TANGIERS PETROLEUM LIMITED 
By
20 January 2014
TANGIERS PETROLEUM LIMITED
Recommended Takeover Offer by Tangiers for Jacka
The Directors of Tangiers Petroleum Limited ("Tangiers" or the "Company")
advise that the Bidder's Statement and Target Statement ("Statements") have
been lodged with ASIC and released to ASX. A copy of the full Statements,
including the diagrams referred to in the text is available on the Company's
website at www.tangierspetroleum.com
Set out below is the key information presented in the Statements.
Key Offer Dates
Date of Bidder's Statement - 20 January 2014
Date of Offers - 4 February 2014
Offer closes (unless extended or withdrawn - 7.00pm (Sydney time) on 18 March
2014
Summary of the Offers Terms
What Tangiers is Tangiers is offering to buy all Jacka Shares, including Jacka
offering to buy Shares that are issued during the Offer Period whether due to
the conversion of Jacka Listed Options or otherwise, on the
terms set out in this Bidder's Statement.
Tangiers is also offering to buy all Jacka Listed Options.
You may only accept the Share Offer in respect of all the
Jacka Shares held by you.
You may only accept the Option Offer in respect of all the
Jacka Listed Options held by you.
What you will If you accept the Share Offer, subject to the satisfaction or
receive if you waiver of the conditions to the Share Offer, for every 1 of
accept the Share Your Shares, you will receive 0.468 Tangiers Shares.
Offer
What you will If you accept the Option Offer, subject to the satisfaction
receive if you or waiver of the conditions to the Option Offer, for every 1
accept the Option of Your Options, you will receive 0.468 Tangiers Options
Offer (with an exercise price of $0.75 and an expiry date of 1
February 2015).
When you will Generally, Tangiers will issue the Tangiers Securities to you
receive the under the Offers on or before the earlier of:
Tangiers
Securities * one month after these Offers are accepted or one month
after all of the conditions have been freed or fulfilled
(whichever is the later); and
* 21 days after the end of the Offer Period.
Full details of when consideration will be provided are set
out in clauses 12.6 and 13.6 of this Bidder's Statement.
Will you need to If your Jacka Securities are registered in an Issuer
pay brokerage or Sponsored Holding in your name and you deliver them directly
stamp duty on to Tangiers, you will not incur any brokerage fees or be
acceptances? obliged to pay stamp duty in connection with your acceptance
of the Offer.
If your Jacka Securities are registered in a CHESS Holding,
or if you are a beneficial owner whose Jacka Securities are
registered in the name of a broker, bank, custodian, or other
nominee, you will not be obliged to pay stamp duty by
accepting the Offers, but you should ask your Controlling
Participant (usually your broker) or that nominee whether it
will charge any transactional fees or service charges in
connection with acceptance of the Offers.
If you are a Foreign Securityholder, brokerage will be
payable in respect of the Tangiers Shares and Tangiers
Options sold under the nominee facility and will be deducted
from the proceeds of sale.
Broker handling Tangiers may offer to pay a commission to brokers who solicit
fees acceptances of the Offers from their clients, but has made no
final decision in relation to the matter at this stage. See
section 11.2 for further information.
Close of the The Offers close at 7.00pm (Sydney time) on 18 March 2014,
Offers unless it is extended as permitted by the Corporations Act.
There are some The Share Offer is subject to the following key conditions:
conditions to the
Share Offer * no material adverse change;
* a minimum acceptance condition of 90% of the Jacka Shares
and 53% of the aggregate of the Jacka Listed Options and
the Jacka Unlisted Options; and
* absence of `prescribed occurrences'.
The full set of conditions of the Share Offer and their full
terms are set out in clause 12.8 of this Bidder's Statement.
There are some The Option Offer is subject to the following key conditions:
conditions to the
Option Offer * no material adverse change in Jacka;
* a minimum acceptance condition of 90% of the Jacka Shares
and 53% of the aggregate of the Jacka Listed Options and
the Jacka Unlisted Options; and
* absence of `prescribed occurrences'.
