Mwana Africa in SouthernEra Take Over Bid

AIM-listed Mwana Africa Plc (MWA-L) intends to make a share exchange takeover bid of SouthernEra Diamonds Inc. Mwana is offering one ordinary share for every 2.3333 SouthernEra common shares. SouthernEra will form a special committee to review the unsolicited bid.

Based on Mwana’s March 15 closing price on the AIM market of £0.433 ($0.841), the offer would represent an implied offer price of approximately £0.185 ($0.359) per SouthernEra share, a valuation of approximately $59.8 million (£30.8 million).

“Mwana's strategy is to develop into a major resource group on the African continent,” said Mwana Chairman Oliver Baring. “The strategy includes partnering with industry majors on new projects and also being a preferred vehicle for African investors and entrepreneurs.”

Mwana is a natural resource company with exploration assets in a range of commodities, including nickel and gold mines in Zimbabwe, gold exploration in Ghana, as well as gold, zinc, and copper-cobalt projects in the Democratic Republic of Congo (DRC).

Last May, Mwana acquired 20 percent of MIBA, the DRC’s largest diamond mine. MIBA has produced an annual average of six million carats of diamonds over the past five years.

SouthernEra is a Canadian diamond firm holding alluvial and kimberlite diamond exploration projects in the DRC, an 18 percent interest in the Camafuca mine in Angola, a 57 percent interest in the Klipspringer diamond mine in South Africa, and advanced diamond exploration projects in Canada.

SouthernEra's exploration properties in Congo and Angola seem to be of most interest to Mwana. Last November, Mwana made a $34.1 million bid for Gravity Diamonds, which also has projects in Congo.

AIM trade of Mwana shares closed Friday at £0.405 ($0.786). SouthernEra shares surged 28 percent on the Toronto Stock Exchange, closing at C$0.38 cents ($0.323) in heavy trading of more than a million shares.