ASX / MEDIA RELEASE 28 MARCH 2006CONSMIN MOVES ON TITAN TO...

ASX / MEDIA RELEASE 28 MARCH 2006
CONSMIN MOVES ON TITAN TO INCREASE NICKEL
EXPOSURE
Consolidated Minerals Limited (ASX: CSM, AIM: CNM, FSE: CMN) today announced an off-market takeover offer
for nickel company, Titan Resources Limited (ASX: TIR), further advancing its nickel growth strategy in the Kambalda
region of Western Australia.
The consideration offered for all Titan’s outstanding ordinary shares is one (1) Consolidated share for every thirty-five
(35) Titan shares. This translates to an offer of 7.77 cents for each Titan share based on the $2.72 closing price of
Consolidated’s share price on 27 March 2006. The Offer will be made through Consolidated’s wholly-owned subsidiary,
Consolidated Nickel Pty Ltd. The Offer consideration represents an attractive premium of 34% to the closing price of
Titan shares on 27 March 2006 and 41% premium to the volume weighted average price for Titan shares in the month
leading up to this announcement. The Offer values Titan at approximately $29 million on an undiluted basis.
The Offer, whilst targeting the acquisition of 100% of Titan, has no minimum acceptance condition but is subject to a
number of standard conditions as set out in Annexure A.
Consolidated is already Titan’s largest shareholder, with a relevant interest of 19.9%, and holds strategic nickel interests
in joint venture with Titan including 50/50 joint ventures at the Munda and Armstrong nickel projects in the
Widgiemooltha Dome region, immediately south east of Consolidated’s existing nickel operations at Kambalda.
Titan’s assets include a strategic 227km2 tenement position at Widgiemooltha containing resources totalling
approximately 123,000t of contained nickel in eight separate deposits, including Armstrong (554,237t at 1.77% Ni),
McEwen (3.35mt at 1.35% Ni), Widgie Townsite (2.08mt at 1.89% Ni) and Munda (256,000t at 1.94% Ni). In addition,
Titan controls a large land position including the historic Carr Boyd nickel-copper mine (815,000t @ 1.11% Ni), located
80km north-east of Kalgoorlie.1
Consolidated’s Executive Director and incoming Managing Director, Rodney Baxter, said the proposed acquisition of
Titan represented a further step in the Company’s nickel growth strategy at Kambalda, augmenting our existing nickel
exploration and development pipeline in one of the world’s premier nickel regions.
“The proposed acquisition will enable us to realise full value from our existing investment in, and strategic relationship
with Titan by consolidating control of a large strategic ground position spanning both the Kambalda and Widgiemooltha
Domes, augmenting our nickel resource base and further enhancing our depth of nickel exploration expertise and
development opportunities in this region,” Baxter said.
Consolidated operates the 5,000tpa Beta Hunt nickel mine at Kambalda and is nearing completion of the nearby East
Alpha development project, which will consolidate a 9-10,000tpa nickel production base. The Company’s growth
strategy is based on increasing production to a target level of 20-25,000tpa by expanding the Kambalda operations and
developing additional production centres within the broader Kambalda and adjacent Widgiemooltha regions.
Consolidated’s Managing Director, Michael Kiernan, said nickel would be the key growth driver for the Company in the
future. The acquisition of Titan is consistent with our strategic objectives. “Consolidated brings the balance sheet
strength and cash flow required to accelerate the exploration and development of Titan’s nickel assets to take advantage
of the current strong nickel price cycle. The acquisition will enable Consolidated to secure control of a substantial
nickel resource base with the potential to underpin construction of the Company’s own nickel concentrator in this
region,” he said.
Kiernan said the offer consideration represented an attractive premium for Titan shareholders and provided the
opportunity to retain exposure to the future upside of the Titan nickel assets but as part of a large, diversified minerals
group with strong earnings and an excellent track record of delivering shareholder returns.
“Titan shareholders who accept will benefit from Consolidated’s proven track record in delivering on its growth strategy
and they will avoid the risk that Titan may be required to undertake further discounted capital raisings,” Kiernan said.
