Platimun Diversified Mining Inc. announces Acquisition
Market Wire, October, 2006
23 October 2006
Platinum Diversified Mining, Inc
('Platinum' or 'the Company')
Proposed Acquisition of Nord Resources Corporation
Notice of Extraordinary General Meeting
Platinum, a Special Purpose Acquisition Corporation ("SPAC") formed to make
investments in the mining industry and listed on AIM in March 2006, today
announces the proposed acquisition of Nord Resources Corporation ("Nord"), a
company whose principal asset is Johnson Camp, an historic oxide copper mining
operation located in Arizona. Nord's shares have traded on the Pink Sheets LLC
since 31 May 2001 (NRDS.PK). Under US law this acquisition is by way of a
merger.
Acquisition Details
- Platinum announces today that it has conditionally agreed to acquire
Nord through a wholly-owned subsidiary of Platinum
- Nord is a Delaware corporation which owns Johnson Camp, an open pit
oxide copper mine near Tucson, Arizona, USA
- Johnson Camp has estimated proven and probable mining reserves of 35.1
million tons of ore at a grade of 0.393% total copper (TCu) when optimized
at a copper price of $0.90 per pound
- First production under Platinum management is targeted for early 2007
for annual copper production of approximately 25 million pounds at an
estimated cash operating cost of US$0.60 per pound of copper produced
- Existing proven and probable reserves are projected to support a 10-year
mine life for copper production of approximately 225 million pounds of
copper cathode
- Total geologic resources calculated at US$0.90 per pound of copper are
approximately 136 million tons at a grade of 0.37% TCu indicating contained
resources approximating one billion pounds of contained copper
- Platinum's management believe that significant amounts of the resource
can be converted to mineable reserves when a new computer model is
constructed and optimized at current copper price levels
- In addition, Platinum's management believe there exists significant
potential for additional discoveries in the form of extensions and step outs
from recognized resources
- Considering the potential for conversion of resources to reserves alone,
and not including any new discoveries, Platinum's management believes there
are good possibilities for both increasing annual throughput as well as
extending the mine life
- Nord also holds options on three exploration-stage properties elsewhere
in the greater Arizona-New Mexico porphyry copper province. One of these,
Coyote Springs at Safford, Arizona, is adjacent to and on the same geologic
trend as Phelps Dodge's Dos Pobres project, a large copper mine currently
being developed.
Acquisition Financing
- At listing the Company raised approximately US$77.9 million, net of fees
and expenses, to fund acquisitions and costs
- The cost of the acquisition will be US$60 million, subject to certain
net asset adjustments, which will be used to acquire 100% of Nord shares and
to repay Nord's corporate debt and certain of Nord's costs of the
transaction, up to a total of $1.085 million, to be satisfied from the
Company's existing cash resources
- The capital cost to reopen the mine and install facilities to improve
copper recovery and resume mining at Johnson Camp is estimated at US$21
million
- Platinum plans to acquire Nord with existing funds and has offer letters
for bank financing sufficient to fund the startup capital and working
capital required to bring Johnson Camp to full production.
Shareholder Approval
- The Acquisition constitutes a reverse takeover pursuant to the AIM Rules
and is therefore subject to Shareholder approval which will be sought at the
EGM. The Company will today publish an admission document containing further
details of the Acquisition and giving notice of the EGM to be held on 27
November 2006. The Acquisition is also subject to Nord Shareholder approval
- A conditional application will be made to the London Stock Exchange for
admission to trading on AIM of the Shares and Warrants
- Admission is conditional, inter alia, on the passing of Resolution at
the EGM approving the Merger Agreement and the approval of Merger Agreement
and the Acquisition by the shareholders of Nord at an extraordinary meeting
of the shareholders of Nord.
Mark Nordlicht, Executive Chairman of Platinum Diversified Mining, Inc.,
commented:
"The Board and management of Platinum strongly believe that the Nord acquisition
represents an outstanding opportunity for the Company's shareholders. The Nord
assets, particularly the Johnson Camp, are the ideal base from which to grow
Platinum into a significant, international mining company.
"Our intention is to build the resource at Johnson Camp through an intensive
exploration program at the property as well as a focused effort at assembling
the known data onto computer-aided modeling software. We expect this work will
result in a substantial increase in resources at the property.
"The Nord acquisition demonstrates our belief that high quality mineral assets
with short lead times to production are still available, despite the prevailing
high commodity prices."
FOR FURTHER INFORMATION, PLEASE CONTACT:
Platinum Diversified Mining KBC Peel Hunt Limited Pelham Public Relations
Tel. 1 520 360 7996 Tel. 44 (0)20 7418 8900 Tel. 44 (0)20 7743 6670
Archie Berens
Bobby Cooper Matt Goode Alisdair Haythornthwaite
Platinum Diversified Mining, Inc
('Platinum' or 'the Company')
Proposed Acquisition of Nord Resources Corporation
Notice of Extraordinary General Meeting
HISTORY AND BACKGROUND
Platinum was incorporated on 12 January 2006 as a Cayman Islands exempted
company to serve as a vehicle for investment in the metals and mining
industries, whether through an asset acquisition, share purchase, merger, share
capital exchange, scheme of arrangement or similar transaction. Platinum was
admitted to trading on AIM on 14 March 2006, and at that time, the Company
raised approximately US$77.9 million net of expenses, via the Placing of
9,935,000 Units (each Unit comprising one Share and one Warrant) at $8.00 per
Unit with institutional investors.
Since Original Admission, Platinum's Directors have focused on identifying and
then negotiating the acquisition of mining assets or companies. Platinum
announced today that it has conditionally agreed to acquire Nord, through a
wholly-owned subsidiary of Platinum for a total Consideration of $60 million
subject to certain net asset adjustments, plus certain of Nord's costs up to a
total of $1,085,000, in a reverse triangular merger pursuant to the Merger
Agreement, which is described in further detail in paragraph 11.10 of Part VIII
of the admission document. Nord is a Delaware corporation which owns Johnson
Camp, an open pit oxide copper mine near Tucson, Arizona, USA with estimated
proven and probable mining reserves of 35.1 million tons of copper at a grade of
0.393 per cent. total copper (TCu) and at a copper price of $0.90 per pound
(after pit optimization).
The Acquisition constitutes a reverse takeover pursuant to the AIM Rules and is
therefore subject to Shareholder approval which will be sought at the EGM to be
held on 27 November 2006. A conditional application will be made to the London
Stock Exchange for Admission to trading on AIM of the Shares and Warrants.
Completion and Admission are also conditional, on the approval of the Merger
Agreement and the Acquisition by the shareholders of Nord at a general meeting
of the shareholders of Nord.
THE MARKET OPPORTUNITY
As stated in the Original Admission Document, your Directors believe that
opportunities exist to acquire undervalued mining assets and companies, in spite
of the current boom in commodity prices. Two elements underpin the Directors'
belief. Firstly, in real terms, metal prices in many instances are not at
historic highs, and may not be waning near term due to what may be a
"super-cycle" - an economic boom only seen twice before in recent history,
during the industrialisation of the United States and during the post-war
reconstruction and evolution of Japan and Germany. The Directors believe that
the current super-cycle is being caused largely by the rapid industrialisation
of China, India and other countries with large population bases leading to
strong industrial demand and a supportive price environment. Secondly, some
large mining companies are consolidating, merging and rationalising, creating
opportunities for orphan subsidiaries to be spun off or sold. The Directors
believe that this is being caused by such companies seeking to take immediate
advantage of the current favourable cycle, not fully comprehending the strength
and duration of the super-cycle that the Directors believe is in place. The
Directors also believe that current commodity price cycle levels will extend for
many years, in contrast to a normal business cycle. Thus, the Directors believe
that the sustained or growing level of metal prices will reward the investors
taking advantage of the current situation. The Directors believe the Acquisition
will allow Platinum to take advantage of the current supercycle. There are a
number of factors affecting supply and demand which lead the Directors to
believe that recent metal price levels will not deteriorate. These can be
grouped into two major categories, those factors relating to ordinary business
cycles, and those relating to a large macro-demand scenario affecting the global
economy. Underpinning metal prices for the past year or so are factors which
have resulted in a recent tightening of supply. There has been limited growth
and development of new mines and new resources both in terms of the limited
number of new operations that have been established and in terms of capital
expenditure not having been made at existing operations. This lack of investment
in both exploration and production capacity is supporting higher metal prices.
Mine production has not been able to feed the demand, and thus stocks and
inventories are down, further fuelling the recent increase in metal prices.
Overlain on the favourable but "normal" business fundamentals is the phenomenon
termed an economic "super-cycle". A super-cycle is a sustained period of
increased real commodity prices, driven by higher demand growth as major
economies industrialise and urbanise; supplies increase, but not sufficiently to
offset demand. There have been two super-cycles in the past 150 years:
(1) Late-1800s/early-1900s (driven by urbanisation and industrialisation of the
US); and
(2) Late-1940s/mid-1970s (driven by post-war reconstruction in Europe and the
Japanese economic renaissance).
The Directors believe the materials-intensive growth in China since 2002 has
been the catalyst for a similar super-cycle. Historically, both Japan and
America have represented between three and 5 per cent. of the world's population
at the time of their significant growth periods. The economy of China, a country
representing over 20 per cent. of the world's population, grew at an average
rate of 7.8 per cent. per annum during the period 1996 to 2002. China's economy
grew by over 9 per cent. in 2004, and is projected to grow at a rate of 8 per
cent. per annum over the coming five years. The Directors believe this rapid
economic growth will continue to drive commodity demands in China. The Directors
believe that India, a country with approximately 20 per cent. of the world's
population, will show similar demand for materials. India is in the process of
liberalizing banking and insurance regulations in order to support massive
investment in infrastructure to sustain its current economic growth rate of 8-10
per cent. per annum. Furthermore, the Directors believe significant future
demand may come from Brazil and Russia, and therefore it is possible that there
will be a fundamental demand for metals and an underpinning of commodity prices
such as has not been seen in decades, and which the Directors expect to persist
for years to come. The Directors believe it is possible that the recent strength
in commodity prices, leading to expansion of existing mining operations or
re-opening of operations which had previously been closed, may cause a small
decrease in prices during 2006-2007, but some metals economists forecast an
increase again by 2008, depending on the commodity.
