Paladin Energy Ltd
TSX : PDN
ASX : PDN

Paladin Energy Ltd

December 02, 2008 09:28 ET

A$17.8 Million Recommended Takeover Offer by Paladin Energy Ltd for Fusion Resources Limited

PERTH, WESTERN AUSTRALIA--(Marketwire - Dec. 2, 2008) - Paladin Energy Ltd (TSX:PDN)(ASX:PDN) ("Paladin") and Fusion Resources Limited (TSX:FNS)(ASX:FSN) ("Fusion") are pleased to announce that Paladin intends to make an off-market scrip takeover offer ("Offer") for Australian and Toronto Stock Exchange listed minerals exploration company Fusion. This announcement was made after close of trading on the ASX.

The consideration under the Offer will comprise 1 fully paid ordinary Paladin share for every 6 fully paid ordinary Fusion shares, implying a price of A$0.365 per Fusion share based on today's closing price of Paladin shares on the ASX of A$2.19.

The Offer values Fusion at approximately A$17.8 million and provides an attractive premium of 59% to the closing price for Fusion shares on the ASX on 1 December 2008 of A$0.23, being the last trading day prior to Fusion shares being placed in a trading halt. The Offer is subject to a number of conditions, which are set out in detail in Appendix 1 to this announcement.

Fusion's directors have unanimously recommended that Fusion shareholders accept the Paladin offer, in the absence of a superior offer. They have also indicated that they intend to accept the Paladin offer in respect of their own shareholdings, in the absence of a superior offer.

Fusion is a minerals exploration company with 100% ownership of a number of uranium exploration projects in the Mt Isa region of Queensland and a portfolio of interests in copper / gold exploration projects in north Queensland. In addition, Fusion is expected to have a closing net cash balance (after allowing for all creditors, contingencies and accruals for any liabilities), of at least $14.0 million at the end of the Offer period.

Fusion's most advanced project is the Valhalla North Uranium Project, which is located approximately 45 kilometres north of the Valhalla and Skal uranium projects owned by the Isa Uranium Joint Venture ("IUJV") participants. Paladin has an effective 90.95% interest in the IUJV through its wholly owned subsidiary Valhalla Uranium Limited ("Valhalla Uranium") and its 81.9% interest in Summit Resources Limited ("Summit").

Fusion expects to announce a maiden JORC compliant resource for Valhalla North before the end of calendar year 2008 (it is a condition of the Offer that Fusion announces a JORC compliant resource of not less than 6Mlbs at a cut off grade of not less than 250ppm of uranium oxide (U3O8) prior to the Offer closing). Fusion's other uranium projects near Mt Isa are the Andersons South uranium project and the Mary Kathleen South project.

The proposed acquisition represents an important addition to the portfolio of uranium exploration projects in the Mt Isa region currently controlled by Paladin, and another step forward in Paladin's aim of developing a world-class uranium mining and processing operation in Queensland. Whilst this ultimately depends on a change in State Government policy in Queensland regarding uranium mining, Paladin plans to continue to progress exploration and appraisal of the Mt Isa projects to ensure readiness if and when this policy change occurs.

Fusion shareholders who accept the Offer will:

- retain the exploration upside associated with Fusion's projects and continued exposure to potential changes in Australian State Government uranium mining policy;

- benefit from becoming shareholders in a uranium producing company, inherit a management team and board with the requisite skills and demonstrated ability to bring a uranium operation into production; and

- obtain increased liquidity of their investment through owning Paladin shares.

Fusion has also agreed to pay Paladin a break fee of approximately A$400,000 in certain circumstances, including a successful competing takeover proposal. A copy of the Takeover Bid Implementation Agreement can be accessed at the Company's website at the following link http://www.paladinenergy.com.au/Portals/0/File/announcements_2008/08.12.02_Recommended_Takover_Offer_by_Paladin_for_Fusion.pdf.

Paladin's financial adviser in respect of the proposed acquisition is Azure Capital and its legal adviser is Blakiston & Crabb. Fusion's legal adviser is Hardy Bowen.

Indicative Timetable

Paladin's Bidder's Statement and Fusion's Target Statement are both expected to be available in two to three weeks and despatched to Fusion shareholders as soon as possible thereafter. The Offer is expected to close in mid January, subject to any unforseen events.

Background Information - Paladin Energy Limited

Paladin is listed on both the Australian Securities Exchange and the Toronto Stock Exchange under the symbol "PDN" with a number of international subsidiary listings.

Paladin is a uranium resources company with a focus on the development and operation of uranium projects in Africa and Australia. During the past three years, Paladin has developed and commissioned the 100% owned Langer Heinrich uranium mine and processing plant in Namibia and begun construction of the Kayelekera uranium mine and processing plant in Malawi (with commissioning of this project expected in the first quarter of 2009). In addition, through its acquisition of 100% of Valhalla Uranium and 81.9% of Summit, Paladin has a majority interest in, and control of, a portfolio of uranium exploration projects in the Mt Isa region of Queensland (complementing its portfolio of existing Australian uranium exploration projects).

