todays proposed takeover of $3.5 billion dollar re

  1. 1,452 Posts.
    when HER finally takes full control of dairi things should start moving. stong buy on this one from grange securities, huntleys, noalls, ozequities & jb were. IAX in canada are up 50% in 5 days (30 to 45c) and today's bid from HER values IAX at CDN60c. full announcement was released after market today. HER certainly carries plenty of sovereign risk however it's aussie gold operations are making the company look better by the day. where to from here?

    HER - ASX Company Announcement
    $gol2
    4 June 2002
    Part 3/7
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    HERALD RESOURCES LIMITED
    ------------------------

    HOMEX - Perth
    -------------------------
    Notice of General Meeting

    INTERNATIONAL ANNAX VENTURES INC

    DIRECTOR'S REPORT TO THE MEMBERS

    At our Extraordinary Meeting of the Shareholders to be held on June
    7, 2002 we will be asking you to approve a proposed Plan of
    Arrangement with Herald Resources Limited ("Herald") of Perth
    Australia. If approved, the Plan of Arrangement will result in Herald
    purchasing all outstanding common shares of Annax in exchange for
    common shares of Herald on a one-for-one basis. If the Plan of
    Arrangement is compleed, Annax will become a wholly-owned subsidiary
    of Herald, and Herald will be the surviving public corporate entity.
    Shareholders of Annax will become shareholders of Herald.

    A fairness opinion of the proposed Plan of Arrangement, prepared by
    an independent valuator, is summarized as follows:

    "Based on the findings and observations as well as analyses prepared
    by the writer and other relevant factors applying to the companies,
    it is the writer's considered opinion that the Arrangement on the
    basis of 1.0 Herald share for each 1.0 Annax share is fair, from a
    financial point of view, to the minority shareholders of Annax."

    Based on the independent fairness opinion, your Board of Directors is
    in favour of the Plan of Arrangemnt and recommends that shareholders
    give favourable consideration to accepting the proposal. The proposal
    is also in keeping with the average relative share price trading
    range of Herald and Annax over the recent past. Additional
    information pertaining to the Plan of Arrangement is more fully
    disclosed within the enclosed Information Circular.

    HERALD RESOURCES LIMITED

    Herald is an Australian-based public mining and mineral exploration
    company that has been listed on the Australian Stock Exchange for 53
    years. Herald has a successful gold mine operating record in Western
    Australia and has also operated exploration projects throughout
    Southeast Asia, including Indonesia. It was Herald who brought the
    Dairi Zinc Project in Sumtra to Annax in 1996. Since that time,
    Herald has managed the exploration program at Dairi and has either
    provided or arranged for over 80% of the exploration funding for the
    benefit of Annax. Accordingly, Herald now owns approximately 73% of
    the issued shares of International Annax. Herald has working capital
    of approximately of CDN$5 million, no debt and a CDN$6 million line
    of credit which it expects to utilize for commencement of production
    at its Coolgardie Gold Project.

    INTERNATIONAL ANNAX VENTURES INC

    Annax is a Canadian-based public mineral exploration company listed
    on the TSX Venture Exchange (formerly CDNX). Annax's major mineral
    resource asset is the Dairi Zinc Project in Sumatra, Indonesia. In
    spite of the highzinc grade and tonnage potential of the Dairi
    Project, Annax has not been successful in arranging significant
    funding for exploration at the Dairi Project. This has primarily been
    due to a depressed zinc price and political uncertainty in Indonesia.
    Accordingly, as Herald has been financing exploration during the past
    year, Annax is indebted to Herald in an amount exceeding CDN$1
    million.

    ADVANTAGES OF A BUSINESS COMBINATION

    A business combination with Herald will provide Annax shareholders
    with an investment in a company that brings asset value comprised of:

    * proven mine operating expertise
    * established gold resources with near term production plans
    * positive working capital
    * a strong presence in the public marketplce
    * a diversity of opportunities in a variety of metal commodities
    * elimination of Annax's indebtedness to Herald
    * development of new opportunities to advance the Dairi Project.

