December 15th, 2015

Rum Jungle Resources Limited (ASX:RUM) Announces Takeover Offer for Central Australian Phosphate (ASX:CEN)

Rum Jungle Resources Limited (ASX:RUM) (Rum Jungle Resources) today announces that it intends to make an off-market takeover bid (Offer) to acquire all of the ordinary shares in Central Australian Phosphate Limited (ASX:CEN) (Central Australian Phosphate) (Offer).

Under the Offer, Central Australian Phosphate shareholders will be offered:

- 20 cents cash; plus

- one Rum Jungle Resources share as consideration for every 20 Central Australian Phosphate shares. This implies a value of approximately$12.7 million for CEN or 2.15 cents per Central Australian Phosphate share.(1)

The Offer provides an opportunity for CEN shareholders to monetise a substantial portion of their value in cash, and to participate in the potential value of the combined company.

Rum Jungle Resources Chairman, Mr Robert Annells, said: "We believe our Offer provides Central Australian Phosphate shareholders with an attractive value proposition. With Rum Jungle Resources' strong growth platform, the Board believes the acquisition of Central Australian Phosphate is a compelling next step in unlocking the value of our complementary Barrow Creek and Arganara assets. We look forward to welcoming Central Australian Phosphate shareholders to Rum Jungle Resources and seeking to maximise value for shareholders."

Significant premium

The Offer represents a significant premium to the recent and historical volume weighted average sale price (VWAP) of Central Australian Phosphate shares as follows:(1)

- A premium of 43.3% to the closing price of 1.5 cents per Central Australian Phosphate share on 12 February 2013 (being the last trading day before the date of this announcement)

- A premium of 35.3% to the one-month volume weighted average sale price of 1.5885 cents per Central Australian Phosphate share on ASX, up to and including 11 February 2013, being the latest practicable date prior to the date of this announcement.

Rationale for the Offer

Rum Jungle Resources sees clear benefits from combining the two companies into a larger company with a significantly increased measured, indicated and inferred resource position. The two companies have complementary assets. Bringing the adjacent Barrow Creek and Arganara resources together and applying the experience of Rum Jungle Resources' management (who have overseen extensive drilling of the Barrow Creek resource) is expected to lead to significant value creation for shareholders.

The adjacent Barrow Creek and Arganara resources are shown below.(2)

Rum Jungle Resources Managing Director, Mr David Muller, said: "The combined company will be better placed to increase the exploration expenditure at Arganara and attract and retain high quality people. Central Australian Phosphate shareholders will benefit initially from the significant up-front offer premium and are expected to benefit over the longer term as value is unlocked by combining the complementary assets of Rum Jungle Resources and Central Australian Phosphate."

"I believe the combination of Rum Jungle Resources and Central Australian Phosphate is very compelling and will deliver value to Central Australian Phosphate shareholders more rapidly than and significantly beyond that achievable by Central Australian Phosphate on a stand-alone basis."

Benefits to Central Australian Phosphate shareholders

By accepting the Offer and becoming shareholders in Rum Jungle Resources, Central Australian Phosphate shareholders will become shareholders in a larger company, with a greater diversity of assets, including a more advanced phosphate project and an inferred potash resource. The combined company offers:

- A board and management who have successfully completed major milestones, including resource evaluation to define a measured resource at Barrow Creek and who are overseeing a scoping study for the Ammaroo Project. For example, Rum Jungle Resources has drilled approximately 2071 reverse circulation drill holes and 33 diamond drill holes in respect of the Barrow Creek 1 phosphate deposit,3 compared to Central Australian Phosphate's 387 reverse circulation drill holes in respect of its Arganara project.(4)

- Exposure to resources in both phosphate and potash with:

-- a measured resource at Barrow Creek 1 phosphate deposit of 136 million tonnes at an average grade of 15.7% at a cut off of 10% P2O5;(5)

-- a maximum inferred resource to 5.5 million tonnes of sulfate of potash at the Karinga Creek Salt Lake Potash Project, equating to a maximum schoenite (potassium magnesium sulfate) resource of 13 million tonnes.(6)

- Increased share liquidity and likely better access to capital markets:

-- In the financial year to date, over $10.2 million of Rum Jungle Resources shares have been traded on the ASX, compared to just $2.6 million of Central Australian Phosphate shares.(7)

-- In December 2012, Rum Jungle Resources successfully completed an institutional placement which raised approximately $7.235 million. This placement was strongly supported by institutional shareholders.

