9 December 2008
PERILYA SECURES
WATERSHED ALLIANCE
WITH ZHONGJIN
RAISES $45.5
MILLION VIA A PLACEMENT OF NEW SHARES
Key Points
?
Perilya signs Share Subscription Agreement with major Chinese metals and
mining company Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd, to raise A$45,464,560
?
Issue price of A$0.23 represents a 53%
premium to the last traded price of Perilya on 5 December 2008 and a 61%
premium to the volume weighted average price (VWAP) of Perilya shares for the
30 trading days up to 5 December 2008
?
Further strengthens Perilya?s balance sheet
cash backing and strongly positions Perilya to weather the current commodity
price environment and for growth
?
Introduces a strong and committed strategic partner to secure the future
of Perilya as an independent company
?
Zhongjin and Perilya agree to enter into good faith negotiations for
potential lead and zinc concentrate off-take sales agreements on commercial and
arms-length terms upon expiry of existing agreements
Perilya Limited
(ASX:PEM) today announced it has entered
into a share placement agreement and strategic partnership with major Chinese
metal company Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd.
(?Zhongjin?), to raise A$45,464,560.
Pending Perilya shareholders? and regulatory
approvals, Zhongjin will subscribe for 197,672,000 fully paid ordinary shares
in Perilya at an issue price of A$0.23 per share, to acquire 50.1% of the
Company.
Under the agreement, the Perilya Board will be
restructured to allow for a new Board with Zhongjin representatives comprising
half of the new Board. Paul Arndt will continue as Managing Director and Chief
Executive Officer.
Perilya Managing Director, Paul Arndt, said ?the
agreement represents a watershed event for Perilya and provides a significant
platform for growth and a major operational and funding boost for the Company.?
?It also will leave Perilya extremely well placed to
withstand the current commodity price environment, and to pursue growth options
as they arise.?
?Perilya believes this access to capital provides a
significant comparative advantage to other resource companies, and will also
allow us to advance, as appropriate, development projects such as the Mount
Oxide copper project,? Mr
Arndt said.
?Zhongjin is a strong and well funded strategic
partner committed to the long-term development of Perilya?s assets. As China?s
third largest zinc producer, Zhongjin has a wealth of mining, processing,
smelting and marketing experience that will add significant value, particularly
through these turbulent times,? he added.
President of Zhongjin, Mr Zhang Shuijian, said that
?this represents a good opportunity to invest in the Australian market and
support Perilya.?
?Zhongjin is fully supportive of Perilya, its current
management team and operating plan. This support will extend to future
opportunities for Perilya and its shareholders as they arise.?
Mr Zhang confirmed that Zhongjin do not intend to
accept CBH Resources Limited offer for Perilya shares post completion of this
transaction.
Perilya Chairman Patrick O?Connor said ?a partnership
with Zhongjin represents a Company-defining agreement for Perilya and its
shareholders and leaves Perilya in a very strong position with no corporate
debt and significant cash and investment reserves.?
?The Board is unanimous in the belief that the
placement of shares to Zhongjin represents the best alternative currently
available to Perilya shareholders, and will be voting their own stock in favour
of the Placement?.
?The Board further believes the ability to deliver
such a significant transaction against an extremely challenging economic
backdrop is testament to both the leadership of Paul Arndt and the strength of
Perilya?s asset base,? Mr O?Connor said.
As part of the Placement, Zhongjin will provide
Perilya with an initial cash deposit of A$10 million, which is refundable in
the event the transaction conditions precedents are either not satisfied or
waived.
Zhongjin and Perilya have also agreed to enter into
good faith negotiations with respect to potential arm?s length, commercial
concentrate sales agreement(s) for a portion of Perilya?s zinc and lead
concentrate production which will further support Perilya?s long-term
viability.
UBS
Investment Bank is acting as financial adviser to Perilya.
ENDS
For further
information please contact:
Investors:
Paul Arndt
Managing
Director
+61 8 6210 2000
Patrick O?Connor
Non-Executive Chairman
+61 8 6210 2000
Inquiries:
Paul Marinko
Company Secretary
+61 8 6210 2000
Media:
Warrick
Hazeldine
Purple Communications
+61 89485 1254
Issued by
Purple Communications
Level 3, 28
Kings Park Road, WEST PERTH
WA 6005
Ph: 08 9485 1254 Fax: 08 6263 0455
purple@purplecom.com.au