Copper
Much of the world's copper production comes from enormous, open pit operations
where mastering the low cost movement and exploitation of huge tonnages of low
grade rock is key. Over half of the world's supply of mined copper is in the
hands of only twenty major producers, and these companies continue to
consolidate and rationalise, which the Directors believe will create further
opportunities for the Company. The Directors believe the major producers are
focused on bottom-line profits, and are therefore currently being cautious about
investment decisions, leaving the opportunity for smaller players to invest in
projects which may have been orphaned due to, for example, size criteria. Copper
consumption, steadily up since 1950, is driven by industrial demand, and
increased demand, coupled with supply shortfalls, has driven prices recently.
China's copper consumption dominates the world market. From 1997 to 2004,
China's refined copper consumption increased by 230 per cent. and is forecast to
grow by a further 9 per cent. by 2010. This is being driven by strong demand in
construction, wire, plumbing, telecommunications and transportation. The outlook
is for near term price decreases followed by renewed growth driven primarily by
demand from China. Global copper consumption is estimated to grow by 3.9 per
cent. per annum between the years 2005-2015.
-Near term global industrial production is expected to decelerate, but
reasonable year-on-year growth of 3.9 per cent. per annum is expected to
overtake and pass this short term softening.
-Global inventories are down - they are currently rebounding from a
30-year low, but Grupo Mexico's strike has ended and its US mines are now
operating again.
-The price of copper from 1971 to 2003 fluctuated between approximately
$0.60/lb and $1.00/lb. Since 2003, prices have increased from $0.80/lb in
September 2003 to $3.53 as at 19 October 2006 (and a high of $3.99 in May
2006), driven by falling stocks.
-Analysts expect prices to remain relatively firm in the remainder of 2006
followed by near term softening of prices during 2007, in spite of
consumption increasing by approximately four per cent., over the same
period. Following this period, the Directors believe continued strong demand
from China and India will cause the price of copper to rise again.
INFORMATION ON NORD
Background
Nord was incorporated on 18 January 1971 in Delaware, USA, and its shares have
traded on the Pink Sheets LLC since 31 May 2001. Its primary asset is the
Johnson Camp property located at Dragoon in Cochise County near Tucson, Arizona,
USA. Nord also owns options over a number of further mining prospects, including
a porphyry copper prospect, Coyote Springs, near Safford, Arizona, USA. The
Johnson Camp mine property includes two existing open pit mines, namely the
Burro and the Copper Chief copper deposits. Its existing facilities include a
truck shop, core storage building, administrative and engineering office and
warehouse, laboratory, plant mechanical shop, solvent extraction/electrowinning
("SX-EW") plant, solution storage ponds, and various vehicles and plant-related
equipment. Using a price of $0.90/lb Cu., it contains proven and probable
reserves of 35.1 million tons of leachable copper at the Burro open-pit and to
the west-northwest in the Copper Chief mineralised zone, at an average ore grade
of 0.393 per cent. copper. The Burro pit is larger than the Copper Chief pit and
contains 68 per cent. of the proven and probable reserves of Johnson Camp. In
2004, Nord acquired an option on the Coyote Springs and Mimbres copper
properties located in Arizona and New Mexico, respectively, and acquired an
option on the Texas Arizona Mine, a polymetallic (copper-lead-silver-gold)
property located immediately south of Johnson Camp. All four projects, including
Johnson Camp, are located in the greater Arizona-New Mexico porphyry copper
province, an area that historically has yielded as much as ten per cent. of
annual world copper production.
Johnson Camp
History
The Johnson Camp property has had a long history of development and mining,
dating back to the early 1880s. A number of underground mines operated during
the period from 1880 to 1975. In 1974, Cyprus Mines Corporation developed a
large scale open pit heap leach mine and solvent extraction, electrowinning
("SX-EW") processing complex on the Johnson Camp property. Cyprus began mining
in the Burro pit in 1975 and continued until 1986 when the operation closed.
After the closure, Cyprus dismantled the original SX-EW plant and continued to
maintain ownership of the Johnson Camp property until 1989, when it sold the
property to Arimetco, Inc. In mid-1990, Arimetco constructed a new SX-EW plant
at the Johnson Camp mine and resumed mining in the Burro pit in 1991. Arimetco
began limited open pit mining from the Copper Chief deposit in 1996. Mining
continued from both the Burro and Copper Chief deposits until 1997, when
production was terminated.
In 1998, Summo USA Corporation entered into an agreement with Arimetco to
acquire the Johnson Camp property, subject to successful completion of due
diligence work. As part of the due diligence, TWC was commissioned by Summo to
complete a feasibility study for the resumption of mining and SX-EW processing
at the Johnson Camp mine. Summo did not pursue mining at Johnson Camp and
assigned its right to the sale and purchase agreement to Nord in June, 1999.
Nord continued production of copper from ore that had been mined and placed on
leach pads until August 2003 when it placed the Johnson Camp mine on a care and
maintenance program due to weak market conditions for copper. Thus, although
mining ceased in 1997, the Johnson Camp leach pads and SX-EW operation remained
active until 2003, producing approximately 6.7 million pounds of copper cathode
from residual copper in the heaps over the period 1998 to 2003.
Location
The Johnson Camp mine is located on the eastern slope of the Little Dragoon
Mountains in Cochise County, near Tucson, Arizona, USA. The average elevation of
the property is approximately 5,000 feet above sea level. The climate of the
region is arid, with hot summers and cool winters, and freezing is rare at the
site. The climate at the Johnson Camp mine is conducive to operations throughout
the year with only limited weather interruptions.
Access to the Johnson Camp property is via Interstate Highway 10 and by gravel
road. Due to its location just one mile north of Interstate Highway 10, the
Directors believe Johnson Camp provides excellent access for transportation and
delivery of bulk supplies and shipment of copper cathodes. The Johnson Camp
property's close proximity to the Union Pacific Railway mainline through
Dragoon, Arizona, gives Platinum the option of shipping copper cathode directly
to customers by truck or rail.
Also located at Johnson Camp is a waste dump, three heap leach pads and a
production facility that uses the SX-EW process in the production of pure copper
from a copper concentrated sulphuric acid solution. This solution is obtained by
leaching copper from broken ore, then extracting the copper from the leach
solution using an organic solvent, and finally returning the copper contained in
this organic solvent into a concentrated solution for the electrowinning stage.
The Burro pit is located east of the SX-EW process plant and the Copper Chief
pit is located approximately 1,500 feet northwest of the Burro pit. The existing
heap leach pads are located west of the open pits. A new leach pad is planned
for future use and is anticipated to be located north of the Burro pit and
northeast of the Copper Chief pit. The mine waste dump is located immediately to
the east of the Burro pit. Johnson Camp was operated from 1975 to 1997 as an
open pit, heap leach SX-EW oxide copper operation. Although mining operations
ceased in 1997, the leach pads and SX-EW operation remained active until 2003,
operated by Nord producing approximately 6.7 million pounds of copper cathode
from residual copper in the heaps over the period 1998 to 2003. Platinum intends
to resume production of copper at Johnson Camp as soon as possible following
Completion. All future copper production is predicated upon leaching operations
exploiting the acid-soluble copper contained within the deposit.
Geology
The Johnson Camp mine is located along the eastern flank of the Little Dragoon
Mountains in southeastern Arizona. From west to east, the rocks exposed at the
Johnson Camp property range in composition and age from older Precambrian
schist, shale, and diabase to Paleozoic quartzite and limestone. Igneous rocks
of quartz monzonitic composition, and Laramide (53 million years old), intrude
the section and, although not present in either open pit at Johnson Camp, are
probably responsible for metamorphism and mineralization of the host rocks. In
the vicinity of the Burro and Copper Chief open pits, the copper-bearing host
rocks dip moderately to the northeast, and there are no major structural
disruptions of the host rock geology. Large, disseminated copper deposits occur
in the Bolsa Quartzite, diabase intrusions, and the overlying Lower Abrigo
Formation. Deep oxidation to about 500 feet has converted hydrothermal sulphide
mineralization to copper oxide minerals. Most of the copper resource is in
disseminated and fracture-filling copper oxide minerals of mainly malachite,
chrysocolla and black copper oxide minerals such as tenorite and neotocite.
Copper grades of the chalcocite blanket are around 1 per cent. and this
mineralisation is included in the resource. Below the chalcocite zone, primary
copper is largely oxidised and copper grades reduce to 0.2-0.5 per cent. total
copper. The style of mineralization and the type of alteration recently mapped
on the northern lower benches of the Burro pit suggest the possible presence
beneath the property of a mineralized porphyry-type deposit. In addition to the
alteration evidence, a prominent magnetic anomaly is present between the Burro
pit and Copper Chief deposit supporting the possible presence of a porphyry-type
deposit at depth. Porphyry copper deposits are typically very large, low grade
and require processing by recovery processes much different than those planned
for the Johnson Camp mine. Other targets lie along strike from the Copper Chief
and Burro deposits and include the North Target and the Keystone-Walnut target.
As described in more detail below, the Directors believe there is significant
potential for developing new mineable reserves beyond the limits of the Burro
and Copper Chief deposits. The Directors believe that the current level of
copper prices also means that much of what was modelled as internal waste -
rocks within the open pit that were below the cutoff grade used to construct the
ore zoning model - is likely to become economically recoverable during
Platinum's operation of Johnson Camp.
