Union plans $4m raising for takeover bid

Union Resources says it has secured a $4 million underwriting deal for a proposed rights issue with funds to support its takeover bid for Bonaparte Diamond Mines.

The underwriting deal is with Novus Capital and Union shareholder Johnny Kahlbetzer.

The agreement is conditional on Union receiving more than 50 per cent of acceptances to its Bonaparte takeover bid.

The Queensland company last week announced its intention to launch an offer for Bonparte and is currently in the process of finalising details as part of its bidder's statement.

Union said its takeover offer will be superior to that of Minemakers' all-scrip offer, which has been recommended by the target's board.

Minemakers, which is advancing its Wonorah phosphate project in the Northern Territory, is offering one of its shares for every 10 Bonaparte shares held.

Minemakers currently holds 39.3 per cent of Bonaparte.

Bonaparte is currently in a joint venture over the Sandpiper-Meob phosphate project off the coast of Namibia.

The announcement is below:

Union Resources Limited (UCL or Union) is pleased to announce that they have secured a conditional underwriting up to $4 million for their proposed rights issue, to support Unions bid for its joint venture partner, Bonaparte Diamond Mines NL (BON or Bonaparte) previously announced to ASX on 17 April 2009.

The underwriting is subject to conditions including the Company receiving acceptances for more than 50% (by number) of the sum of all the fully paid ordinary shares in the capital of Bonaparte on issue (including any Bonaparte shares issued by the exercise of convertible securities during the offer period of the takeover bid announced by the Company to ASX on 17 April 2009).

The underwriting is being provided by Novus Capital Ltd and is fully sub underwritten by existing UCL shareholder and major agricultural industry player, Mr J I (Johnny) Kahlbetzer through his private investment company.

In the light of this announcement, Bonaparte shareholders will have certainty that Union has the capacity to satisfy the condition to Union's takeover of completing a $4mn right issue.

The combined entity will be much better placed to develop the Sandpiper-Meob Phosphate Project.

The confirmation of the underwriting provides certainty to all associated with UCL

- That it can proceed with the bid for Bonaparte in the full knowledge that the rights issue financing is in place from an impeccable source.

- That the combination of Union and its joint venture partner Bonaparte, provides unassailable logic that it is the best way to develop the Sandpiper-Meob Phosphate Project.

- That it can capitalise on the fact that its estimated cash cost per tonne is considerably

below that of Minemakers published estimates and that of many other deposits. Union is in the final stages of documenting the takeover bid announced last Friday, and is very confident that it will be a much more attractive proposition for Bonaparte shareholders than the one being offered by Minemakers Limited (MAK).

Union is being advised by Novus Capital Ltd and Empire Securities Group Pty Ltd.