22/07/2008 - 10:56

Zedex boosts stake in Canadian company

22/07/2008 - 10:56

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Balcatta-based gold company Zedex Minerals Ltd will boost its interest in Canadian resource company Olympus Pacific Minerals Inc in a bid to become a leading player in the Asia Pacific gold sector.

Zedex boosts stake in Canadian company

Balcatta-based gold company Zedex Minerals Ltd will boost its interest in Canadian resource company Olympus Pacific Minerals Inc in a bid to become a leading player in the Asia Pacific gold sector.

Under an agreement, Zedex will acquire a further 40 million ordinary shares and nearly 10 million warrants in Olympus.

On completion of the offer, Zedex's stake in Olympus will be 30.9 per cent in shares, 49.4 per cent in warrants and 32.3 per cent in outstanding Olympus shares on a diluted basis.

In consideration for the Olympus acquisition, Zedex has agreed to issue two fully paid ordinary shares for each Olympus share and two unlisted Zedex options.

Each Zedex option is exercisable until August 28, 2009 into one Zedex share at an exercise price of 40 cents per Zedex share.

Olympus holds the Bong Mieu mine and the Phuoc Son gold project in Vietnam while Zedex holds the majority interest in the Bau gold project in Malaysia and the Tien Thuan gold project in Vietnam.

Below is the full announcement:

Zedex Minerals Limited ("Zedex") (ASX: ZDX) announces it has entered into private agreements to acquire further shares and warrants of Toronto Stock Exchange listed mining and exploration company, Olympus Pacific Minerals Inc. ("Olympus") (TSX: OYM) thereby increasing its ownership in the gold reserves and mining operations of
Olympus, Vietnam's leading operating gold mining company.

Olympus is currently in production at Bong Mieu which has an NI 43-101 Mineral Reserve and Resource Estimate of 845,000 oz gold and gold equivalent (see below). Zedex has a 2% royalty over Olympus' share of production.

Olympus is also developing Vietnam's second modern gold mine at Phuoc Son which has an NI 43 101 Mineral Reserve and Resource Estimate of 647,000 oz gold or gold equivalent (see below) whilst ongoing drilling programmes are targeting a further 550,000 to 750,000 ounces based on the ore body continuity. A recently completed independent technical feasibility report recommended continuing its development to a mine.

Zedex holds the majority interest and is the operator of the Bau Gold Project in Malaysia and the Tien Thuan Gold Project in Vietnam. Zedex considers the Olympus assets to have significant upside potential and will work to unlock the value contained within Olympus' portfolio of mining, exploration and development properties. Zedex is making the acquisitions to increase its ownership of Olympus for investment purposes and may acquire ownership or control over additional Olympus shares depending on market conditions and other strategic considerations.

Zedex's chairman, John Seton, said today that he " is extremely pleased that this transaction gained the support of a number of Olympus's institutional holders, including Halman Aldubi Group, Macquarie, Phoenix Gold Fund and a large UK fund manager, and he welcomed the strengthening of Zedex's shareholder register as a result.

Furthermore, this strategic stake in Olympus and its associated gold resources and mines, provides an important step in the path to building Zedex into a leading player in the Asia Pacific gold exploration and production sector".
Zedex shares trade on the ASX and closed on July 21, 2008 at AUS$0.165. Olympus shares trade on the Toronto Stock Exchange, and have traded in the range of CAD$0.18 to CAD$0.73 over the last 12 months, and closed on July 21, 2008 at CAD$0.18 (AUD$0.182).

The agreements allow Zedex to acquire a further 40,332,028 common shares in Olympus (the "Olympus shares") and 9,654,850 warrants of Olympus (the "Olympus warrants"), representing 17.36% of the Olympus shares outstanding and 49.39% of the Olympus trading warrants outstanding.

Prior to entering into the agreements Zedex held 31,396,849 Olympus shares and no Olympus warrants, representing 13.51% of the outstanding Olympus shares, 0% of the outstanding Olympus warrants and 12.46% of
the outstanding Olympus shares on a diluted basis. Upon completion of the acquisitions, Zedex will hold 71,728,877 Olympus shares and 9,654,850 Olympus warrants representing 30.87% of the outstanding Olympus shares, 49.37% of the outstanding Olympus warrants and 32.30% of the outstanding Olympus shares on a diluted basis.

The private agreements are with non-Canadian shareholders and made entirely outside Canada. Zedex is not required under any legislation to make any further acquisitions or offers to acquire additional Olympus securities.

In consideration for the Olympus securities to be acquired, Zedex has agreed to issue two fully paid ordinary Zedex shares (the "Zedex shares") for each Olympus share and two unlisted Zedex options (the "Zedex options") for each Olympus warrant. Each Zedex option is exercisable until August 28, 2009 into one (1) Zedex share at an
exercise price of Aus $0.40 per Zedex share. This would result in the issue of a total of 80,664,056 Zedex shares and 19,309,700 Zedex options. The exercising of these options would provide Zedex with $7,723,880 additional capital.

The private purchase agreements are conditional upon Zedex obtaining Zedex shareholder approval pursuant to ASX Listing Rules 7.1 and, where applicable, ASX Listing Rule 10.11. The shareholder meeting is scheduled to be held on 25 August 2008, and the notice of meeting and explanatory memorandum will be sent to shareholders this week.

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