The full set of conditions of the Option Offer and their full
terms are set out in clause 13.8 of this Bidder's Statement.
What happens if If the conditions of the Offers are not satisfied or waived
the conditions of by the closing date, the Offers will lapse and your
the Offers are acceptance will be void.
not satisfied or
waived?
Share Offer in Optionholders who hold Jacka Options (being Jacka Listed
respect of Options or Jacka Unlisted Options) and whose Options are
converted Jacka converted into Jacka Shares during the Offer Period, will be
Options able to accept the Share Offer in respect of the Jacka Shares
which they are issued.
The final date for converting Jacka Options into Jacka Shares
in order to participate in the Share Offer is 5 March 2014
unless the Offer Period is extended under the Corporations
Act.
How you accept You may only accept the Share Offer for all Your Shares and
the Offers the Option Offer for all Your Options.
Issuer sponsored security holders
If your Jacka Securities are registered in an Issuer
Sponsored Holding (such holdings will be evidenced by an `I'
appearing next to your holder number on the accompanying
Acceptance Form), to accept the Offers, you must complete and
sign the Acceptance Form accompanying this Bidder's Statement
and return it in the supplied envelope or post it to the
address specified on the form so that it is received before
the Offers close.
CHESS security holders
If your Jacka Securities are registered in a CHESS Holding
(such holdings will be evidenced by an `X' appearing next to
your holder number on the accompanying Acceptance Form), you
may accept the Offers by either:
* completing and signing the Acceptance Form accompanying
this Bidder's Statement and returning it in the supplied
envelope to the address specified on the form; or
* instructing your Controlling Participant (normally your
broker) to accept the Offers on your behalf,
in sufficient time for it to be processed before the Offers
close.
Participants
If you are a Participant, acceptance of the Offers must be
initiated in accordance with Rule 14.14 of the ASX Settlement
Operating Rules before the Offers close.
Full details on how to accept the Share Offer are set out in
clause 12.3 of this Bidder's Statement.
Full details on how to accept the Option Offer are set out in
clause 13.3 of this Bidder's Statement.
Can you accept No. You cannot accept for part of your holding. You can only
the Offers for accept the Share Offer for ALL of Your Shares and accept the
part of your Option Offer for ALL of Your Options.
holdings
What if you are a Jacka Foreign Securityholders, being Jacka Securityholders
Foreign with a registered address outside of Australia and its
Securityholder external territories or New Zealand, that accept the Offers
will not receive Tangiers Shares or Tangiers Options. Rather,
the Tangiers Shares and Tangiers Options that Foreign
Securityholders would have been entitled to receive will be
issued to, and sold by, a Nominee and the net proceeds
attributable to each Foreign Securityholder will be paid to
them by cheque in Australian dollars drawn on an Australian
bank account.
Foreign Securityholders should read clauses 12.7 and 13.7
which provide further information on Foreign Securityholders
and the Nominee sale process.
What happens if You will remain a Jacka Securityholder and will not receive
you do not accept the consideration under the Offers. If Tangiers becomes
the Offers entitled to compulsorily acquire your Jacka Securities, it
intends to proceed with the compulsory acquisition.
Where to go for For queries on how to accept the Offers, see the enclosed
further Acceptance Form or call the Tangiers Offers Information Line
information on 1300 453 060 or +61 3 9415 4040.
For queries in relation to your Jacka shareholding or option
holding, call Jacka Securityholder Information Line on 1300
433 306 between 9.00am and 5.00pm (Perth time).
For all other queries in relation to the Offers, please
contact the Tangiers Offers Information Line on 1300 453 060
or +61 3 9415 4040.
Please note that any calls to the above numbers may be
recorded. Inquiries in relation to the Offers will not be
received on any other telephone numbers of Tangiers or its
advisers.
Important notice The information in this clause 1 is a summary only of
Tangiers' Offers and is qualified by the detailed information
set out elsewhere in this Bidder's Statement.