Further information regarding Paladin and its key assets can be found in Paladin's latest Annual Report (a copy of which can be found on Paladin's website, www.paladinenergy.com.au)

Background Information - Fusion Resources Limited

Fusion is a mineral exploration company focused on uranium exploration in Queensland. Fusion has a number of prospective, 100% owned uranium exploration projects in the Mt Isa region, as well as a portfolio of copper / gold projects located in North Queensland.

Fusion's principal asset is the Valhalla North Uranium Project which is located approximately 45 kilometres to the north of Paladin's Valhalla and Skal uranium projects. Fusion has identified two key prospects at Valhalla North; Duke Batman and Honey Pot.

Fusion is currently finalising a uranium mineral resource estimate in accordance with the JORC code and National Instrument 43-101 'Standards of Disclosure for Mineral Projects' in relation to Valhalla North, which is expected to be released in the December 2008 quarter.

Fusion's other Mt Isa uranium projects include the Andersons South project and the Mary Kathleen South project, and has a number of other early stage gold and base metal exploration projects located in Queensland.

APPENDIX 1

of the TSX Announcement dated 2 December 2008

(6 pages)


The Offer is subject to the fulfilment of the following conditions:

(a) Minimum Acceptance

At or before the end of the Offer Period, Paladin has a relevant interest in such number of Fusion Shares which represents at least 90% of the aggregate of all the Fusion Shares on issue at the end of the Offer Period.

(b) Consent to Quotation

The TSX consents to the issue and quotation of the Paladin Shares to be issued under the Offer on that exchange on an unconditional basis or subject only to customary conditions.

(c) Lender's Consent

The Societe Generale, Australia Branch (ABN 71 092 516 286), in its capacity as agent under the Common Terms Agreement:

(i) irrevocably and unconditionally consents to the acquisition by Paladin of all the Fusion Shares pursuant to the Offer for the purposes of the Common Terms Agreement; and

(ii) irrevocably and unconditionally waives any default under the Common Terms Agreement which has arisen, or may arise, solely as a result of the announcement or completion of the Offer by Paladin.

(d) Options

During or at the end of the Offer Period, either:

(i) all Fusion Options have been exercised, cancelled or transferred to Paladin or agreement has been reached between Paladin and the holders of the Fusion Options to do so; or

(ii) Paladin is entitled to compulsorily acquire all outstanding Fusion Options in accordance with Chapter 6A of the Corporations Act.

(e) Preference Shares

At the end of the Offer Period all Fusion Preference Shares have been, or the holder of the Fusion Preference Shares has agreed that the Fusion Preference Shares will be, converted into a total of 1,500 Fusion Shares, cancelled, revoked, amended and transferred to Paladin or otherwise rendered permanently ineffective.

(f) Valhalla North Uranium Project JORC Code Resource

Before the end of the Offer Period, Fusion announces to ASX that the Valhalla North Uranium Project has a JORC Code compliant resource of not less than 6 million pounds at a cut off of not less than 250ppm of uranium oxide (U3O8) based on information compiled by CSA Global Pty Ltd ACN 077 165 532.

(g) Cash Balance

At the end of the Offer Period, Fusion has a net cash balance (after allowing for all creditors, contingencies and accruals for any liabilities, including any amounts due by Fusion to Cazaly pursuant to the settlement and release deed referred to in condition ®) of not less than $14.0 million.

(h) No Change of Control Rights

Between the Announcement Date and the end of the Offer Period (each inclusive), there is no person having any rights, being entitled to have any rights, alleging an entitlement, or expressing or announcing an intention (whether or not that intention is stated to be a final or determined decision of that person) (in all cases whether subject to conditions or not), as a result of any change of control event in respect of Fusion (including Paladin acquiring shares in Fusion) or any of its subsidiaries or assets, to:

(i) terminate or alter any contractual relations between any person and Fusion or any of its subsidiaries (for this purpose an alteration includes of the operations of a contract, whether or not that altered operation is provided for under the existing terms of the contract);

(ii) require the termination, modification or disposal (or offer to dispose) of any interest or asset, corporate body, joint venture or other entity; or

(iii) accelerate or adversely modify the performance of any obligations of Fusion or any of its subsidiaries under any agreements, contracts or other legal arrangements.

(i) Access to Information

Between the Announcement Date and the end of the Offer Period, Fusion promptly, and in any event within two Business Days, provides to Paladin a copy of all material information which Paladin may from time to time reasonably request, whether or not generally available (within the meaning of section 1042C of the Corporations Act) relating to Fusion or any of its subsidiaries, or their respective assets, liabilities or operations.

