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143 Pages·2010·3.3 MB·English

THISDOCUMENTISIMPORTANTANDREQUIRESYOURIMMEDIATEATTENTION.Ifyouareinanydoubtaboutthecontentsofthis
document you should consult your stockbroker, bank manager, solicitor, accountant or other independent professional adviser
authorisedforthepurposesofFSMA,whospecialisesinadvisingontheacquisitionofsharesandothersecurities.Aninvestmentinthe
Companyinvolvesasignificantdegreeofriskandmaynotbesuitableforallrecipientsofthisdocument.Investorsshouldconsider
carefullytheRiskFactorswhicharesetoutinPartVofthisdocument.Ifyouhavesoldortransferredallyourordinarysharesinthe
Company, you should send this document, together with the accompanying form of proxy, to the purchaser or transferee or to the
stockbroker,bankorotheragentthroughwhomthesalewasaffected,fortransmissiontothepurchaserortransferee.Ifyouhavesold
ortransferredonlypartofyourholdingofOrdinarySharesyoushouldretainthesedocuments.
The Company, its Directors and the Proposed Directors whose names appear on page 5 of this document accept individual and collective
responsibilityfortheinformationcontainedinthisdocumentincludingindividualandcollectiveresponsibilityforcompliancewiththeAIMRules,save
fortheinformationconcerningtheConcertPartyforwhicheachmemberoftheConcertPartyisresponsibleandtherecommendationsetoutin
paragraph26ofPartIofthisdocument,forwhichtheIndependentDirectorissolelyresponsible.Tothebestoftheknowledgeandbeliefofthe
Company,itsDirectorsandtheProposedDirectorswhohavealltakenreasonablecaretoensurethatsuchisthecase,theinformationcontained
inthisdocumentforwhichtheyareresponsible(asabove)isinaccordancewiththefactsandcontainsnoomissionlikelytoaffecttheimportof
suchinformation.Inconnectionwiththisdocument,nopersonisauthorisedtogiveanyinformationortomakeanyrepresentationsotherthanas
containedinthisdocumentandifgivenormade,suchinformationorrepresentationmustnotberelieduponashavingbeenauthorised.Underno
circumstancesshouldtheinformationcontainedinthisdocumentberelieduponasremainingaccurateatanytimeafterAdmission.
ThedirectorofGrandinex,thedirectorsofObtala,FrankScolaroandDavidRichardsonacceptresponsibilityfortheinformationcontainedinthis
documentrelatingtothemselvesorotherwiseexpresslyreferabletothem.TothebestoftheknowledgeandbeliefofeachmemberortheConcert
Party(whohastakenreasonablecaretoensuresuchisthecase)theinformationcontainedinthisdocumentforwhichtheyareresponsibleisin
accordancewiththefactsandtherearenootherfactstheomissionofwhichislikelytoaffecttheimportofsuchinformation.
Thisdocument,whichcomprisesanadmissiondocument,hasbeendrawnupinaccordancewiththeAIMRulesandhasbeenissuedinconnection
withtheproposedadmissionoftheEnlargedIssuedShareCapitaloftheCompanytotradingonAIM.IntheUnitedKingdom,anyofferofOrdinary
Sharesisbeingmadeonlytoqualifiedinvestorsforthepurposesofandasdefinedinsection86ofFSMAand,accordingly,thisdocumentisnot
anapprovedprospectusforthepurposesofsection85ofFSMAandacopyofithasnotbeen,andwillnotbe,deliveredtotheUKListingAuthority
inaccordancewiththeProspectusRulesordeliveredtoorapprovedbyanyotherauthoritywhichcouldbeacompetentauthorityforthepurposes
oftheProspectusDirective.ThisdocumentandtheaccompanyingFormofProxyshouldnotbeforwardedortransmittedbyyoutoanypersonin
theUnitedStates,Canada,Australia,theRepublicofSouthAfricaorJapanortheirrespectiveterritoriesorpossessions.
TheExistingOrdinarySharesareadmittedtotradingonAIM.ApplicationwillbemadetotheLondonStockExchangefortheEnlarged
IssuedShareCapitaltobeadmittedtotradingonAIM.TheOrdinarySharesarenotdealtinonanyotherrecognisedinvestmentexchange
and no application has been, or is being, made for the Ordinary Shares to be admitted to any such exchange. It is expected that
AdmissionwillbecomeeffectiveandthatdealingsinOrdinaryShareswillcommenceonAIMon26March2010.
