Mwana Africa PLC
AIM : MWA

Mwana Africa PLC
SouthernEra Diamonds Inc.

August 24, 2007 20:37 ET

Mwana Africa PLC Announces That the Board of SouthernEra Diamonds Unanimously Recommends Mwana's Share Exchange Offer

VALUING THE OUTSTANDING SOUTHERNERA SHARES AT C$105.3 MILLION (POUNDS STERLING 49.8 MILLION) MWANA NOW OWNS, OR HAS RECEIVED COMMITMENTS FROM SOUTHERNERA SHAREHOLDERS TO TENDER TO THE OFFER, APPROXIMATELY 63% OF THE SOUTHERNERA SHARES

LONDON, UNITED KINGDOM--(Marketwire - Aug. 24, 2007) -

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES

Following the offer by Mwana Africa PLC ("Mwana" or "the Company")(AIM:MWA) of July 27, 2007 to acquire any and all of the outstanding Class A common shares (the "SouthernEra Shares") of SouthernEra Diamonds Inc. ("SouthernEra"), Mwana is pleased to announce that the Board of Directors of SouthernEra has agreed to recommend a revised offer (the "Revised Offer") made by Mwana under the terms of an agreement entered into between Mwana and SouthernEra. The Revised Offer values the outstanding SouthernEra Shares at approximately C$105.3 million (Pounds Sterling 49.8 million). The main terms of the agreement are:

- agreement by the SouthernEra Board of Directors to unanimously recommend that SouthernEra shareholders tender their shares to the Revised Offer;

- an increase in the share exchange ratio offered by Mwana from 2.33 SouthernEra Shares for each Mwana ordinary share (the "Mwana Shares") to 2.28 SouthernEra Shares for each Mwana Share;

- a waiver of the dilutive effects of the SouthernEra rights plan; and

- SouthernEra Directors and Senior Officers agreeing, subject to the terms of the Revised Offer, to tender their SouthernEra Shares (including SouthernEra Shares issued on the exercise of options) to the Revised Offer, representing approximately 3% of SouthernEra's issued share capital.

The increase in the share exchange ratio under the Revised Offer would result in Mwana issuing approximately 68.9 million shares (excluding share options and warrants) compared to approximately 67.3 million under the previous exchange ratio, representing a 2.4% increase in the offer.

Furthermore, on August 24, 2007, the Company entered into lock-up agreements with BTR Global and an individual shareholder (the "Additional Lock-Up Shareholders"), in respect to an aggregate 34,333,200 SouthernEra Shares, representing approximately 19.8% of the outstanding SouthernEra Shares, under which the Additional Lock-Up Shareholders have agreed to tender their SouthernEra Shares to the Revised Offer.

As previously disclosed, the Company has entered into lock-up agreements with JP Morgan Asset Management (UK) Limited, OZ Management, L.L.C., each on behalf of certain of their managed funds, and BHP Billiton in respect to an aggregate 52,427,330 SouthernEra Shares, representing approximately 30.2% of the outstanding SouthernEra Shares.

The SouthernEra Shares represented by the lock-up agreements and those committed by the directors and officers of SouthernEra to the Revised Offer, together with the SouthernEra Shares already owned by Mwana, aggregate approximately 63% of the outstanding SouthernEra Shares.

Commenting on the recommendation received from the SouthernEra Board of Directors, Oliver Baring, Chairman of Mwana, said:

"We are delighted that the SouthernEra Board is recommending our offer. We believe that it provides SouthernEra shareholders with an exciting opportunity to participate in an enlarged group which is well positioned to become a major African diamond exploration and production business. The combined assets of the two companies extend across some of the most prospective diamond territories of the DRC, South Africa, Zimbabwe, Angola and Botswana. We look forward to concluding this transaction and ensuring that we derive real value for all our shareholders from this strong platform."

Notice Describing the Revised Offer

A notice of variation describing the Revised Offer, together with a notice of change to SouthernEra's directors' circular recommending the Revised Offer, will be mailed to SouthernEra shareholders tommorrow and filed on SEDAR (http://www.sedar.com). Further details regarding the Revised Offer, including the conditions to the Revised Offer, are included in the notice of variation. The notice is also available from the Company's website (http://www.mwanaafrica.com/) free of charge.

Time and Manner for Acceptance

The time and manner of acceptance of the Revised Offer remains unchanged from the previously announced acceptance procedures.

The Revised Offer will be open for acceptance until 5:00 p.m. (Toronto time) on September 5, 2007, unless the Revised Offer is extended or withdrawn.

Mwana has engaged Numis Securities Limited as financial adviser in connection with the offer.

Canaccord Adams Limited acts as Nominated Adviser and Joint Broker to Mwana in the United Kingdom. JP Morgan Cazenove Limited also acts as Joint Broker to Mwana in the United Kingdom.

Canaccord Adams Limited acts as Dealer Manager for the offer.

