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VRM: Verdant Scheme Implementation Agreement

03/11/2019 | 07:24am EST

ASX RELEASE 11 March 2019 ASX Limited Melbourne

VERDANT MINERALS AND CD CAPITAL ENTER INTO SCHEME

IMPLEMENTATION AGREEMENT

Verdant Minerals Ltd (ASX: VRM) today announces that it has entered into a scheme implementation agreement (SIA) relating to the acquisition by CD Capital Natural Resources Fund III LP (CD Capital), of all of the issued shares in VRM, other than any shares held by Washington H. Soul Pattinson and Company Limited (WHSP) or in which WHSP has a relevant interest, by scheme of arrangement under the Corporations Act 2001 (Cth) (Scheme).

Should the Scheme be implemented, VRM shareholders (other than WHSP) will receive $0.032 per VRM share held as at the Scheme record date. This values VRM at $40,509,700 on a fully-diluted basis (i.e. assuming options that are "in the money" at a VRM share price of $0.032 are exercised), and represents:

  • a 113% premium to the closing price of VRM's shares on 8 March 2019 of $0.015 , being the last trading day before this announcement;

  • a 110% premium to VRM's 30-day VWAP up to the last trading day before this announcement of $0.0152;

  • a 92% premium to VRM's 6 month VWAP up to the last trading day before this announcement of $0.0167; and

  • a 76% premium to VRM's 12 month VWAP up to the last trading day before this announcement of $0.0182.

Accordingly, the Scheme represents an opportunity for VRM shareholders (other than WHSP) to realise immediate value for their VRM shares at a significant premium to VRM's recent trading price.

Commenting on the Scheme, VRM's Managing Director, Chris Tziolis, said "The offer from CD Capital, a London based Private Equity Firm, represents a 113% premium to VRM's current share price and so is demonstrably accretive to our shareholders on the basis of the company's share price and market capitalisation. The advancement of the Ammaroo Phosphate Project will require significant capital which, at the market capitalisation and share price prior to the offer, is highly unlikely to be raised from existing shareholders and without very significant dilution. Subject to an independent expert's report and in the absence of a superior competing proposal, I have voted with my fellow independent directors to recommend CD Capital's proposal to VRM's shareholders."

Verdant Minerals Ltd

ABN 33 122 131 622

T +61 8 8942 0385 F +61 8 8942 0318 E info@verdantminerals.com.au

A 20/90 Frances Bay Drive, Stuart Park NT 0820 P GPO Box 775 Darwin NT 0801

www.verdantminerals.com.au

DIRECTORS - James Whiteside | Jason Conroy | Robert Cooper | Chris Tziolis, MD MAJOR PROJECTS - Ammaroo Rock Phosphate | Karinga Lakes Sulphate of Potash

The Independent Board Committee unanimously recommends the Scheme

VRM has formed a committee of independent directors, comprised of James Whiteside, Jason Conroy and Chris Tziolis (Independent Board Committee), to consider the proposed Scheme1. The members of the Independent Committee unanimously recommend that VRM shareholders vote in favour of the Scheme, in the absence of a superior proposal and subject to the Independent Expert concluding (and continuing to conclude) that the Scheme is fair and reasonable to, and in the best interests of, VRM shareholders.

Subject to the above qualifications, each member of the Independent Board Committee intends to vote all of the VRM shares held or controlled by them in favour of the Scheme.

WHSP consents to the Scheme

Should the Scheme be implemented, CD Capital will hold approximately 67% of the shares in VRM and WHSP will continue to hold approximately 33% of the shares in VRM. At this time, it is anticipated that VRM would be de-listed from ASX. CD Capital, WHSP and VRM have entered into a shareholders' agreement to govern the management of the company which will come into effect following implementation of the Scheme (Shareholders' Agreement).

WHSP has provided a letter to VRM stating that it intends to consent to the Scheme on the terms and conditions of the SIA, in the absence of a superior proposal and provided the deed of irrevocable undertaking entered into by WHSP in favour of CD Capital is not terminated in accordance with its terms.

Scheme Implementation Agreement

A copy of the SIA entered into between VRM and CD Capital is attached to this announcement.

The Scheme is subject to a number of customary conditions including VRM shareholder and court approval, no material adverse change occurring between the date of the SIA and the Second Court Hearing, and the Independent Expert concluding (and continuing to conclude) that the Scheme is fair and reasonable to, and in the best interests of, VRM shareholders.

The SIA also contains customary exclusivity provisions including no shop and no talk restrictions, a notification obligation and a matching right, with a customary carve out to ensure VRM's independent directors can continue to comply with their fiduciary and statutory duties.

1 Rob Cooper, the fourth VRM director, is not considered independent of WHSP and accordingly an independent board committee was formed.