TherulesofAIMarelessdemandingthanthoseoftheOfficialListoftheUKListingAuthority.AIMisamarketdesignedprimarilyfor
emergingorsmallercompaniestowhichahigherinvestmentrisktendstobeattachedthantolargerormoreestablishedcompanies.
AIMsecuritiesarenotadmittedtotheofficiallistoftheUKListingAuthority.Aprospectiveinvestorshouldbeawareoftherisksof
investinginsuchcompaniesandshouldmakethedecisiontoinvestonlyaftercarefulconsiderationand,ifappropriate,consultation
with an independent financial adviser. EachAIM company is required pursuant to theAIM Rules to have a nominated adviser. The
nominatedadviserisrequiredtomakeadeclarationtotheLondonStockExchangeonAdmissionintheformsetoutinScheduleTwo
to the AIM Rules for Nominated Advisers. The London Stock Exchange has not itself examined or approved the contents of this
document.
Gemstones of Africa Group Plc
(IncorporatedandregisteredinEnglandandWaleswithregisterednumber05292528)
Approval of proposed acquisition of Edenville International Limited
Proposed placing of 200,000,000 Ordinary Shares of 0.02 pence each in the capital of
the Company at 0.5 pence per share
Approval of the waiver of the obligation to make a mandatory offer under Rule 9
of the City Code on Takeovers and Mergers
Proposed change of name to Edenville Energy Plc
Adoption of NewArticles ofAssociation
Application forAdmission toAIM
and
Notice of General Meeting
NominatedAdviser Rule3AdvisertoGemstonesofAfrica Broker
ZAICorporateFinanceLimited MerchantJohnEastSecuritiesLimited ZimmermanAdamsInternationalLimited
TheNewOrdinaryShareswill,followingallotment,rankparipassuinallrespectswiththeExistingOrdinarySharesincludingtherighttoreceive
alldividendsandotherdistributionsdeclared,madeorpaidontheOrdinarySharesafterAdmission.
ZAICorporateFinanceLimited,whichisauthorisedandregulatedintheUnitedKingdombytheFinancialServicesAuthority,isactingasnominated
advisertotheCompanyinconnectionwiththearrangementsdescribedinthisdocument.ItsresponsibilitiesastheCompany’snominatedadviser
undertheAIMRulesareowedsolelytotheLondonStockExchangeandarenotowedtotheCompanyortoanyDirectorortoanyProposed
Directors or to any other person in respect of his decision to acquire shares in the Company in reliance on any part of this document. No
representationorwarranty,expressorimplied,ismadebyZAICorporateFinanceLimitedastoanyofthecontentsofthisdocument(withoutlimiting
thestatutoryrightsofanypersontowhomthisdocumentisissued).ZAICorporateFinanceLimitedwillnotbeofferingadviceandwillnototherwise
beresponsibletoanyoneotherthantheCompanyforprovidingtheprotectionsaffordedtoclientsofZAICorporateFinanceLimitedorforproviding
adviceinrelationtothecontentsofthisdocumentoranyothermatter.NoliabilityisacceptedbyZAICorporateFinanceLimitedfortheaccuracy
of any information or opinions contained in, or for the omission of any material information from, this document, for which the Company, the
Directors,theProposedDirectorsandtheConcertPartyaresolelyresponsible.
ZimmermanAdamsInternationalLimited,whichisauthorisedandregulatedbytheFSAandamemberoftheLondonStockExchange,isactingas
brokertotheCompany,ZimmermanAdamsInternationalLimited’sresponsibilitiesasthebrokertotheCompanyareowedsolelytotheCompany.
Norepresentationorwarranty,expressorimplied,ismadebyZimmermanAdamsInternationalLimitedastoanyofthecontentsofthisdocument
(withoutlimitingthestatutoryrightsofanypersontowhomthisdocumentisissued).ZimmermanAdamsInternationalLimitedwillnotbeoffering
adviceandwillnototherwiseberesponsibletoanyoneotherthantheCompanyforprovidingtheprotectionsaffordedtocustomersofZimmerman
AdamsInternationalLimitedorforprovidingadviceinrelationtothecontentsofthisdocumentoranyothermatter.Noliabilityisacceptedby
ZimmermanAdamsInternationalLimitedfortheaccuracyofanyinformationoropinionscontainedin,orfortheomissionofanymaterialinformation
from,thisdocument,forwhichtheCompanyandtheDirectorsaresolelyresponsible.
MerchantJohnEastSecuritiesLimited,whichisauthorisedandregulatedintheUnitedKingdombytheFinancialServicesAuthority,isactingas
Rule3AdvisertotheCompany.MerchantJohnEastSecuritiesLimited’sresponsibilitiesastheRule3AdvisertotheCompanyareowedsolelyto
theCompany.