Land and Title
The Johnson Camp property consists of 59 patented lode mining claims, 102
unpatented lode mining claims and 617 acres of fee simple lands. The patented
claims comprise approximately 871 acres and the unpatented claims comprise
approximately 1,604 acres. The Johnson Camp property therefore covers
approximately 3,092 acres in total. All of the claims are contiguous, and some
of the unpatented mining claims overlap, the normal circumstance in a
jurisdiction where mining claims are physically staked in the field as opposed
to being recorded digitally in a government office. The copper processing
facilities and the Copper Chief and Burro open pits that serve as focal points
for the mine plan are all located on the patented mining claims or the fee
simple lands and hence the principal mining assets occupy lands which will be
protected by title insurance upon Completion.
Nord's patented mining claims give it title to the patented lands. It has full
mineral rights and surface rights on the patented lands. Unpatented mining
claims give Nord the exclusive right to possess the surface covered by the
claim, as well as the right to develop and exploit valuable minerals contained
within the claim, so long as the claim is properly located and validly
maintained. In such cases, the United States Bureau of Land Management ("BLM")
retains certain surface and other management rights.
Platinum has obtained from Pioneer Title Agency, Inc., subject to Completion,
title insurance on patented mining claims and fee simple lands in the amount of
$60 million. Accepted practice in real estate transactions involving mining
lands in Arizona is to rely on title insurance for real property, patented
mining claims and fee land such as the patented lode mining claims and other fee
land associated with the Johnson Camp mine. The commitment outlines certain
exceptions to title most of which are common exceptions for local taxing
districts, easements, and minor conveyance issues. There are recognized
encumbrances such as a Deed in Trust held by Nedbank and a small royalty from
production payments payable to Arimetco capped at $1 million.
Unpatented mining claims are possessory interests in the public domain of the
United States and are initiated through a process of posting a notice on the
ground and filing a copy of the notice with the appropriate authorities ("claim
staking"). After this initiation, claims must be maintained through the payment
of a claims maintenance fee to BLM. Whereas unpatented mining claims may be
challenged by third parties or the United States government, Platinum's title
work and the BLM report for the area covered by Nord's mining claims indicated
that fees had been paid in full and that the claimant of record was Nord.
Nord is currently allowed to mine, develop and explore the Johnson Camp
property, subject to holding the required operating permits and approvals, and
being in compliance with applicable federal, state and local laws, regulations
and ordinances.
Reserves and Resources
Three Dimensional Computer Block Model
The resource model used to estimate geologic resources and mineable reserves at
Johnson Camp was created for the 2000 Johnson Camp Feasibility Study. The 2000
Feasibility Study was conducted by The Winters Company ("TWC"), a mining
engineering consulting firm in Tucson Arizona. The 2005 Feasibility Study, which
was conducted by the Winters, Dorsey Company ("WDC") on behalf of Nord was an
up-date of the TWC study. There was no additional drilling or mining at Johnson
Camp after the drafting of the 2000 feasibility study, but regrettably the
digital model constructed by TWC and updated in 2005 by WDC was not available to
Platinum. RDi, as the Competent Person, has confirmed it is happy with the
validity and robustness of the resource model.
Platinum conducted its evaluation utilizing a base case which was optimized on
$.90 copper and did not have the benefit of a current model which could be
optimized at prices approaching $2.50 copper. Fortunately there are some 2005
runs comparing unoptimized reserves at prices as high as $1.10 where potential
increases in the reserves of Johnson Camp can be seen. The Directors and RDi
believe, therefore, that the mineable reserves used for analysis by Platinum may
be understated. Following Completion, the Directors intend to reconstruct the
block model of the resource base, and believe that there is significant
potential to increase the proven and probable reserves of the Johnson Camp
project.
Drill hole data
The database used by TWC to construct the computer model and reviewed by RDi
included 142 drill holes from the Burro deposit and 151 holes from the Copper
Chief deposit. Drill hole spacing in the Burro and in the up-dip portion of the
Copper Chief is generally approximately 100-feet. Locally spacing in the Copper
Chief is approximately 50-feet, but deeper portions of the Copper Chief were
drilled at a spacing approximating 175 feet. Almost all drill holes were
vertical and none have down-hole surveys. Since the copper resources modelled
are generally close to the surface, the Directors and RDi believe that the
absence of down-hole surveys does not impair the resource estimate. Finally,
although a common method of verifying the computer model is to compare actual
drill hole assays with computer-generated copper grades in the block model,
Summo drilled 12 confirmatory drill holes to not only compare assays with the
model but to obtain its own assays as well. The Summo holes were not
incorporated into the block model, although they now form part of the database
that Platinum can use in the next model; the ore intervals in the 12
confirmation holes drilled by Summo show good comparison to block model grades
in the vicinity of said intervals.
The block model was constructed using assays for total copper. Almost all drill
holes in the Burro deposit have both acid soluble copper and total copper assay
data while 39 percent of the Copper Chief holes have both assay types; however,
Cyprus and Arimetco each used different techniques for calculating acid soluble
copper. Thus, because the one element common to all data sets is total copper
(TCu), the block model was constructed with total copper assays. RDi has
concluded that compiled copper assay results on the in-pit material scheduled to
be mined and leached in the future demonstrate that approximately 80 per cent.
of the mineralized oxide material is acid-soluble. From this 80 per cent.
acid-soluble copper material, RDi has estimated that the new leaching operation
will exceed Cyprus' assumed historic recovery of 64 per cent. (80 per cent. x 80
per cent.), with 90 per cent. recovery of the oxide copper due to crushing of
heap ore to nominal one-inch (2.5 centimeters) size. Although drilling work has
indicated that approximately 15 per cent. of the reserves below an elevation of
4,560 feet contain sulphides, a copper recovery of 72 per cent. (90 per cent. of
80 per cent. = 72 per cent.) is used in the current economic model which has
been confirmed as a valid assumption by RDi. This is a significant increase
compared to the historic recoveries of Cyprus and Arimetco, who recovered an
assumed 64 per cent. of total copper and 43 per cent. of total copper
respectively.
Model Verification
The block models for either pit consist of 50-foot by 50-foot by 20-foot high
blocks, and separate variography was done for each deposit. Five ore types were
defined for the Burro Pit and three for the Copper Chief, and grade estimations
were conducted using strict rock code matching.
Two main methods, and several statistical methods, were used to verify the
completed block model. The first was to compare actual drill hole data bench by
bench in the computer model against drill hole data that actually pierced those
benches. The second method, since the computer model was able to model not only
what ore remains but what had been mined out in operations by Cyprus and
Arimetco, was to compare ore tonnage mined (31.8 million tons with an average
total copper grade of 0.508 per cent.) with recorded mine production (32.1
million tons at a total copper grade of 0.504 per cent.). The comparison was
very close (0.1 per cent.). The Directors are confident in the block model,
based on this latter extremely large sample in used to verify the model.
RDi reviewed the analysis contained within the WDC 2005 feasibility study report
in relation to the block model. The WDC 2005 feasibility study includes an
analysis which RDi has concluded is incorrect because the back-calculated total
copper grade of the Burro Pit contained within the study was 0.682 per cent.
total copper, a grade which is significantly higher than the block model grade
derived from actual assays (0.504 per cent. total copper). RDi believe that the
back-calculated grade is high because part of the copper production used to
calculate it should have been attributed to still-leaching ore previously placed
by the predecessor operator, Cyprus. The balance of the copper production in the
earlier years of Arimetco operations would be from copper leached from new ore
placed by Arimetco. RDi has calculated that Arimetco's recovery of copper in
Arimetco's first year was 108 per cent. of the Arimetco copper placed on the
heap, by dividing the pounds of copper shipped by pounds of copper placed. RDi
also sourced independent data verification exercises and concluded that the
digital database, deposit resource model, and the reserve estimates are based on
real information (as contrasted with complicated back-calculation exercises).
RDi has reviewed the data verification exercises and confirmed its satisfaction
of their validity. Thus the block model is based strictly on drill data (whereas
the erroneous backcalculation is based on production data and, by virtue of
having incorporated an error, cannot be used to verify the drill hole
assay-derived block model). The Directors are confident of the validity of the
block model, based on RDi's judgement supporting the construction of the model
and the reasoning for disregarding the back calculation analysis.
Mineable Reserves
The current mineable reserves are estimated to be 35.1 million tons at an
average grade of 0.393 per cent. total copper (TCu) when optimized at a copper
price of $0.90 per pound (equivalent to 47 million tons at a grade of 0.379 per
cent. Cu before optimization). RDi classifies proven and probable mineable
reserves as follows:
Proven and Probable Mineable Reserves (Optimized)
'000 Tons Copper Grade(%) Copper Metal
('000 pounds)
Proven 28,041 0.397 222,646
Probable 7,100 0.378 53,676
Total 35,141 0.393 276,322
Platinum's due diligence work has indicated that there may be resources which
can convert to mineable reserves at copper prices higher than the $0.90 per
pound base case on which Platnium's evaluation was based. The table below
contains RDi's estimates of reserves, calculated prior to pit optimization, for
copper prices of $0.90-$1.10 per pound of copper. These known resources lie
within the existing open pit shells, or adjacent thereto, and demonstrate that a
lower cutoff grade, effective at higher copper prices, may enhance the mineable
reserves. The Directors and RDi believe that when optimized at present copper
price levels, the mineable reserves will increase significantly. The Company
intends, following Completion, to create a new mine model to assess not only the
addition of reserves but the potential for increasing production and therefore
cash flow and profitability.
Lerch-Grossman Reserves at varying copper prices
(Calculated prior to modeling roads and in-pit ramps)
Copper Price '000 Tons Copper Grade Copper
(%) Metal(pounds)
For comparison, $.90
optimized 35,141 0.393 276,322
$.90 per pound of copper 47,045 0.379 356,461
$1.00 per pound of
copper 61,041 0.357 435,777
$1.10 per pound of
copper 73,379 0.345 506,873
Geologic Resources
The total resource is estimated by RDi to be 136 million tons at a cut-off grade
of 0.2 per cent. TCu, with average copper grade of approximately 0.37 per cent.
or approximately one billion pounds of contained copper. The Directors and RDi
believe that there is excellent potential to increase the total resource by
additional drilling. The global resource can be classified as follows:
Total Geologic Resources
Tons Copper Grade Copper
(%) Metal(pounds)
Measured 62,442,199 0.38 480,654,881
Indicated 32,292,999 0.37 240,246,989
Subtotal Measured & Indicated 94,735,198 0.38 720,901,870
Inferred 41,422,399 0.35 286,090,454
Total 136,157,597 0.37 1,006,992,324
Historical Production
From 1975 to 1986, Johnson Camp's then owner, Cyprus mined approximately 15
million tons of ore grading approximately 0.4 per cent. acid soluble copper from
the Burro pit. All ore placed on the heaps was run-of-mine (that is, uncrushed).
