Africo Resources enters into CAD$100 million private placement agreement with BVI company
Africo Resources Ltd., a Canadian TSX-listed mineral company focused on developing, acquisition and exploration of metal and gold assets in Africa, announced that it has entered into a Subscription Agreement for a private placement of CAD$100 million at a price of $2.50 per unit with Camrose Resources Limited, incorporated in the British Virgin Islands. The main shareholder of this BVI company is a trust for the benefit of family members of Dan Gertler.
By the terms of agreement, each unit will consist of a common share and one half of a share purchase warrant, and each whole warrant will entitle Camrose to acquire an additional common share at a price of $3.50 per share for an eighteen month period following closing.
There is number of conditions that should be satisfied for the completion of the private placement – including termination of Africo’s Shareholders Rights Plan Agreement, regulatory approval and the approval of Canadian company’s shareholders.
After the placement is completed, BVI-incorporated Camrose Resources will own approximately 60% of the outstanding share capital of Africo. It will also have majority representation on the Board of Africo, and the right to participate in future financings in order to maintain its percentage equity ownership.
Along with execution of the Subscription Agreement, Camrose Resources (BVI) has loaned Cdn $2 million to Africo. This loan will mature at the completion of the Subscription Agreement or the termination of the Subscription Agreement, or on August 31, 2008. Also, the BVI company has entered into an agreement to acquire the outstanding shares of Akam Mining Sprl, Africo’s subsidiary which holds, indirectly through Swanmines Sprl, the Kalukundi property. Camrose and Africo have entered into an agreement pursuant to which Akam will unequivocally confirm ownership of 75% of the outstanding shares of Swanmines. Africo is advised that Camrose anticipates completing the transactions with Akam shortly; the completion of the private placement and the Akam Agreement will result in Camrose owning approximately 63% of the outstanding share capital of Africo.
Additionally, Africo has agreed to acquire a 75% interest in the Mashitu property, which consists of an exploration permit for copper, cobalt, gold and nickel, and covers approximately 34.82 square kilometres, from the BVI company’s affiliate. The purchase price will be based on a valuation to be prepared by an independent expert agreed to by the parties, and will be paid in common shares of Africo at a price per share of $2.50.