- A strong platform for growth, with a 2013 budget of $10 million in place for Rum Jungle Resources on a stand-alone basis following the completion of its December 2012 placement.

In the event that Rum Jungle Resources acquires 100% of Central Australian Phosphate, Rum Jungle Resources intends to review its 2013 budget with a view to allocating resources in a way that maximises shareholder value.

If Rum Jungle Resources acquires all of the Central Australian Phosphate shares under the Offer, Rum Jungle Resources will have approximately 270 million ordinary shares on issue and former Central Australia Phosphate shareholders will own approximately 11% of the combined company (in addition to receiving 20 cents for every 20 shares they hold under the Offer).

Further information about the benefits and the risk factors will be set out in Rum Jungle Resources' Bidder's Statement.

Conditions

The Offer will be subject to certain conditions, including a 50% minimum acceptance, no material acquisitions or disposals and no prescribed occurrences.

Full details of the conditions to the Offer are set out in the Appendix to this Announcement.

Fractional entitlements

No fractions of Rum Jungle Resources shares will be issued to holders of Central Australian Phosphate shares. Any fractional entitlements will be rounded up or down to the nearest whole number (with fractional entitlements to 0.5 of a Rum Jungle Resources share being rounded up).

Funding

The cash component of the Offer is approximately $6 million and will be funded through existing Rum Jungle Resources cash reserves. At the end of January 2013, Rum Jungle Resources had cash at bank of approximately $16 million.

Further information about the Offer

Ashurst Australia is acting as legal adviser to Rum Jungle Resources.

Further details about the Offer and further information about Rum Jungle Resources will be set out in Rum Jungle Resources' Bidder's Statement. A Bidder's Statement will be lodged with ASIC, ASX and Central Australian Phosphate in due course.

View the complete Rum Jungle announcement at the link below:
http://media.abnnewswire.net/media/en/docs/ASX-RUM-385680.pdf

A copy of this announcement and further information about Rum Jungle Resources is also available at www.rumjungleresources.com.au.

(1) Based on the closing share price of Rum Jungle Resources of 23 cents as at 12 February 2013, the last trading day prior to announcement of the Offer.

(2) The information used for the right hand side of the diagram showing Central Australian Phosphate's Arganara Phosphate Deposit has been taken from Central Australian Phosphate's Company Presentation announced 19 November 2012.

(3) For further detail see Rum Jungle Resources announcement dated 21 January 2013 "Measured Resource Update Barrow Creek 1 Phosphate Deposit Ammaroo Phosphate Project".

(4) Based on Central Australian Phosphate's 31 January 2013 Quarterly Activities Report.

(5) For further detail see Rum Jungle Resources' Quarterly Activities Report announced 30 January 2013.

(6) Rum Jungle Resources has an 85% interest in the Karinga Creek Salt Late Potash Project. For further detail see Rum Jungle Resources' Quarterly Activities Report announced 30 January 2013.

(7) Calculated as the sum of the daily closing price multiplied by the daily volume traded for each trading day during that period.



About Rum Jungle Resources Limited:

Rum Jungle Resources (ASX:RUM) is an Australian Securities Exchange listed, diversified junior explorer focused on highly prospective land located in Australia’s Northern Territory and Queensland.

A Northern Territory and Queensland focussed mineral explorer with a portfolio including: Uranium, Potash, Phosphate and Base Metals.

Rum Jungle Resources has strategic alliances with other major Northern Territory explorers increases exposure to additional exploration areas.

Rum Jungle Resources has experienced geological management backed up by a solid financial base to fund exploration budgets.

Contact:

Rum Jungle Resources Limited
T: +61-8-8942-0385
F: +61-8-8942-0318
WWW: www.rumjungleresources.com.au

 


Source:

Rum Jungle Resources Limited

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