Notice of General Meeting and Return of Capital

RNS Number : 0307A

Bezant Resources PLC

18 March 2013

 



18 March 2013

Bezant Resources Plc

("Bezant" or the "Company")

Notice of General Meeting to approve an 8 pence per share Return of Capital

Proposed cancellation of the Company's Deferred Shares

and part of its Share Premium Account

Bezant (AIM: BZT), the AIM listed gold and copper exploration and development company operating in the Philippines and Argentina, announces that it is today posting a circular containing details of a proposed return of capital of, in aggregate, approximately £5.2m (8p per ordinary share) to its Shareholders, other than Gold Fields Netherlands Services BV ("Gold Fields"), together with formal notice of the requisite general meeting.

Highlights:

·      Proposed capital return of approximately £5.2m (8p per Share) to Shareholders, other than Gold Fields, subject to the receipt of Shareholder approval at a duly convened General Meeting.

·      The proposals are also subject to the approval of the High Court and comprise:

o  The cancellation of all of the Company's Deferred Shares (created as a result of historic share capital reorganisations in 2001 and 2003);

o  The cancellation of part of the Company's Share Premium Account; and

o  The return of approximately £5.2m to Shareholders, other than Gold Fields, utilising the sums arising from the Capital Reduction.

·      Shareholders will retain their proportionate equity interests in the Company following implementation of the proposals.

·      Bezant will remain well funded to pursue its current work programme on its Eureka copper-gold exploration project in Argentina following completion of the proposed return of capital.

The General Meeting will be held at 10.00 a.m. on Tuesday 9 April 2013 at the offices of Joelson Wilson LLP, 30 Portland Place, London W1B 1LZ.  The record date for Shareholders (other than Gold Fields) to be entitled to receive the Distribution is 6.00 p.m. on 22 April 2013.

The proposals are unanimously recommended by the Board of Bezant and, subject to receiving the requisite shareholder and High Court approvals, it is currently anticipated that funds will be credited to CREST accounts or cheques dispatched to Shareholders, as appropriate, on or around 30 April 2013.

Bernard Olivier, Chief Executive Officer of Bezant, today commented:

"This proposed return of capital serves to demonstrate the value created for our Shareholders from successfully advancing a promising copper-gold project in the Philippines through the exploration cycle to a JORC compliant Probable Ore Reserves category.

With an extended Option now in place with Gold Fields for the potential disposal of our Mankayan Project and a strong balance sheet, we are proposing to return 8p per Share (approximately £5.2m in aggregate) to Shareholders, other than Gold Fields. Subject to obtaining Shareholder approval for all of the Resolutions at the forthcoming General Meeting and the approval of the High Court, we currently intend to distribute the funds by the end of April 2013.

With Gold Fields now the Company's largest shareholder, we will continue to seek to add value to our copper-gold assets and intend to make a further future, more significant, return of monies to all Shareholders (including Gold Fields) in the event that Gold Fields elects to exercise its Option to acquire the Mankayan Project for US$60.5m prior to its scheduled expiry date on 31 January 2014."

For further information, please contact:

Gerry Nealon Executive Chairman, Bezant Resources Plc                              Bernard Olivier Chief Executive Officer, Bezant Resources Plc     Laurence Read Director / Communications Officer, Bezant Resources Plc                            James Harris / Matthew Chandler / David Altberg Strand Hanson Limited                                                           James Maxwell / Jenny Wyllie N+1 Singer                                               or visit http://www.bezantresources.com

Tel: [phone] Tel: [phone] Tel: [phone] Tel: [phone] Tel: [phone] Tel: [phone]

Introduction

In the Company's announcement of 10 December 2012, it was stated that, following the extension of the period in which Gold Fields can exercise its Option to acquire the Company's Mankayan Project and completion of the Subscription by Gold Fields, both of which were duly approved by Shareholders on 10 January 2013, it would investigate means by which an appropriate portion of the aggregate proceeds from both the non-refundable Option Extension Fee and the Subscription could be used to fund an initial return of capital to Shareholders, excluding Gold Fields, in the first half of 2013.

Accordingly, the Company today announces details of its proposal to reduce the Company's capital by the cancellation of all of the Deferred Shares in the capital of the Company and part of the Share Premium Account of the Company (the "Capital Reduction") and to return an amount of approximately £5.2m (8 pence per Share) to Shareholders, other than Gold Fields. Shareholders will retain their proportionate equity interests in the Company following implementation of the proposals.

