Asian Mineral Resources says no to Norilsk Nickel’s $22 million offer

“[The] timing of Norilsk’s proposal exposes AMR to significant financial risks,” writes Asian Mineral Resources in a press release.

“If AMR does not proceed with the transaction with Pala Investments Holdings Limited (“Pala”), it will be required to pay a break fee to Pala. Given the Corporation’s current financial position and the conditional nature of Norilsk’s proposal, the failure of Norilsk to make an offer to AMR’s shareholders would significantly reduce AMR’s working capital, further delay development of its Ban Phuc Nickel Project and create significant risks of its status as a going concern.”

Asian Mineral Resources is a exploration company with projects in northwestern Vietnam. It also has interest in a nickel mine.

Full news release from Norilsk Nickel announcing the offer is here.

TORONTO, ONTARIO–(Marketwire – May 23, 2012) – OJSC “MMC NORILSK NICKEL” today announced that it intends, acting through a subsidiary (“Norilsk Nickel”), to make an all-cash take-over bid (the “Take-over Bid”) to acquire all of the outstanding common shares (the “Shares”) of Asian Mineral Resources Limited (“AMR”) at a price of C$0.11 per Share (the “Offer”).

Norilsk Nickel will request shareholder lists from AMR promptly and mail the Take-over Bid circular to shareholders of AMR as quickly as possible.

Norilsk Nickel confirms that it made offers to AMR through the course of the AMR strategic alternatives process that included superior consideration to that contemplated by the Pala Investments Holdings Limited (“Pala”) share purchase. Further the Norilsk Nickel offers contemplated, as does the Take-over Bid, an offer to all shareholders of AMR, and not a preference for certain shareholders.

The Norilsk Nickel Offer will contain typical conditions, with the additional condition that the transaction with Pala is either rejected by shareholders of AMR, withdrawn or otherwise terminated, or Pala agreeing to tender to the Take-over Bid pursuant to a lock-up agreement acceptable to Norilsk Nickel.

The Offer

The Offer provides AMR shareholders with an immediate opportunity to realize cash consideration for their Shares. In addition the Offer:

* Is in cash only, providing certainty of value to holders of AMR Shares; and

* Represents a premium of approximately 69% over the 20 day volume weighted average price ending May 22, 2012 of $0.065 per Share on the TSX Venture Exchange (“TSXV”).

Details of the Offer

Full details of the Offer will be contained in a formal offer and Take-over Bid circular to be filed with securities regulatory authorities and mailed to shareholders of AMR. Norilsk Nickel expects to formally launch the Offer on June 4, 2012. The Offer will remain open for at least 35 days following formal commencement of the Offer.

The Offer price represents a premium of 69% over the 20 day volume weighted average price ending May 22, 2012 of $0,065 per Share on the TSXV.

Norilsk Nickel will promptly request a list of shareholders of AMR for the purpose of disseminating the offering documents to shareholders. Upon receipt of such list, Norilsk Nickel will cause the offering documents to be mailed to shareholders of record and furnished to brokers, dealers, banks, trust companies and similar persons whose names or the names of whose nominees appear on the shareholders lists or, if applicable, who are listed as participants in a clearing agency’s share position listing, for subsequent transmittal to beneficial owners of the Shares.

The Take-over Bid will be subject to customary conditions, including: that a minimum of 50.1% of the outstanding Shares on a fully-diluted bases are tendered to the Offer, receipt of required regulatory approvals, the absence of any material adverse change in AMR, the absence of certain prohibited activities on the part of AMR (including, but not limited to, share issuances, borrowing, granting of security, acquisitions and dispositions) between the date of this announcement and the expiry of the Offer, the absence of untrue statements in the public information of AMR. The Norilsk Nickel offer will also be conditional upon the transaction with Pala being either rejected by shareholders of AMR, withdrawn or otherwise terminated, or Pala agreeing to tender to the Take-over Bid pursuant to a lock-up agreement on terms acceptable to Norilsk Nickel. Norilsk Nickel intends to take all reasonable steps to acquire any Shares that remain outstanding following expiry of the Offer.

Fraser Milner Casgrain LLP is acting as legal counsel to Norilsk Nickel.

About OJSC “MMC “NORILSK NICKEL”

OJSC “MMC “NORILSK NICKEL” is the largest mining company in Russia, the largest producer of nickel and palladium globally, and an important producer of copper, concentrating approximately 20%, 45% and 2% of the worldwide production of these metals, respectively. OJSC “MMC “NORILSK NICKEL” has operating mines in Russia, Australia, Botswana, Finland, and South Africa, and distribution centers in Pittsburgh, London, Zurich, Beijing, Shanghai, and Hong Kong. OJSC “MMC “NORILSK NICKEL” is publicly traded in the MICEX and RTS (Russia), and our ADRs are listed in the LSE (UK), NYSE (US) and the Deutsche Borse (Germany), and holds a market capitalization of approximately US$35 billion.

The social mission of OJSC “MMC “NORILSK NICKEL” is to produce output demanded by society – base and precious metals – in the most efficient and safe way possible on a sustainable long-term basis, thereby contributing to the social progress and prosperity of the society, the sustainable development of the regions in which we operate, and the well-being of their population, and the improvement of the living standards of our employees. Please see our Corporate Social Responsibility Report.

Cautionary Note Regarding Forward Looking Financial Information

Certain of the statements made herein may contain forward-looking statements or information within the meaning of Canadian securities laws and the applicable securities laws of the United States. Such forward looking statements or information include, but are not limited to, statements or information with respect to Norilsk Nickel’s intention with respect to a proposed offer to acquire AMR; the proposed terms of such an offer; the business, operations and financial performance and condition of each of Norilsk Nickel and AMR.

Forward-looking statements or information are based on a number of estimates and assumptions and are subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking statements or information. Should one or more of these risks and uncertainties materialize, or should underlying estimates and assumptions prove incorrect, actual results may vary materially from those described in forward looking statements or information. Factors related to such risks and uncertainties, and underlying estimates and assumptions include, among others, the following: Norilsk Nickel’s assessment of the effect of an offer on Norilsk Nickel, AMR and on the shareholders of AMR, the timing and prospects for shareholder acceptance of an offer and the implementation thereof; the satisfaction of any conditions to an offer; the ability of Norilsk Nickel to advance development of the assets of AMR; price volatility of nickel and other metals; impact of any hedging activities, including margin limits and margin calls; discrepancies between actual and estimated production, between actual and estimated resources, and between actual and estimated metallurgical recoveries; mining operational risk; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign investment; speculative nature of mineral exploration; defective title to mineral claims or property, litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological or operational difficulties or inability to obtain permits encountered in connection with exploration activities; and labour relations matters. Accordingly, undue reliance should not be placed on forward looking statements or information. We do not expect to update forward-looking statements or information continually as conditions change, except as may be required by law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.