Thewholetextofthisdocumentshouldberead.InvestmentintheCompanyisspeculativeandinvolvesahighdegreeofrisk.Your
attentionisalsodrawntothesectionheaded“RiskFactors”inPartVofthisdocument.
CONTENTS
Page
Forward-looking statements 3
Admission Statistics 4
Expected Timetable 4
Directors, Proposed Directors, Secretary andAdvisers 5
Definitions 7
Glossary 13
PART I: Letter from the Chairman of Gemstones ofAfrica Group Plc 14
PART II: Information on Tanzania 26
PART III: Mining Regulations in Tanzania 28
PART IV: Competent Persons Report on Edenville International Limited 32
PART V: Risk Factors 84
PART VI: Information on the Concert Party 91
PART VII: Financial Information on Gemstones ofAfrica Group Plc 92
PART VIII: Financial Information on Edenville International Limited 96
PART IX: Additional Information 107
PART X: Notice of General Meeting 139
APPENDIX 141
2
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements.These statements relate to the Enlarged
Group’s future prospects, developments and business strategy.
Forward-lookingstatementsareidentifiedbytheiruseoftermsandphrasessuchas“believe”,
“could”, “expect”, “envisage”, “estimate”, “intend”, “may”, “plan”, “will” or the negative of those,
variationsorcomparableexpressions,includingreferencestoassumptions.Thesestatements
are primarily contained in Part I of this document.
The forward-looking statements in this document are based on current expectations and are
subjecttorisksanduncertaintiesthatcouldcauseactualresultstodiffermateriallyfromthose
expressed or implied by those statements. Certain risks to and uncertainties for the Company
are specifically described in Part V of this document headed “Risk Factors”. If one or more of
these risk factors or uncertainties materialises, or if the underlying assumptions prove
incorrect, the Enlarged Group’s actual results may vary materially from those expected,
estimated or projected. Given these risks and uncertainties, potential investors should not
place any reliance on forward-looking statements.
These forward-looking statements speak only as at the date of this document. Neither the
Directors, the Proposed Directors nor the Company undertake any obligation to update
forward-looking statements or risk factors other than as required by the AIM Rules for
Companies or by the rules of any other securities regulatory authority, whether as a result of
new information, future events or otherwise.
3
ADMISSION STATISTICS
Number of Existing Ordinary Shares 1,393,941,536
Number of Existing Deferred Shares 64,179,632
Number of Consideration Shares proposed to be issued 1,393,941,536
Number of Placing Shares proposed to be issued 200,000,000
Placing Price 0.5 pence
Number of Ordinary Shares in issue onAdmission 2,987,883,072
Percentage of Enlarged Issued Share Capital represented by the
Placing Shares 6.69 per cent.
Percentage of Enlarged Issued Share Capital represented by the
Consideration Shares 46.65 per cent.
Percentage of Enlarged Issued Share Capital not in Public Hands on
Admission 80.40 per cent.
Gross proceeds of the Placing available to the Company £1,000,000
Net proceeds of the Placing available to the Company £840,000
Market capitalisation immediately followingAdmission at the Placing Price £14,939,415
International Security Identification Number (ISIN) GBOOB05MCJ34
TIDM Symbol GOA.L
EXPECTED TIMETABLE
Publication date of theAdmission document 3 March 2010
Latest time and date for receipt of Forms of Proxy
in respect of the GM 10.00 am on 24 March 2010
General Meeting 26 March 2010
Completion of theAcquisition,Admission and dealings in the
Ordinary Shares expected to commence onAIM 29 March 2010
Expected crediting of CREST accounts (where applicable) by 29 March 2010
Expected despatch of definitive share certificates (where applicable) 29 March 2010
Each of the times and dates in the Expected Timetable is subject to change.
