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Billiton and Tri Origin sign exploration agreement
Billiton subsidiaries, Billiton E&D BV and Billiton E&D 10 BV, have entered into subscription and option agreements with Tri Origin Exploration Ltd to participate in the exploration of the Kazan Project in Nunavut, Canada. The objective of the project is to discover large copper-gold deposits of the "Olympic Dam" type. In terms of the agreement, Billiton will make an equity placement in common shares of Tri Origin in two parts. Initially, Billiton will purchase 800 000 units at $0.25pu (all money references are in Canadian dollars) for net proceeds of $200 000, and in addition, will exercise a portion of pre-existing $0.30 warrants currently held by Rio Algom Inc. (acquired by Billiton in 00). Each unit consists of one common share of Trio Origin and one share purchase warrant. At a second phase and at its option, Billiton may exercise the purchase warrants to acquire 800 000 additional common shares of Tri Origin by 31 Dec 01 at a price of $0.33ps for a total cost of $264 000. Billiton may also exercise the remaining Rio Algom warrants at $0.30. Upon completion, Billiton's equity placement in Tri Origin's shares would total $596 000.
Following completion of the first phase exploration program, Billiton will have the option to earn a 50% interest in the property by incurring additional work expenditures of $1.6m over a four year period. Completion of this expenditure will initiate a joint venture and all further work will be funded by the joint venture partners in proportion to their ownership of the project, unless Billiton elects, at its option, to increase its interest in the project from 50% to 70%. This would be done by providing financing for all further work through to the commencement of commercial production. Tri Origin will be the initial project manager but Billiton will have the right to replace Tri Origin at any time during the joint venture phases.
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Billiton and Smarttrans enter into agreement
An agreement has been signed between Billiton Exploration Australia and Smarttrans Holdings, the agreement is in relation to the Riversleigh Base Metal project in Queensland.
The terms of the agreement state that Billiton can earn 51% in Riversleigh by sole funding A$3m of exploration expenditure within 3 years with the option to extend this by another 3 years earning an additional 19% (to 70%) funding a further A45m. Billiton also has the right to invest in any subsidiary company that is established to hold the Riversleigh project after such a company lists on the ASX.
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Billiton declares second interim dividend
Billiton declared, following approval of its merger with BHP, a second interim dividend of 8 US cents per share. The dividend would be in lieu of a final dividend in order to bring the timing of dividend payments in line with those of BHP.
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BHP free to look for more acquisitions
The approved merger between Billiton and BHP leaves BHP free to look for more acquisitions and the company is not ruling out a takeover of Australian companies like Woodside Petroleum or WMC.
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Results of Extraordinary Gereral Meeting
91.5% voted In favour of the DLC merger agreement. The implementation of the proposed DLC merger is subject to the outcome of the EFM for BHP shareholders, to be held in Melourne on 18 May 01 and upon receipt of all necessary regualory approvals.
Also approved was the appointment of the following directors; Paul Anderson, Ronald McNeilly, Don Argus, Ben Alberts, Michael Chaney, John Conde, David Crawford, David Jenkins, John Ralph, John Schubert.
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Billiton shareholders in favour of BHP deal
Billiton shareholders approved the proposed merger of the group with Australia's BHP at a meeting on 15 May 01. BHP investors would vote on the merger on 18 May 01.
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Billiton claims support for BHP bid
According to Billiton votes representing more than half its share capital had been received and nearly all of them were in favour of the Billiton/BHP merger. The shareholders meeting has been scheduled for May 15 while those not attending the meeting had until May 13 to send through their votes. Analysts expect little opposition to the deal but they feel that some shareholders may abstain in order to show there displeasure at the proposed bonuses for Billiton directors tied to the agreement.
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BHP/Billiton deal hits opposition
Increasing opposition has come from shareholders of both companies to the proposed acquisition of Billiton by BHP. The BHP shareholders are calling for an independent evaluation of the acquisitions value as they are concerned the company is paying too much while the Billiton shareholders feel that they have better prospects without BHP, Billiton has remained profitable while BHP has lost money in two of the past three years. Billiton shareholders are scheduled to vote on the plan on May 15 while BHP are to vote on May 18.
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Billiton and Intrepid
Billiton Resources Canada has signed a letter of intent with Intrepid Minerals Corporation regarding its Batchawana Bay copper-gold projects. Components of the proposed agreement are that Billiton will receive a total of 450 000 units in Intrepid over a period of four years. Intrepid may earn a 50% interest in the property by investing C$1.25m in exploration work over four years. The joint venture partners will fund all further work in proportion to their ownership of the project.
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Billiton and Western Keltic Mines
The terms of an option agreement have been finalised between Billiton Resources Canada and Western Keltic regarding its Sault Dam Cu-Au project. The agreement includes 250 000 units which Western Keltic will issue to Billiton over four years, 50 000 units will be issued on commencement. Western Keltic may earn 70% interest in the property from Billiton by investing C$1.75m in exploration work over four years. Billiton will retain a First Back In Right to earn an additional 20% interest in the property by spending C$3.5m over a 3 year period. A second Back In Right will allow Billiton to increase its interest in the property to 70% by providing project financing to the start of commercial production.
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BHP discloses Billiton valuation details
BHP has, at the request of the Australian Securities and Investments Commission, disclosed details of the AS$28bn valuation of Billiton. Assumptions were that estimated cash flows would be realised each year over a 20 year period. In the case of Mining and petroleum assets with lives of less than 20 years, cash flows were projected over the estimated operating lives of the assets. The results were discounted to present values at 30 Jun 01 using an exchange rate of R6.8500 to the US$ with the value of the Australian dollar at $0.6600. Details were disclosed by way of a circular in which chairman Don Argus urged shareholders to vote in favour of the scheme.
Two Billiton shareholder groups have voiced their disapproval of the company's intention to release funds from the share incentive scheme following the merger. The Association of British Insurers (ABI), whose members are one of the largest groups of Billiton shareholders, said that the proposal was in breach of "prevailing best practice". Pirc, a corporate governance agency was advising investors to abstain from the merger vote as a means of protesting against the share scheme, approval for which goes hand in hand with approval of the merger. ABI recommendations would have included a special vote on the share incentive scheme.
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Australian managers "enraged" at Billiton packages
Australian fund managers were "enraged" about the GHP49.5m in shares that Billiton executives stood to earn on conclusion of the proposed merger. The Australian Financial Review 's comments were "Biggest Pay Bonanza in Australian history". Billiton said that a second share scheme for employees (similar to those found in the USA) made provision for employees to use half of their annual salary to buy Billiton shares which, provided the stock was kept for two years, would be matched by a company purchase on their behalf. Should the shares be kept for four years, the purchase by the company could be as much as three times the original purchase. Billiton also said that this share incentive scheme was created to "match" Billiton salaries, in particular that of Brian Gilbertson, to those of BHP employees.
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