Proposed Acquisition of Tri-S

RNS Number : 8001P

Canisp PLC

23 July 2010

 



23 July 2010

Canisp Plc

("Canisp" or the "Company")

Proposed Acquisition of Tri-Star

Proposed Rule 9 Waiver, Subscription for New Shares

Board Changes and Name Change

Following the Company's announcement on 12 February 2010, the directors of Canisp (the "Directors") announce that the Company yesterday entered into a conditional agreement to acquire Tri-Star*, which holds a mining licence and permit to explore for and produce antimony in the Gediz district of Turkey, for a maximum consideration of £300,000 (the "Proposed Acquisition"). The Proposed Acquisition is subject to a number of conditions, summary details of which are set out below.

About Tri-Star

Tri-Star, which is incorporated in Turkey, holds licences and permits in respect of the mining and exploitation of mineral rights to the Goynuk antimony mine (the "Goynuk Mine"), in the Gediz district of Turkey.  The exploitation licences grant the company the right to exploit non-ferrous metals and covers base and precious metals such as copper, lead, zinc, arsenic, antimony, gold and silver. 

Tri-Star Strategy

The strategy of Tri-Star is to evaluate the antimony mineral resource of the Goynuk Mine through initial drilling and advanced geophysical techniques, in order to delineate a mineable reserve.

If the antimony occurrence at the Goynuk Mine is proved to be of economic significance, the Directors believe that having a deposit which constitutes an alternative source to the material supplied by the main exporter China and which is in closer proximity to key European customers will be of significant strategic importance in the context of the wider European antimony market. 

As is customary for a company at this stage of development, Tri-Star is currently not generating a profit and, in the financial year ended 31 December 2009, Tri-Star generated a loss of 17,124 Turkish Lira (approximately £7,316) and had net assets of 466,368 Turkish Lira (approximately £199,256) as at that date.

Terms of the Acquisition and Approvals

The consideration is to be satisfied as to £150,000 payable in cash on completion of the Proposed Acquisition, with a further £150,000 payable in cash subject to certain milestones being achieved (the "Deferred Consideration").

The Deferred Consideration will be payable by the Company following (i) the provision of sufficient evidence relating to the commercial viability of the Goynuk Mine and (ii) the raising of funding sufficient to enable continued development of the mine and to cover current contractual obligations which would arise from making that decision.

It is proposed that a group of related parties will subscribe for new ordinary shares in Canisp to augment the Company's working capital position. The anticipated subscription in the Company will require the Takeover Panel to approve a waiver of Rule 9 of the Takeover Code ("Waiver"). Accordingly, the Company is in the process of seeking the Waiver. In addition, the Proposed Acquisition constitutes a reverse takeover under the AIM Rules for Companies, and accordingly is subject to shareholder approval.  Assuming the Waiver is granted, a detailed circular, comprising an AIM admission document, containing full details of the Waiver and the Proposed Acquisition, will be sent to the Company's shareholders, seeking shareholder approval for, inter alia, the Waiver, the Proposed Acquisition and a change in the name of the Company to Tri-Star Resources plc.

The Company intends to enter into a facility agreement with EMMEF Investments Limited ("EMMEF"), pursuant to which EMMEF will make available to the Company a facility of £750,000 until 30 June 2011 which falls due for payment by 30 June 2012, for the purpose of undertaking exploration of the Goynuk Mine, if required.

As part of the Proposed Acquisition, the Company intends to effect a number of board changes, with the appointment of a number of directors with relevant resources expertise, further details of which will be set out in the Company's AIM admission document. The Company's trading facility on AIM will remain suspended until the AIM admission document referred to above is published, which is expected in the near future and at which time the Company will make a more detailed announcement with regards to the Proposed Acquisition, board appointments, the subscription and related matters.

The Antimony Market

Antimony is an important mineral for the global economy and is also relatively rare. According to a recent EU report on critical raw materials, antimony is considered to be of high relative economic importance and high relative supply risk.  The high level of supply risk is mainly due to the fact that the bulk of the world's known reserves are located in China, which has stopped accepting applications for new mines to produce antimony until June 2011, in order to conserve resources.  Antimony's economic importance is enhanced by its lack of substitutes and its low recycling rates. It was reported, in April 2010, that antimony prices had soared by as much as US$700 per tonne and has now reached a market price of US $9,250 per tonne. Some EU member states have indicated their support for a suspension of import duties payable on antimony. The consumption of antimony, predominantly in the form of its trioxide salts as a flame retardant, is a structurally expanding market, driven mostly by safety and regulatory concerns.  Antimony is also used in metal supply, storage batteries, safety matches and glass manufacture. 

www.canispplc.com

*The full name of Tri-Star is Üç Yildiz Antimon Madencilik Ithalat Ve Ihracat Sanayi ve Ticaret Anonim Sirketi.

Enquiries:

Strand Hanson Limited (Nomad) James Harris / Paul Cocker / Liam Buswell	Tel: [phone]
Keith, Bayley, Rogers & Co Limited (Broker) Simon Frost / Brinsley Holman	Tel: [phone]
Hansard Communications Justine James /John Bick	Tel: [phone]

 

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