4
DIRECTORS, PROPOSED DIRECTORS, SECRETARY AND ADVISERS
Directors Simon John Rollason, Non-Executive Chairman and
Proposed Executive Chairman
RakeshRameshPatel,ExecutiveDirector(IndependentDirector)
Registered Office and Aston House
Principal Place of CornwallAvenue
Business London
N3 1LF
Proposed Directors Mark Jonathan Pryor, Chief Executive Officer
Sally Joy Schofield, Non-Executive Director
Secretary David Venus and Company LLP
Continuing Board Simon John Rollason
Rakesh Ramesh Patel
Mark Jonathan Pryor
Sally Joy Schofield
NominatedAdviser ZAI Corporate Finance Limited
12 Camomile Street
London
EC3A7PT
Broker ZimmermanAdams International Limited
12 Camomile Street
London
EC3A7PT
Rule 3Adviser to Merchant John East Securities Limited
Gemstones 10 Finsbury Square
London
EC2A1AD
Auditors and Reporting HW Fisher & Company
Accountants Acre House
11-15 William Road
London
NW1 3ER
Solicitors to the Harbottle & Lewis LLP
Company as to Hanover House
English law 14 Hanover Square
London
W1S 1HP
Solicitors to the Company Mkono & CoAdvocates
as to Tanzanian law 9th Floor, PPF Tower
GardenAvenue
Ohio Street
P.O. Box 4369
Dar es Salaam
Tanzania
5
Solicitors to the Speechly Bircham LLP
NominatedAdviser 6 New Street Square
London
EC4A3LX
Competent Person WardellArmstrong LLP
Sir Henry Dalton House
Forge Lane
Etruria
Stoke-on-Trent
Staffordshire
ST1 5BD
Registrars Capita Registrars Limited
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
HD8 0GA
Website www.gemstonesofafrica.net changing to
www.edenville-energy.com
6
DEFINITIONS
The following definitions apply throughout this document, unless the context requires
otherwise:
“Acquisition” the proposed acquisition by the Company of the entire
issued share capital of Edenville pursuant to the
AcquisitionAgreement
“AcquisitionAgreement” the conditional agreement dated 3 March 2010 between
the Company and the Vendors relating to the Acquisition,
further details of which are set out in paragraph 14.6 of
Part IX of this document
“Acts” the CA1985 and CA2006
“CA1985” the CompaniesAct 1985, as amended
“CA2006” the CompaniesAct 2006, as amended
“Admission” the admission of the Enlarged Issued Share Capital to
tradingonAIMbecomingeffectiveinaccordancewithRule
6 of theAIM Rules for Companies
“AIM” the market of that name operated by London Stock
Exchange
“AIM Rules” the rules published by London Stock Exchange governing
the admission to, and operation of, AIM from time to time
and including the AIM Rules for Companies and the AIM
Rules for NominatedAdvisers
“Articles” the current articles of association of the Company
“Audit Committee” the audit committee of the Board to be established after
Admission
“Board” the board of directors of the Company from time to time
andanydulyauthorisedandconstitutedcommitteethereof
“Code” or “City Code” or the City Code on Takeovers and Mergers published from
“Takeover Code” time to time by the Panel
“Combined Code” the Combined Code on Corporate Governance published
in June 2006 by the Financial Reporting Council, as
amended from time to time
“Company” or “Gemstones” Gemstones ofAfrica Group Plc
“Completion” completion of the Acquisition Agreement in accordance
with its terms
“Concert Party” Grandinex, Obtala, Frank Scolaro and David Richardson
“Consideration Shares” the 1,393,941,536 Ordinary Shares to be issued to the
Vendors on Completion in accordance with the terms of
theAcquisitionAgreement
7
“Continuing Board” the board of the Company immediately after Admission,
comprising the Directors and the Proposed Directors
“CPR” Competent Persons Report
“CREST” the relevant system (as defined in the CREST
Regulations) enables title to be evidenced and transferred
without a written instrument and which is operated by
Euroclear
“CREST Regulations” the Uncertificated Securities Regulations 2001 (SI 2001
No. 3755) (as amended)
“Directors” or “Board” the directors of the Company as at the date of this
document, whose names are set out on page 5 of this
document
“Edenville” Edenville International Limited, a company incorporated in
the Republic of the Seychelles with a registered number
51823
“Edenville Tanzania” Edenville International (Tanzania) Limited, a company
incorporated in the United Republic of Tanzania with a
registered number 72897
“Enlarged Group” the Company and its subsidiary undertakings immediately
followingAdmission
“Enlarged Issued Share the aggregate of the Existing Ordinary Shares and the
Capital” New Ordinary Shares in issue immediately following
Admission
“Euroclear” Euroclear UK & Ireland Limited, the operator of CREST
“Existing Ordinary Shares” the 1,393,941,536 Ordinary Shares in issue at the date of
this document
“Form of Proxy” the form of proxy enclosed with this document for use by
holders of Existing Ordinary Shares at the GM
“FSMA” Financial Services and Markets Act 2000 as amended,
including any regulations made pursuant thereto
“General Meeting” or “GM” thegeneralmeetingoftheCompany,noticeofwhichisset
out at the end of this document
