| Tue 14 Aug 2007, 16:00 | | GBG - Great Basin Gold - Introduction Of BBBEE Sha |
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GBG
GBG
GBG - Great Basin Gold - Introduction Of BBBEE Shareholding And Withdrawal Of
Cautionary Announcement
Great Basin Gold Limited
(Incorporated in Canada and registered as an External Company in South Africa)
(External Company Registration number 2006/021304/10)
Share code: GBG & ISIN: CA3901241057
("Great Basin Gold")
INTRODUCTION OF BROAD-BASED BLACK ECONOMIC EMPOWERMENT SHAREHOLDING IN GREAT
BASIN GOLD AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the various cautionary announcements that have been made to Great
Basin Gold shareholders, the most recent of which was published in the press on
Friday, 6 July 2007, regarding the introduction of Tranter Gold (Proprietary)
Limited ("Tranter") as a broad-based black economic empowerment ("BEE")
shareholder in Great Basin Gold ("the proposed transaction"), Great Basin Gold
shareholders are hereby advised that various conditions precedent to the
proposed transaction as set out in the Transaction Framework Agreement (entered
into between Great Basin Gold, Southgold Exploration (Proprietary) Limited
("Southgold") and Tranter on Wednesday, 21 February 2007) have been fulfilled,
including, inter alia, the conclusion of a binding subscription and acquisition
agreement on Wednesday, 8 August 2007 ("the Subscription and Acquisition
Agreement") between Great Basin Gold, Southgold, Tranter Holdings (Proprietary)
Limited, Tranter and Pamish Investments No 29 (Proprietary) Limited (which
company is to change its name to Tranter Burnstone (Proprietary) Limited, or
such other name as the Registrar of Companies may approve) ("Tranter Burnstone")
(collectively, "the parties"), which supercedes and replaces the Transaction
Framework Agreement.
2. TERMS OF THE SUBSCRIPTION AND ACQUISITION AGREEMENT
2.1 Structure of the proposed transaction
2.1.1. Subscription by Tranter Burnstone for shares in Southgold
In terms of the Subscription and Acquisition Agreement and
subject to the fulfilment of the conditions precedent as set out
in paragraph 4 below, Tranter Burnstone, a wholly-owned
subsidiary of Tranter, will subscribe for 812 new ordinary shares
in Southgold ("the new Southgold shares"), which, after the issue
and allotment of the new Southgold shares, will constitute 26% of
the entire issued share capital of Southgold ("the Southgold
subscription"). The new Southgold shares will rank pari passu
with the existing issued ordinary shares in Southgold.
The purchase consideration payable by Tranter Burnstone for the new
Southgold shares is R260 million, which will be settled by Tranter
Burnstone in cash, as follows:
- R190 million out of an aggregate of R200 million to be received
from Investec Bank Limited ("Investec") through the subscription
by Investec for preference shares to be issued by Tranter
Burnstone ("the Tranter Burnstone preference shares") in terms of
a preference share facility approved by Investec in respect of
the proposed transaction ("the preference share facility"); and
- R70 million out of an aggregate of R80 million to be received
from GFI Mining South Africa (Proprietary) Limited ("GFIMSA") in
terms of the memorandum of agreement entered into between Gold
Fields Limited, GFL Mining Services Limited, GFIMSA, Great Basin
Gold, Southgold and Tranter on 27 June 2007 ("the Gold Fields
agreement").
The balance of R20 million in cash remaining in Tranter, comprising
the residual R10 million from the preference share facility and R10
million to be received in terms of the Gold Fields agreement, will be
utilised by Tranter for the establishment, administration and day-to-
day operational costs relating to its objective to become an active
and operational prospecting, mining and procurement company in the
gold mining sector, as set out in further detail in paragraph 2.3
below.
2.1.2 The disposal by Tranter Burnstone of the new Southgold shares in
exchange for shares in Great Basin Gold
Following the implementation of the Southgold subscription, Great Basin
Gold or, at its election, a wholly-owned subsidiary of Great Basin Gold,
will purchase the new Southgold shares from Tranter Burnstone ("the Great
Basin Gold acquisition").