The purpose of this announcement is to provide details of the Capital Reduction and the Resolutions to be proposed to Shareholders at the forthcoming General Meeting. The Board considers that the Resolutions to be proposed at the General Meeting are in the best interests of the Company and its Shareholders as a whole and unanimously recommends that Shareholders vote in favour of the Resolutions.

Background to the Capital Reduction

Further to the Company's comprehensive review of the strategic options available for its Mankayan Project and the subsequent sale process, the Company entered into a conditional Option Agreement with Gold Fields on 4 October 2011 (the "Exchange Date") pursuant to which Gold Fields was granted an Option to acquire the entire issued share capital of Asean, a wholly owned subsidiary of Bezant. Asean holds the group's entire interest in its flagship copper/gold Mankayan Project which as at 30 June 2012 had an audited carrying value of approximately £7.68m. The Option Agreement was conditional on Shareholder approval, which was provided by Shareholders at a General Meeting of the Company held on 26 October 2011. Pursuant to the terms of the Option Agreement, the Company received a non-refundable upfront option fee of US$7m from Gold Fields.

On 7 December 2012 (the "Extension Exchange Date"), the Company entered into the Option Extension Agreement with Gold Fields, conditional on Shareholder approval, which was duly provided at a General Meeting of the Company held on 10 January 2013, in order to extend the period within which the Option may be exercised to 31 January 2014 in return for an additional non-refundable upfront cash payment of US$2.5m. The Option Extension Fee is to be deducted from the Option exercise price in the event that Gold Fields exercises the Option on or before the end of the extended option period.

On the Extension Exchange Date, the Company and Gold Fields also entered into a Subscription Agreement, which was also conditional on Shareholder approval which was duly provided at the General Meeting of the Company held on 10 January 2013. Pursuant to the Subscription Agreement, Gold Fields subscribed for a total of 17,945,922 new Shares in the capital of the Company for an aggregate subscription amount of US$7.5m.

In the Circular sent to Shareholders on 10 December 2012, the Company indicated that it intended to use an appropriate portion of the aggregate proceeds from both the non-refundable Option Extension Fee and the Subscription to return cash to Shareholders, other than Gold Fields, in the first half of 2013.

Pursuant to the terms of the Subscription Agreement, Gold Fields agreed not to participate in the first scheme or process for the return of funds to Bezant's shareholders (the "Distribution"). Gold Fields' restricted entitlement expires on the earliest of the exercise of the Option by Gold Fields, the completion of the Distribution by the Company and 30 September 2013 (the "Non-Participation Period"). Gold Fields will be entitled to participate, on a pari passu basis with the other Shareholders, in any distributions made after the Non-Participation Period.

As the Company currently has negative distributable reserves, in order to return money to Shareholders it is necessary to effect the Capital Reduction.

The Company's issued share capital currently consists of 82,939,525 ordinary shares of £0.002 each nominal value, 339,581 deferred shares of £0.99 each nominal value and 7,959,196 deferred shares of £0.04 each nominal value. The number of deferred shares of £0.99 each nominal value in issue has previously been wrongly stated in the accounts of the Company as being 625,389. There have also been errors concerning the number of deferred shares of £0.99 each nominal value in issue in the filings made by the Company with the UK Registrar of Companies. These errors go back to December 2003 and were noted in the AIM Admission Document issued by the Company on 4 September 2006 but the accounts of the Company and the filings with the UK Registrar of Companies were not corrected at that time. Accordingly, a correction will be noted in the Company's forthcoming interim results to 31 December 2012 and the Companies House filings have now been amended to resolve this administrative issue.

The Company's Share Premium Account currently stands at £35,315,664. It is proposed that all the Deferred Shares and part of the Share Premium Account be cancelled and an amount of approximately £5.2m be returned to Shareholders, other than Gold Fields, by way of a return of capital.

If approved by Shareholders and subsequently confirmed by the High Court in the terms proposed by the Company, the effect of the Capital Reduction will be to release the entire nominal value of both classes of the Deferred Shares in the capital of the Company and part of the amount standing to the credit of the Share Premium Account of the Company so that approximately £5.2 million (representing 8 pence per Share calculated by reference to the expected number of Shares in issue at the Record Date, excluding the Shares held by Gold Fields, and assuming no exercise of options or warrants over any Shares) may be returned to Shareholders, other than Gold Fields, as a return of capital.

The implementation of the Capital Reduction is subject to a number of criteria and legal processes which are explained further below.

Capital Reduction - Deferred Shares

As at 18 March 2013, the Company's issued share capital included 339,581 deferred shares of £0.99 each nominal value and 7,959,196 deferred shares of £0.04 each nominal value. The nominal value of the Deferred Shares is part of the capital of the Company and is not distributable.

