19/03/2009 - 15:12

Fox launches $6m takeover of Hannans

19/03/2009 - 15:12

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The Terry Streeter-backed Fox Resources has launched a $6 million all-scrip takeover of junior explorer Hannans Reward to increase its spread of iron ore and nickel assets in Western Australia.

The Terry Streeter-backed Fox Resources has launched a $6 million all-scrip takeover of junior explorer Hannans Reward to increase its spread of iron ore and nickel assets in Western Australia.

Fox Resources is offering one share for every two Hannans Reward shares, valuing the deal at $5.87 million at Fox Resources' closing price of 13 cents.

Hannans Reward shares closed at 5.7 cents.

Fox chairman Terry Streeter said the combination of the two companies would provide a strong geographical spread of assets and a team with considerable experience in developing base metal projects.

Fox's main assets include the Mt Oscar iron ore project and the Radio Hill nickel operation in the Pilbara, which was last year placed on care and maintenance. The company has been focused on boosting its nickel resource at Radio Hill.

Hannans also holds an iron ore tenement, Jigalong, in the Pilbara and is exploring for nickel at its Forrestania project, located north of Western Areas' Flying Fox nickel mine. Mr Streeter also chairs Western Areas.

The indicative offer has a 90 per cent minimum acceptance condition.

 

The announcement is below:

 

Pilbara-based minerals developer Fox Resources Limited (ASX: FXR) has today announced its intention to make an off-market takeover offer for all the shares in Hannans Reward (ASX: HNR).

Fox Resources said the combination of the complementary nickel and iron ore assets of the two organisations would provide long term benefits of scope and scale for the shareholders of both Companies.

The all scrip Offer is based on one Fox Resources share, for every two Hannans Rewards shares on issue. The off market bid is not for the options.

Fox Resources Chairman Terry Streeter said the Offer represented a compelling case for Hannans Reward shareholders - particularly in the current market environment.

"Hannans Reward shareholders will have the opportunity to realise a substantial premium for their shares, as well as retain long term exposure and upside in the development of the nickel and iron ore assets through Fox," Mr Streeter said.

"We believe the organisations have complementary assets and focus, and combining these would provide a strong geographical spread of assets and a team with considerable experience in the development of successful base metals projects."

"Hannans Reward shareholders would also benefit from Fox's relationships into China via our major shareholder and off-take partner Jinchuan Group Ltd, which is China's largest producer of nickel," he said.

"While the nickel market is currently at low levels, we have a long term positive outlook for steel feed minerals, and through joint development there is an opportunity to position these assets to capitalise on the return to improved metals prices," Mr Streeter said.

Hannans Reward is a WA focussed explorer with its primary projects being the Forrestania Nickel project east of Perth, and the Jigalong iron ore project in the Pilbara.

The combined entity would:

- Offer increased geographical spread of development assets
- Provide benefits of increased size and scope
- Have access to key Chinese markets through Fox major shareholder Jinchuan Group
- Provide greater market liquidity

Fox is in the process of preparing a formal Bidder's Statement and will lodge that document with the Australian Securities Exchange and the Australian Securities and Investments Commission in due course. The proposed offers will be subject to a number of conditions. Fox is being advised by Blake Dawson.

 

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