12/10/2007 - 14:28

Dioro shareholders approve acquisition, spinoff

12/10/2007 - 14:28

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Shareholders in Nedlands-based Dioro Exploration NL have approved the acquisition of Harmony Gold Mines Ltd's South Kalgoorlie Mining Operations as well plans to spin-off of its nickel holdings, list on the Toronto Stock Exchange and raise $70 million.

Dioro shareholders approve acquisition, spinoff

Shareholders in Nedlands-based Dioro Exploration NL have approved the acquisition of Harmony Gold Mines Ltd's South Kalgoorlie Mining Operations as well plans to spin-off of its nickel holdings, list on the Toronto Stock Exchange and raise $70 million.

 

 

The full text of a company announcement is pasted below

Dioro shareholders give overwhelming support to A$45m acquisition of Harmony's South Kal operations, nickel spin off and TSX listing

Highlights:

Dioro shareholders approve:

  • $70m capital raising,
  • A$45m cash and scrip acquisition of Harmony Gold mining company's South Kal project, Kalgoorlie Western Australia.
  • Transfer of the company's nickel assets into a spin off nickel company, Lodestar Minerals, to be listed on the ASX.
  • Listing of Dioro on the Toronto Stock Exchange.
  • $70m capital raising program underway in Canada by Dioro management team

Australian gold company Dioro Exploration NL ("Dioro" or "the company") today received overwhelming shareholder approval for the 100 per cent acquisition of Harmony Gold Mines Ltd's South Kalgoorlie Mining Operations ("South Kal Project").

Dioro shareholders also approved the proposed transfer of the company's nickel assets from its Penfold Project into a wholly owned subsidiary of the Company, Lodestar Minerals Limited, which it is proposed to list on the Australian Stock Exchange.

South Kal acquisition

The South Kal Project includes the operating Jubilee 1.2mtpa mill, three years of reserves at current production rates, and a resource inventory of approximately 1.878 million ounces of gold. In addition, a large highly prospective tenement package covering an area of in excess of 1100 km is being acquired.

Consideration for the acquisition of the South Kal project is approximately A$45 million, with Harmony Gold to receive A$25 million cash and 160 million Dioro shares with a deemed value of A$20 million. The acquisition includes at least 2000 ounces of gold in circuit ($1.6 million),a minimum of $2 million in consumables and approximately $2.2 million for the replacement of environmental bonds.

Following the Harmony acquisition, Dioro will have a total JORC compliant resource inventory of 2.6 million ounces of gold when combining the company's 49% interest in the Frog's Leg project, 100% of the Penfold project and 100% of South Kal.

Nickel transaction - Lodestar Minerals

Last year Dioro acquired the Penfolds tenements from Harmony Gold Pty Ltd. The Penfolds tenements are located near Kalgoorlie, Western Australia, and are highly prospective for gold and nickel. Lodestar will issue 25,000,000 Lodestar Shares to Dioro for the assignment of the nickel rights over the Penfolds tenements. The Lodestar Shares wil be distributed to Dioro Shareholders at no cost, on a pro rata basis, by way of an in specie distribution.

Lodestar will then seek to raise up to $5,000,000 by way of an initial public offer of 25,000,000 Lodestar Shares with an issue price of 20 cents each, of which 20,000,000 will be offered on a priority basis to Dioro Shareholders on a pro rata basis.

$70m Capital raising program commences - Canada

Dioro's management team has arrived in Canada to commence a $70m capital raising program. The company will be working with leading Canadian broker Cormark Securities to raise the necessary funds to complete the acquisition of Harmony's South Kal operations, upgrade the company's working capital and ensure the ongoing exploration and development of the company's projects.

Speaking from Canada, Dioro Exploration Managing Director, Rhod Grivas said today's shareholder approval of the acquisition of the South Kal operations from Harmony Gold was a significant milestone which would see Dioro become an instant producer.

"We are pleased our shareholders have strongly supported our decision to acquire this significant gold project and to spin off our nickel assets," Mr Grivas said.

"Shareholder approval means we can issue the necessary shares to satisfy the scrip component of the South Kal acquisition, raise sufficient working capital to fund the cash component of the acquisition cost, plus provide funds for the Frog's Leg underground development and future exploration activities at each of the company projects."

Mr Grivas also said the establishment of Lodestar Minerals would provide the appropriate focus and funding to maximize the value of the company's nickel assets.

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