In total during Cyprus' ownership of Johnson Camp, approximately 107 million
pounds of cathode copper were produced by SX-EW methods.
Arimetco operated the property from 1991-1998, having constructed a new SX-EW
and rehabilitated the leach systems on the existing Cyprus pads and ancillary
ponds. It resumed mining in the Burro Pit and made further improvements to the
facility between 1993 and 1996. Arimetco began limited open pit mining from the
Copper Chief deposit in 1996, and continued mining in both the Burro and Copper
Chief deposits until 1997 when production was terminated. Ore placed on the
heaps from 1991 through 1995 was run-of-mine (uncrushed). In 1996, Arimetco
added a crushing plant in an attempt to improve recoveries. Initially production
was from ore crushed to a nominal 3 inches, however later the crusher screen
size was increased when Arimetco was unable to meet production requirements. It
is unclear what the actual crushed size was.
Production by Arimetco between 1991 and 1997 for the Burro and Copper Chief pits
totalled approximately 16 million tons of ore grading approximately 0.35 percent
total copper, primarily from the Burro pit, producing approximately 50 million
pounds of cathode copper. Arimetco achieved recoveries of approximately 43
percent of the total copper grade from mostly uncrushed ore placed on the heaps.
Arimetco was unable to continue mining operations beyond mid-1997 due to
financial difficulties.
Since 1997, including the entirety of Nord's ownership of Johnson Camp, mining
has not taken place but leaching continued until 2003.
The Johnson Camp mine is not currently in production. Historical production
figures are provided below, categorized by mine operator.
Mining Plan
Johnson Camp is a "brownfield" operation in that following Completion and when
permitted, Platinum will resume production on an existing mine. As such, most of
the pre-stripping normally required to remove waste rock and access ore-bearing
rocks associated with a new mine, has already been completed. The Directors and
RDi therefore believe that the unit mining costs per pound of copper produced
will be low compared to many operations where pre-stripping has not occurred.
Numerous mine sequencing alternatives were investigated to optimize the sequence
with the goal of minimizing costs while generating 25 million pounds of copper
per year.
The scheduling starts with mining the northern end of the Copper Chief pit,
followed by rehabilitated portions of the Burro in years 2-8, and then back to
the southern end of the Copper Chief in Year 8-9. The leaching operation will
continue through years 10-12 although the present mineable reserves will have
been depleted. At current copper prices, some of the material which was formerly
considered waste may be reclassified as ore once a new block model has been
produced. The Directors believe it necessary to reoptimize mine scheduling based
on updating mineable reserves for current prices.
Platinum intends to use a long-established, North American mining contractor to
handle the day-to-day mining operations and handling of ore and waste, and
Platinum has received a firm and acceptable bid which Platinum would execute
following Completion. The quote prescribes a projected production rate of 9,000
bulk cubic yards ("BCY") per day (about 19,400 tons per day) for a 40-hour week.
Mining equipment will be provided by the mining contractor and as such is not
covered within Platinum's capital expenditure plan. The forecast annual ore
production rates are presented in the below table.
Production forecast of 9,000 BCY/day 19,440 tons
Overall average stripping ratio 0.48
Production forecast ore 13,135 tons/day
Average annual ore forecast, 5 days/week schedule 3,415,135 tons/year
Resulting life-of-mine ("LoM") average mining costs are based on detailed
buildup calculations, including labour schedules and pay rates, unit
consumptions and unit costs for consumables, and materials and power. The
manpower requirements are based on similar operations in Arizona and include a
review of unit costs for critical cost items such as power, fuels, and reagents.
The unit consumption rates are based on parameters developed during engineering
and laboratory studies or industry experience at similar operations. LoM
combined costs for ore and waste have been estimated by RDi to be approximately
$66 million. Contractor mobilization and demobilization are estimated by RDi to
represent an additional $750,000, resulting in estimated unit mining costs per
ton of ore moved of:
Burro Pit ore $1.08/ton
Copper Chief ore $1.18/ton
Waste $1.22/ton
RDi has also estimated it will be possible to recover approximately eleven
million pounds of copper already contained within the leach pad over the first
few years of production. Total copper produced (including residual recovery) is
forecast by RDi to be 224,588,000 lbs, leading to a unit mining cost of $0.297
per pound of copper recovered and a total production cost of $0.60 per pound of
copper recovered (taking into account mining, leading and SX-EW).
Processing and Copper Production
Platinum intends to resume mining and leaching to produce approximately 25
million pounds of copper cathode per year. To achieve such production levels,
Platinum will, following completion and the award of the necessary mining
permits, upgrade the crushing circuit and ore conveyance system, and
rehabilitate portions of the plant's electrowinning section. A possible crusher
has already been purchased by Nord. The cost for these upgrades, including
working capital, is estimated by RDi to be $21.1 million and will be necessary
prior to the start of the operation.
The Directors and RDi believe copper production will originate from both an
active leach program of newly mined ore as well as residual leaching of historic
material previously placed on the pads. The Directors intend to place crushed
ore on top of existing heaps for the first four years of the mine's operation,
and, commencing in year five, place the remaining leach ore on a new pad. The
Directors intend to continue leaching on the old pad until the grade of copper
in solution is too low for profitable processing.
Once the ore has been crushed, the operating plan includes acidulating and drum
agglomerating the crushed ore with sulphuric acid and conveying the ore through
a series of movable conveyors to the new leach pad. The Directors intend to
acid-cure the ore with a 144-gram-per-litre raffinate solution before
conventional leaching commences. The ore will be stacked on 30-foot lifts on
both the old heaps and the new. The solutions will report to the SX plant and
raffinate from the plant will be applied to the existing heaps for residual
copper recovery. Copper will be recovered from solution utilizing the SX
circuit, and cathode copper will be produced from the electrowinning circuit
using stainless steel blanks. RDi's forecast for copper production is presented
below.
Annual Copper Production (pounds, in millions)
Year Copper (mm lbs)
2007 2.3
2008 18.2
2009 24.2
2010 25.0
2011 25.0
2012 25.0
2013 24.2
2014 25.0
2015 25.0
2016 19.6
2017 9.1
2018 2.0
Total 224.6
Exploration potential
The Directors believe that there is significant exploration potential at Johnson
Camp for new resources, as well as the expansion of mineable reserves previously
discussed. To the south of the Burro pit there is a water monitoring well
drilled, which contained ore grade copper mineralization. Additionally, the
Directors believe there may be copper mineralization contained in the rock
between the Burro and Copper Chief pits, as the rock types are believed to be
continuous between the two pits. Finally, a deep hole drilled in the Burro pit
intersected mineralization in Bolsa quartzite assaying 0.75 per cent. copper.
The Directors will evaluate exploration following Completion but their priority
will be the extraction of known resources.
Environmental and Permitting
Johnson Camp and other mining projects in Arizona fall under the jurisdiction of
the Arizona Department of Environmental Quality ("ADEQ") in relation to
environmental affairs and related permitting matters. There are numerous
government permits relating both to mining operations and to environmental
oversight. The principal permit affecting the restart of Johnson Camp is the
Aquifer Protection Permit ("APP"). Mining activities have occurred at and around
Johnson Camp for over 100 years and Nord will be obligated to monitor ground
water quality and protect the two recognized acquifers (alluvial and bedrock)
before, during, and after operating the mine. Other significant permits which
are required in order to fully restart production at Johnson Camp mine, include
those relating to air quality, storm water, surface water, and a high explosives
license.
Johnson Camp is under a compliance order (#APP-114-02) ("Compliance Order") and
must rectify certain deficiencies before the ADEQ will award an APP. Nord
officials accompanied by Platinum met with the ADEQ on 5 October 2006, and Nord
submitted supplemental materials to address the deficiencies. Among the
deficiencies, Nord must provide evidence that it is using BADCT (Best Available
Demonstrated Control Technology) procedures and/or equipment which will require
certain upgrades to the SX-EW plant, pond, and piping; such upgrades are
included in Platinum's plan for restarting the mine. A further deficiency, which
will be rectified following Completion, is the ability to demonstrate that Nord
is financially capable of reopening, operating and closing the Johnson Camp.
The ADEQ begins an administrative completeness review when an application is
received. Since the APP program is tied to a 186-day licensing time frame, ADEQ
will start the licensing time frame only when it has received a completed
application. This will only be possible following Completion. Once the
application is deemed administratively complete, ADEQ starts a substantive, 186
calendar-day review of technical issues such as the submitted plans,
specifications, and processes. From the time of completed application to
issuance of an APP, the total period for fully permitting the operation can take
a year; however, the mine can recommence limited operations in a shorter
timeframe.
The ADEQ confirmed verbally on 5 October 2006, that, provided the deficiencies
were cleared, and following Completion, the mine will be able recommence
circulation of solutions through the heaps and to produce copper from ore that
had already been placed on the heaps within three to four months of Completion.
Once the Company has upgraded the crushing circuit and conveying system, the
Directors will be able to apply for an air quality permit. Once the air quality
permit has been received, the Directors anticipate the Company will be able to
mine, crush, stack, and leach new materials under the existing Compliance Order
and in anticipation of the new APP but prior to APP issuance once the financial
demonstration and BADCT upgrades to the SX-EW facility, ponds, and piping are
complete. Platinum's mining model assumes the commencement of mining operations
in early 2007, however, there can be no guarantee that Nord will have received
the necessary APP at that time and ADEQ is not bound to honour its verbal
confirmation.
