Societe d'Organisation, de Participation et de Management

December 31, 2007 10:26 ET

Societe d'Organisation, de Participation et de Management Agrees to Acquire Common Shares of Moto Goldmines Limited

KINSHASA, DEMOCRATIC REPUBLIC OF CONGO--(Marketwire - Dec. 31, 2007) - Societe d'Organisation, de Participation et de Management ("Orgaman") is issuing this news release pursuant to the early warning reporting provisions of securities legislation in the Provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia, in respect of Moto Goldmines Limited ("Moto" or the "Company") (TSX:MGL)(AIM:MOE).

Orgaman has entered into an agreement with Moto to acquire ownership of 9,319,211 Common Shares of Moto, which agreement is subject to the satisfaction of various conditions. For the purposes of this news release, Orgaman is deemed to have acquired ownership and control of an aggregate of 9,319,211 Common Shares in the capital of Moto. This represents 12.9% of Moto's Common Shares, calculated by adding the 9,319,211 Common Shares agreed to be issued to Orgaman to the currently outstanding 62,898,270 Common Shares of Moto. Orgaman together with certain of its directors, officers, employees and shareholders (namely Messrs William Damseaux, Jean-Claude Damseaux, Antoine Lakondo and Augustin Yenga) currently own and exercise control over 1,783,840 Common Shares, options to acquire 100,000 Common Shares at a price of C$7.65 each and no other securities issued by Moto. This would represent 15.49% of Moto's Common Shares, calculated by adding the 9,319,211 Common Shares agreed to be issued to Orgaman to the 1,783,840 Common Shares already held by Orgaman and the persons named above plus the Common Shares to be issued upon exercise of the warrants referred to above (11,203,051 shares in total), and dividing by the currently outstanding 62,898,270 Common Shares of Moto plus the 9,319,211 Common Shares to be issued to Orgaman and the 100,000 Common Shares to be issued upon exercise of the warrants (72,317,481 shares in total). Save as set out above, Orgaman is not acting jointly or in concert with any other person in respect to Moto or any securities issued by Moto and Orgaman does not share ownership or control with any other person over any securities issued by Moto.

Moto and Orgaman currently hold their 70% interest in the Moto Gold Project through their ownership of a number of Moto subsidiaries that are incorporated in the Democratic Republic of Congo ("DRC"). Orgaman has agreed to transfer its interests in those subsidiaries (comprising shares and shareholder loans) to Moto for an aggregate consideration of approximately US$34.6 million comprising 9,319,211 common shares in Moto (to be issued at C$2.93 per share) and a cash payment of approximately US$7.5 million to repay shareholder loans made by Orgaman to Borgakim Mining sprl ("Borgakim"), a subsidiary of Moto. The cash portion will bear interest at 8% per annum from signing to completion. The issuance of the Moto common shares is conditional upon receipt of regulatory approvals from the TSX and AIM.

Pursuant to the November 2006 Protocol between Moto and L'Office des Mines d'Or de Kilo-Moto ("OKIMO") (announced by the Company on November 8, 2006) Moto is to acquire certain debts owed by OKIMO to Orgaman (the "OKIMO Loan") and the contractual arrangements between Moto and OKIMO are to be further simplified into one agreement regarding the Moto Gold Project (the "Consolidated Lease Agreement").

As part of the agreements announced today, Moto has formalised the documentation to reflect its agreement with Orgaman to acquire the OKIMO Loan for a purchase price equal to its face amount and accrued interest to date of approximately US$31.1 million (the "Assignment"). The purchase price will bear interest at 8% per annum and will be paid to Orgaman as to US$10 million within seven business days of the effective date of the Assignment, US$10 million on the first anniversary of the effective date and the balance of approximately US$11.1 million and accrued interest on the second anniversary of the effective date. Moto has also agreed to certain other protections for Orgaman if it abandons the Moto Gold Project prior to payment in full to Orgaman.

The Assignment is conditional on the Consolidated Lease Agreement and the Tripartite Agreement, referred to below, being entered into. As part of the November 2006 Protocol, it was agreed that the OKIMO Loan would only be removed from the books of OKIMO once an agreement (the "Tripartite Agreement") is entered into among OKIMO, Moto/Borgakim and Orgaman confirming completion of the assignment of the OKIMO Loan. Moto and Orgaman have agreed in the negotiation of the Tripartite Agreement to seek the insertion of a clause that the OKIMO Loan, less interest accrued during the force majeure period, being an amount of approximately US$23 million as at today's date, is assumed by Borgakim.

Pending the Tripartite Agreement being entered into, Moto has agreed that Orgaman will be granted a charge over an effective 10% interest in Borgakim or the Moto DRC subsidiary that will hold the Consolidated Lease Agreement. If the Tripartite Agreement is not entered into within 18 months, Orgaman will be entitled to exercise the charge and become involved in the management of the Moto Gold Project, unless Moto pays the outstanding amount due to Orgaman under the Assignment.

Moto has the option to pay up to 50% of any instalment of the purchase price for the OKIMO Loan by the issuance to Orgaman of Moto Common Shares, subject to receipt of regulatory approvals. The number of Moto common shares to be issued will be determined by reference to the volume weighted average price of Moto common shares on the TSX for the five trading days immediately prior to the payment date converted to US dollars at the noon rate of exchange published by the Bank of Canada on the last day of the five-day period.

If there is a change of control of Moto, all unpaid amounts due by Moto in respect of the purchase price (together with accrued interest) will become payable within seven days. If a change of control occurs before the Consolidated Lease Agreement and the Tripartite Agreement become unconditional, then Orgaman can require payment only upon the Assignment becoming effective.

Orgaman has agreed that for twelve months it will not dispose of the Moto common shares issued to it pursuant to the above transactions without first offering such shares to Mr. Samuel Jonah, Moto's Chairman, and to Moto. Pursuant to applicable Canadian securities laws, Orgaman will be restricted from selling any common shares issued in connection with these transactions in Canada for four months, absent an exemption from registration and prospectus requirements.

Moto and Orgaman have agreed in the SPA that the shareholdings of Orgaman in the subsidiary companies of Moto that are to be sold to Moto by Orgaman, in consideration for the issuance to Orgaman of the Common Shares of Moto that are the subject of this news release, have a value of C$27,289,446.

Orgaman agreed to acquire the Common Shares of Moto that are the subject of this report for investment purposes. Depending on economic and market conditions and matters relating to Moto, but subject to the provisions of the SPA, in future Orgaman may choose to either acquire additional securities or to dispose of its Common Shares of Moto.

Contact Information

  • Societe d'Organisation, de Participation et de Management
    Jean-Claude Damseaux
    Director
    + 24 389-891-0379
    or
    Societe d'Organisation, de Participation et de Management
    Avenue Lieutenant Colonel Lukusa no. 4854
    Kinshasa/Gombe
    Democratic Republic of Congo