exergen seeks asx listing via merger with cape, page-2

Mantle Mining Corporation Limited (ASX: MNM) “Mantle”, is pleased to provide an update
(following) that Exergen Pty Ltd (Exergen) and Cape Range Ltd (Cape Range) have announced
plans for an amalgamation which will result in Exergen’s shareholders becoming the major
shareholders of Cape Range.
Exergen is an Australian company which has developed a patented technology used in a process
called Continuous Hydrothermal Dewatering (CHTD). CHTD upgrades low rank coal (LRC) with
high moisture content in an economic and efficient manner, thereby adding significant value to
those resources.
Exergen has established a joint venture with Mantle to develop the Bacchus Marsh Project in
Victoria. Mantle and Exergen each hold a 50% interest in Exploration Licences (EL) 5294 and
5323 which combined host a JORC compliant Inferred Resource of 1.6Bt of LRC.
Exergen Chief Executive Officer Trevor Bourne said: “The transaction provides the company with
an efficient and effective corporate structure on which to execute its strategy to become an
internationally significant coal company.”
Mantle Managing Director Ian Kraemer commented that: “Mantle is pleased that Exergen
continues to progress its business model in a way that will allow it to accelerate the successful
demonstration of its patented (CHTD) technology.”
Further Information: Media enquiries:
Ian Kraemer Ben Ready
Managing Director Director
Mantle Mining Crook Publicity
0407 758 722 0415 743 838
About Mantle Mining Corporation Limited
Mantle Mining (ASX: MNM) is an Australian based minerals exploration company that is focussed on a
range of in high demand commodities. Mantle’s principal activities are to acquire exploration tenements
and locate economically developable deposits of coal and gold. It is Mantle’s intention to progress mineral
deposits through feasibility and into mining operations, to the benefit of all stakeholders.
16 May 2013
Company Announcements Officer ASX/MEDIA RELEASE
Australian Securities Exchange
EXERGEN SEEKS ASX LISTING VIA MERGER WITH CAPE RANGE
Australian clean coal technology company Exergen Pty Ltd (Exergen) and Cape Range Ltd (Cape
Range) have today announced plans for an amalgamation which will result in Exergen’s shareholders
becoming the major shareholders of Cape Range.
Today’s announcement, made collectively by the Boards of Exergen and Cape Range, confirms the
parties have entered into a Binding Heads of Agreement that will see Exergen merge with Cape Range
via an all-scrip transaction.
Exergen is an Australian company which has developed a patented technology used in a process called
Continuous Hydrothermal Dewatering (CHTD). CHTD upgrades low rank coal with high moisture content
in an economic and efficient manner, thereby adding significant value to those resources.
The proposed transaction will result in the potential issue to Exergen shareholders of up to 412.5 million
Cape Range shares, or approximately 87.7% of the expanded issued capital of Cape Range. The
transaction is subject to a number of conditions precedent including approval by Cape Range
shareholders.
Cape Range confirms that the proposed transaction with Yong Sheng Mining Company Ltd (Yong Sheng)
is not proceeding due to technical difficulties and it intends to repay the fully drawn down $500,000 loan
facility made available to Cape Range by Yong Sheng.
Subject to the receipt of Cape Range shareholder approval, stage one of the Exergen transaction
involves a $2 million capital raising, via the placement of 40 million Cape Range shares at an issue price
of $0.05 per share (Initial Capital Raising)1.
Exergen Chief Executive Officer Trevor Bourne said: “The transaction provides Exergen with an efficient
and effective corporate structure on which to execute its strategy to become an internationally significant
coal company.
A listing on the ASX gives us the right corporate structure and the timely access to capital markets to
pursue the next phase of our development. We have a clear strategy to utilise and enhance our proven
technology to build a major coal business and will now focus our efforts entirely on that goal.”
Cape Range Chairman Wayne Johnson said: “The company’s Board was excited to have attracted such
an outstanding Australian technology and projects combined with quality directors and management.
“The transaction provides Cape Range shareholders with the opportunity to participate in the
development of an exciting new Australian technology with scalability and international licensing
possibilities.”