“Grandinex” Grandinex International Corp, a company registered in the
Republic of the Seychelles with a registered number
039018
“Group” the Company and its subsidiaries at the date of this
document
“IAS” InternationalAccounting Standards
“IFRS” International Financial Reporting Standards
8
“Ikungu Licence” the prospecting licence number PL5659/2009 held by
Edenville Tanzania allowing for the exploration for all
minerals other than building materials or gemstones in an
area of 81.73km2 in the Singida District, Tanzania, further
details of which are set out in paragraph 3 of Part I of this
document
“Ikungu LicenceArea” the area covered by the Ikungu Licence
“Independent Director” Rakesh Patel
“Independent Shareholders” those Shareholders of the Company, excluding Obtala
Resources plc, considered to be independent for the
purposesofapprovingthewaiveroftheobligationtomake
a mandatory offer under Rule 9 of the Code
“Kyela District” is one of 8 districts of the Mbeya Region of Tanzania
“Kyela-Rungwe Licence” the prospecting licence number PL5002/2008 held by
Edenville Tanzania allowing for the exploration for all
minerals other than building materials or gemstones in an
area of 102.70km2 in the Kyela and Rungwe Districts,
Tanzania, further details of which are set out in paragraph
3 of Part I of this document
“Kyela-Rungwe LicenceArea” the area covered by the Kyela-Rungwe Licence
“Geosurvey” Geosurvey International; the company that completed the
country wide airborne radiometric, magnetic and
geological survey between 1976 and 1980
“Lock-InAgreements” the agreements dated 3 March 2010, entered between the
Company, each member of the Continuing Board, ZAI CF,
and Robert Quested further details of which are set out in
paragraph 14.8 of Part IX of this document
“London Stock Exchange” London Stock Exchange plc
“Matiri North Licence” the prospecting licence number PL6174/2009 held by
Edenville Tanzania allowing for the exploration for all
minerals other than building materials or gemstones in an
area of 28.50km2 in the Mbinga District, Tanzania, further
details of which are set out in paragraph 3 of Part I of this
document
“Matiri North LicenceArea” the area covered by the Matiri North Licence
“Matiri South Licence” the prospecting licence number 6149/2009 held by
Edenville Tanzania allowing for the exploration for all
minerals other than building materials or gemstones in an
area of 76.65km2 in the Mbinga District, Tanzania, further
details of which are set out in paragraph 3 of Part I of this
document
“Matiri South LicenceArea” the area covered by the Matiri South Licence
“Mbinga District” one of the 5 districts of the Ruvuma Region of Tanzania
9
“Mtwara Development a Spatial Development Initiative (SDI) which has the
Corridor” backing of the 4 countries directly affected, namely
Tanzania, Malawi, Zambia and Mozambique. The corridor
runs for approximately 856km from Mtuara in the east
(Indian Ocean port) to Mbamba Bay or Manda in the West
(Lake Nyasa). The anchor project is the Colliery and the
Thermal Power Station both in the Mchuchama area with
its supporting infrastructure
“Mwitikila East Licence” the prospecting licence number PL5420/2008 held by
Edenville Tanzania allowing for the exploration for all
minerals other than building materials or gemstones in an
area of 170.16km2, further details of which are set out in
paragraph 3 of Part I of this document
“Mwitikila East LicenceArea” the area covered by the Mwitikila East Licence
“Mwitikila West Licence” the prospecting licence number PL5790/2009 held by
Edenville Tanzania allowing for the exploration for all
minerals other than building materials or gemstones in an
area of 138.33km2, further details of which are set out in
paragraph 3 of Part I of this document
“Mwitikila West LicenceArea” the area covered by the Mwitikila West Licence
“NewArticles” the new articles of association to be adopted by the
Company, details of which are set out in the appendix to
the Notice of GM
“New Options” options to subscribe for Ordinary Shares to be granted by
the Company, as at Admission, under the Share Option
Plan, further details of which are set out in paragraph 6 of
Part I of this document
“New Ordinary Shares” the Consideration Shares and the Placing Shares
“Ngaka Coalfield” coal seams and associated sedimentary rocks at the
Karoo Supergroup occurring within the Ruvuma Region of
South Western Tanzania
“Notice of GM” the notice of GM set out at the end of this document
“not in Public Hands” Ordinary Shares held, directly or indirectly (including via a
related financial product) by:
(i) a related party (as defined in theAIM Rules)
(ii) the trustees of any employee share scheme or
pension fund established for the benefit of any
directors/employees of the Enlarged Group
(iii) any person who under any agreement has a right to
nominate a person to the Board
(iv) anypersonwhoisthesubjectofalock-inagreement
pursuant to rule 7 of theAIM Rules for Companies;
(v) the Company as treasury shares
“Obtala” Obtala Resources plc
10