Notice of EGM

RNS Number : 3567I

Landore Resources Limited

14 June 2011

 



Landore Resources Limited

("Landore" or the "Company")

Notice of Extraordinary General Meeting

Demerger of Iron Ore assets

The Directors of Landore announce that a circular containing a notice of Extraordinary General Meeting ('EGM'), to be convened for 10.30am on 5 July 2011, at La Tonnelle House, Les Banques, St. Sampson, Guernsey GY1 3HS, is today being sent to shareholders.

The purpose of the EGM is to seek shareholder approval for, inter alia, the demerger of the Company's Lamaune iron ore assets ("Lamaune Assets") by way of a distribution in specie of the entire issued share capital of its newly formed subsidiary, Lamaune Iron Inc. ("Lamaune Newco") to the Company's existing shareholders ("Distribution"). In order to effect the demerger, resolutions will be proposed at the EGM to approve certain alterations to the Company's articles of association and to approve the Distribution itself ("Resolutions").

Following a strategic review of the Company's key assets the Board has determined that the Lamaune Assets, which have significant potential value, should be transferred into a separate entity with, in due course, independent management and finance.

Accordingly the Company's subsidiary, Landore Resources Canada Inc. ("Landore Canada") has transferred the Lamaune Assets into Lamaune Newco, with a long term intention for Lamaune Newco to pursue a public listing of its shares. The Lamaune Assets are part of the Company's flagship property, the Junior Lake Property, which is situated 235 kilometres north-north east of Thunder Bay in the province of Ontario, and is highly prospective for numerous metals including; iron ore, nickel, copper, PGE's, gold and lithium. The Lamaune Assets consist of 23 staked claims covering approximately 4,096 ha in one contiguous block. The major asset which this includes is a resource definition stage, Algoma-type, iron deposit, historically referred to as the Despard-Zmudzinski deposit.

In consideration for the transfer of the Lamaune Assets by Landore Canada to Lamaune Newco, Lamaune Newco has issued a secured loan note to the value of C$6.2 million in favour of Landore Canada ("Loan Note"). The Loan Note is for a term of 18 months at an interest rate of 3% per annum. In addition, the Company has made a loan facility available to Lamaune Newco to borrow up to $100,000 to assist Lamaune Newco with its working capital requirements in the short-term ("Loan Facility"). The Loan Facility is repayable upon demand of the Company and bears interest at a rate of 3% per annum.

As at 31 December 2010, accumulated expenditure incurred in relation to the Lamaune Assets totalled £1,172,288, all of which has been expensed through the Company's profit and loss account in accordance with the Company's accounting policies.

Having completed the transfer of the Lamaune Assets, the Board has resolved, subject to the passing of the Resolutions, to make a distribution of the entire issued share capital of Lamaune Newco to the shareholders pro rata and on the basis of 1 new Lamaune Newco share for every 1 Ordinary Share.

In order to ensure that, going forward, the number of issued shares in Lamaune Newco is kept at an appropriate level, it is intended that a 5 for 1 consolidation of the shares in Lamaune Newco occurs immediately following completion of the Distribution.  The Lamaune Newco shares, which shareholders receive by way of the Distribution, will be in addition to any existing Ordinary Shares held by shareholders, which will continue to be traded on AIM following the Distribution.

In terms of the Company's intentions going forward, as per the announcement made on 6 June 2011, the Company has recently raised £1.75 million before expenses by way of a subscription for Ordinary Shares, the proceeds of which are to be used to finance working capital and exploration and drilling expenditures on the B4-8 nickel zone on the Junior Lake project in the province of Ontario, Canada.

The notice of EGM and form of proxy, together with an explanatory covering letter from the Chairman of the Company, is being posted to shareholders today and can be downloaded from the Company's website at www.landore.com.

Enquiries:

Enquiries:

Bill Humphries / Richard Prickett

Landore Resources Limited

Tel: [phone]

Tel: [phone]

Simon Raggett / Angela Peace

Strand Hanson Limited

Nomad / Broker

Tel: [phone]

David Bick

Financial PR

Tel: [phone]

 

END

 

 

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