Exergen shareholders include the company’s founders, India’s largest private utility company Tata Power,
Leighton Holdings subsidiary Thiess, one of Japan’s largest trading houses Itochu Corporation and ASXlisted
minerals processing group Sedgman. Tata and Itochu represent potential off take partners in two of
the largest coal markets in the world.
Exergen’s shareholders have to date invested in excess of $40 million in developing, testing and proving
its CHTD technology. Exergen has worked to add value to its patented technology both through research
and through application to coal deposits.
Core to Exergen’s CHTD technology is a deep shaft vertical autoclave that utilises gravity to achieve high
pressure and incorporates heat recovery in its design, resulting in minimal energy input and high
efficiency. The autoclave exposes coal water slurry to high temperature and pressure to transform the
surface chemistry and physical structure of the coal. Up to 80% of the original moisture in the coal can be
removed in the liquid state without the need for energy intensive evaporation processes.
As an effective, energy efficient and low cost method of dewatering low rank coal, CHTD technology has
a range of commercial applications based on the properties of the upgraded coal. Potential products
include CHTD briquettes, CHTD pulverised fuel and a CHTD slurry suitable for long distance transport or
as fuel for a Direct Injection Coal Engine.
The technology has been proven via a 4tph pilot plant that was established at the Beaconsfield mine in
Tasmania. The plant was developed in 2004 and upgraded in 2008 to operate at higher temperatures
before being decommissioned in 2012.
Exergen is planning to further prove the CHTD technology by constructing and operating a 50tph Pre-
Commercial Demonstration Plant in the Latrobe Valley, Victoria. Exergen has signed a memorandum of
understanding with Energy Brix Australia Corporation (EBAC) to use the Morwell Power Station site to
host the demonstration plant.
Exergen has established a joint venture with ASX listed exploration company Mantle Mining Corporation
Limited (ASX code: MNM) to develop the Bacchus Marsh Project in Victoria. Mantle and Exergen each
hold a 50% interest in Exploration Licences (EL) 5294 and 5323 which combined host a JORC compliant
Inferred Resource of 1.6Bt (A Competent Persons Statement, as contained in Mantle Mining Corporation
Limited ASX announcement on August 29, 2012, is provided at the end of this document).
Details of Proposed Transaction
The consideration to be paid by Cape Range to Exergen shareholders is to be:
1. 162.5 million fully paid ordinary shares at settlement2; and
2. 250 million shares2 (Deferred Consideration Shares) to be issued upon satisfaction of the
following milestones in relation to the Pre-Commercial Demonstration Plant (PCDP):
o 125 million shares upon the execution of a lease with EBAC at Commercial Road,
Morwell, Victoria and a site services deed with EBAC for the supply of services, including
making available infrastructure to enable the construction, operation and maintenance of
the PCDP; and
o 125 million shares upon the award of a government grant under a current joint
Commonwealth and Victorian government initiative.
Cape Range will seek a waiver from ASX in order to allow it to issue these shares outside of the 3
month period after receipt of shareholder approval.
The acquisition by Cape Range of Exergen is subject to the following Conditions Precedent:
? All Exergen shareholders accepting Cape Range’s offer to acquire their Exergen shares;
? Cape Range obtaining a waiver from ASX to allow it to issue the Deferred Consideration Shares
outside of 3 months from the date of shareholder approval;
? Cape Range entering into formal share sale and purchase agreements with all Exergen
shareholders;
? completion by Cape Range of the Initial Capital Raising;
? Cape Range shareholders approving a 1 for 2 consolidation of its share capital (Consolidation);
? Cape Range completing a prospectus to raise a minimum of $3,000,000 at an issue price of at
least $0.20 per share2 (Prospectus);
? the approval by Cape Range shareholders of:
o the settlement of all entitlements by Cape Range directors and others;
o a change in the nature and/or scale of Cape Range’s activities in accordance with ASX
Listing Rule 11.1.2;
o the allotment and issue of the 412.5 million Cape Range shares2; and
o the change of name of Cape Range to Exergen Limited;
? Cape Range complying with any requirements of ASX including, if necessary, the requirements of
Chapters 1 and 2 of the ASX Listing Rules, including issuing the Prospectus, as if Cape Range
were applying for admission to the Official List of ASX (as required by ASX Listing Rule 11.1.3);
? Cape Range preparing and lodging the Prospectus with the Australian Securities & Investments
Commission and receiving applications to meet the minimum subscription under the prospectus
of not less than $3,000,000;
? Exergen entering into or varying various agreements which are necessary as a consequence of
the transaction;
? Cape Range discharging its material liabilities; and
? Cape Range retaining cash deposits of at least $1,000,000 following the discharging of its
material liabilities.