The Deferred Shares arose as a result of past re-organisations of the Company's share capital. The deferred shares of £0.04 each were created on 31 December 2001 when each of the then issued ordinary shares of £0.05 each in the capital of the Company were divided into one ordinary share of £0.01 each and one deferred share of £0.04 each. The deferred shares of £0.99 each were created pursuant to a resolution passed by the Company's shareholders on 24 November 2003, effective from 30 December 2003, as part of a Company Voluntary Arrangement whereby every 100 of the ordinary shares of £0.01 each were, firstly, consolidated into one ordinary share of £1 each and, secondly, each new ordinary share of £1 each was sub-divided into one ordinary share of £0.01 each nominal value and one deferred share of £0.99 each nominal value. This resulted in there being 339,581 ordinary shares of £0.01 each and 339,581 deferred shares of £0.99 each in issue.

As mentioned above, the number of deferred shares of £0.99 each nominal value was subsequently wrongly reported in the accounts of the Company and the filings with the UK Registrar of Companies as being 625,389. The Company's filings at Companies House have now been corrected and the adjustment to the number of deferred shares of £0.99 each in issue will also be noted in the Company's forthcoming interim results to 31 December 2012.

The ordinary shares of £0.01 each created at the end of 2003 were subsequently sub-divided into ordinary shares of £0.0001 each on 30 December 2003 and then consolidated into ordinary shares of £0.002 each in September 2006. The nominal value of the ordinary shares has remained at £0.002 each since that time.

Pursuant to Article 3(d) of the Articles, on 1 March 2013, the Company designated Lawnswood Nominees (Holdings) Limited ("Lawnswood") to accept the transfer to it of all the Deferred Shares for an aggregate consideration of £0.000001 per share, being £8.30 in aggregate, as provided for in the Articles (the "Transfer"). In accordance with the same provision of the Articles, on that date the Company appointed Mr Sheldon Cordell of Joelson Wilson LLP, the Company's solicitors, to execute the documentation to effect the Transfer on behalf of the holders of the Deferred Shares. As no former holder of any Deferred Shares was entitled to more than £5.00 as a result of the Transfer, the consideration was paid to the Company in accordance with the Articles. Lawnswood, as the holder of all the Deferred Shares after the Transfer, subsequently consented in writing to the Capital Reduction and Return of Capital proposals for the purposes of the Articles and the Companies Act. 

The Deferred Shares carry only very limited rights to participate in the capital of the Company on a winding-up and carry no voting or dividend rights. These rights are such as to make the Deferred Shares effectively worthless in the hands of their holder(s). However, in the Company's books, the capital paid up on the Deferred Shares represents a capital reserve of £654,553.03, being the aggregate nominal value of all the Deferred Shares of both classes. Cancelling the Deferred Shares with the prior approval of Shareholders by way of a special resolution and subsequent confirmation by the High Court, will remove them from the Company's balance sheet and permit an amount of £654,553.03 to be returned to Shareholders.

Capital Reduction - Share Premium Account

As at 30 June 2012, the Share Premium Account of the Company stood at a sum of approximately £30,691,000, which arose on the issue of shares at a premium. Adding to this figure the premium on the shares issued to Gold Fields on 10 January 2013 increases the Share Premium Account to approximately £35,315,664. At 30 June 2012, the profit and loss account of the Company had a deficit in the sum of approximately £18,925,000.

Share premium is treated as part of the capital of the Company and arises on the issue by the Company of shares at a premium to their nominal value. The premium element is credited to the Share Premium Account. The Company is generally precluded from the payment of any dividends or other distributions or the redemption or buy back of its issued shares in the absence of sufficient distributable reserves, and the deferred share capital and the Share Premium Account can be applied by the Company only for limited purposes.

In particular, the Share Premium Account is a non-distributable capital reserve and the Company's ability to use any amount credited to that reserve is limited by the Companies Act. However, with the approval of its shareholders by way of a special resolution and subsequent confirmation by the High Court, a company may reduce or cancel its share premium account and in certain circumstances either return all or part of the sum arising to shareholders as a return of capital, or credit some or all of such sum arising to its profit and loss account.

To the extent that the release of such a sum from the Share Premium Account creates or increases a credit on the profit and loss account, that sum represents distributable reserves of the Company

Capital Reduction - Procedure

In order to effect the Capital Reduction the Company firstly requires the authority of its Shareholders by the passing of special resolutions of the Company at the General Meeting. Resolutions 1, 2 and 3 are proposed in this regard - Resolutions 1 and 2 being to effect the cancellation of the two classes of Deferred Shares and Resolution 3 being to effect the cancellation of part of the Share Premium Account.

