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ANTAM And Zhongjin Announce A Joint A$504.8 Million Recommended Cash Offer For Herald Resources
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PT ANTAM Tbk ("ANTAM") and Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. ("Zhongjin") today announced a joint cash offer of A$2.50 per share for the entire issued capital of Herald Resources Limited ("Herald Resources"), valuing Herald Resources at A$504.8 million (US$448.1 million) ("ANTAM / Zhongjin Offer").

The Board of Herald Resources withdraws their previous recommendation to accept the lower offer of AUD$2.25 per share of Calipso Investment Pte Ltd ("Calipso Offer") and unanimously recommends that Herald Resources shareholders accept the ANTAM / Zhongjin Offer in the absence of a superior proposal.

The Directors of Herald Resources have also indicated that in the absence of a superior proposal they currently intend to accept the ANTAM / Zhongjin Offer for their own holdings of Herald Resources shares.

ANTAM is a state-controlled Indonesian mining group that already holds a 20% interest in Herald Resource's 80%-owned Dairi zinc/lead project in Northern Sumatra, Indonesia.

Zhongjin is a zinc/lead mining and smelting company based in the People's Republic of China ("China") and operates the low cost Fankou mine.

The ANTAM-Zhongjin Offer is A$0.25 per share (over 11%) higher than the Calipso Offer of A$2.25 per share and represents a premium of A$0.236 over the volume weighted average of all Herald Resources shares traded since the announcement of the Calipso Offer. 

The ANTAM-Zhongjin Offer is subject to a number of conditions, including 50.1% minimum acceptance, Foreign Investment Review Board approval and ANTAM and Zhongjin obtaining necessary shareholder and regulatory approvals. The conditions are outlined in full in Appendix 1 to this announcement.

The President Director of ANTAM, Dedi Aditya Sumanagara, said: "The joint acquisition of Herald Resources represents an opportunity for ANTAM to have a majority interest in the Dairi Project and build a strategic partnership with one of China's leading zinc and lead companies".

"In view of the recently launched offer for Herald Resources, we believe that the value of the Dairi Project can be best optimised by the expertise of ANTAM and the introduction of an operating partner, such as Zhongjin, which has demonstrated expertise in zinc and lead mining and the capacity to enter into long-term production off-take arrangements.  These factors have enabled us to offer an amount in excess of the valuation range of A$2.03 - A$2.39 per share derived by PT Zodiac Perintis Penilai, the independent valuer commissioned by Calipso's parent, PT BUMI Resources Tbk."

The President of Zhongjin, Zhang Shuijian, said: "We believe that Zhongjin and ANTAM have the potential to add significantly to the current value of the Dairi Project".

"Zhongjin looks forward to working alongside ANTAM in developing the Dairi Project and building a long and prosperous relationship".

The Chairman of Herald Resources, Terrence Allen commented that: "We believe that the ANTAM / Zhongjin Offer represents an excellent outcome for Herald's shareholders and we will be working with ANTAM and Zhongjin to ensure that this offer is put to shareholders as expediently as possible".

The ANTAM / Zhongjin Offer will be made by way of an off-market takeover bid under the Australian Corporations Act 2001 through a Special Purpose Vehicle ("SPV") that will be owned by ANTAM and Zhongjin in the proportions of 40% and 60%, respectively. In the event that the SPV is successful in acquiring 100% of the entire issued capital of Herald Resources, ANTAM and Zhongjin will hold combined direct and indirect interests in the Dairi Project of 52% and 48%, respectively.

ANTAM and Zhongjin intend to fund the ANTAM / Zhongjin Offer through a combination of cash and new and existing debt facilities.

Herald Resources has entered into a Deed of Undertaking with ANTAM and Zhongjin in relation to the ANTAM / Zhongjin Offer. This includes a break-fee of A$5 million payable to ANTAM and Zhongjin in certain circumstances, including a successful competing takeover proposal. 

In addition, ANTAM has today purchased a total of 21.2 million shares in Herald Resources representing a 10.7% interest in the shares currently on issue.
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