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Central Asia Metals PLC Proposed acquisition of -80-

22 Sep 2017 6:01 am

The unaudited pro forma financial information is based on the consolidated net assets of CAML as at 30 June 2017 and has been prepared using accounting policies consistent with those set out in the interim financial statements of the Group for the six months ended 30 June 2017.

The unaudited pro forma financial information has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and, therefore, does not represent CAML's or the Enlarged Group's actual financial position. The unaudited pro forma financial information has been prepared on the basis set out in the notes below and in accordance with Schedule Two of the AIM Rules for Companies.

The unaudited pro forma information does not constitute financial statements within the meaning of Section 434 of the Act.

Unaudited Pro Forma Statement of Net Assets
 
                                                                             Adjustments 
                                                                                                                        Pro 
                                                                                                                       forma 
                                                     Lynx 
                                                     Group 
                                                     as at 
                                                    30 June                           Debt 
                                                     2017                           financing      Company Placing      Total 
                                                                  Acquisition 
                                                                       of 
                                                                      the 
                                                                      Lynx 
                                                                     Group 
                CAML as at 30 June 2017 $'000         $'000          $'000             $'000             $'000          $'000 
                                                   --------      ------------      ----------                        -------- 
                                     (Note 1)        (Note           (Note            (Note           (Note 5) 
                                                       2)              3)               4) 
Non-current 
assets 
Property, 
 plant and 
 equipment                             50,361       186,392                 -               -                    -    236,753 
Intangible 
 assets                                41,761        10,438           200,798               -                    -    252,997 
Other 
 non-current 
 receivables                            2,653             -                 -               -                    -      2,653 
                                                   -------- 
                                       94,775       196,830           200,798               -                    -    492,403 
Current assets 
Inventories                             4,406         2,094                 -               -                    -      6,500 
Trade and 
 other 
 receivables                              975        17,409                 -               -                    -     18,384 
Other 
 financial 
 receivables                                -         3,879                 -               -                    -      3,879 
Deferred tax 
 assets                                     -           131                 -               -                    -        131 
Restricted 
 cash                                     122             -                 -               -                    -        122 
Cash and cash 
 equivalents                           41,580        14,815         (285,676)         117,360              147,207     35,286 
                                       47,083        38,328         (285,676)         117,360              147,207     64,302 
                                                   -------- 
Total assets                          141,858       235,158          (84,878)         117,360              147,207    556,705 
                                                   ======== 
 
 Non-current 
 liabilities 
Borrowings                                  -        57,450                 -         101,360                    -    158,810 
Deferred 
 Consideration                              -             -            12,000               -                    -     12,000 
Deferred 
 revenue 
 received 
 advances for 
 silver 
 delivery                                   -        18,484                 -               -                    -     18,484 
Deferred 
 income tax 
 liability                              8,661             -                 -               -                    -      8,661 
Provisions for 
 other 
 liabilities 
 and charges                            2,023         2,750                 -               -                    -      4,773 
                                                   -------- 
                                       10,684        78,684            12,000         101,360                    -    202,728 
 
 Current 
 liabilities 
Borrowings                                  -        14,219                 -          16,000                    -     30,219 
Deferred 
 revenue 
 adances for 
 silver 
 delivery                                   -         2,143                 -               -                    -      2,143 
Other 
 financial 
 liabilities                                -         1,740                 -               -                    -      1,740 
Provisions for 
 other 
 liabilities 
 and charges                                -            58                 -               -                    -         58 
Trade and 
 other 
 payables                               4,770         3,612             (771)               -                    -      7,611 
                                                   -------- 
                                        4,770        21,772             (771)          16,000                    -     41,771 
                                                   -------- 
Total 
 liabilities                           15,454       100,456            11,229         117,360                    -    244,499 
                                                   -------- 
Net assets                            126,404       134,702          (96,107)               -              147,207    312,206 
                                                   ======== 
 

Notes:

(1) The net assets of CAML as at 30 June 2017 have been extracted without material adjustment from the unaudited interim financial statements of CAML for the six months ended 30 June 2017, which is available at www.centralasiametals.com.

(2) The net assets of the Lynx Group for the six months ended 30 June 2017 have been extracted without material adjustment from the unaudited interim financial information of the Lynx Group for the six months ended 30 June 2017, set out in section C of section 26 of this announcement.

(3) The adjustments arising as a result of the acquisition of the Lynx Group are set out below:

(a) The adjustment to current assets of $285.7 million represents the aggregate of $273.5 million cash consideration payable to the Sellers for the Acquisition and $12.2 million of estimated transaction costs. This includes $0.8 million of estimated transaction costs which were accrued as at 30 June 2017. In addition, transaction costs of $0.1 million were paid prior to 30 June 2017. Estimated Acquisition costs include those of the financial and legal advisers, fees, reporting accountant and other costs associated with the Acquisition. In accordance with IFRS, no provision has been made for possible contingent costs associated with the Acquisition, estimated at $23.0 million.

(b) The unaudited pro forma statement of net assets has been prepared on the basis that the acquisition of Lynx will be accounted for using the acquisition accounting method. The excess of consideration over the book value of assets acquired has been reflected as intangible assets. No account has been taken of any fair value adjustments which may arise on the acquisition, including for any amounts that may be reclassified to property, plant and equipment (mining assets).

The intangible assets arising on this basis have been calculated as follows:
 
                                                     $'m 
Consideration: 
Cash consideration (note 3(i))                     273.5 
Deferred consideration (note 3(ii))                12.00 
Equity consideration (note 3(iii))                  50.0 
                                                   335.5 
Less net assets of the Lynx Group (note 3(iv))   (134.7) 
Intangible assets                                  200.8 
 

(i) The cash consideration of $273.5 million will be financed by the $120.0 million new debt facilities provided by Traxys (Note 4) and the proceeds of the Placing (Note 5). No adjustment has been made for any net debt and net working capital adjustments under the Acquisition Agreement.

(ii) Deferred cash consideration of $12.0 million has been accrued, payable in six equal monthly instalments commencing on the first anniversary of the completion of the Acquisition.
   (iii)          The equity consideration amount assumes the issue of $50 million of new CAML shares. 

(iv) The net assets of the Lynx Group are those as at 30 June 2017 as set out Section C of section 26.

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September 22, 2017 02:01 ET (06:01 GMT)

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