A new individual application for the proposed crushing facility was submitted to
the ADEQ, Air Quality Division, in October 2006. Sources of particulate matter
at the site will include the primary and secondary crusher and related screens.
The Directors anticipate a new permit will be issued in three to six months.
Storm water discharge in Arizona is administered by ADEQ for the U.S.
Environmental Protection Agency and thus the ADEQ has responsibility for
National Pollutant Discharge Elimination System ("NPDES") permitting. Johnson
Camp Mine was issued a NPDES permit in 2001 for discharge in Arizona, however
the permit has expired. Nord is updating its storm water pollution prevention
plan and the Directors anticipate receipt of a new permit when the U.S.
Environmental Protection Agency resumes control of NPDES. The mine has been
automatically granted an administrative continuance of permit coverage.
Activities that impact jurisdictional waters of the United States must be
approved and permitted by the U.S. Army Corps of Engineers. The proposed
additional heap leach pad located north of the Burro Pit could impact drainages
that are considered to be jurisdictional waters. The Directors believe that the
current heap leach design can be reduced in size and relocated outside of
jurisdictional waters, and such matters will be taken into consideration
following Completion.
The mine is not located in an active management area, so it is not subject to
pumpage restrictions, and Nord's current sources of water supply are believed to
be adequate for the anticipated operation. Should Platinum engage in an expanded
mine plan, the Directors understand that additional sources of water may be
required. A new water supply well is proposed as part of future
activities.
A water balance study prepared in 2003 indicated that the proposed solution
ponds and heap leach expansions that were designed were inadequate for solution
storage capacity and runoff containment of the expanded operations. The volumes
specifically excluded internal plant operation flows. The Directors may alter
the original designs in the future if operations are expanded, and will review
the water balance requirements if and when a new design is developed.
A biological evaluation identified agaves that may serve as a food source for
the federally-listed lesser long-nosed bat. The agaves are located within the
proposed Copper Chief expansion area. Nord has proposed to move small- to
medium-sized agaves and provide watering to transplanted agaves. A cultural
resources survey which was completed in 2004 determined that no eligible sites
were identified and therefore no action was required by Nord.
Nord does not have a current license for use and storage of explosives. Platinum
intends to utilize a mining contractor, which would hold an appropriate license.
Nord representatives at the mine indicated that waste tires are removed
periodically. Solid wastes are collected by an outside contractor for off-site
disposal. Sanitary wastes are handled by an onsite septic system. It is not
known how wastes were disposed of in the past. Mines typically have hazardous or
regulated materials, such as transformer oil with polychlorinated biphenyls,
asbestos, petroleum-contaminated soils, lamps and ballasts, and batteries. Due
to the long history of mining in the area, and lack of documentation regarding
previous waste handling, it is possible that such wastes may be buried on-site;
however, Platinum is unaware of any known problems.
The operation's current reclamation plan is dated November 2003, and the costs
of the plan and associated groundwater monitoring program are incorporated in
Platinum's financial model. If new facilities are constructed, revisions to the
plan will be submitted to the Arizona State Mine Inspector's Office.
Further information on Johnson Camp
The Competent Person's Report on Johnson Camp and Coyote Springs is set out in
Part III of the admission document. This report was prepared by RDi and, in
particular as it relates to Johnson Camp, describes the geology, provides
estimates of mineral resources and mineable reserves, and summarizes plans for
mining, processing, copper production, and environmental permitting. The Coyote
Springs prospect is also covered by the CPR and briefly summarized below.
Base Metal Prospects
Nord holds option agreements on three base metal prospects which are described
below. Additional details on commercial terms of the arrangement at each
prospect are described in paragraph 11.26 of Part VIII of the admission
document.
Coyote Springs, Safford, Arizona
Nord currently holds an option on 112 unpatented mining claims and two Arizona
prospecting permits on state sections, for an area covering approximately 3,000
acres, located about 12 miles north of Safford, Arizona. The exploration target
is a porphyry copper deposit, either covered by alluvium or concealed by
pre-mineral volcanic bedrock. No copper resources have been identified due to
limited drilling by predecessors-in-interest, but copper staining exists on
limited surface outcrops, suggestive of a copper-bearing system at depth.
Coyote Springs is situated immediately north of and adjacent to Phelps Dodge's
Safford project, which reportedly has been determined by the U.S. Geological
Survey to be the largest undeveloped porphyry copper mining district in the
world. Ore reserves in the Safford District reportedly stand at over
3,000,000,000 tons grading 0.30 per cent. leachable copper oxide and copper
sulphide ores grading over 0.60 per cent. This prospect is of particular
interest to the Directors as it occurs along the northwest-trending
Morenci-Safford lineament and along the westnorthwest extension of the Safford
porphyry copper-gold belt. The Directors believe that these structural trends
may control the location of several neighboring copper deposits and mines such
as porphyry copper-molybdenum deposits (similar to Phelps Dodge's Safford Lone
Star project), porphyry copper-gold (Dos Pobres), and Cu-Au-As-Sb (copper, gold,
arsenic and antimony) deposits like the western margin of the diatreme breccias
at Lone Star. Coyote Springs is also located adjacent to Phelps Dodge's
under-construction Dos Pobres mine, which is projected to produce approximately
240 million pounds of copper per year over an 18-year mine life. Induced
polarization surveys yield geophysical anomalies interpreted as being
characteristic of a deep mineralised porphyry system (i.e., sulphide
mineralisation). The obligation will be to spend approximately $3 million over
five years to earn 100 per cent. interest in the property, subject to a sliding
scale royalty (3 per cent. net smelter returns at $3.00/lb copper).
In summary, Coyote Springs is an exploration target for a porphyry copper
deposit covered by alluvium, or a deep deposit lying beneath pre-mineral
bedrock. Porphyry copper deposits occur in clusters and the Nord property may
contain yet another deep deposit similar to Phelps Dodge's Safford Annex (more
than 2,000 feet deep). The Directors intend to evaluate their options in respect
of Coyote Springs following Completion.
Texas Arizona Mine, Dragoon, Arizona
In the area surrounding Johnson Camp, the Directors believe that potential
exists for the discovery of additional copper resources along with silver, gold,
lead and zinc deposits. The Directors believe that the Texas Arizona Mine may
have potential for large, low grade copper deposits and also smaller, high grade
polymetallic mineral deposits.
The Texas Arizona Mine is located 4 miles southeast of the Johnson Camp Mine on
the flank of the Gunnison Hills. The five-level underground mine was developed
in 1908 and was most actively mined during the period 1910-1928. According to
the U.S. Geological Survey Professional Paper #416, typical ore mined at Texas
Arizona averaged 38.5 per cent. lead, 49 ounces silver per ton, 1.6 per cent.
copper and 0.05 ounces gold per ton.
In July 2004, Nord entered into an option agreement to acquire four unpatented
mining claims at the Texas Arizona Mine, Cochise County, Arizona. Nord paid
US$980 for the option and must pay an additional US$10,000 within four years in
order to exercise the option. No substantial work has been done on the property
by Nord since acquisition of the option. The Directors intend to evaluation
their options after Completion.
Mimbres, Grant County, New Mexico
Nord holds an option on the Mimbres prospect, which was explored by Kennecott in
the 1970s. Platinum's geologist was involved in the Kennecott exploration
program and therefore the Directors believe this property to be immaterial. The
Directors intend to evaluate their options after Completion.
CURRENT TRADING
Nord
Nord did not have any sales during the six months ended 30 June 2006 due to the
fact that Johnson Camp was on a care and maintenance program during this period.
Nord's operating expenses totalled approximately $2,676,000 for the six months
ended 30 June 2006. Depreciation, depletion and amortization charges of
approximately $42,000 meant Nord made a loss from operations of approximately
$2,718,000 for the period, and a loss before income taxes of US$3,251,000.
Platinum
Since Original Admission, Platinum has been focused upon the identification of
appropriate assets for investment by the Company by way of the acquisition of
producing assets and/or developed reserves with near term production. Net income
for the period from 12 January 2006 to 31 August, 2006 was $1.2 million as
interest income from the Trust funds offset administrative expenses relating to
the Platinum's acquisition strategy. At 31 August 2006, the Company held $78.3
million in cash and short term securities, of which $78.0 million is held in
Trust.
PRINCIPAL TERMS OF THE NORD ACQUISITION
Pursuant to the terms of the Merger Agreement, the Company has conditionally
agreed, subject to, inter alia, Platinum Shareholder approval and Nord
Shareholder approval, to acquire the entire issued share capital of Nord from
the Nord Shareholders.
Under the terms of the Merger Agreement the Company will purchase the entire
issued and outstanding share capital in Nord for a total consideration of $60
million subject to certain net asset adjustments plus certain of Nord's costs,
up to a total of $1,085,000, in a reverse triangular merger pursuant to the
Merger Agreement, which is described in further detail in paragraph 11.10 of
Part VIII of the admission document. Additionally, except for the Excess Price
Options, Nord is required under the Merger Agreement to cancel or cause the
exercise of all Nord Options and Nord Warrants for the purchase of Nord Shares
so that no Nord Options or Nord Warrants for the purchase of Nord Shares will be
outstanding after the closing of the Acquisition.
There will be a holdback amounting to US$3 million of the purchase price from
Nord Shareholders. The Holdback will be held in escrow for a period of six
months from Completion. The Company has the right to draw against the Holdback
for certain claims arising as a result of changes in the elements included in
the calculation of the per share merger consideration or certain breaches in
representations and warranties related to severance, change of control and
similar payments to employees. At the end of the Holdback period, the remaining
portion of the Holdback amount will be paid to Nord Shareholders.
The Acquisition will be accomplished through a reverse triangular merger,
whereby an indirect wholly-owned subsidiary of the Company will be merged with
and into Nord, with Nord being the surviving corporation. Upon completion of the
Acquisition, Nord will be an indirect, wholly-owned subsidiary of the Company.
