Key points
- Nautilus Minerals will issue 22,833,334 common shares at US$3 per share in a non-brokered private placement for gross proceeds of US$68.5-million.
- A wholly owned Anglo American subsidiary is investing US$25-million as one of the placees.
- Nautilus and Anglo signed a five-year heads of agreement under which Anglo may second specialist personnel to Solwara and other projects at its own cost.
- Nautilus will pay a finder’s fee of US$4.35-million in cash plus 1.45 million warrants exercisable at US$3 within two years of closing.
Nautilus Minerals Inc. has agreed to carry out a non-brokered private placement of 22,833,334 common shares at a price of $3 (U.S.) per common share for gross proceeds of $68.5-million (U.S.).
One of the placees is a wholly owned subsidiary of Anglo American PLC, which will invest $25-million (U.S.). Anglo American is one of the world’s largest mining and natural resource groups with a market capitalization of around $66-billion (U.S.). It is a global leader in platinum-group metals, gold and diamonds, with significant interests in coal, base and ferrous metals, industrial minerals, and paper and packaging. The group is geographically diverse, with operations in Africa, Europe, South and North America, Australia and Asia.
David Heydon, chief executive officer of Nautilus, comments: “We are pleased to welcome Anglo American as an investor in the company. Anglo American’s access to world-class operating and technical capability can provide assistance to Nautilus in its development of its projects.”
In addition, Nautilus and Anglo have signed a heads of agreement under which Anglo may assist Nautilus in its development of Solwara and other projects by seconding personnel with specialist skills to the project at Anglo’s cost. The seconded personnel will continue to be employed by Anglo but will report to and be under the direction of Nautilus. Technical input by Anglo may take the form of advice and expertise in exploration, geophysics, metallurgy, mining, subsea diamond mining technology and equipment as well as operating experience related thereto. For the five-year term of the agreement, and subject to Anglo entering in to a non-compete agreement, Nautilus would offer to Anglo the opportunity to enter in to a joint venture should Nautilus consider entering in to a joint venture on any areas over which it held exploration rights or applications for such rights on Oct. 20, 2006.
Anglo has been granted an anti-dilution right that will enable it to maintain its percentage ownership in the shares of the company until Oct. 31, 2008, with the purchase price for the additional shares being 1.1 times the volume-weighted average trading price of the company’s shares during the month of October, 2008.
Nautilus has granted an anti-dilution right to the purchaser of the balance of the shares under the private placement that will enable it to maintain its percentage ownership in the shares of the company, as and when, and at the price at which any common shares, or securities convertible into common shares, are issued by the company until Oct. 31, 2008. In addition, the purchaser has been granted the right to receive additional common shares, for no additional consideration, if Nautilus issues common shares at a price of less than $3 (U.S.) per share after Nov. 1, 2006. Additional shares will be issued so that the average price of all shares issued to the purchaser will be equal to the weighted-average per share price of all subsequent financings completed by the company by the earlier of Oct. 31, 2007, or the date that a total of $43.5-million (U.S.) has been raised by the company.
Nautilus has agreed to pay a finder’s fee of $4.35-million (U.S.) in cash and to issue 1.45 million warrants exercisable at $3 (U.S.) within two years of the closing of the private placement. An additional finder’s fee will be payable if the anti-dilution right is exercised in the future.
The proceeds of the private placement will be used to finance the development of the company’s business. The private placement and payment of the finder’s fee are subject to regulatory approval. All securities will be subject to a four-month hold period in Canada.
Conference call
A conference call and live audio webcast is scheduled for 1 pm. (ET) on Wednesday, Nov. 1, 2006. Those who wish to participate should dial 1-416-644-3425, or 1-866-250-4909 if outside the Greater Toronto Area. A link to the live and archived audio webcast will be available on the company’s website.
Registered brokers, analysts, media and accredited investors will be invited to ask questions. All participants are also encouraged to submit questions via e-mail prior to the scheduled call.