IMPORTANT NOTICE

The Revised Offer is not being made, directly or indirectly, to "U.S. persons" (as such term is defined in Regulation S of the United States Securities Act of 1933, as amended, the "U.S. Securities Act") or in or into the United States (including its territories, possessions, each state thereof and the District of Columbia, the "United States") or any other jurisdiction where it would be unlawful to do so, or by use of the mails, or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce, or by any facility of a national securities exchange of any jurisdiction where it would be unlawful to do so, and the Revised Offer will not be capable of acceptance by U.S. persons or by any such means, instrumentality or facility from or within the United States or any other jurisdiction where it would be unlawful to do so. Accordingly, copies of this press release, the notice of variation describing the Revised Offer and all other documents relating to the Revised Offer are not being, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from the United States or any other jurisdiction where it would be unlawful to do so. Persons receiving such documents (including, without limitation, nominees, trustees and custodians) should observe these restrictions. Failure to do so may invalidate any related purported acceptance of the Revised Offer.

The Mwana Shares have not been, and will not be, registered under the U.S. Securities Act or any U.S. state securities or "blue sky" laws and may not be offered or issued in the United States or to, or for the account or benefit of U.S. persons. Notwithstanding the forgoing and the other provisions of the Revised Offer, Mwana may, in its sole discretion in certain limited circumstances offer or issue Mwana Shares in the United States or to, or for the account of U.S. persons, pursuant to an exemption from the registration requirements of the U.S.Securities Act and in compliance with any applicable U.S. state securities or "blue sky" laws.

Persons who are resident in the United Kingdom should note that the Revised Offer will not be subject to the provisions of the United Kingdom Takeover Code.

The content of this press release, which has been prepared by and is the sole responsibility of Mwana, has been approved by Numis Securities Limited, The London Stock Exchange Building, 10 Paternoster Square, London, England EC4M 7LS, solely for the purposes of section 21 of the United Kingdom's Financial Services and Markets Act 2000. Numis Securities Limited is acting exclusively for Mwana in connection with the Revised Offer and no one else and will not be responsible to anyone other than Mwana for providing the protections afforded to clients of Numis Securities Limited nor for providing advice in relation to the Revised Offer or any other matter referred to in this press release.

This press release does not constitute or form part of any offer to sell or invitation to purchase any securities or solicitation of an offer to buy any securities, pursuant to the Revised Offer or otherwise. The Revised Offer will be made solely by the formal notice of variation, which will contain the full terms and conditions of the Revised Offer, including details of how the Revised Offer may be accepted.

This press release is for information purposes and is not a substitute for the formal documents relating to the Revised Offer. Copies of such documents can be obtained free of charge at the SEDAR website at www.sedar.com (http://www.sedar.com).

Neither the issuance of this news release by Mwana in connection with the Revised Offer nor the filing of early warning reports prescribed by applicable Canadian securities laws is an admission that an entity named in this news release or such reports owns or controls any described securities or is a joint act or with another named entity. The lock-up agreements entered into with the Additional Lock-Up Shareholders are "Permitted Lock-up Agreements" under SouthernEra's shareholder rights plan, but will automatically become irrevocable lock-ups at such time that Mwana determines that the dilutive effects of the rights plan no longer applies to the Revised Offer. A copy of each lock-up agreement is available to the public and may be obtained on request from Mwana.

This press release contains forward-looking statements with respect to the Revised Offer and the transactions contemplated thereby, including the proposed business combination of Mwana and SouthernEra, Mwana's financial condition, results of operations, business prospects, plans, objectives, goals, strategies, future events, capital expenditures, and exploration and development efforts. Words such as "anticipates", "expects", "intends", "plans", "forecasts", "projects", "budgets", "believes", "seeks", "estimates", "could", "might", "should", and similar expressions identify forward-looking statements. Although Mwana believes that its plans, intentions and expectations reflected in these forward-looking statements are reasonable, Mwana cannot be certain that these plans, intentions or expectations will be achieved. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained in this press release. These statements include comments regarding: operations and synergies of the combined entity, the establishment and estimates of mineral reserves and mineral resources, production, production commencement dates, production costs, grade, processing capacity, potential mine life, feasibility studies, development costs, capital and operating expenditures, exploration, the closing of certain transactions including acquisitions and offerings, and Mwana's expansion plans.

For further information visit our web site at (http://www.mwanaafrica.com/).

A copy of the early warning report filed by the Company pursuant to Canadian securities laws can be obtained from the individuals identified above at Mwana:



Mwana Africa plc
Devon House
12-15 Dartmouth Street
London
SW1H 9BL


Neither the Toronto Stock Exchange nor the London Stock Exchange has reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Mwana Africa PLC
    Oliver Baring
    Chairman
    +44 20 7654 5588
    or
    Mwana Africa PLC
    Kalaa Mpinga, CEO or David Fish, CFO
    +27 11 883 9550/1
    Website: www.mwanaafrica.com
    or
    Numis Securities Limited
    John Harrison
    Managing Director
    +44 20 7260 1000
    or
    Canaccord Adams Limited
    Mark Ashurst
    Managing Director
    +44 20 7050 6500
    or
    Canaccord Adams Limited
    Michael Barman
    Dealer Manager
    (416) 869-7216
    or
    Merlin
    Tom Randell or Maria Suleymanova
    +44 20 7653 6620