ENDS
1 Information sourced from Titan Resources web site and 2005 Annual Report.
2
Released by: On behalf of:
Jan Hope / Nicholas Read Michael Kiernan, Managing Director
Jan Hope & Partners Rodney Baxter, Executive Director
Telephone: (+61-8) 9388-1474 Consolidated Minerals Limited
Telephone: (+61-8) 9321-3633
www.consminerals.com.au
OFFER TERMS AND ADDITIONAL INFORMATION
Consolidated’s offer is one (1) Consolidated share for every thirty-five (35) Titan shares on issue. Based on the closing
price of Consolidated shares on 27 March 2006, the day prior to the announcement, of $2.72 the value of the
Consolidated scrip consideration is equivalent to 7.77 cents per Titan share. This represents an attractive premium to the
level at which Titan shares were trading prior to the announcement of Consolidated’s offer, namely:
· a 34% premium to the closing price of Titan shares of 5.8 cents on 27 March 2006
· a 40% premium to the volume weighted average price for Titan shares for the 5 days prior to the date of this
announcement;
· a 41% premium to the volume weighted average price for Titan shares for the month prior to the date of this
announcement.
Based on Titan’s register immediately prior to this announcement, the total consideration for the ordinary shares not
currently owned by Consolidated is approximately 8.6 million Consolidated shares. Using the closing price for
Consolidated shares on 27 March 2006 the day prior to the announcement, this represents a total consideration of
$23.4 million for the securities subject to the offer.
Consolidated’s Bidder’s Statement is expected to be lodged with the Australian Securities and Investments Commission
(ASIC) in the next few days and mailed to Titan shareholders shortly thereafter. This document will contain details of
the Offer and information regarding acceptance.
Consolidated has been advised on this transaction by Perth-based Argonaut Capital Limited and Perth-based law firm
Steinepreis Paganin as legal adviser.
BACKGROUND INFORMATION – CONSOLIDATED MINERALS LIMITED
Consolidated is a diversified, ASX S&P 200 Australian-based resource group (ASX: CSM) with a strong growth focus
as a supplier of key raw materials to the world’s steel and stainless steel industries. The Company is also listed on the
AIM of the London Stock Exchange (Code: CNM) and the Frankfurt Stock Exchange (FSE: CMN).
Consolidated has a sound profit base founded on its successful West Australian manganese operations at the Woodie
Woodie mine. Woodie Woodie has a secure position as a reliable supplier of 1 million tonnes per annum of high-grade,
low-phosphorous manganese ore to markets in Asia and Europe, representing approximately 10% of the world’s highgrade
manganese exports.
The Coobina Chromite Project, located 80 km south-east of Newman in Western Australia, has increased production to
capacity levels of 250,000 tonnes per annum of 42% chromite ore, representing some 2.5% share of the world market.
Consolidated’s nickel operations are located in the world-class Kambalda nickel district of Western Australia. They
currently comprise the Beta Hunt nickel mine and the nearby East Alpha development project together with a portfolio
of advanced exploration and development prospects.
The Company has announced an accelerated development program at its Kambalda operations designed to bring the
East Alpha project into production during 2006, consolidating a 9-10,000tpa nickel production complex through
combined production from Beta Hunt and East Alpha, while continuing to pursue other exploration and growth
opportunities in order to reach the target of 25,000tpa nickel production.
Consolidated is also developing a new zinc-copper business through its 32.55% shareholding in ASX-listed mining
company, Jabiru Metals Ltd (ASX: JML). Consolidated supported Jabiru’s $81.5 million debt and equity funding
package, finalised in early 2006, which underpins development of the Jaguar zinc-copper project located in Western
Australia.
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Jaguar is scheduled to commence production in the June quarter of 2007, producing 20-25,000tpa of zinc in concentrate,
8-10,000tpa of copper in concentrate and 800,000oz of silver in concentrate at world competitive cash operating costs.
Consolidated has a strong track record in the successful and cost-effective development and operation of mining
projects. Consolidated is also pursuing a number of growth opportunities including joint ventures and strategic
investments in the carbon steel materials sector, including a portfolio of iron ore projects in the Pilbara region of
Western Australia.
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ANNEXURE A – CONDITIONS OF THE OFFER
The Offer is subject to the following conditions:
(a) No Material Adverse Change
No material adverse change occurring, being announced or otherwise becoming public in the structure,
business, financial or trading position or profitability or prospects, of Titan or the group consisting of Titan
and its subsidiaries taken as a whole during the period commencing on the Bid Date (being the date of
announcement of the Takeover Bid) and ending on the expiry of the Offer Period.
