06/10/2008 - 09:28

Perilya seals deal for $20m project sale

06/10/2008 - 09:28

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The potential merger between CBH Resources Ltd and Perilya Ltd will have to go ahead without the Mount Oxide copper project, after formal agreements were executed for the $20 million scrip sale.

Perilya seals deal for $20m project sale

The potential merger between CBH Resources Ltd and Perilya Ltd will have to go ahead without the Mount Oxide copper project, after formal agreements were executed for the $20 million scrip sale.

Takeover target Perilya and West Perth-based Chalice Gold Mines Ltd have finalised due diligence investigations and have both agreed to the transaction.

The sale of the copper and cobalt project to Chalice is for the consideration of 200 million Chalice shares to Perilya.

Chalice shares were last trading at 10 cents while Perilya shares were 28c at 12:30 AEST.

Under the deal, Chalice also has the option to acquire a 50 per cent interest in Perilya's Tampang copper-gold project in Malaysia.

The transaction is still subject to shareholder approval.

"If all of the condition precedents are satisfied and the sale proceeds to completion, Perilya shareholders will retain an interest in the Mount Oxide project, via a 73.3% shareholding in Chalice," both companies said in a statement.

Perilya is currently the subject of a hostile takeover bid by CBH Resources which has laid out two offers on the table.

CBH is offering 2.8 shares for each Perilya share if the Mt Oxide transaction goes ahead, or 4.2 shares for ever Perilya share if the sale of the project is not completed.

Today Perilya said it will initiate a capital management program, which it said mau include an in specie capital return of the Chalice shares to Perilya shareholders.

 

Below is the full announcement:

 

Further to the announcement on 11 September 2008, Perilya Limited (ASX:PEM) and Chalice Gold Mines Limited (ASX:CHN) are pleased to advise that a formal agreement (incorporating the previous agreed terms of a heads of agreement) for Chalice to acquire 100% of Perilya's interest in the Mount Oxide copper and cobalt project located in the Mt Isa region in northern Queensland, has been executed. The agreement follows the finalisation of due diligence by each of Perilya and Chalice.

The acquisition of Perilya's Mount Oxide project by Chalice and the issue of the Chalice shares in consideration remains subject to certain conditions precedent and Chalice shareholder and other regulatory approvals. Chalice expects to put the acquisition to its shareholders at its Annual General Meeting on or about 17 November 2008.

The agreement with Perilya also includes an option to acquire Perilya's 50% interest in the Tampang porphyry copper-gold Project in Sabah, Malaysia,

As part of the approvals process, Chalice has engaged independent expert's BDO Kendalls Chartered Accountants and Behre Dolbear Australia to consider whether the transaction is fair and reasonable to Chalice shareholders.

If all of the condition precedents are satisfied and the sale proceeds to completion, Perilya shareholders will retain an interest in the Mount Oxide project, via a 73.3% shareholding in Chalice.

Perilya also confirms its commitment following the completion of the sale of the Mount Oxide assets to undertake a review of its shareholding in Chalice. After assessing the capital needs of the resized Broken Hill Operation a prudent capital management program will be initiated, which may include the but not be limited to, an in specie capital return of the Chalice shares to Perilya shareholders.

 

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