    Your Board of Directors favours combining the assets of Annax and
    Herald under one corporate entity that will be advantageous for all
    shareholders, and therefore recommends that you, the Annax
    shareholder, consider voting in favour of the Plan of Arrangement.

    J S Brock
    PRESIDENT


    HER - ASX Company Announcement
    $gol2
    4 June 2002
    Part 4/7
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    HERALD RESOURCES LIMITED
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    HOMEX - Perth
    -------------------------
    Notice of General Meeting

    LETTER TO ANNAX SHAREHOLDERS

    The directors of Herald Resources Limited (Herald) believe that you
    will be best served financially by exchanging your International
    Annax Ventures (IAX) shares for Herald shares as set out in the
    Information Circular enclosed relating to a proposed Plan of
    Arrangement whereby IAX will become a wholly-owned subsidiary of
    Herald. If the Plan of Arrangement is approved it is believed that
    funding for the Dairi project will be more readily available with the
    projet under one corporate roof based in Australia, and held by a
    company with experience in Indonesian operations. Herald also brings
    the advantage of diversification, as it is not a one commodity
    resource company, and has existing gold projects, on which a decision
    to proceed to mining has already been made.

    The independent fairness opinion included in the Information Circular
    determined that the Plan of Arrangement was fair, from a financial
    point of view, to the shareholders of IAX, even prior to the decision
    to start gold mining operations.

    Herald is very proud of its reputation as a conservative company. It
    has not sought funds from its shareholders for over eight years.
    Herald has been listed on the Australian Stock Exchane for 53 years,
    the last twenty under current management. The 42.5 million shares on
    issue have had no previous restructuring. This expresses the board's
    desire to preserve shareholder equity.

    The Herald board would welcome you as shareholders, and believe that
    with your continued support Herald can enhance the value of the Dairi
    project with the minimum amount of shareholder dilution possible. It
    should be remembered that disposal of IAX shares in exchange for
    Herald shares does not preclude you from the upside potential in the
    Dairi Project. In addition to that upside, you obtain exposure in
    another commodity, gold, including potential production in a short
    time frame. Herald is domiciled in a politically stable country,
    Autralia, with the gold operations in that country. This will help
    balance the poor international perception of investment in Indonesia.

    Due to Herald's gold assets and expectation of cash flow from the
    reopening of the Coolgardie mine we expect more positive investor
    interest than has been experienced by IAX in raising funds for the
    Dairi project. In addition, we expect that considerable savings in
    administration and management can be achieved for the group.

    As pointed out in the fairness opinion, the market liquidity of
    Herald shares is greater than that of IAX, hence giving you a greater
    opportunity to liquidate or increase your holdings if you so desire.
    As you may not be familiar in dealing in foreign shares, details
    withn the Information Circular will help you understand the
    procedure, and consultation with your advisor is recommended.

    The following bullet points summarise Herald's position.

    * Herald vended the Dairi project to IAX believing that exploration
    finance would be more readily available via funding in Canada.

    * The facts are that of all the funds raised by IAX since that date,
    approximately 80% has been supplied by Herald or Australian brokers,
    as IAX has found it extremely difficult to raise funds for Indonesian
    projects since the BreX debacle.

    * In addition to subscribed funding, Herald has made available a loan
    facility to ensure that the Dairi project is kept in good standing.
    This has now been drawn down by IAX to $1 milion, and is increasing
    daily.

    * Herald has managed all exploration programs on behalf of IAX, so
    all of the Indonesia experience and goodwill developed in that
    country (which is essential to operate in Indonesia) is due to the
    efforts of Herald staff. IAX does not employ any direct technical
    field people.

    * If the Plan of Arrangement does not proceed, a large fund raising
    will be required by IAX, which in today's market place will cause a
    significant dilution. The fairness opinion addresses this
    possibility.

    * If the Plan of Arrangement does not proceed, any funds raised by
    IAX will go first to repaying loans to Herald, making any such fund
    raising even more difficult, whereas if the Plan of Arrangement
    proceeds, these oans will cease to exist.