You should read the entire Bidder's Statement and the
Target's Statement that Jacka sends to you, before deciding
whether to accept the Offers.
Profile of the Merged Group
Corporate activities and strategy
If Tangiers acquires all Jacka Shares on issue, the Merged Group will provide
shareholders with a diversified international oil and gas group with potential
for significant growth resulting in economic benefits which may not be
available to either Tangiers or Jacka as stand-alone entities.
The Merged Group aims to continue to build an African focused exploration and
production company that delivers material value to its shareholders and
contributes to the development of the countries in which it works.
It intends to achieve this by building a portfolio of assets with a balance of
low risk, moderate reward exploration, development or production opportunities
and higher risk, large exploration potential in shallow water and onshore
basins.
The opportunities the Merged Group will seek will be based on robust technical
evaluation together with informed socio-political decisions and cultural
sensitivity in business relationships.
The Merged Group will have a stronger financial position with an unaudited pro
forma cash position of approximately $7 million (before payment of transaction
costs of $1.94 million and repayment of Jacka's short term loan facility of
$1.7 million) as at 31 December 2013 and the portfolio of oil and gas assets of
each of the separate entities.
Further funding is likely to be required to advance the projects of the Merged
Group. The Merged Group is likely to raise additional equity capital as
appropriate. Tangiers believes it has sufficient working capital to carry out
the Merged Group's objectives in the short term.
The retention of Jacka's existing interests in Somaliland, Nigeria and Tunisia
may, in some cases, be subject to the consent of its joint venture partners or
governmental departments to the change of control of Jacka. Further information
on these consents are set out in section 9.2(c) of this Bidder's Statement.
A pro forma table of the material project interests that would be held by the
Merged Group is as follows:
Country Block / Interest Joint Venture Operator Stage
Licence Partners
Morocco Tarfaya 25% Galp (50%) Galp Exploration
Offshore
Block ONHYM (25%)
Tunisia Bargou 15% Cooper Energy Cooper Exploration &
(offshore) (15%) Appraisal
Dragon Oil (55%)
Nigeria Aje Field 5% YFP (25%) YFP Exploration,
(offshore) (revenue Appraisal, &
interest) EER (16.9%) Development
Feasibility
FHN (16.9%)
New Age (24%)
Panoro (12.2%)
Somaliland Odewayne 15% (subject
(onshore) to completion Petrosoma (10%) Genel Exploration
of farmout
agreement Genel Energy
with Sterling (50%)
Energy),
(option to Sterling Energy
20%) (25%)
Tanzania Ruhuhu 100% - Jacka Exploration
(onshore)
Notes:
* The interests stated are after completion of any announced farm-in
arrangements.
* Interest percentages have been rounded.
* The Australian interests of both Tangiers and Jacka are not included as
they are intended to be cancelled or relinquished or are otherwise not
considered material.
* Other than as referred to elsewhere in this Bidder's Statement, the
acquisition of Jacka is not expected to have a material effect on the
existing assets and operations of Tangiers.
Ownership of Merged Group
If all existing Jacka Shareholders accept the Share Offer (excluding any Jacka
Shares issued on exercise of Jacka Options on issue) there will be 331,035,210
Tangiers Shares on issue, of which 156,455,990 Tangiers Shares will be held by
Jacka Shareholders. This equates to a percentage of 47%. On a fully diluted
basis, if all Jacka Optionholders accept the Option Offer and the Tangiers
Options received as consideration were all exercised, there would be
401,477,497 Tangiers Shares on issue of which 196,423,190 Tangiers Shares will
be held by Jacka Shareholders. This equates to a percentage of 49%.
Based on the current holdings in each of Jacka and Tangiers, there is no
scenario in which any one holder of Tangiers Shares will have voting power of
more than 20% of the Merged Group. Furthermore, there would be no Significant
Shareholders (as defined in the AIM Rules for Companies) in the Merged Group,
as no one holder would hold over 3% of the Tangiers Shares on issue.
