Forte Energy NL

July 11, 2013 02:27 ET

Proposed Acquisition of Leo Mining and Exploration Ltd

                                                                                          Forte Energy NL
11 July 2013

                 Proposed Acquisition by Forte Energy of Leo Mining and Exploration Ltd

Forte  Energy NL ("Forte Energy" or "the Company") (ASX/AIM: FTE) announces it has entered  into  a  non-
binding  term  sheet  for  the  proposed acquisition ("the Proposed  Acquisition"),  of  Leo  Mining  and
Exploration  Limited  ("Leominex"), (together "the Parties"). Leominex  is  an  unlisted  British  Virgin
Islands  ("BVI") registered company which has interests in a portfolio of uranium and rare earth elements
("REE")  assets in Africa which complement Forte Energy's existing projects. The Proposed Acquisition  is
expected to create a diversified, larger scale Africa-focussed exploration and development company with a
well-balanced  portfolio  of  uranium and REE assets, both of which feature in  Forte  Energy's  existing

It is anticipated that the Proposed Acquisition will be effected through a statutory merger under BVI law
pursuant to which Forte Energy shall issue and allot to Leominex shareholders a total of 95 per  cent  of
the  Company's  issued  share capital (equivalent to approximately 860 million  ordinary  shares  in  the
capital  of  Forte Energy at the date of this announcement), as consideration for 100  per  cent  of  the
issued share capital of Leominex.

It  is  also  anticipated  that  two additional non-executive directors nominated  by  Leominex  will  be
appointed  to  the  board of directors of Forte Energy following completion of the Proposed  Acquisition,
expanding  the  Forte board from 4 directors to 6 directors. It is envisaged that any  new  non-executive
directors would be appointed on similar terms as Forte Energy's existing non-executive directors.

The Proposed Acquisition is subject to a number of conditions, including:

    *   the  completion of final binding documentation (the "Final Agreements"), including a  merger
        implementation agreement, voting undertakings from major shareholders of Leominex and a 
        relationship agreement among Forte Energy, Leominex and Mkango Resources Ltd. ("Mkango"), a 
        Canadian company listed on the TSX-Venture exchange in which Leominex holds an equity interest 
        of approximately 48 per cent;
    *   obtaining applicable regulatory or securities exchange approvals; and
    *   approval by the shareholders of each of Forte Energy, Leominex and Mkango.

The Parties are in the process of negotiating the terms of the Final Agreements and notices convening the
relevant shareholder meetings will be announced in due course by Forte Energy, Leominex and Mkango.
The  Proposed  Acquisition has the support of significant shareholders of both Parties and  the  enlarged
Forte  Energy's  market  capitalisation and enhanced asset base would position  it  well  to  execute  on
strategic growth plans, including potential acquisition opportunities. In addition there are expected  to
be significant synergies in technical expertise through the Proposed Acquisition.

About Forte Energy
Forte  Energy is an ASX and AIM listed emerging international exploration and development company with  a
portfolio of uranium assets in the Republics of Mauritania and Guinea, West Africa.  While recent work by
Forte  Energy has focussed on increasing its uranium resources, previous exploration work also  indicated
potential for REEs.  Areva has a 7.1 per cent shareholding in Forte Energy.

About Leo Mining and Exploration
Leominex  is  a  private, BVI-registered company which has interests in a portfolio of  REE  and  uranium
assets  in  Africa.  Leominex has a 48 per cent shareholding in Mkango, which owns 100 per  cent  of  two
prospecting licenses covering a combined area of 1,751 sq km in southern Malawi.  Mkango's most  advanced
stage  project  is  the Songwe Hill rare earth project where it has defined a significant  Indicated  and
Inferred  REE  Mineral  Resource  Estimate.  In parallel with completion  of  environmental  studies  and
metallurgical test work for the Songwe project, Mkango is also undertaking regional exploration for  REEs
and  uranium  in  Malawi.  On  April  11,  2013, Mkango closed an oversubscribed  C$2.3  million  private
placement.  Under the Proposed Acquisition, Forte Energy will become an indirect 48 per cent  shareholder
of Mkango, which will continue to trade as an independent company.