Thereafter, Resolution 4 is to permit the return of an amount equal to the amount of capital cancelled to Shareholders, other than Gold Fields.

Secondly, the Capital Reduction must be confirmed by the High Court, to which the Company will make an application if all the special resolutions are passed.

The Capital Reduction will take effect when the Order of the High Court confirming it and a statement of capital approved by the High Court have been registered with the Registrar of Companies. The Effective Date of the Capital Reduction is currently expected to be 23 April 2013. That date is likely to be within a few working days after the hearing at which the Capital Reduction is confirmed by the High Court, which is currently expected to be on or around 22 April 2013. If the Capital Reduction becomes effective on the basis that the proposed return of capital is permitted by the Court, it is the Company's intention to pay this capital to Shareholders, other than Gold Fields, as soon as practicable thereafter. It is expected that cheques in respect of the Distribution will be dispatched on or around 30 April 2013 to Shareholders who hold their Shares in certificated form and that CREST accounts of Shareholders who hold their Shares through CREST will be credited on or around the same date.

In order to approve the Capital Reduction, the High Court will need to be satisfied that the interests of the Company's creditors will not be prejudiced by the Capital Reduction. The Company will be seeking written consent to the Capital Reduction from certain of its creditors, including Gold Fields. For the benefit of those of its creditors who do not consent or from whom consent will not be sought, the Company may be obliged to provide security in a form acceptable to the High Court. This is in order that the Capital Reduction can be confirmed by the High Court on terms that will permit any part of the sum released by the Capital Reduction either to be returned to Shareholders as a capital payment or credited to the profit and loss account of the Company so as to create distributable reserves.

If the Company is unable in the timetable proposed to obtain consent from, or is unable or unwilling to provide security (where security is required) for all such creditors, then the amount released by the Capital Reduction, when the Capital Reduction is confirmed by the High Court, will remain undistributable for the time being until any such outstanding consents have been obtained, security (where security is required) has been put in place, or the relevant obligations have been discharged, and the Company may be required to give an undertaking to that effect to the High Court.

The Board reserves the right (where necessary by application to the High Court) to abandon, discontinue or adjourn any application to the High Court for confirmation of the Capital Reduction, and hence the Capital Reduction itself, if the Board believes that the terms required to obtain confirmation are unsatisfactory to the Company or if as the result of a material unforeseen event the Board considers that to continue with the Capital Reduction is inappropriate or inadvisable.

The Capital Reduction does not affect the voting or dividend rights of any Shareholder, or the rights of any Shareholder on a return of capital.

The Resolutions          

An explanation of the Resolutions which are to be proposed as special business at the General Meeting is set out below:

Resolution 1: Capital Reduction - Cancellation of Deferred Shares of £0.99 each nominal value

Resolution 1 cancels the deferred shares of £0.99 each nominal value in the capital of the Company and reduces the amount standing to the credit of the share capital account of the Company in respect of those shares.

Resolution 2: Capital Reduction - Cancellation of Deferred Shares of £0.04 each nominal value

Resolution 2 cancels the deferred shares of £0.04 each nominal value in the capital of the Company and reduces the amount standing to the credit of the share capital account of the Company in respect of those shares.

Resolution 3: Capital Reduction - Cancellation of Part of the Share Premium Account

Resolution 3 cancels part of the amount standing to the credit of the share premium account of the Company and reduces the amount of the share premium account accordingly.

The Capital Reduction does not affect the number of Shares in issue or the nominal value per Share.

Resolution 4: Return of Capital

Resolution 4 provides that upon the Capital Reduction taking effect, such amount of the surplus capital arising from the reduction as is determined by the Board is returned to Ordinary Shareholders, other than Gold Fields, pro rata as a capital payment.

Resolution 5: Amendment to the Company's Articles of Association

Resolution 5 amends the Articles by deleting references to the Deferred Shares and the rights attaching to them. The amendment is to reflect the proposed cancellation of the Deferred Shares and provides that the Company's authorised share capital shall thereafter consist of a single class of ordinary shares. Although, since 1 October 2009, following the implementation of the relevant provisions of the Companies Act 2006, a company is no longer required to have an authorised share capital, the existing reference to it has been retained in the Articles to confirm the nominal value of the ordinary shares and it also acts as an absolute upper limit on the number of Shares that the Company may issue. The Directors intend to continue to seek general authority from Shareholders to allot further Shares at future Annual General Meetings and/or a specific authority in addition to, or in substitution therefor, at future general meetings in accordance with the requirements of the Companies Act.