As at the date of this Bidder's Statement, a pro forma list of the Merged
Group's top 20 shareholders is set out below:
Shareholder No of Percentage
Tangiers of total
Shares Tangiers
Shares (%)
1 CITICORP NOMINEES PTY LIMITED 9,064,601 2.74
2 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LTD 7,617,563 2.30
3 HSBC CUSTODY NOMINEES (AUSTRALIA) 7,008,094 2.12
4 ABLETT PTY LTD (DAVID EDWARDS FAMILY A/C) 6,550,000 1.98
5 AUSTRALIAN GLOBAL CAPITAL PTY LTD 6,085,509 1.84
6 PENINSULA INVESTMENTS (WA) PTY LTD 5,475,000 1.65
7 MARFORD GROUP PTY LTD 4,738,365 1.43
8 JP MORGAN NOMINEES AUSTRALIA 3,890,581 1.18
9 WILLOWDALE HOLDINGS PTY LTD 3,299,400 1.00
10 BARCLAYSHARE NOMINEES LIMITED 3,224,364 0.97
11 PHANTOM WA PTY LTD (KIRKHAM FAMILY A/C) 3,142,165 0.95
12 HARGREAVES LANSDOWN (NOMINEES) LIMITED (15942) 2,828,244 0.85
13 EKCO INVESTMENTS PTY LTD 2,779,900 0.84
14 HARGREAVES LANSDOWN (NOMINEES) LIMITED (VRA) 2,691,617 0.81
15 BANKSIA INVESTMENTS PTY LTD (BANKSIA INVEST CORP 2,687,250 0.81
S/F A/C)
16 SYDNEY EQUITIES PTY LTD (SUPERANNUATION FUND A/C) 2,659,921 0.80
17 MULATO NOMINEES PTY LTD 2,564,451 0.77
18 TD DIRECT INVESTING NOMINEES (EUROPE) LIMITED 2,390,761 0.72
(SMKTNOMS)
19 MR JASWINDER SINGH TAKHAR 2,246,400 0.68
20 HARGREAVES LANSDOWN (NOMINEES) LIMITED (HLNOM) 2,042,193 0.62
Directors of the Merged Group
The directors of Tangiers, if Tangiers acquires Jacka, are proposed to be
Tangiers' existing directors Eve Howell, Brent Villemarette and Max de Vietri
(see section 2.2 for a profile of these directors) and Bob Cassie and Scott
Spencer (see section 4.2 for a profile of these directors). As previously
announced, it is proposed that following completion of the acquisition there
will be a three month period during which Eve Howell will transition to
Non-Executive Chairman, Bob Cassie will be appointed Managing Director, and Max
de Vietri is likely to be replaced by a new Non-Executive Director to be
nominated by Tangiers.
Further information on the proposed Jacka appointees, as required by the AIM
Rules for Companies, is as follows:
Bob Cassie
Robert Alexander Cassie (aged 56) holds a Bachelor of Science with honours in
geology and is a member of the American Association of Petroleum Geologists. Mr
Cassie is currently the Managing Director of Jacka and is currently also a
director of Bob Cassie Consulting Pty Ltd and various Jacka subsidiary
companies.
Scott Spencer
Scott Sherwood Spencer (aged 63) holds a Bachelor of Arts, a Bachelor of
Philosophy and a Master of Letters. Mr Spencer is currently a Non-Executive
Director of Jacka and is also a director of various Jacka subsidiaries and
Aubrey Consulting Pty Ltd. In the past 5 years, Mr Spencer has also been a
director of Monitor Energy Ltd (now Orca Energy Ltd), Greenrock Energy Ltd,
Blade Petroleum Ltd and Leopard Minerals Plc.