(j) No Regulatory Actions

Between the Announcement Date and the end of the Offer Period (each inclusive):

(i) there is not in effect any preliminary or final decision, order or decree issued by a Government Agency;

(ii) no action or investigation is announced, commenced or threatened by any Government Agency; and

(iii) no application is made to any Government Agency (other than by Paladin or any of its associates),

in consequence of or in connection with the Offer (other than an application to, or a decision or order of, ASIC or the Takeovers Panel under, or relating to a breach of, Chapter 6, 6A, 6B or 6C of the Corporations Act or relating to unacceptable circumstances within the meaning of section 657A of the Corporations Act) which restrains, prohibits or impedes, or threatens to restrain, prohibit or impede, the making of the Offer or the acquisition of Fusion Shares under the Offer or the completion of any transaction contemplated by the Bidder's Statement, or seeks to require the divestiture by Paladin of any Fusion Shares, or the divestiture of any material assets of the Fusion Group or Paladin Group.

(k) No Material Adverse Change

Between the Announcement Date and the end of the Offer Period, no event, change or condition occurs, is announced or becomes known to Paladin (whether or not it becomes public) where that event, change or condition has had, or could reasonably be expected to have, a material adverse effect on:

(i) the business, assets, liabilities, financial or trading position, profitability or prospects of the Fusion Group, taken as a whole, since 30 June 2008;

(ii) the status or terms of arrangements entered into by the Fusion Group; or

(iii) the status or terms of any approvals, licences or permits from Public Authorities applicable to the Fusion Group,

except for events, changes and conditions publicly announced by Fusion or otherwise disclosed in public filings by Fusion or any of its subsidiaries prior to the Announcement Date where the relevant disclosure is not, and is not likely to be, incomplete, incorrect, untrue or misleading.

(l) No Material Acquisitions, Disposals or New Commitments

Except for any proposed transaction publicly announced by Fusion before the Announcement Date, none of the following events occurs during the period from the Announcement Date to the end of the Offer Period (each inclusive):

(i) Fusion or any subsidiary of Fusion acquires, offers to acquire or agrees to acquire one or more entities, businesses or assets (or any interest in one or more entities, businesses or assets) for an amount in aggregate greater than $100,000, or makes an announcement in relation to such an acquisition, offer or agreement;

(ii) Fusion or any subsidiary of Fusion disposes of, offers to dispose of or agrees to dispose of one or more entities, businesses or assets (or any interest in one or more entities, businesses or assets) for an amount, or in respect of which the book value (as recorded in Fusion's consolidated balance sheet as at 30 June 2008) is, in aggregate, greater than $100,000, or makes an announcement in relation to such a disposition, offer or agreement; or

(iii) Fusion or any subsidiary of Fusion enters into, or offers to enter into or agrees to enter into, any agreement, joint venture or partnership which would require expenditure, or the foregoing of revenue, by the Fusion Group of an amount which is, in aggregate, more than $100,000, other than in the ordinary course of business, or makes an announcement in relation to such an entry, offer or agreement.

(m) Non-Existence of Certain Rights

No person (other than a member of the Paladin Group) has or will have any right (whether subject to conditions or not) as a result of Paladin acquiring Fusion Shares under the Offer to:

(i) acquire, or require the disposal of, or require Fusion or a subsidiary of Fusion to offer to dispose of, any material asset of Fusion or a subsidiary of Fusion; or

(ii) terminate, or vary the terms or performance of, any material agreement with Fusion or a subsidiary of Fusion.

(n) No Prescribed Occurrences

During the period from the date of the Bidder's Statement to the end of the Offer Period (each inclusive), none of the following occurrences (being the prescribed occurrences listed in section 652C of the Corporations Act) happens:

(i) Fusion converts all or any of its shares into a larger or smaller number of shares under section 254H of the Corporations Act;

(ii) Fusion or a subsidiary of Fusion resolves to reduce its share capital in any way (other than a selective capital reduction in connection with the Fusion Preference Shares);

(iii) Fusion or a subsidiary of Fusion enters into a buy-back agreement or resolves to approve the terms of a buy-back agreement under section 257C(1) or 257D(1) of the Corporations Act;

(iv) Fusion or a subsidiary of Fusion issues shares (other than as a result of the exercise of Fusion Options or conversion of Fusion Preference Shares) or grants an option over its shares, or agrees to make such an issue or grant such an option;

(v) Fusion or a subsidiary of Fusion issues, or agrees to issue, convertible notes;

(vi) Fusion or a subsidiary of Fusion disposes, or agrees to dispose, of the whole, or a substantial part, of its business or property;

(vii) Fusion or a subsidiary of Fusion charges, or agrees to charge, the whole, or a substantial part, of its business or property;

(viii) Fusion or a subsidiary of Fusion resolves to be wound up;

(ix) a liquidator or provisional liquidator of Fusion or of a subsidiary of Fusion is appointed;

(x) a court makes an order for the winding up of Fusion or of a subsidiary of Fusion;

(xi) an administrator of Fusion or of a subsidiary of Fusion is appointed under section 436A, 436B or 436C of the Corporations Act;

(xii) Fusion or a subsidiary of Fusion executes a deed of company arrangement; or

(xiii) a receiver, or a receiver and manager, is appointed in relation to the whole, or a substantial part, of the property of Fusion or a subsidiary of Fusion.