In addition, Exergen will have the right to appoint not less than 3 nominees to the board of Cape Range.
Initial Capital Raising
Subject to the receipt of Cape Range shareholder approval, the company is to complete a capital raising
of a minimum of $2,000,000 by way of an equity placement of not less than 40,000,000 shares at an
issue price of $0.05 per share1. As Cape Range is proposing a change in nature and scale of its activities
as a result of the acquisition of Exergen, ASX has indicated that the shares issued under the initial capital
raising will be escrowed as if those shares were issued as seed capital prior to an entity applying to be
listed for the first time. It is anticipated that a general meeting, to enable shareholders to approve the
Initial Capital Raising will be held on or around 21 June 2013.
Cape Range intends to use the funds raised from the initial capital raising towards the costs of the
acquisition of Exergen, satisfying the obligations of the Company to Yong Sheng and for general working
capital.
Consolidation of Cape Range’s Share Capital
Following completion of the Initial Capital Raising and subject to the receipt of shareholder approval,
Cape Range is to consolidate its share capital on a 1 for 2 basis.
Cape Range Shareholder Loyalty Option Issue
Cape Range is to undertake a 1 for 1 issue of loyalty options, at an issue price of $0.01 per loyalty option,
to all Cape Range shareholders as at the date which is 3 months after Cape Range is readmitted to the
official list of the ASX. Each loyalty option is exercisable at $0.25 and expires 12 months after their issue.
Application will be made to ASX for the granting of official quotation for the loyalty options.
Capital Structure
As a result of the acquisition of Exergen, the proposed capital structure of Cape Range will be as set out
below:
Issued Capital Shares
Existing shares on issue 45,393,158
Initial capital raising 40,000,000
SUB-TOTAL 85,393,158
Consolidation (1 for 2) 42,696,579
Issue of shares under Prospectus 15,000,000
Consideration shares 162,500,000
Deferred Consideration Shares 250,000,000
TOTAL 470,196,579
Proposed Timetable*
An indicative timetable for the acquisition of Exergen and associated corporate activities is set out below:
Event Date
Announcement of transaction 16 May 2013
Hold general meeting for initial capital raising 21 June 2013
Lodgment of Prospectus 26 June 2013
Hold general meeting for remainder of transaction 5 July 2013
Commence consolidation timetable 5 July 2013
Complete consolidation timetable 22 July 2013
Complete Prospectus capital raising 24 July 2013
Re-instatement to trading 31 July 2013
* The timetable set out above is indicative only and is subject to change. Cape Range will keep
shareholders informed on the timing of implementing the transaction as it progresses.
A notice of general meeting is being prepared to enable shareholders to consider, inter alia, the
acquisition of Exergen and should be available to shareholders during June. In addition, Cape Range will
also be convening its Annual General Meeting.
ENDS
Enquiries to: Media enquiries to:
Wayne Johnson Trevor Bourne Ben Ready
Chairman CEO Director
Cape Range Limited Exergen Crook Group
+61 411 544 449 +61 7 3512 5610 +61 415 743 838
Notes
1. To be issued pre Consolidation; and
2. To be issued post Consolidation.
Competent Persons Statement
Statements in this report relating to the Bacchus Marsh Brown Coal Resource estimates are based on a
report provided to the Company by AMC Consultants Pty Ltd, dated August 2012: “Information in this
report that relates to Coal Resource estimates prepared by AMC Consultants Pty Ltd is based on
information compiled by Ms K Zunica, who is a Member of the Australasian Institute of Mining and
Metallurgy and is a full time employee of AMC Consultants Pty Ltd. The estimates are based on
exploration data provided by Mantle Mining Corporation Ltd. Ms Zunica has sufficient experience relevant
to the style of mineralisation and type of deposit under consideration and to the activity which she is
undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Ms Zunica has provided
written consent to the inclusion in the report of the matters based on her information in the form and
context in which it appears.”