ferrets stock to watch: scarborough minerals

Ferret's Stock to Watch: SCARBOROUGH MINERALS PLC
09:33, Monday, April 16, 2007

MINING GURU AIMS TO SET UP ANOTHER BIG MINING HOUSE

Sydney - Monday - April 16: (RWE Aust Business News)
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OVERVIEW
********

Renowned Australian mining entrepreneur Robert Champion de
Crespigny's Scarborough Minerals plc (ASX:SRB), a London-based resource
finance company, appears to be at the crossroads in announcing a merger
with Mineral Securities Ltd (ASX:MSX).

The boards of Scarborough, Minsec and Minsec (BVI) Ltd have
announced that terms have been agreed for the merger of Scarborough and
Minsec.

The merger offer will be implemented by way of a scheme of
arrangement under section 425 of the Companies Act of England and Wales.

Scarborough has made the following points in relation to the
deal:

* Share for share offer by Minsec (BVI) (a newly incorporated
company formed in connection with a restructuring of the Minsec Group)
for Scarborough on the basis of four Minsec (BVI) Scheme Shares for every
five Scarborough Scheme Shares (including in the form of Minsec (BVI)
Scheme CDIs for existing Scarborough CDIs);

* The combination of diversified asset portfolios and successful
and complementary management teams of the two businesses offers the
opportunity to create significant value for the shareholders of both
companies;

* The combined asset portfolio is of a size which allows
hands-on involvement but also benefits from diversification of platinum,
gold, copper, zinc;

* Geography and political risk - Australia, Europe, Central
Asia, southern Africa and South America; and

* Stage of development - advanced exploration, feasibility, mine
development, production.

The enlarged group intends to continue to focus on making new
early stage equity investments in resource companies and projects.

The management of the enlarged group intends to take a hands-on
approach and inject its range of technical and commercial skills to
maximise the value of these investments.

It will be chaired by Mr Champion de Crespigny AC (chairman of
Scarborough) and managed by Keith Liddell (executive chairman of Minsec).

The group will be owned 55.7 per cent by the existing
shareholders of Scarborough and 44.3 per cent by existing Minsec
shareholders.

SHARE PRICE MOVEMENTS
*********************

Shares of Scarborough Minerals closed steady at $1.06 on Friday.
Higher for the year is a record $1.78 and low 90c. The company has 27.7
million shares on issue before the merger with a market cap of $29.3
million.

The merger is conditional on, amongst other conditions, the
restructuring of Minsec to be implemented by inter-conditional schemes
of arrangement in Australia and the approval of the merger by the
shareholders of both Scarborough and Minsec.

The merger is expected to be completed in June.

Commenting on the move, Mr Champion de Crespigny said:

"We are very pleased to have concluded merger negotiations with
Minsec.

"We have a shared vision for the future development of the
merged business and are focused on the delivery of long-term value for
all shareholders.

"The merger provides greater scale and financial muscle and a
strong platform for growth," the chairman added.

Mr Liddell added:

"The combination of Minsec and Scarborough is a natural step in
Minsec's progression to becoming a larger resource investment house.

"I believe the combination of our skill sets and assets with
Scarborough's will enable us to continue to deliver significant value
growth for shareholders of the merged company."

The Minsec board unanimously supports both the merger offer and
the restructuring and recommends that Minsec security holders vote in
favour of the resolutions required to implement both transactions.

BACKGROUND AND REASON FOR DEAL
******************************

During 2004, both Scarborough (indirectly through Buka Minerals
Pty Ltd, then called Buka Minerals Ltd, which became a wholly owned
subsidiary of Scarborough after the three-way merger which formed
Scarborough in April 2006) and Minsec were involved in the establishment
of CopperCo, a new Australian copper project development company, and
contributed assets and became substantial shareholders in that company.

Part of the establishment of CopperCo involved the purchase of
assets from Buka Minerals Pty Ltd.

As reported on July 31, Scarborough and Minsec subsequently
consolidated their CopperCo shareholdings under Minsec.

Scarborough holds 17.42 per cent of Minsec's issued ordinary
share capital and is Minsec's largest shareholder.

This shareholding is expected to be diluted to 16.07 per cent.
upon completion of certain previously announced transactions.

The Boards of Scarborough, Minsec and Minsec (BVI) believe that
there are considerable benefits to the merger offer.

The merger offer formalises and consolidates the close and
beneficial relationship which has developed between the Scarborough
Group and the Minsec Group.

If the scheme is successfully implemented, the enlarged group
will be an internationally focused resource investment company with a
larger and more diversified base of both direct and indirect investments
in resource assets spread across the globe.

The enlarged group will have increased financial resources and a
wider range of technical, project development, corporate and financial
market expertise by bringing together two management teams with
different and complementary skills sets.

The management teams of Minsec and Scarborough are
complementary.

The group's combined corporate, capital market, project
evaluation and development skills are expected to provide considerable
strategic, commercial and financial benefits to the enlarged group.

ENDS

Copyright © 2007 RWE Australian Business News. All rights reserved.