    * Since the fairness opinion was prepared, Herald has announced the
    reopening of its Coolgardie gold mine, which will generate cash flows
    in the near future. Management of Herald believes that this increases
    the value of Herald's gold assets, when compared to that used in the
    fairness opinion. The cash flows generated from gold mining may be
    used to fund the Dairi project after project finances are repaid.

    * Herald staff are experienced miners, who have been operating mines
    for many years. This experience will serve well for the development
    of the Dairi project.

    * Herald has many other exploration projects not highlighted in the
    document. These are first class projects and could add considerable
    alue to Herald's asset base. Please visit Herald's website on
    www.herald.net.au to review these.

    If the Plan of Arrangement does not proceed we greatly fear for the
    future of the ownership of the Dairi project as Indonesia requires
    regular exploration on their mining contracts. IAX has found it very
    difficult to raise external finance in the past, and there is no sign
    of improvement in the short term. After you have reviewed the
    Information Circular, we urge you to support the Plan of Arrangement
    as proposed jointly by both companies directors, and send your proxy
    votes or attend the meeting to cast your vote to that effect.

    T Allen
    CHAIRMAN


    HER - ASX Company Announcement
    $gol2
    4 June 2002
    Part 5/7
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    HERALD RESOURCES LIMITED
    ------------------------

    HOMEX - Perth
    -------------------------
    Notice of General Meeting

    NOTICE OF SPECIAL GENERAL MEETING OF SHAREHOLDERS
    OF INTERNATIONAL ANNAX VENTURES INC

    Take notice that a special general meeting (the "Meeting") of
    shareholders of International Annax Ventures Inc ("Annax") will be
    held at the Xchange Conference Centre, 2nd Floor, 888 Dunsmuir
    Street, Vancouver, British Columbia on Tuesday, July 2, 2002, at
    10:00 am for the following purposes:

    1. To consider and, if deemed advisable, to pass a special resolution
    in the form attached as Exhibit B to the Crcular, with or without
    amendment, authorizing, approving and agreeing to the acquisition by
    Herald Resources Limited ("Herald") of the outstanding shares of
    Annax pursuant to an arrangement agreement dated as of May 23, 2002
    between Annax and Herald (the "Arrangement Agreement") and plan of
    arrangement (the "Arrangement") involving Annax, Herald and the
    shareholders of Annax, all as more particularly described in the
    Circular;

    2. To authorize the directors, in their discretion, either to proceed
    with or refrain from the Arrangement, if some or all of the
    conditions set out in the Arrangement Agreement are not satisfied;

    3. To consider and, if deemed advisable, to pass an ordinary
    resolution authorizing and approving an amedment to the exercise
    price of certain stock options previously granted to insiders of the
    Company, all as more particularly described in the Circular;

    4. To consider any amendment or variation to any matter identified in
    this Notice; and

    5. To transact such other business as may properly come before the
    Meeting or any adjournment thereof. A complete description of the
    Arrangement, which will be completed pursuant to the Arrangement
    Agreement, is included in the Circular.

    A shareholder who is unable to attend the Meeting in person and who
    wishes to ensure that such shareholder's shares will be voted at the
    Meeting, is requested to complete, sign, date and return the enclosed
    proxy in the enclosed envelope and to forward i to Computershare
    Trust Company of Canada, 4th Floor, 510 Burrard Street, Vancouver,
    British Columbia, V6C 3B9 before the close of business on June 27,
    2002.

    Pursuant to an order of the Supreme Court of British Columbia (the
    "Interim Order"), registered shareholders of Annax have been granted
    the right to dissent in respect of the special resolution approving
    the Plan of Arrangement and, if the Arrangement becomes effective, to
    be paid the fair value of their shares in accordance with the
    provisions of Article 5 of the Plan of Arrangement. To exercise such
    right, the Corporate Secretary of Annax, prior to the Meeting, must
    receive from the dissenting registered shareholder, a written
    objection to the special resolution and th dissenting registered
    shareholder must have otherwise complied with the provisions of the
    Interim Order. The right to dissent is described in the Information
    Circular. Failure to strictly comply with Article 5 of the Plan of
    Arrangement may result in the loss of any right of dissent.

    J S Brock
    President






 
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