ANVIL MINING LIMITED - DIRECTORS’ CIRCULAR RECOMMENDING SHAREHOLDERS ACCEPT OFFER BY MMG MALACHITE LIMITED
On September 29, 2011, it was announced that MMG Malachite Limited (the ‘‘Offeror’’), a wholly-owned indirect subsidiary of Minmetals Resources Limited (‘‘MMR’’), had agreed to make an offer to acquire all of the issued and outstanding common shares (the ‘‘Common Shares’’) of Anvil Mining Limited (the ‘‘Company’’) for consideration of C$8.00 in cash for each Common Share (the ‘‘Offer’’).
The Board of Directors UNANIMOUSLY RECOMMENDS that shareholders ACCEPT the Offer and DEPOSIT their Common Shares under the Offer. The Directors’ Circular explains in detail why the Board of Directors has reached this conclusion, and strongly encourage you to read the Directors’ Circular in its entirety.
Engagement of BMO Capital Markets
The Company initially contacted BMO Capital Markets regarding a potential advisory assignment in July 2011. BMO Capital Markets was formally engaged by the Company pursuant to an agreement dated September 13, 2011 (the “Engagement Agreement”). Under the terms of the Engagement Agreement, BMO Capital Markets has agreed to provide the Company, the Strategic Transaction Committee and the Board of Directors with various advisory services in connection with the Transaction including, among other things, the provision of the Opinion.
Scope of Review
In connection with rendering the Opinion, they have reviewed and relied upon, or carried out, among other things, the following:
- a draft of the Support Agreement dated September 28, 2011;
- a draft of the lock-up agreement (the “Lock-Up Agreement”) dated September 28, 2011;
- a draft of the commitment letter and side letter (together, the “Commitment Letter”) dated September 22, 2011 and provided to the Acquiror by China Minmetals Non-Ferrous Metals Co., Ltd for a US$1,000,000,000 12-month term loan credit facility in connection with the Transaction;
- the final offer letter submitted by the Acquiror dated September 23, 2011;
- certain publicly available information relating to the business, operations, financial condition and trading history of the Company and other selected public companies we considered relevant;
- certain internal financial, operating, corporate and other information prepared or provided by or on behalf of the Company relating to the business, operations and financial condition of the Company;
- internal management forecasts, projections, estimates (including internal estimates of mineral resources) and budgets prepared or provided by or on behalf of management of the Company;
- valuation of the Company’s advanced exploration Mutoshi Project completed by Optiro Pty Ltd. dated August 27, 2010;
- discussions with management of the Company relating to the Company’s current business, plan, financial condition and prospects;
- public information with respect to selected precedent transactions we considered relevant;
- historical commodity prices and the impact of various commodity pricing assumptions on the business, prospects and financial forecasts of the Company;
- various reports published by equity research analysts and industry sources we considered relevant;
- a letter of representation as to certain factual matters and the completeness and accuracy of certain information upon which the Opinion is based, addressed to us and dated as of the date ereof, provided by senior officers of the Company; and4
- such other information, investigations, analyses and discussions as we considered necessary or appropriate in the circumstances.
BMO Capital Markets has not, to the best of its knowledge, been denied access by the Company to any information under the Company’s control requested by BMO Capital Markets.
For further information please see the attached Director's Circular released by Anvil Mining Limited.