It is proposed that Bob Cassie and Scott Spencer will enter into executive or
services agreements with Tangiers with the following salary or directors fee:
Director Salary or Director Fee
Bob Cassie $400,000 per annum, inclusive of superannuation
(Managing Director)
Scott Spencer $50,000 per annum, exclusive of superannuation
(Non-Executive Director)
Following the successful close of the Offers, the proposed directors will have
an interest in the following number of Tangiers Shares and Tangiers Unlisted
Options as a result of accepting the Offers in respect to existing Jacka Shares
and Jacka Listed Options that they hold as at the date of this Bidder's
Statement and entering into option cancellation deeds in relation to their
existing Jacka Unlisted Options (see section 11.11 of this Bidder's
Statement)::
Director Tangiers Shares Unlisted Tangiers Options
Bob Cassie 35,100 234,000
(Managing Director)
Scott Spencer 702,000 936,000
(Non-Executive Director)
Pro forma historical consolidated financial information for the Merged Group
a. Basis of presentation of unaudited pro forma historical consolidated
financial information
The unaudited pro forma historical consolidated financial information for the
Merged Group, reflects the consolidated businesses of Tangiers and Jacka and
comprises the pro forma historical consolidated statement of financial position
as at 31 December 2013 and is presented in this section to provide Jacka
Securityholders with an indication of the financial position of the Merged
Group as at 31 December 2013.
As a result it is likely that this information will differ from the actual
financial position for the Merged Group. The unaudited pro forma historical
consolidated statement of financial position of the Merged Group as at 31
December 2013 and the pro forma adjustments are disclosed in this section.
The Merged Group unaudited pro forma historical consolidated financial
information has been provided on the basis that Tangiers acquires Jacka
accordingly and:
1. the accounting policies of the Merged Group used to prepare the Merged
Group unaudited pro forma historical consolidated statement of
financial position are based on the recognition and measurement
requirements of AASB standards;
2. the Merged Group unaudited pro forma historical financial information
has been prepared based on the unaudited trial balance of Tangiers and
the half year report for Jacka as at 31 December 2013 as released to
ASX on 16 January 2014; and
3. the Merged Group unaudited pro forma historical consolidated financial
information is presented in an abbreviated form and does not contain
all of the presentation and disclosures that are usually provided in an
annual financial report in accordance with the Corporations Act. In
particular it does not include notes to the historical consolidated
financial information of Tangiers and Jacka.
b. Pro forma historical consolidated statement of financial position of the
Merged Group
The Merged Group's unaudited pro forma historical consolidated statement of
financial position is compiled from the aggregation of the:
1. Tangiers' historical consolidated statement of financial position as at 31
December 2013, an extract of which is set out in clause 2.4 of this
Bidder's Statement;
2. Jacka's historical consolidated statement of financial position as at 31
December 2013, as extracted from the half year report and accounts released
on ASX on 16 January 2014; and
3. pro forma adjustments to reflect the acquisition of Jacka by Tangiers as if
Tangiers acquired all Jacka Shares and all Jacka Listed Options and Jacka
Unlisted Options as outlined in this document on 31 December 2013 based on
price of shares at 31 December 2013 which may change and the results might
change.
Set out below is the Merged Group's unaudited pro forma historical consolidated
statement of financial position as at 31 December 2013.
Tangiers Adjustments Adjusted
Proforma
December $ December
2013 2013
$ $
ASSETS
Current Assets
Cash and cash equivalents 6,089,313 934,092 7,023,405
Other receivables 121,212 12,116,591 12,237,803
Total Current Assets 6,210,525 13,050,683 19,261,208
Non-Current Assets
Plant and equipment 49,243 11,529 60,772
Other financial assets 3,566,500 (3,253,366) 313,134
Exploration and evaluation 7,742,856 32,094,901 39,837,757
expenditure
Total Non-Current Assets 11,358,599 28,853,064 40,211,663
TOTAL ASSETS 17,569,124 41,903,747 59,472,871
LIABILITIES
Current Liabilities
Trade and other payables 915,761 5,394,421 6,310,182
Borrowings - 1,700,000 1,700,000
Total Current Liabilities 915,761 7,094,421 8,010,182
TOTAL LIABILITIES 915,761 7,094,421 8,010,182
NET ASSETS 16,653,363 34,809,326 51,462,689
EQUITY
Contributed equity 55,889,563 36,767,158 92,656,721
Reserve 10,761,256 1,025,000 11,786,256
Accumulated losses (49,997,456) (2,982832) (52,980,288)
TOTAL EQUITY 16,653,363 34,809,326 51,462,689
The pro forma historical consolidated statement of financial position shows
adjustments based on the following transactions as if they occurred on 31
December 2013.
c. Pro forma adjustments
The following pro forma adjustments have been made in the compilation of Merged
Group pro forma historical consolidated financial information on assumed
acquisition of all Jacka Shares and all Jacka Listed Options by Tangiers and
cancellation of all Jacka Unlisted Options.