Resolution 6: Further amendment to the Company's Articles of Association

Resolution 6 amends the Articles to reflect the full implementation of the Companies Act 2006 and the repeal of the remaining provisions of the Companies Act 1985 since the Articles were last amended in October 2008. It also corrects a number of cross-referencing errors in the Articles. These are just "house-keeping" matters and no changes of substance are being proposed.

General Meeting

A Circular containing a formal notice of a General Meeting to be held at the offices of Joelson Wilson LLP, 30 Portland Place, London WIB 1LZ at 10.00 a.m. on Tuesday 9 April 2013 is today being posted, together with a form of proxy, to those shareholders who have elected to receive hard copy shareholder communications from the Company and will shortly be made available to download from the Company's website at www.bezantresources.com.

Unless the context otherwise requires, defined terms used in this announcement shall have the meanings given to them in the Circular dated 18 March 2013.

Expected Timetable of Principal Events

Publication of the Circular	18 March 2013
Latest time and date for receipt of Forms of Proxy for the General Meeting	10.00 a.m. on 7 April 2013
Date and time of General Meeting	10.00 a.m. on 9 April 2013
Record Date and time for determining entitlements to the Distribution	6.00 p.m. on 22 April 2013
Expected date for confirmation of the Capital Reduction by the High Court	22 April 2013
Expected Effective Date of the Capital Reduction	23 April 2013
Credit CREST accounts with or dispatch cheques in respect of the Distribution	on or around 30 April 2013

Notes:

(1)  All references in this announcement to time are to London time.

(2)  Capital will be returned to those persons who are Shareholders on the Record Date, other than Gold Fields.

(3)  If any of the above times or dates should change, the revised times and/or dates will be notified to Shareholders via an appropriate announcement on a Regulatory Information Service.

(4)  All events in the above timetable following the holding of the General Meeting are conditional upon: (i) the passing of the Resolutions; (ii) approval of the Capital Reduction and Distribution by the High Court; and (iii) registration of the High Court Order confirming the Capital Reduction and Distribution with the UK Registrar of Companies.

 **ENDS**

Notes to editors:

Mankayan Project

Bezant is currently focussed primarily on the copper and gold mineral sector and its flagship project is its Mankayan copper/gold project situated in the Mankayan-Lepanto mining district of the Philippines, an area of established copper and gold mining.  The deposit is located approximately 240km north of Manila and 6km east of the copper/gold mine owned and operated by Lepanto Consolidated Mining Company.  Since its discovery in the early 1970s, extensive drilling (more than 45,000 metres over 48 holes) and metallurgical work has been undertaken by Goldfields Asia Ltd, Pacific Falkon Resources Corp and others.  Bezant currently has a JORC compliant mineral resource estimate of 221.6 million tonnes Indicated and 36.2 million tonnes Inferred, grading at 0.49% for copper and 0.52g/t for gold, at a 0.4% copper cut-off.  This equates to an Indicated Resource of 2.42 billion pounds (1.1 million tonnes) of copper and 3.7 million ounces of gold, with a further Inferred Resource of 0.44 billion pounds (0.2 million tonnes) of copper and 600,000 ounces of gold.  In December 2010, the Company upgraded its independent Mankayan resource estimate to JORC Compliant Probable Ore Reserves of 189 million tonnes grading at 0.46% copper and 0.49g/t gold, resulting in total Recoverable Metal Reserves of 811,000 tonnes of copper and 2.21 million ounces of gold.  A Total Mining Inventory Statement was also reported of approximately 400Mt of ore at an average grade of 0.38% copper and 0.42g/t gold.

Eureka Project

The 11 licences comprising the Eureka Project are located in north-west Jujuy near to the Argentine border with Bolivia and are formally known as Mina Eureka, Mina Eureka II, Mina Gino I, Mina Gino II, Mina Mason I, Mina Mason II, Mina Julio I, Mina Julio II, Mina Paul I and Mina Paul II, covering, in aggregate, an area in excess of approximately 5,500 hectares and accessible via a series of gravel roads.  To date, no JORC compliant or equivalent resource estimate has been established, but historic exploration activities have been conducted on the project area since the 1980s by Minera Penoles, Codelco and Mantos Blancos, with unaudited unclassified estimates in the order of, in aggregate, up to approximately 62 million tonnes grading at 1% copper and approximately 52,000 ounces of gold as credits.  The copper oxide mineralisation occurs in loosely consolidated conglomerates and is the focus of the project's economic potential.  The near surface mineralisation is amenable to heap leaching, while the carbonate content of the conglomerate is reported to be low, thereby reducing potential acid consumption.

 

END

 

 

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