Loan facility

VRM and CD Capital have also entered into a short term loan facility agreement. Under this agreement, CD Capital will advance an aggregate of $800,000 in three tranches to VRM for the purposes of funding VRM's transaction costs in connection with the Scheme and for general working capital purposes. Interest will be payable on the amount drawn by VRM under this facility at a rate of 6% per annum, and the facility will mature in 12 months.

Indicative timetable and next steps

VRM shareholders do not need to take any action in relation to the Scheme at this stage. An indicative timetable for the implementation of the Scheme is set out below, but this is subject to change.

Milestone

Indicative Date

Lodge Scheme Booklet (and Independent Expert's Report) with ASIC

5 April 2019

First Court Hearing

29 April 2019

Dispatch of Scheme Booklet and Independent Expert's Report to VRM shareholders

30 April - 6 May 2019

Meeting of VRM shareholders to approve Scheme

5 June 2019

Second Court Hearing

6 June 2019

Lodge court order approving the Scheme with ASIC (Effective Date)

7 June 2019

Record Date

17 June 2019

Implementation Date

24 June 2019

VRM will keep shareholders informed of any material developments in relation to the Scheme.

Advisers to VRM

VRM is being advised by Ashurst in relation to the Scheme.

Advisers to CD Capital

CD Capital is being advised by EY Law in relation to the Scheme.

- ENDS -

For Further Information Please Contact

Chris Tziolis

Managing Director Verdant Minerals Ltd. +61 (0)8 8942 0385

About Verdant Minerals (ASX: VRM)

Verdant Minerals is focused on the discovery, development and operation of fertiliser and industrial mineral projects, located in close proximity to existing transport infrastructure, focused on the Northern Territory of Australia.

The Company's portfolio of projects includes:

  • Developing the 100% owned world class Ammaroo Phosphate Project located approx. 200km south-east of Tennant Creek and 300km north-east of Alice Springs in the Northern Territory;

  • Sulphate of Potash projects in the Northern Territory; and

  • The Dingo Hill Silica Project in the Northern Territory, which has the potential to produce high purity quartz.

About CD Capital

CD Capital is a global private equity natural resources and mining fund. CD Capital has a track record of successfully identifying and investing in world-class mining and resource assets at the growth equity stage, and has a team comprised of industry insiders with decades of experience and relationships.

For further information about CD Capital, please contact Investor Relations at IR@CD-Capital.com or on +44 207 389 1450.

Forward Looking Statements

This announcement has been prepared by Verdant Minerals Ltd). It is not intended to be and does not constitute an offer to sell, or a solicitation of an offer to buy or sell securities in the Issuer.

This announcement does not constitute a recommendation to invest in the Verdant Minerals assets, nor investment, accounting, financial, legal, tax or other advice and does not take into consideration the investment objectives, financial situation or particular needs of any recipient of the announcement (Recipient). Before making an investment decision, Recipients should (a) conduct their own independent investigations and analysis of the Issuer and the information set out in the announcement, (b) rely entirely on such investigations and analysis and not on this announcement in relation to their assessment of the Issuers and (c) form their own opinion as to whether or not to invest in the relevant securities.

The announcement contains information on Verdant Minerals and its activities which are current as at the date of this announcement. The information in this announcement is general in nature and does not purpose to be complete nor does it purport to contain all of the information that a prospective investor may require in evaluating a possible investment in the Issuer or that would be required in a prospectus or a product disclosure statement prepared in accordance with the Corporations Act. To the maximum extent permitted by law, Verdant Minerals and its related bodies corporate, and each of those parties' officers, employees, agents, advisers and associates (each a Relevant Person) is, or may be taken to be, under any obligation to correct, update or revise the announcement.

Any forward-looking statements (including forecasts) included in this announcement are not representations as to future matters and should not be relied upon by Recipients. The statements are based on a large number of assumptions about future events and are subject to significant uncertainties and contingencies, many of which are outside the control of the Issuers. No representation is made that any forecast or future event will be achieved. Actual results may vary significantly from the forecasts. Each Recipient should make its own enquiries and investigations regarding the assumptions, uncertainties and contingencies which may affect the assets of the Issuers.

To the maximum extent permitted by law, each Relevant Person makes no representation or warranty (express or implied) as to the currency, accuracy, reasonableness or completeness of the information, statements and opinions expressed in this announcement (Information). To the maximum extent permitted by law, all liability in respect of the Information is expressly excluded, including without limitation any liability arising from fault or negligence, for any direct, indirect or consequential loss or damage arising from the use of the Information or otherwise. No responsibility is accepted by any Relevant Person, for any of the Information, any omission from this announcement or for any action taken by the Recipient or any other person on the basis of the Information.

Disclaimer

Washington H. Soul Pattinson & Company Limited published this content on 11 March 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 11 March 2019 12:24:02 UTC


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