Ltd through a scrip issue worth around $3.3 million, the company has announced.

San Greal shareholders will receive three Centaurus shares for every five they currently hold, at a deemed price of 80 cents. Under the offer, Centaurus expects to issue 4.2 million shares.

The acquisition comes two months after the company made its debut on the Australian Securities Exchange, with the company's share price increasing more than 200 per cent since listing on August 10.



The full text of a company announcement is pasted below

The board of Centaurus Resources Limited (Centaurus or Company) is pleased to announce that it has entered into an Agreement to acquire San Greal Resources Pty Ltd (San Greal), a company focused on mineral exploration and development in Brazil. Centaurus will acquire 100% of the shares of San Greal and, as part of the acquisition, secure the services of a fully serviced technical, legal and administrative team on the ground in Brazil.

The acquisition of San Greal will give Centaurus immediate access to:

  • High quality technical management with a track record of exploration and acquisition success in Brazil over 20 years;
  • 12 tenements in Brazil which are prospective for gold and coppergold mineralisation;
  • A local team of widely experienced geologists as well as legal and land administration advisors; and
  • Exploration office and infrastructure based in the city of Belo Horizonte, centrally located within the world famous mining state of Minas Gerais.

The addition of the San Greal business and exploration team to Centaurus will allow Centaurus shareholders to benefit from, not only the highly prospective tenements held by San Greal but importantly, the opportunity to
access future high quality resource opportunities in Brazil.

This transaction represents the foundation for the Company's intentions to tap into the significant resource potential of Brazil. The strategy will complement the continued exploration and development of Centaurus' gold and base metal projects in Australia.

The Agreement

The key terms of the Agreement are:

  • Centaurus will issue San Greal shareholders three Centaurus shares for every five fully paid ordinary shares they hold in San Greal. The deemed price of each Centaurus share is $0.80, which is approximately equal to the volume weighted average trading price of Centaurus fully paid ordinary shares on the ASX for the 30 trading days prior to 8 October 2007.
  • Accordingly, 4,190,000 Centaurus shares will be issued to San Greal shareholders taking the total number of Centaurus shares on issue to 26,623,339.
  • Klaus Petersen, a director of San Greal has agreed to enter an exclusive executive employment agreement with Centaurus and Steffen Hagemann has agreed to be a consultant to Centaurus on ordinary commercial terms. They will be issued with 1 million incentive options each to acquire a fully paid ordinary share in the capital of Centaurus. These options, which expire five years from issue, will be exercisable at $0.80 per share with half having a hurdle of $1.50 and the other half $2.50.
  • Klaus Petersen has been invited to join the board of Centaurus upon completion of the Agreement.

Completion of the Agreement is subject to due diligence by both parties and obtaining all necessary regulatory and shareholder approvals to complete the acquisition including, without limitation, related party approvals required by virtue of Centaurus directors having interests in San Greal. Full details regarding the transaction (including the interests of related parties) will be set out in an Information Memorandum for Centaurus shareholders, which will consist of a notice of meeting, explanatory statement and expert's report. The Company anticipates being in a position to dispatch the Information Memorandum to shareholders in late November 2007.

About San Greal

San Greal is a private Australian exploration company with a Brazilian subsidiary founded by Klaus Petersen and Steffen Hagemann. San Greal has secured 12 exploration tenements in strategic, highly prospective areas in Brazil. These projects are prospective for gold and copper-gold mineralization and exploration on these tenements has commenced.

Klaus Petersen, a director of San Greal will join Centaurus as Exploration Manager - Brazil and technical director. He will be responsible for managing the technical and commercial team in Brazil as well as generation and review of new opportunities in consultation with the board.

Klaus has 20 years experience in exploration and business in Brazil and is a member of the CREA (the AusIMM equivalent in Brazil) with a strong network of technical and political connections within Brazil.

Klaus has a wide range of experience in exploring for different commodities in many areas of Brazil and wider South America. He has successfully established several exploration teams and company structures in Brazil and has experience in negotiating high quality resource acquisitions. Klaus has a PhD from the University of São Paulo and 4 years experience working at the Centre for Exploration Targeting at the University of Western Australia. He is fluent in Portuguese, German and English.

About San Greal (continued)

Steffen Hagemann, who is a shareholder of San Greal, will be a consultant to Centaurus. Steffen has 20 years experience in economic geology worldwide and has worked in Brazil since 1986 on many different projects for academia and industry in gold and iron. He has conducted short courses in Brazil for industry and survey geologists and was an invited speaker at a series of major mining and exploration conferences over the past five years. His ability to interpret and generate new projects through the use of the cutting-edge geological models and exploration techniques have proved to be very successful in target generation for a variety of ore deposit types in South America and other countries. Steffen is currently an Associate Professor at the Centre for Exploration Targeting with gold, iron, copper, and nickel projects in Australia, South America and Asia. Steffen speaks Portuguese, German and English.

San Greal has established an experienced geological team and exploration office in the city of Belo Horizonte, the hub of the world renowned mining province, the Iron Quadrangle. This team is well supported by legal and administrative advisors with the skills to provide logistical support and manage the company's legal, compliance and land access requirements in Brazil

About Brazil

Brazil represents the fifth largest country in the world by area and with a population of approximately 200 million people (fifth largest) is one of the major economies of the world. As one of the BRIC (Brazil, Russia, India and China) economies, Brazil is also recognized as one of the most rapidly growing economies in the world - fuelling a large domestic demand for resources. Furthermore, Brazil is consistently rated as one of the lowest risk destinations in the world for exploration and mining investment and development.

Brazil has extensive infrastructure allowing for the efficient expansion of mining industries and subsequent internal consumption and export of mineral commodities. Its land surface is over 10% larger than Australia and is comprised of large areas of exposed Archean and Proterozoic rocks prospective for a large range of major deposit styles. This highly prospective geology has had a fraction of the detailed exploration compared to that conducted in Australia and remains largely underexplored.


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