Pan African Mining Corp. to be Acquired by Asia Thai Mining Co., Ltd.
10:30 EDT Monday, April 14, 2008
FSC / Press Release
Pan African Mining Corp. to be Acquired by Asia Thai Mining Co., Ltd.
Vancouver, British Columbia CANADA, April 14, 2008 /FSC/ - Pan African Mining Corp. (PAF - TSX Venture, P2A - FWB, PAFRF - OTCBB_Pink_Sheets), (the "Company"), Asia Thai Mining Co. Ltd. ("ATM") and 0819615 B.C. Ltd. (the "Purchaser"), a wholly owned subsidiary of ATM, are pleased to announce that they have entered into an agreement for the Purchaser to offer to purchase all of the outstanding common shares of the Company at the price of $4.00 cash per share and for the Purchaser to also offer to purchase for cash all outstanding warrants and all outstanding options (vested and not yet vested) of the Company for a price equal to the difference between $4.00 and the exercise price of the respective warrant or option (the "Transaction"). Prior to the completion of the Transaction, the Company will establish a new entity ("NewCo") and transfer to NewCo the following: (i) $2,500,000 cash, and (ii) all of the shares of the Company's non-Madagascar subsidiaries, namely, PAM Botswana (Pty) Ltd., PAM Minerals Namibia (Pty) Ltd. and PAM Mocambique Limitada. Subject to analysis of tax implications and any required approvals, the Company plans to distribute the shares of NewCo to shareholders of the Company as of a record date to be hereafter determined by way of spin off or similar mechanism. The purchase price represents an 84.3% premium over the Company's average closing price for the 20 preceding trading days on the TSX Venture Exchange. The Transaction is anticipated to close on or about May 31, 2008, subject to obtaining necessary approvals and fulfillment of conditions of the Transaction.
The structure of the Transaction will be determined by mutual agreement after taking into consideration tax and other matters, and may be either a formal take over bid, an amalgamation or plan of arrangement. If a formal bid is undertaken, it will be subject to there having been validly deposited and not withdrawn not less than 66 2/3% of the shares of the Company then outstanding. In the event of an amalgamation or plan of arrangement, it will be subject to the approval of at least 66 2/3% of the votes present in person or by proxy at a special meeting of the shareholders of the Company. The formal documentation will include a Pre-Acquisition Support Agreement of the Company confirming the support of the Board of the Company for the Transaction and its agreement not to solicit any competing offers, a Principal Shareholder Support Agreement confirming the support of Irwin A. Olian for the Transaction to be executed by April 15, 2008 and a Lock-up Agreement from directors and officers of the Company. The Company has agreed to pay a break fee of $3,000,000 in certain circumstances. In a separate transaction, Purchaser will be acquiring from Irwin Olian his approximate 1% interest in the Company's Madagascar subsidiaries for a price which is economically equivalent to the $4.00 per share being paid for shares of the Company.
The Transaction is subject to the completion of due diligence and a number of other standard conditions, including all necessary regulatory and shareholder approvals. The Purchaser has represented that the cash consideration payable to shareholders of the Company is in place and accordingly there is no financing condition to closing of the Transaction.
A Special Committee of our Board of Directors has been established to assist with this transaction. The Special Committee is chaired by Gregory Sparks, P.Eng., and also includes Benjamin Catalano and Dr. Edward Schiller. Dr. Peter Christopher acts as an advisor to the Special Committee. Mr. Sparks and Drs. Schiller and Christopher are all Qualified Persons within the meaning of NI 43-101.
According to Irwin Olian, CEO of the Company, "We view this transaction as highly beneficial to the shareholders of the Company as it provides liquidity at a reasonable valuation to our shareholders in this most difficult of financial environments and a significant reward for their financial investments in the Company. At the same time, ATM and its affiliates are highly experienced in mining operations and have access to the financial and technical resources that may be required to bring the Madagascar projects controlled by the Company to fruition. Thus, the Transaction is likely to enhance the prospects for successful commercial mining operations in the future in Madagascar, with strong benefits to the people and economy of Madagascar. This suggests the Transaction will be a win-win for all concerned."
About Pan African
The Company is an exploratory resource company with approximately 7,500 sq. km. of diversified mineral properties and 5,000 sq. km. of uranium properties in Madagascar. The Company is exploring these properties for uranium, gold, coal, precious stones, base metals and industrial commodities. In addition, the Company is exploring two large regions for gold and metals in Mozambique under agreements with other companies. It also has approximately 5500 sq. km. of diamond licenses in Botswana which it is presently exploring. Its operations in Madagascar are carried out through its operating subsidiary, PAM Madagascar Sarl, and its uranium activities are carried out through its 80% owned subsidiary PAM Atomique Sarl. The Company has offices in Vancouver, Canada and Antananarivo, Madagascar. More information about the Company is available at www.panafrican.com.
About Asia Thai Mining Co., Ltd.
Asia Thai Mining Co., Ltd. ("ATM") is a holding company incorporated in Thailand. ATM, either directly or through affiliated companies has extensive experience in the development and operation of mining interests, in particular in respect of coal mining interests. Through its subsidiaries, it is involved in the exploration and development of several coal mines in Indonesia. The company projects its coal production capacity will reach approximately 4 million tons by 2009. ATM forms part of a group of affiliated mining companies, including Saraburi Coal Co., Ltd. ("SBCC"). SBCC has been mining coal and tin in Thailand and other Southeast Asian countries since 1998. In addition, SBCC has recently been awarded a 9-year, US$500 million coal mining contract in Thailand from Electricity Generating Authority of Thailand and SBCC will start work in 2008. ATM is a private company with its registered address and principal place of business at 2034/132-161 New Petchburi Road, Bangkapi, Huaykwang, Bangkok, Thailand.