Leominex  also holds approximately 8 per cent of the shares in Signet Mining Services Ltd., a  Niger  and
Chad  focussed  uranium  exploration and development company, with  seven  100  per  cent  owned  uranium
exploration  licences  in Niger covering approximately 1,664 sq km and four 100 per  cent  owned  uranium
exploration licences in Chad covering approximately 413.2 sq km. The Licenses in Niger are located within
and close to the Tim Mersoi basin which is home to world class uranium mines and deposits.

Following the Proposed Acquisition, Mkango and Signet Mining Services Ltd will continue to be managed  by
their respective Boards and management teams.  Apart from the above mentioned additions to the Board, the
executive management team of Forte Energy will remain as it is currently.

Leominex  has 55 shareholders with its largest two shareholders being William Dawes and Alexander  Lemon,
each  with a shareholding of approximately 17 per cent in Leominex, and who would each indicatively  hold
around  8  per  cent  of  the  expanded  Forte Energy share capital  after  completion  of  the  Proposed

Commenting on the proposed transaction, Mark Reilly, Managing Director of Forte Energy, said:

"The  proposed  transaction to acquire Leominex would create an African focussed uranium and  rare  earth
explorer  and  developer with an enhanced portfolio of project interests and the technical expertise  and
financial  strength  to  advance its assets towards production. In addition, the combined  business  will
benefit  from deeper technical expertise and a Board with experience in developing and building  numerous

For further information contact:

Mark Reilly                                      Geoff Nash/Ben Thompson
Managing Director                                Elizabeth Johnson (broking)
Forte Energy NL                                  finnCap
Tel: +44 (0) 203 3849555                         Tel: +44 (0)207 220 0500

Bobby Morse/Cornelia Browne                      Stuart Laing
Louise Hadcocks                                  RFC Ambrian Ltd
Buchanan                                         (AIM Nominated Adviser to the Company)
Tel: +44 (0) 207 466 5000                        Tel: +61 (0) 8 9480 2506

Forte Energy NL

Australia                                        United Kingdom

Suite 3, Level 3                                 3C Princes House
1292 Hay Street                                  38 Jermyn Street
West Perth WA 6005                               London SW1Y6DN
Ph: +61 (0)8 9322 4071                           Ph: +44 (0)203 3847474
Fax: +61 (0)8 9322 4073                          Fax: +44 (0)207 2878387
Email:                   Email:

About Forte Energy

Forte  Energy  is  an  Australian-based minerals company focussed on the exploration and  development  of
uranium  and associated bi-products in Mauritania and Guinea in West Africa. The Company has an extensive
pipeline  of  assets and total JORC resources of 76.8Mt @ 266ppm U3O8for 44.9Mlbs contained U3O8  (100ppm

Its  flagship assets are the A238 prospect (23.4Mlbs U3O8) and the Bir En Nar project (2.06Mlbs U3O8)  in
Mauritania, and the Firawa Project in Guinea (19.5Mlb U3O8).

Forte Energy U3O8 JORC resources (all at a 100ppm cut-off):

Project              Resource Category         M tonnes         ppm U3O8           Contained U3O8 Mlbs
A238*                         Inferred             45.2              235                          23.4
Bir En Nar                   Indicated              0.5              886                           1.0
                              Inferred              0.8              575                           1.0
Firawa                        Inferred             30.3              295                          19.5
Total                        Indicated              0.5              886                           1.0
                              Inferred             76.3              262                          43.9
                                 Total             76.8              266                          44.9

        * A238NW Anomaly included in the A238 Inferred Resources
The  Company  is  quoted on the Australian Stock Exchange (ASX: FTE) and AIM market of the  London  Stock
Exchange (AIM: FTE). For more information, visit

The information in this report that relates to the reporting of Mineral Resources is based on information
compiled  or  reviewed by Mr. Galen White, who is a Fellow of the Australasian Institute  of  Mining  and
Metallurgy (FAusIMM). Mr White is the Principal Geologist of CSA Global (UK) Ltd. CSA Global have an  on-
going  role  as geological consultants to Forte Energy NL. Mr. White has sufficient experience  which  is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which
he  is  undertaking to qualify as a Competent Person as defined in the 2004 Edition of the  'Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. White consents to the
inclusion  in  this report of the matters based on his information in the form and context  in  which  it

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