ACN: 061 104 158288 Stirling Street, PerthWestern Australia...

ACN: 061 104 158
288 Stirling Street, Perth
Western Australia 6000
PO Box 8260
Perth Business Centre
Western Australia 6849
Telephone (+61 8) 9227 3260
Facsimile (+61 8) 9227 3271
Email: [email protected]
Web: http://www.subsahara.com.au
Sub-Sahara Resources NL
24 January 2006
Australian Stock Exchange Limited
Companies Announcements Office
Level 10 Exchange Centre
20 Bond Street
Sydney NSW 2000
Dear Sir
REQUEST TO LIFT TRADING HALT
Please find attached a Stock Exchange Release with respect to a capital raising
and proposed acquisition of a further interest in the Zara Project in Eritrea by
Sub-Sahara Resources NL.
Accordingly Sub-Sahara requests the lifting of the trading halt of its securities
with immediate effect.
Yours faithfully
For and on behalf of
Sub-Sahara Resources NL
E A Myers
Company Secretary
• Plan to increase equity in Zara Gold Project by
33.33%
• Major fund raising of $8,000,000 to finance Zara
exploration programme
Zara Gold Project – Increase of equity
Following the success of the initial drilling at the Zara project, Sub-Sahara plans to
increase its current equity in the project from 33.33% to 66.66% by acquiring the
33.33% project interest of Africa Wide Resources Limited (AWR). This will result in the
Company then having the right to earn up to an 80% interest in the project. Under the
agreement reached with AWR, the company will, issue 20,000,000 shares to AWR
together with 10,000,000 options exercisable at fifteen cents ($0.15) per share on or
before 30 June 2009, and pay a Net Smelter Return Royalty of 1.5% on 33.33% of the
revenue derived from the sale of any gold or metal recovered from the project.
Sub-Sahara has also agreed to reimburse to AWR it’s share of project expenditure
incurred from 20 January 2006 until approval of the transaction by shareholders.
AWR is controlled by Mr H.D. (Dave) Kennedy, the Chairman of Sub-Sahara and a major
shareholder.
The transaction is subject to regulatory and shareholder approvals, and the execution of
binding agreements. It is also subject to approval of the Eritrean Minister for Mines.
Sub-Sahara has the right to earn a 48% interest in the project from Dragon Mining NL by
funding Dragon’s share of project costs either to completion of a Bankable Feasibility
Study or the expenditure of US$3.3m, whichever is the lesser. To date Sub-Sahara has
earned a 33.33% interest. On the basis that approval is obtained by Sub-Sahara to
acquire AWR’s interest, the ultimate contributing equities will be Sub-Sahara 80% and
Dragon 20%.
Exploration
Sub-Sahara is sufficiently encouraged from the preliminary drilling results at Koko (one of
several targets that make up the Zara Project) to embark on a major drilling programme
during 2006 that will see it conduct some 20,000 metres of diamond and reverse circulation
drilling with the view to obtaining sufficient information to produce a resource estimate.
The estimated cost of exploration is approximately $7.5m and Sub-Sahara’s share of this
programme is estimated at $6.8m with Dragon being required to contribute the balance to
maintain its 20% equity.
ACN: 061 104 158
288 Stirling Street, Perth
Western Australia 6000
PO Box 8260
Perth Business Centre
Western Australia 6849
Telephone (+61 8) 9227 3260
Facsimile (+61 8) 9227 3271
Email: [email protected]
Web: http://www.subsahara.com.au
Sub-Sahara Resources NL
Major Financing
To finance its share of Zara project costs and ongoing corporate costs the company proposes
to raise up to $8,000,000 by way of the issue of up to 100,000,000 shares.
The issue will be in two parts, viz;
1. The placement of 20,000,000 shares at eight cents ($0.08) each to raise $1,600,000.
Each share subscribed will entitle the subscriber to one option for every four shares
subscribed, exercisable at15 cents per share and expiring on or before 30 June 2009, and;
2. a pro rata, non- renounceable offer of 80,000,000 shares at eight cents ($0.08) each to
all shareholders on a one for four basis to raise $6,400,000. Each share subscribed will entitle
the subscriber to one option for every four shares subscribed, exercisable at 15 cents per
share and expiring on or before 30 June 2009.
The placement will be managed by DJ Carmichael Pty Ltd (DJC) and they will be paid a
management fee of 2% together with a brokerage fee of 4% on funds subscribed. These
shares will be placed in accordance with Section 708A (5) of the Corporations Act.
The offer to shareholders will be subject to an offer document which will be forwarded to
shareholders when it has been lodged with the regulatory authorities. The timetable will be
announced when available.
DJ Carmichael Pty Ltd has been engaged to place any shortfall arising from the pro rata issue
on a best endeavours basis. DJC will receive a management fee of 2% together with a
brokerage fee of 4% for placement of any shortfall arising from the pro rata issue and will
also be granted a success fee of 750,000 options exercisable at 15 cents per share, on or
before 30 June 2009. Paradigm Capital Pty Ltd will be assisting DJC with the placement of any
shortfall and will also be granted a success fee of 750,000 options on the same basis as DJC
as above. It will also be paid fees by DJC on an agreed basis.
Sub-Sahara
Sub-Sahara is an exploration company with an extensive portfolio of advanced exploration
projects. An estimated 9 drill rigs are operating currently on 3 projects, namely the highgrade
Asmara gold/copper/zinc/silver project (4 rigs), Nyanzaga gold Joint Venture with
Barrick Gold (4 rigs) and high-grade Zara gold project (1 rig).
Initial mineral resource estimates are expected for Debarwa (Asmara project) and Nyanzaga
in the current half year while a Conceptual Mining Study on Debarwa copper/gold deposit is
due for completion during February 2006.
In addition two further Sub-Sahara projects will be subject to follow-up drilling commencing
the next quarter by Joint Venture partners, Resolute Mining Limited and Currie Rose
Resources INC.
For and on behalf of
Sub-Sahara Resources NL
M R Griffiths
CEO & Executive Director