Sydney, Dec 14, 2007 (ABN Newswire) - Herald Resources Limited (ASX: HER) - Letter to Shareholders Regarding Takeover Bid - Mr Michael Wright, Executive Director; Herald Resources Limited (ASX: HER) present the following audio webcast regarding "Letter to Shareholders Regarding Takeover Bid". You may also download this audio webcast to your computer or portable audio player.
Broadcaster: Herald Resources Limited (ASX: HER)
Broadcast Title: Letter to Shareholders Regarding Takeover Bid
Broadcast Type: Audio stream
Audio webcast Link:
http://abnnewswire.net/alnk/23HANL6R
Listen to the Audio stream and view the announcement for Herald Resources Limited (ASX: HER) below.
http://abnnewswire.net/vlnk/J2P16264
The full text of the announcement by Herald Resources is reproduced below:
On 12 December 2007, PT Bumi Resources Tbk ("PT Bumi") announced its intention to make an all-cash offer for all the shares in Herald that it does not already own at $2.25 per share. Your directors wish to confirm that:
- the bid is HOSTILE and UNSOLICITED; and
- their advice that shareholders TAKE NO ACTION in relation to the bid until your Board has an opportunity to fully consider the bid and make a formal recommendation.
Your directors wish to address certain matters regarding the Company's progress to date with our high grade zinc/lead Dairi Project in Sumatra, Indonesia and the announcement made by PT Bumi.
THE DAIRI PROJECT
Herald is a long established and well-regarded mining company with a strong record of developing and operating mines.
The Dairi project, in which Herald has an 80% stake, is the most exciting in the Company's history. At the Anjing Hitam deposit, we have a high value reserve of 6.6 million tonnes grading 15% zinc and 9% lead. It is planned to extract that reserve via a 1 million tonne per annum operation with an initial mine life of 7 years. At full capacity this will give us annual metal production of around 115,000 and 60,000 tonnes of zinc and lead respectively, a serious producer in the base metals business.
Apart from those reserves, substantial other resources have also been delineated (e.g. Lae Jehe 6.5MT @ 11% Zn, 6% ) which give us great confidence that the eventual mine life will be well beyond the initial 7 year period.
In addition to that, the potential for further discoveries within our Contract of Work as we continue to explore remains outstanding. Despite the success to date, we feel we have only just "scratched the surface" of what is clearly a major new zinc/lead province. In summary, Dairi is an outstanding project that has already delivered substantial value for Herald shareholders. We expect further value to be added as we progress towards the commencement of mining and full development of the Dairi project.
APPROVAL PROCESS
Your Company has made a number of announcements regarding the approvals required to proceed to full development. The approvals process is now at an advanced stage. To date we have been granted 2 out of 3 of the most important approvals to proceed with the development, namely approvals from the Environment and Mines departments, both of whom we have found very supportive.
The principal outstanding approval required is that of the Minister of Forestry to issue a permit for underground mining and construction of treatment facilities, as these functions lie within a forest area. The Company has been advised that a Presidential Regulation is required in order for the Minister to issue the permit, and that this regulation is now being drafted.
Your directors believe your Company has traded at a significant discount to its intrinsic value while awaiting this forestry permit.
We have confidence in the integrity of the Indonesian Government's approval process and that Herald has at all times complied with all regulatory and other requirements of the Indonesian authorities.
Accordingly your directors believe the offer by PT Bumi at this late stage of the approval process to be opportunistic.
PT BUMI STATEMENT
Your directors are concerned by PT Bumi's statement in its announcement that its "experience in the Indonesian mining sector and the requirements of the Indonesian regulatory process make it uniquely positioned to advance the Dairi zinc / lead development in an effective and timely fashion".
Herald is not aware of any special circumstances which may uniquely position PT Bumi in securing the forestry approval required to develop the Dairi Project or in any way disadvantage you as owners of the Company relative to PT Bumi. In this regard we note that our 20% joint venture partner in the Dairi Project is PT Antam, which is one of Indonesia's largest mining companies. PT Antam is 65% owned by the Indonesian Government and is listed on the Jakarta and Australian stock exchanges.
We are fortunate to have an exceptionally strong and experienced team of people at Herald, both Australian and Indonesian nationals. Our ability to attract good staff has positioned us extremely well to advance Dairi and our other projects in Sumatra, both operationally and in terms of the approvals process.
We will keep you fully informed of all developments and will provide you with a formal response and recommendation regarding the bid in due course.
Contact
Michael Wright
Telephone: +61 8 9322 2788
Fax: +61 8 9481 1669
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