Refined metals deal for Apple Fields

By Phil Boeyen, ShareChat Business News Editor

Thursday 4th April 2002

Former orchardist Apple Fields (NZSE: APF) will issue shares in return for at least $47,500 worth of precious metals each month under a revised deal with US and Australian partners.

Previously the company was to purchase ore concentrates from Delaware-based Titan Resource Group in return for shares but says it will now receive gold, platinum, rhodium and palladium refined to London Metal Exchange purity levels.

"Apple Fields is to receive a monthly volume of precious metals, of at least a minimum value of NZ$47,500. If there is a shortfall in the supply of metals in any month, Titan is to provide a cash top-up. No maximum volume level has been set," the company says.

"The issue price for the shares is to be the greater of the prevailing market price, as each tranche of the metals is received, or 25cps, rising to 50cps over the first year."

Apple Fields says the transition removes any refining risk for the company and secures new capital for the next two years.

"This provides the company with the resources to complete the investigation and assessment of current investment opportunities and to pursue a number of potential investments in the mineral and broader resources sector.

"The contract also provides Apple Fields with the opportunity to raise further capital as Titan refines and supplies additional volumes of the precious metals. "

The independent directors have also reached agreement with Adelaide-based SABC Project Management to subscribe for $450,000 of new capital in two tranches, the first at 15cps and the second at 25cps. The total number of shares proposed to be issued is 2.733 million.

Money raised will be used to repay the loan advances made by SABC to the company and to meet operational costs.

Both the SABC and Titan agreements are subject to shareholder approval and an independent appraisal report.

Apple Fields also plans to split the publicly listed company from its subsidiary companies. The listed company will concentrate on the resources sector while a new subsidiary holding company will seek a secondary listing. Existing shareholders will own shares in both Apple Fields Ltd and the new subsidiary holding company.

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