(o) No Prescribed Occurrences between the Announcement Date and date of Bidder's Statement

During the period from the Announcement Date to the date that is the day before the date of the Bidder's Statement (each inclusive), none of the occurrences listed in sub-paragraphs (i) to (xiii) of paragraph (n) above happened.

(p) Fall in Indices

That the All Ordinaries Index published by the ASX at the close of business on any 5 consecutive trading days after the Announcement Date is not below 3121.

(q) Paladin Share Price

That the closing price on Paladin's Shares as traded on ASX does not exceed $4.00 per Paladin Share for any 5 consecutive trading days during the Offer Period provided for the avoidance of doubt that this defeating condition shall cease to operate as such in the event, during the Offer Period, of any conversion of Paladin Shares into a smaller number pursuant to section 254H of the Corporations Act.

® Settlement of Contingent Liability

Fusion enters into a settlement and release deed with Cazaly settling all outstanding claims and liabilities due or claimed by Cazaly to be due by Fusion to Cazaly in relation to the decision by the Minister for State Development to terminate Cazaly's application with respect to the Shovelanna Iron Ore Project (notified to Cazaly and Fusion on 21 April 2006), including any and all appeals, applications for review or applications for special leave to appeal concerning such decision which have been or could be made by Cazaly, and releasing Fusion from any and all claims and liabilities to Cazaly including as a result of any costs order made against Cazaly in such proceeding or proceedings or any costs resulting from agreement or agreements, written or otherwise, between Cazaly and Fusion concerning any costs (whether legal, professional, advisory or otherwise whatsoever).

In these conditions:

"Agreement" means the takeover bid implementation agreement;

"Agreed Announcement" means an announcement in the terms agreed in writing between the parties;

"Announcement Date" means the date on which Paladin and Fusion release the Agreed Announcement to the ASX;

"ASIC" means the Australian Securities and Investments Commission;

"ASX" means the Australian Securities Exchange;

"Bidder's Statement" means the bidder's statement and acceptance form under sections 636 and 637 of the Corporations Act, and which includes the Offer;

"Business Day" means a day on which the banks are open for business in Perth, Australia, excluding a Saturday, Sunday or public holiday;

"Cazaly" means Cazaly Resources Limited ACN 101 049 334;

"Common Terms Agreement" means the agreement dated 25 May 2006 between Paladin Finance Pty Ltd, Paladin Energy Ltd, Langer Heinrich Mauritius Holdings Ltd, Langer Heinrich Uranium (Pty) Ltd, Societe Generale, Australia Branch, N.B.S.A. Nominees Ltd and Standard Bank;

"Corporations Act" means the Corporations Act 2001 (Cth);

"Fusion Group" means Fusion and its Related Bodies Corporate;

"Fusion Option" means an option to subscribe for a Fusion Share;

"Fusion Preference Shares" means the B class convertible cumulative preference shares in the capital of Fusion;

"Fusion Share" means a fully paid ordinary share issued in the capital of Fusion;

"Fusion Shareholder" means a person who is recorded in Fusion's register of members as the holder of one or more Fusion Shares;

"Government Agency" means any government or representative of a government or any governmental, semi-governmental, administrative, fiscal, regulatory or judicial body, department, commission, authority, tribunal, agency, competition authority or entity whether foreign, federal, state, territorial or local in any part of the world. It includes ASIC and ASX (and any other stock exchange);

"JORC Code" means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves current as at the date of the Agreement;

"Offer" means each offer to acquire Fusion Shares to be made by Paladin to Fusion Shareholders in connection with the Takeover Bid;

"Offer Period" means the period during which the Offer is open for acceptance;

"Paladin Group" means Paladin and its Related Bodies Corporate;

"Paladin Share" means a fully paid ordinary share issued in the capital of Paladin;

"Related Body Corporate" has the meaning given in the Corporations Act;

"Shovelanna Iron Ore Project" means the iron ore project between Cazaly Resources Limited, Cazaly Iron Pty Ltd and Fusion over the land subject to Exploration Licence Application 46/678, evidenced by the document entitled 'Shovelanna Deed' dated on or about 25 November 2005; and

"TSX" means the Toronto Stock Exchange.

ACN 061 681 098

Contact Information