The Consideration is payable in cash on completion and will be funded from
existing cash resources in the Company currently held in the Trust Fund.
A summary of the principal terms of the Merger Agreement is set out in paragraph
11.10 of Part VIII of the admission document.
RATIONALE FOR THE ACQUISITION
Your Directors stated in March 2006 that Platinum was formed to acquire
undervalued producing mining assets and/or developed reserves with near term
production. Nord owns Johnson Camp, which contains a recently producing mine
which is currently on "care and maintenance status". The Directors intend to
resume production of copper from Johnson Camp, in order to capitalise on current
copper prices. The Directors believe Johnson Camp provides substantial expansion
and optimization opportunities to Platinum.
PROSPECTS FOR THE ENLARGED GROUP
The Directors intend to build the Company aggressively via the expansion of
existing operations as well as through additional acquisitions. At Johnson Camp,
the Directors intend to initiate conversion of known resources to mineable
reserves as soon as possible after Completion and then commence the exploration
of existing targets for potential addition to resources. Within a year or two of
Completion, the Directors believe the existing land package holds potential for
identification of new targets. The Directors believe the opportunities for
growth can be categorised in four main areas.
Increased Production
Platinum's due diligence work has indicated that there may be resources which
can convert to mineable reserves at higher copper prices than the $0.90-$1.20
cases which were run historically. These known resources lie within or adjacent
to the existing open pit shells, and represent a potential doubling or tripling
of mineable copper reserves without development drilling. The Company intends to
create a new mine model to assess not only the addition of reserves but the
potential for increasing production and therefore cash flow and profitability.
Once the analysis is complete, the Directors and RDi believe the cost of
implementing this plan is relatively low because Platinum will mine the same
volume of rock regardless of whether it is placed on the leach pile or the waste
pile. At higher copper prices more ore would be placed on the leach pile, and
Platinum would have to add additional solution to the ore, and expand the
electro-winning cell capacity to handle the additional copper production. The
Directors and RDi believe it is possible that copper production could be
increased by an estimated 30 per cent. after optimisation of the mine within one
year of defining the reserves to justify the expansion, subject to obtaining
applicable permits.
Increased Resources
Platinum's due diligence work has indicated that there are immediate
opportunities for potential increases of the total copper resource of Johnson
Camp. For instance, (1) to the south - there is a water monitoring well drilled
approximately 600 feet to the south of the Burro Pit; (2) between the deposits -
the Burro and Copper Chief pits are separated by approximately 1500 feet, and
the rock types are believed to be continuous between them. The Directors believe
there could be copper mineralization contained in these rocks, but there has
been no historic drilling between
them; and (3) at depth, there was one deep hole drilled in the Burro Pit which
intersected mineralization in Bolsa quartzite assaying 0.75 per cent. copper.
Additional Deposits
Platinum's due diligence has indicated that the known mineralization extending
on trend through the Burro and Chief deposits is contained within a belt of
mineralized rocks which extends further north and further south to historic
showings. There has historically not been any drilling of either the showings or
the rocks in between.
By-products
The Directors believe there is potential for by-product revenues from two
sources, the sale of Bolsa quartzite as garden rock, and the sale of limestone
to the cement industry, as follows:
-The existing Nord operation sells Bolsa quartzite through a local
contractor into the garden rock business. Water restrictions in Arizona have
led to the replacement of lawns with crushed rock suitable for residential
use. Nord currently has a contract allowing a local contractor to pick up
waste rock (predominantly Bolsa quartzite) which it then sells into local
markets, whereby Nord receives a minimum of $1.00/ton of rock removed, at no
cost to Nord. This has the effect of reducing the cash cost of producing a
pound of copper by $0.06. The Directors believe Platinum can build this
business into a substantial construction material/garden rock/aggregate
business.
-Nord was contacted by Arizona Portland Cement ("APC") about the potential
for mining limestone (which is waste in the context of Nord's operations)
for the cement business. A 50,000 ton sample was collected, but APC has yet
to offer Nord a mining contract. If this opportunity is taken forward the
Directors believe the operation could yield future cash flows to Platinum at
no cost.
Further acquisitions
In the context of searching for an Initial Acquisition for Platinum, and
identifying Johnson Camp, the Directors have come across numerous opportunities
which did not meet the requirements for the Company's Initial Acquisition but
which nevertheless have substantial merit as acquisitions in their own right.
Platinum is evaluating additional potential acquisitions of copper, lead, nickel
and zinc base metal operations, including the copper-zinc-lead property
previously described.
STRUCTURE OVERVIEW
The Company was set up as a Special Purpose Acquisition Corporation ("SPAC"),
which the Directors believe provides more protection and flexibility for
investors than a cash shell or investment fund.
Immediately upon Original Admission, $77,890,400, representing 98 per cent. of
the gross placing proceeds, was placed in an escrow account set up by the
Trustee, and will be held in such account on the terms of the Investment
Management Trust Agreement, until the earlier of (i) completion of an Initial
Acquisition (including the Acquisition) or (ii) the dissolution of the Company.
The Company's Initial Acquisition must, pursuant to the terms of the Investment
Management Trust Agreement, be an Acquisition Target or Acquisition Targets
whose combined fair market value at the time of acquisition is equal to not less
than 50 per cent. of the initial amount placed in Trust.
The Company will proceed with an Initial Acquisition only if: (i) 80 per cent.
of the Shares voted at the general meeting of the Company (convened to approve
such acquisition) vote in favour of such Initial Acquisition; and (ii) the
Company confirms that it has sufficient cash resources to pay both:
-the consideration required to close such Initial Acquisition; and
-all sums due to any Shareholders (excluding Founder Shareholders) who did
not vote in favor of such Initial Acquisition and who have exercised their
Repurchase Rights.
Founder Shareholders must vote in accordance with the wishes of the majority of
New Shareholders at such meeting.
The Warrants will not become exercisable until the later of the completion of an
Initial Acquisition or one year following Original Admission. If the Company
does not complete an Initial Acquisition prior to the Initial Acquisition
Deadline, the Warrants will expire worthless.
The Acquisition may not be completed and the Merger may not be implemented if
New Shareholders holding 20 per cent. or more of the Issued Shares vote against
the Merger at the EGM. New Shareholders who exercise their Repurchase Rights
will continue to be entitled to exercise any Warrants they may hold. Founder
Shareholders do not have any Repurchase Rights.
The Company will be dissolved and funds, including funds held in Trust, will be
returned to holders of Shares and Warrants, in line with their pro rata
entitlements, if the Company has not (i) effected an Initial Acquisition or
signed a letter of intent, agreement in principle or definitive agreement within
the 12 months following Original Admission or (ii) (having signed a letter of
intent or an agreement in principle within 12 months following Original
Admission) effected an Initial Acquisition within 18 months of Original
Admission. If the Company is dissolved, the Founder Shares will not participate
in a return of capital to Shareholders and there will be no distribution from
the Trust with respect to Warrants, which will expire worthless.
REPURCHASE RIGHTS
At the time the Company seeks approval of any Initial Acquisition, each New
Shareholder shall be entitled to require the Company to purchase their Shares if
the New Shareholder votes against the Initial Acquisition and the Initial
Acquisition is approved and subsequently completed. Following completion of an
Initial Acquisition, New Shareholders who did not vote against such an Initial
Acquisition will no longer have Repurchase Rights. Any request to exercise
Repurchase Rights may be withdrawn prior to the vote taken to approve the
Initial Acquisition at a meeting held for that purpose. For the avoidance of
doubt, if the Initial Acquisition is not approved, the Company is not required
to repurchase the Shares of any Shareholder who has requested to exercise
Repurchase Rights.
The Repurchase Price is $7.84 per Share.
A New Shareholder will be entitled to have his Shares repurchased by the Company
at the Repurchase Price following completion of the Acquisition if: (i) at the
EGM, the New Shareholder votes against the Acquisition and exercises his
Repurchase Rights with respect to all of his Shares by giving written notice of
such exercise to Platinum's company secretary, Tom Myatt, (at c/o Capita
Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU) at or
prior to the EGM; or (ii) the New Shareholder votes against the Acquisition by
placing an "X" in the column "Against" next to the special resolution and places
an ''X'' in the column "Yes" next to ''I wish to exercise the Repurchase Rights
in respect of all my/our shares'' on the enclosed proxy card and returns it.
Such payment will be made no later than three business days following the later
of Completion and the delivery to the Company by the New Shareholder of his
Shares. However, the Company's repurchase obligation will only be effective if
the Acquisition is approved by 80 per cent. or more of the Shareholders voting
at the EGM and Completion occurs. For the avoidance of doubt a Shareholder who
votes for the Acquisition is not entitled to have his Shares, repurchased by the
Company.
FAILURE TO APPROVE THE ACQUISITION
If the Acquisition is not approved, the Trust Fund will continue to be held in
the Trust maintained by the American Stock Transfer and Trust Company as Trustee
pursuant to the Investment Management Trust Agreement. The proceeds held in the
Trust Fund may be used in connection with a future Initial Acquisition (whether
as consideration, as reimbursement of any expenses associated with completing
such an Initial Acquisition, to fund any working capital needs considered
necessary subsequent to the date of the closing of such an Initial Acquisition,
or in connection with the exercise by any Shareholder of his Repurchase Rights.
The interest earned on the Trust is released to the Company to fund working
capital or other expense requirements, including expenses relating to due
diligence of potential Acquisition Targets, and office space and administrative
services.
The entirety of the sums held in the Trust (subject to the exercise of
Repurchase Rights by Shareholders) will be released only on the earlier of: (i)
the completion of an Initial Acquisition by the Initial Acquisition Deadline, in
which event such sums, will be distributed to the Company to fund, among other
things, the Initial Acquisition and any amount due to a Shareholder who has
exercised his Repurchase Right; or (ii) the distribution of the remaining funds
held in the Trust on Platinum's failure to complete an Initial Acquisition by
the Initial Acquisition Deadline, in which event, if no Initial Acquisition has
occurred, Platinum will liquidate the Trust Fund as part of a plan of
dissolution and liquidation as described below, and the remaining funds will be
distributed, on a pro rata basis, to all Shareholders.
