PRICE PROPOSED BY MANO RIVER RESOURCES FOR AFRICAN AURA
TORONTO, April 22, 2009 – Northern Financial Corporation (“Northern”; TSX: NFC) today
announced that the proposed acquisition of African Aura Resources Ltd. (“Aura”; TSX-V:
AAZ) by Mano River Resources Inc. (“Mano”; TSX-V: MNO, AIM: MANA) on the basis of
1.57 Mano shares for each Aura share (the “Mano Offer”) is completely inadequate for Aura
Mano Offer is a very cheap financing
The Mano Offer is, in reality, a very cheap financing by Mano. Mano proposes to acquire
Aura’s $5.9 million in cash by issuing 105.3 million Mano shares at $0.056 per share. This
financing price is a very small discount of 7% to Mano’s 30-day volume weighted average price
(“VWAP”) of $0.06 per share. With the addition of the Aura properties valued at $1.25 million,
Mano is issuing its stock at $0.068 per share which is a 13% premium to its 30-day VWAP of
$0.06 per share. Mano would acquire $7.15 million of cash and properties for $6.3 million in
Mano stock, which badly misprices the transaction for Aura shareholders.
Northern believes that Mano would not be able to raise $5.9 million on its own in this depressed
market. In a normal market, Mano’s financing price would be approximately $0.045 per Mano
share, a 25% discount to its 30-day VWAP of $0.06. Raising $5.9 million in a private placement
at $0.045 per share would result in the issuance of 131.1 million Mano shares. If this pricing is
applied to the proposed acquisition of Aura, and taking into account the $1.25 million value of
Aura’s properties, Aura shareholders would receive 34% of the equity of the combined Mano
and Aura, not the 25% currently proposed.
Mano Offer needs to be repriced as an acquisition
The Mano Offer needs to be repriced as an acquisition, which typically provides a 40% premium
to the target shareholders, rather than being priced as a cheap financing. The average of Aura’s
30, 60 and 90 day VWAPs is $0.09 per share. Aura’s Net Asset Value per share is estimated to
be $0.107 consisting of its cash resources and the value of Aura’s properties.
The midpoint of the average VWAP price and the Net Asset Value is $0.098 which, at a 40%
acquisition premium, is $0.138 per Aura share and would give Aura shareholders 33% of the
The $0.138 acquisition price per Aura share would be prior to consideration of the proposed 6-
for-1 share consolidation in Mano, which would result in an estimated 20% drop in the share
price of the combined company. In order to protect the purchase price of $0.138 per share, Mano
should pay $0.172 per Aura share. This would provide Aura shareholders with 38% of the
Aura directors failed miserably in Mano pricing
Based on the current terms of the Mano Offer, Aura has given away its cash at a low price and
has not protected its shareholders from the inevitable drop in share price of the combined
company that will occur post-consolidation. Northern believes that the mispriced transaction
between Mano and Aura has been influenced by interested conflicted parties in Mano and Aura
and fails the test of independent scrutiny.
Guido Pas is a Mano director and owns 30.9 million shares of Mano according to his SEDI
filings. Mr. Pas also owns 6.35 million shares of Aura according to Aura’s share register as at
January 7, 2009. Steven Poulton is a director of Aura and a former director of Mano. Mr.
Poulton’s SEDI filings indicate that he currently owns 5.8 million shares of Aura and that he
owned 805,262 shares of Mano in August 2007.
Vic Alboini, Northern’s Chairman and Chief Executive Officer said, “One cannot help but draw
an inference that this badly mispriced Mano Offer has been influenced by the closely connected
and conflicted parties involved in both Mano and Aura. With proper independent business
judgement, and independent financial analysis, there is no way this Mano Offer should have been
approved. The Aura shareholders deserve a much better offer when Mano shares are the only
Northern commenced an offer to acquire all of the AAZ shares on February 4, 2009 (the
“Northern Offer”). The Northern Offer is at $0.06 in cash and provides immediate liquidity to
Aura shareholders while the Mano Offer involves significant uncertainty with respect to the post-
consolidation share price and liquidity of the combined company. Copies of the Northern Offer
documents are available on SEDAR at www.sedar.com.
About Northern Financial Corporation
Northern Financial Corporation wholly owns Northern Securities Inc., a full service investment
dealer that provides financial advisory services to retail and institutional clients and investment
banking services to small capitalization companies. Northern’s head office is at 145 King Street
West, Toronto, Ontario.
The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this
news release. This press release may contain forward-looking statements with respect to the
Company, its operations, strategy, financial performance and condition. These statements
generally can be identified by use of forward looking words such as “may”, “will”, “expect”,
“estimate”, “anticipate”, intends”, “believe” or “continue” or the negative thereof or similar
variations. The actual results and performance of the Company discussed herein could differ
materially from those expressed or implied by such statements. Such statements are qualified in
their entirety by the inherent risks and uncertainties surrounding future expectations. Important
factors that could cause actual results to differ materially from expectations include, among
other things, general economic and market factors, and competition. The cautionary statements
qualify all forward-looking statements attributable to the Company and persons acting on their
behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this
press release and the Company has no obligation to update such statements.
For further information please contact:
Vic Alboini, Chairman & Chief Executive Officer
Kyler Wells, General Counsel