(b) Prescribed Occurrence
That none of the following occurrences take place during the period commencing on the Bid Date (being the
date of announcement of the Takeover Bid) and ending on the expiry of the Offer Period, it being a separate
condition of this Offer and any resulting contract that each such occurrence not happen during that period:
(i) Titan converting all or any of its shares into a larger or smaller number of shares;
(ii) Titan or a subsidiary of Titan resolving to reduce its share capital in any way;
(iii) Titan or a subsidiary of Titan:

entering into a buy back agreement; or

resolving to approve the terms of a buy back agreement under sub Section 257C(1) or
257D(1) of the Corporations Act;
(iv) Titan or a subsidiary of Titan issuing shares or granting an option over its shares, or agreeing to
make such an issue or grant such an option (other than an allotment of Titan Shares upon the
exercise of Titan Employee Options);
(v) Titan or a subsidiary of Titan issuing, or agreeing to issue, convertible notes;
(vi) Titan or a subsidiary of Titan disposing, or agreeing to dispose, of the whole, or a substantial part,
of its business or property;
(vii) Titan or a subsidiary of Titan charging, or agreeing to charge, the whole, or a substantial part, of its
business or property;
(viii) Titan or a subsidiary of Titan resolving that it be wound up;
(ix) a liquidator or provisional liquidator of Titan or a subsidiary of Titan being appointed;
(x) a court making an order for the winding up of Titan or of a subsidiary of Titan;
(xi) an administrator of Titan, or of a subsidiary of Titan, being appointed under Section 436A, 436B or
436C of the Corporations Act;
(xii) Titan, or a subsidiary of Titan, executing a deed of company arrangement; or
(xiii) a receiver, or a receiver and manager, being appointed in relation to the whole, or a substantial part,
of the property of Titan or a subsidiary of Titan;
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(c) Fall in Index
At any time after the Bid Date up to the end of the Offer Period, the S&P/ASX 200 Index not falling below
4200 on any trading day;
(d) Fall in Nickel Price
The closing cash sale price of nickel as quoted on the London Metal Exchange not falling below US$12,500
per metric tonne at any time after the Bid Date up to the end of the Offer Period;
(e) Breach of Material Contracts
At any time between the Bid Date and the end of the Offer Period, no notice is given to the Titan Group or
Consolidated Nickel, and no announcement or claim is made or becomes public, in respect of any agreement
or arrangement existing between any member of the Titan Group and a third party (including all financing
agreements or arrangements), which agreement or arrangement is material to the Titan Group, that:
(i) the announcement of the Offer;
(ii) the making of the Offer; or
(iii) the acquisition of Titan Shares by Consolidated Nickel,
will give or has given rise to any right or obligation whereby a third party may directly or indirectly and
whether subject to the giving of notice or otherwise,
(iv) rescind, cancel, terminate or vary such agreement or arrangement;
(v) acquire or force the disposal of any assets of any member of the Titan Group;
(vi) be entitled to the payment of any damages or money from any member of the Titan Group; or
(vii) be entitled to the benefit of varied terms or increased consideration relating to or forming part of
such agreement or arrangement,
unless Titan satisfies Consolidated Nickel (acting reasonably) that such notice, announcement or claim lacks
any legal basis and Titan takes immediate steps to contest the notice, announcement or claim or any action
taken in reliance on it;
(f) Receipt of Required Approvals
During the Offer Period, all approvals which are required by law or by any government agency:
(i) for the announcement of the Offer;
(ii) as are necessary or required to permit the Offer to be made and accepted; or
(iii) which are required as a result of the Offer,
are granted, given, made or obtained on an unconditional basis;
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(g) No Farm Out Agreements
At any time between the Bid Date and the end of the Offer Period, no member of the Titan Group enters into
or agrees to enter into, any farm out agreement or arrangement in respect of any of the nickel projects
owned or controlled by the Titan Group;
(h) No Finance Arrangements
At any time between the Bid Date and the end of the Offer Period, no member of the Titan Group enters into
any financing agreement or arrangement (other than with Consolidated Minerals) or varies any existing
financing agreement or arrangement with a third party (other than with Consolidated Minerals), including,
without limiting the generality of this condition, further hedging or similar agreements or arrangements or
the closing out of any existing positions; or
(i) Titan Employee Options
Prior to the expiry of the Offer Period, the holders of all of the Titan Employee Options on issue either
exercise their Options or accept a cash consideration in respect of all Titan Employee Options held by them.
The full text of these conditions will be set out in the Bidder’s Statement. The Bidder reserves the right to waive any or
all of these conditions in accordance with the Corporations Act.
ENDS