In the event the Warrants become exercisable, the proceeds from any exercises of
the Warrants will be paid directly to Platinum and not held in the Trust Fund.
If Platinum does not complete any Initial Acquisition by the Initial Acquisition
Deadline, the Company will liquidate the Trust as soon as practicable under
applicable law as part of a plan of dissolution and liquidation which would
result in a distribution to Shareholders of all the sums held in the Trust,
including: any accrued interest, net of income taxes payable on such interest
and trust expenses, not previously released to Platinum. The Company will
promptly adopt a plan of dissolution and liquidation and initiate procedures for
its dissolution and liquidation and the distribution of its assets, including
the Trust Fund, if the Company does not complete an Initial Acquisition by the
Initial Acquisition Deadline. The Company cannot provide Shareholders with
assurances of a specific time frame for the dissolution and distribution. If the
Company has not completed an Initial Acquisition by the Initial Acquisition
Deadline, its corporate purpose and powers will be limited to acts and
activities relating to dissolving, liquidating, and winding up. Holders of
Founder Shares have agreed to waive their respective rights to participate in
any distribution from the Trust in respect to Founder Shares occurring upon the
Company's failure to complete an Initial Acquisition by the Initial Acquisition
Deadline. The holders of the Shares included in the Units (including Founder
Shareholders who purchased Units pursuant to the Placing or who purchased Shares
in the after market) will participate in any such liquidating distribution from
the Trust. On a dissolution and liquidation due to the Company's failure to
complete any Initial Acquisition by the Initial Acquisition Deadline, the funds
held outside of the Trust may be distributed to all holders of Shares in
accordance with applicable law.
DIRECTORS AND SENIOR MANAGEMENT
The Directors of Platinum are:
Mark Nordlicht, Chairman, aged 38
Mr Nordlicht is the founder of Platinum Partners Value Arbitrage Fund, L.P. and
the sole managing member of the general partner. Mr Nordlicht has over sixteen
years experience in the derivatives trading industry and is responsible for
overseeing all trading and operations of the fund. Mr Nordlicht is currently the
Chairman of Platinum Energy Resources Inc., a Special Purpose Acquisition
Corporation. From 1997 to 2001, Mr Nordlicht was a founder and managing partner
of West End Capital, a New York based money management firm. In 1991 Mr
Nordlicht founded Northern Lights Trading and was its general partner until
2000. Northern Lights Trading was a proprietary options firm based in New York
which employed traders in the cotton, coffee, natural gas, crude oil, gold, and
silver option trading pits.
Bobby Cooper, Chief Executive Officer, aged 61
Mr Cooper is a mining industry executive with over forty years of diversified
multi-site, multiproduct mining industry experience. Mr Cooper currently serves
as Board Chairman to High Plains Uranium, Inc which successfully completed an
IPO in December 2005 and is now a publicly traded company on the Toronto Stock
Exchange. Until 1997 Mr Cooper was the President and CEO of Kennecott
Corporation - a North American mining company with revenues of $1.2 billion at
that time, having started his working life at the company in 1965 as a clerk. In
his most recent role at Kennecott Corporation he built and operated gold,
silver, copper, zinc, coal and diamond properties. Between July 1984 and
February 1987, Mr Cooper served in various positions with Atlantic Richfield
Company, including as Maintenance Manager, Operations Manager and General
Manager. During his tenure, he helped de-commission molybdenum operations in
Nevada and significantly expand coal mining operations in Wyoming. Between 1965
and 1984 Mr Cooper worked in Kennecott Corporation, Shell Mining Company, Arch
Minerals Corporation and Kerr McGee Coal Corporation. During this time he worked
in various positions from clerk to management positions, with progressively more
responsibility. Mr Cooper graduated from Arizona State University with a BA in
Business Administration in 1972 and subsequently carried out graduate work in
industrial technology and mineral economics.
Thomas Loucks, President, aged 57
Mr Loucks is a senior level mining industry executive with over thirty years of
diverse Fortune 500 and small cap experience in mining company management as
well as international exploration, mineral project development, corporate
planning, acquisitions, and divestitures. Mr Loucks has been President & CEO of
Trend Mining Company since June of 2004 where he has diversified the company's
portfolio and found partners to invest and take on the costs of exploration and
production on Trend's international projects. Between 1988 and 1999 Mr Loucks
served as Executive Vice President, Treasurer, and Chief Financial Officer of
Royal Gold Inc. - a Denver-based, NASDAQ-listed company. He led the raising of
$18 million in private placements during 1993-1999. As well as initiating and
handling investment/joint venture transactions and acquisitions, Mr Loucks
participated in a collaborative management effort to restructure the Company
from an operating mining company into successful royalty company, involving a
major redirection of the Company's business plan. Between 1985 and 1988, Mr
Loucks was responsible for business development activities of Newmont Mining
Corporation, NY. Previously, he worked in major mineral project development
programs at Climax Molybdenum Company, precious metals exploration with AMAX,
Inc., and in international exploration with Kennecott Copper Corporation. Mr
Loucks holds an MBA from Stanford Graduate School of Business and earlier
received bachelors and masters degrees in geology from Dartmouth College.
Howard Crosby, Senior Vice President, aged 54
Mr Crosby has more than 25 years of mining industry experience. Since September
of 1989, he has been President of Crosby Enterprises, Inc., ,and from 1995
through October of 2005 was Chairman and CEO of Cadence Resources Corporation, a
publicly traded oil and gas company. Early in his career, Mr. Crosby worked for
United Nuclear Corporation, which at the time was extensively involved in the
uranium mining business in the western United States. Mr. Crosby also currently
serves as an officer or director of White Mountain Titanium Corporation (WMTM
USOTC), High Plains Uranium (Canadian TSE), US Silver Corporation, Gold Crest
Mines, Inc, Netcentric Systems, plc (United Kingdom). Mr Crosby was also
formerly a director of Western Goldfields (USOTC-WGDF). He is a 1975 graduate of
the University of Idaho.
John Ryan, Chief Legal Officer, aged 44
Mr Ryan is currently also the Chairman and Chief Financial Officer of US Silver
Corporation which owns the operating Galena Mine, an underground high-grade
silver mine located in North Idaho. He is also currently Chief Financial Officer
of Trend Mining Company, which focuses on platinum metals exploration. Mr Ryan
has over twelve years' senior level experience in the mineral and oil and gas
industry sectors. Mr Ryan was until September, 2006 Chief Financial Officer of
High Plains Uranium Inc, which he led from start up in April 2004 to its
successful IPO on the Toronto Stock Exchange in December 2005. He was until
October 2005 Executive Vice President and Chief Financial Officer of Cadence
Resources Corporation where he was instrumental in negotiating the acquisition
of Aurora Energy which involved assisting with the successful raising of over
$20 million in new equity capital to close the transaction. Mr Ryan was also
previously Executive Vice President and Chief Financial Officer of Western
Goldfields, Inc. Prior to this he was a stockbroker at Pennaluna & Co, and
Shearson-Lehman Brothers. Mr Ryan gained a BSc in Mining Engineering from the
University of Idaho prior to gaining his Juris Doctor at Boston College Law
School.
Brian Burgess, Non-Executive Director, aged 65
Mr Burgess is a human resources specialist with a technical mining background.
He has had multi cultural experience of large complex businesses. He is
presently retired but worked in several Rio Tinto companies between 1978 and
1998. He served as Senior Executive in charge of International Human Resources
between 1995 and 1998, where he brought together the senior management
development and succession planning programme for Rio Tinto (headquartered in
London) with that of CRA (headquartered in Melbourne). Between 1993 and 1995 he
served as Senior Vice President Administrative Services for Kennecott
Corporation. He took part in changing the management style of the Corporation in
the nineties and oversaw the implementation of an organizational change process
for the whole of the Corporation. Between 1991 and 1993 Mr Burgess lead the
introduction of a system of inter company transfers for senior employees of high
potential for Rio Tinto. Between 1988 and 1991 Mr Burgess served as Human
Resources Manager for Palabora Mining Company in South Africa and between 1978
and 1988 Mr Burgess served as Personnel Manager for Rossing Uranium. Mr Burgess
also served as Personnel Manager for the Rhodesian Iron and Steel Company and as
Management Consultant for P-E Consulting Group. He graduated from the City
University London with BSc Honours in Electrical Engineering in 1964. In 1969 Mr
Burgess received a Diploma in Management Studies from the British Institute of
Management.
John May, Non-Executive Director, aged 58
Mr May is currently a director of AIM listed Netcentric Systems Plc, Nasdaq
listed Avatar Systems, Inc. and a Non-Executive Chairman of Channel Islands
listed Southbank UK Plc. He was previously Finance Director of AIM listed London
& Boston Investments Plc. and a non-executive Director of AIM listed Croma Group
Plc. Mr May is also currently a principal of a boutique chartered accountancy
practice, focusing on advising companies on finance raising, mergers and
acquisitions, business strategies and entry onto the OFEX and AIM markets, in
addition to providing general accountancy, tax and audit services. He was
previously a Senior Partner at Horwath Clark Whitehill, an UK accountancy firm,
for 17 years, including 8 years on the Managing Board. Mr May is the Policy
Director and Deputy Chairman of the Small Business Bureau Limited (SBB) and
Deputy Chairman of the Genesis Initiative, which are lobbying groups to the UK
government on behalf of small businesses, particularly to the DTI and the
Treasury. He is also a Conservative Borough Councillor for Surrey Heath Borough
Council. Mr May qualified as a chartered accountant in 1974 having previously
gained his DIA at the University of Bath Management School in 1970and his BA
from the University of London in 1969.