1. the recognition of the farmout agreement with Galp Energia following the
finalisation of documentation;
2. Tangiers' acquisition of all Jacka Shares on the issue of 1 Tangiers Share
to Jacka Shareholders for every 0.468 Jacka Shares held. The maximum number
of Tangiers Shares issued under the Offers will be 156,455,990 (subject to
rounding), valued at $36,767,158. This assumes that no Jacka Options are
exercised during the Offer Period;
3. Tangiers' acquisition of all Jacka Listed Options for consideration of the
issue of 1 Tangiers Option to Jacka Listed Optionholders for every 0.468
Jacka Listed Options held; and
4. The cancellation of all Jacka Unlisted Options for consideration of the
issue of 1 Tangiers Unlisted Option to Jacka Unlisted Optionholders for
every 0.468 Jacka Unlisted Options held.
The maximum number of Tangiers Options and Tangiers Unlisted Options issued
under the Offers will be 39,967,200 (subject to rounding), valued at
$1,025,000. This assumes that no Jacka Listed Options or Jacka Unlisted Options
are exercised during the Offer Period.
5. For the purposes of allocating the consideration that Tangiers will provide
to Jacka Securityholders, it has been assumed that the book value of
Jacka's assets and liabilities as per their unaudited half year financial
report at 31 December 2013 as extracted from the half year report and
accounts released on ASX on 16 January 2014 are equal to their fair value
as at 31 December 2013, with the excess of the consideration less these
fair values being attributable to the exploration assets owned by Jacka. It
is noted that the fair value assessment post acquisition may result in the
identification of difference from the book value as extracted from the half
year report and accounts released on ASX on 16 January 2014, which could
materially impact the allocation as presented in the pro forma statement of
financial position.
6. Accrual of advisory fees on completion of the Offer estimated at $1.94
million. For the purposes of the above pro forma historical consolidated
statement of financial position, the amount has been included within Trade
and other payables
Prospects of the Merged Group
If Tangiers acquires all the Jacka Shares and the Jacka Listed Options,
Tangiers will remain the entity listed on the ASX and AIM and will be the
ultimate holding company for all companies with the new Merged Group. The
acquisition by Tangiers of all Jacka Shares and Jacka Listed Options will
result in a Merged Group with a diversified portfolio of oil and gas assets.
This Bidder's Statement does not include forecasts or projections for
production or earnings in relation to Tangiers or the Merged Group. Tangiers
believes that the inclusion of such forecasts would be unduly speculative and
potentially misleading to Jacka Securityholders.
The current dividend policy will be maintained. It is not anticipated that
Tangiers will pay a dividend in the foreseeable future as Tangiers' focus is on
the development of its project portfolio with any operating surplus expected to
be re-invested in the Merged Group's projects.
ROBERT DALTON
Joint Company Secretary
Tangiers Petroleum Limited
Level 2, 5 Ord Street
West Perth WA 6005, Australia
Ph: + 61 8 9485 0990
www.tangierspetroleum.com
Contacts
RFC Ambrian Limited (Nominated Adviser)
Mr Stuart Laing
+61 8 9480 2506
Peel Hunt LLP (Joint AIM Broker)
Mr Richard Crichton
Mr Andy Crossley
+44 20 7418 8900
Mr Ed Portman (Media and Investor Relations - United Kingdom)
Tavistock Communications
+44 20 7920 3150Tangiers Petroleum Limited : - Bidder's Statement to acquire Jacka Resources Limited
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