SENIOR MANAGEMENT
Tom Myatt, Chief Financial Officer and Company Secretary, aged 59
Mr Myatt has over 20 years of senior level experience in the mining industry
sector. He was until February 2006, President and General Manager of Rio Tinto
Services, Inc., which provided business services, including accounting,
treasury, information services, benefit administration, risk management,
government affairs and public relations, to Rio Tinto plc's North American
subsidiaries. Mr Myatt previously held Chief Financial Officer, Manager Business
Improvement, Controller, and Director of Finance positions at Rio Tinto's
divisional organization level, and mine General Manager and Controller positions
at Rio Tinto and Kennecott properties. While with Rio Tinto, Mr Myatt also led
acquisition evaluation teams and strategic supply procurement negotiating teams.
Prior to this, he was Controller for Arizona Products Inc., an agribusiness
company, and Manager Coal Planning for Atlantic Richfield Co. Mr Myatt gained a
Bachelor of Business Administration degree at University of Iowa, and has
participated in Executive Education programs at Duke University and University
of Michigan. Mr Myatt is not a director of the Company.
DIRECTORS AND SENIOR MANAGEMENT SERVICE CONTRACTS
The Company has entered into letters of appointment with each of the Directors,
that will supersede the existing letters of appointment conditional on
Admission, in respect of their appointment as directors of the Company. Except
for John Ryan and Howard Crosby, who are also contracted to provide occasional
consultancy services to group companies of the Company at a fee of US$750 per
day with no guarantee as to the minimum number of days, the terms of these
letters are the same for all the Directors. The letters of appointment provide
for an annual fee of £30,000 to each Director, payable quarterly in arrears
following submission of an invoice. The appointment will be deemed to commence
on 14 March 2006 and will be terminable on six months' notice on either side. No
compensation will be payable for loss of office and the appointment may be
terminated immediately if, among other things, the Director is no longer a
director of the Company. The Directors have agreed not to accept any
appointments which create a conflict of interest with their directorship during
the course of their appointments and not to act in competition with the Company
for six months after termination, save in each case where they have the consent
of the board or their interests have been disclosed in paragraph 10 of Part VIII
of the Admission Document. The Directors have also agreed that for six months
after termination of their appointment they will not assist, encourage or
procure any third party to offer any appointment to a member of the board
without the board's prior written consent.
Bobby Cooper and Thomas Loucks have entered into employment agreements, which
are conditional on Completion, with PDM USA under which they hold the titles of
Chief Executive Officer and President, respectively. Bobby Cooper is to receive
a salary US$450,000 and Thomas Loucks US$350,000. Under their respective
agreements, Bobby Cooper and Thomas Loucks are appointed to the board of
directors of PDM USA and agree to accept appointments in affiliates, if
reasonably requested, by the board. The employment agreements for Bobby Cooper
and Thomas Loucks are for a three year term (with automatic one year extensions)
and include six month non-compete and non-solicitation restrictive covenants.
Tom Myatt has also entered into an employment agreement, which is also
conditional on Completion, with PDM USA under which he holds the title of Chief
Financial Officer and is entitled to a salary of US$160,000. Tom Myatt is not a
director of the Company and has no such duties in respect of affiliates,
however, he agrees to accept appointments as an officer in affiliates. The term
of Tom Myatt's agreement is for one year provided that he may terminate the
agreement for any reason by giving 3 months' prior written notice.
The three employment agreements of Bobby Cooper, Thomas Loucks and Tom Myatt can
each be terminated by the Company without cause. Each of Messrs Cooper, Loucks
and Myatt receives severance payments equal to six months salary upon
termination or resignation, subject to certain limited exceptions, and subject
to the relevant employee agreeing to enter into a Separation and General Release
Agreement. If the employment agreements are terminated with cause, no severance
pay is payable. The employment agreements are governed by the laws of the State
of Colorado, United States of America.
DEFINITIONS
"Acquisition" the proposed acquisition by PDM USA of Nord through the merger
(under US law) of Merger Sub with and into Nord, with Nord as
the surviving corporation pursuant to the Merger Agreement.
"Acquisition an acquisition target whose characteristics match the investing
Target" strategy of the Company as set out in the Original Admission
Document. This would include the acquisition of Nord pursuant to
the Merger (if the Merger completes).
"Admission" the effective re-admission of the Shares and Warrants in issue
to trading on AIM in accordance with the AIM Rules.
"AIM" the AIM market operated by the London Stock Exchange.
"AIM Rules" the rules applicable to companies whose securities are traded on
AIM, as published from time to time by the London Stock
Exchange.
"Arimetco" Arimetco, Inc.
"Board" the board of directors of the Company from time to time.
"Bolsa has the meaning as defined in the Competent Person's Report on
Quartzite" page 131 of the admission document.
"Company" or Platinum Diversified Mining Inc., incorporated and registered in
"Platinum" or the Cayman Islands with registered number CD-160817.
"PDM"
"Competent Resource Development, Inc.
Person"
"Completion" completion of the Proposals.
"Consideration" $60,000,000, subject to certain net asset adjustments plus
certain of Nord's costs up to a total of $1.085 million.
"CPR" or the competent person's report prepared by RDi in relation to
"Competent Nord, a copy of which is set out at Part III of the admission
Person's document.
Report"
"Cyprus" Cyprus Mines Corporation.
"Directors" the existing directors of the Company as at the date of the
admission document whose names are listed on page 7 of the
admission document.
"EGM" the extraordinary general meeting of the Company, notice of
which is set out at the end of the admission document.
"Enlarged together, the Company, Nord and their subsidiaries following
Group" Completion.
"Excess Price shall have the same meaning as set out in paragraph 11.10.14 of
Options" Part VIII.
"Founder the 2,483,752 Shares in issue immediately prior to the Placing
Shares" on 14 March 2006.
"Founder Mark Nordlicht, Bobby Cooper, Thomas Loucks, John Ryan and
Shareholders" Howard Crosby, being the holders of the Founder Shares.
"Holdback" the sum of $3,000,000 less any damages to be held in escrow for
a period of six months from the closing of the Acquisition.
"Initial an acquisition by the Company of an Acquisition Target or
Acquisition" Acquisition Targets of aggregate fair market value of at least
50 per cent. of the initial amount placed on Trust, being $77.9
million (which will include the acquisition of Nord, if the
Merger completes).
"Initial the later of the date which is (i) 12 months from Original
Acquisition Admission/or the date which is 18 months from Original Admission
Deadline" if, within such 12 month period, the Company has signed a letter
of intent or agreement in principle in respect of a proposed
Initial Acquisition; or (ii) an extended date approved by the
majority of Shareholders.
"Investment the agreement dated 8 March 2006 between the Company and the
Management Trustee, further details of which are set out in paragraph 11.5
Trust of
Agreement"
Part VIII of the admission document.
"Johnson Camp" the Johnson Camp Mine facility located in Cochise County,
or "JCM" Arizona, USA.
"KBC Peel Hunt" KBC Peel Hunt Ltd.
"London Stock London Stock Exchange plc.
Exchange"
"Lower Abrigo has the meaning as defined on page 136 of the admission
Formation" document.
"Merger" the merger of Merger Sub into Nord pursuant to the Merger
Agreement.
"Merger the conditional agreement dated 23 October 2006 between the
Agreement" Company, PDM USA, Merger Sub and Nord relating to the
Acquisition, details of which are set out in paragraph 11.10 of
Part VIII of the admission document.
"Nedbank" Nedbank Limited.
"New Shareholders other than the Founder Shareholders.
Shareholders"
"Nord" Nord Resources Corporation.
"Nord Options" means options granted by Nord to purchase Nord Shares that are
outstanding immediately prior to the Effective Date.
"Nord holders of Nord Shares.
Shareholders"
"Nord Shares" shares of common stock of Nord of $US0.01 each.
"Nord Warrants" means warrants to purchase Nord Shares that are outstanding
immediately prior to the Effective Date.
"Original the admission of Shares and Warrants to trade on AIM on 14 March
Admission" 2006.
"Original the admission document, dated 8 March 2006, issued in connection
Admission with Original Admission.
Document"
"Paleozoic" has the meaning as defined on page 138 of the admission
document.
"PDM USA" Platinum Diversified Mining USA, Inc., a Delaware corporation
and a wholly owned subsidiary of the Company.
"Placing" the placing of 9,935,000 Units at the Placing Price at the time
of Original Admission made pursuant to the Placing Agreement.
"Placing the agreement relating to the Placing dated 8 March 2006 between
Agreement" the Company, the Directors and Casimir Capital L.P. and KBC Peel
Hunt (as joint placing agents), further details of which are set
out in paragraph 11.2 of Part VIII of the admission document.
"Placing Price" $8 per Unit.
"Precambrian" has the meaning as defined on page 139 of the admission
document.
"RDi" Resource Development Inc, being the Competent Person (as defined
under the AIM Rules).
"Registrars" Capita IRG (Offshore) Limited.
"Repurchase $7.84 per eligible Share.
Price"
"Repurchase has the meaning set out on page 35. If such Shareholder votes
Rights" against the Initial Acquisition.
"Resolution" the resolution to be proposed at the EGM as set out in the
notice of EGM at the end of the admission document.
"Shareholders" holders of Shares.
"Shares" ordinary shares in the Company having a par value of US$0.001
each.
"Summo" Summo USA Corporation.
"Trust" the trust into which the Net Placing Proceeds were received and
are held in trust, as constituted by the Investment Management
Trust Agreement.
"Trustee" the American Stock Transfer and Trust Company.
"Trust Fund" US$77,890,400 deposited with the Trustee pursuant to the
Investment Management Trust Agreement.
"TWC" The Winters Company.
"Unit" a unit comprising of one Share and one Warrant.
"US$" or "$" means US dollars, the lawful currency of the United States of
America.
"Warrants" instruments convertible into Shares which were issued as part of
a Unit and, each of which entitles the registered holder to
purchase one Share (currently at US$6) per Warrant. The Warrants
are
exercisable on the later of:
1. the completion of an Initial Acquisition; and
2. the date which is one year from the date of the Original
Admission.
This information is provided by RNS
The company news service from the London Stock Exchange
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