The purchase consideration for the new Southgold shares will be settled by
Great Basin Gold through the issue by Great Basin Gold of 19 938 650 new
ordinary Great Basin Gold shares ("the new Great Basin Gold shares") to
Tranter Burnstone, which, after the issue and allotment of the new Great
Basin Gold shares, will constitute 9.3% of the entire issued share capital
of Great Basin Gold, on a fully diluted basis. The new Great Basin Gold
shares will rank pari passu with the existing issued ordinary shares in
Great Basin Gold.
In terms of the independent valuation undertaken in February 2007 in
relation to the relative values of Great Basin Gold`s Burnstone project,
located in the Witwatersrand Basin in the Balfour area in South Africa, and
its Hollister Development Block project, located in the Carlin Trend in
Nevada, United States of America, the new Great Basin Gold shares
represented an effective interest on a see-through basis of at least 26% in
the Burnstone project as at the date on which the Transaction Framework
Agreement was entered into between the various parties.
2.2 Tranter and Tranter Burnstone`s rights and restrictions
Tranter and Tranter Burnstone will have, inter alia, the following rights
and restrictions in terms of the Subscription and Acquisition Agreement:
- the new Great Basin Gold shares will be registered on the South
African register and will only be tradeable on the JSE Limited
("JSE");
- for as long as Tranter, directly or indirectly, holds 5% or more of
the issued share capital of Great Basin Gold, Tranter will be entitled
to appoint one director to the board of directors of Great Basin Gold
("the Great Basin Gold board"). Mr Sipho Nkosi, who is currently a
director of Great Basin Gold, will remain on the Great Basin Gold
board as Tranter`s representative;
- for as long as Tranter, directly or indirectly, holds any Great Basin
Gold shares, Tranter will be entitled to appoint one director to the
board of directors of Southgold ("the Southgold board"). Mr Joshua
Ngoma will be appointed to the Southgold board as Tranter`s
representative;
- any trading in the new Great Basin Gold shares will be subject to a
restricted period ("the restricted period") commencing on the date on
which Tranter Burnstone acquires the new Great Basin Gold shares ("the
acquisition date") and ending on the later of:
- three years from the acquisition date; and
such date upon which the disposal by Tranter Burnstone of some or
all of the new Great Basin Gold shares will not prejudice the on-
going validity of any prospecting or mining right held by
Southgold in relation to the Burnstone project; and
- for the duration of the restricted period or unless consent has been
granted by Great Basin Gold to the contrary:
- Tranter is, and will maintain its status as, a BEE entity;
- Tranter Burnstone will not dispose of any of the new Great Basin
Gold shares;
- Tranter will not dispose of its shareholding in Tranter
Burnstone; and
- neither Tranter nor Tranter Burnstone will do anything, or permit
anything to be done (where it is within their power to prevent
such thing from being done), to compromise Southgold`s compliance
with the BEE equity ownership requirements as set out in the
Broad-Based Socio-Economic Empowerment Charter for the South
African Mining Industry and the on-going validity of any
prospecting or mining right held by Southgold in relation to the
Burnstone project.
2.3 Operationalisation of Tranter
It is Tranter`s primary objective to become an active and operational
prospecting, mining and procurement company in the gold mining sector.
Great Basin Gold has undertaken to assist Tranter with this objective by
providing Tranter with, inter alia:
- further opportunities to partner with Great Basin Gold in respect of
other mining exploration activities in South Africa;
- access to certain of Great Basin Gold and Southgold`s existing
prospecting and mining rights in exchange for a market-related fee to
be paid as and when such mineral rights become cash generative;
- the transfer of skills and expertise to staff and management of
Tranter;
- introductions to other industry players; and
- assistance with administrative support.
Tranter has recently appointed Mr Joshua Ngoma as its Chief Executive
Officer and will appoint other staff as required.
3. APPROVAL FROM THE SOUTH AFRICAN RESERVE BANK
The South African Reserve Bank has granted its approval for the utilisation
by Great Basin Gold of its shares as acquisition currency in respect of the
acquisition of the new Southgold shares from Tranter Burnstone and for
Tranter Burnstone to hold the new Great Basin Gold shares.
4. REMAINING CONDITIONS PRECEDENT
The proposed transaction is subject to and conditional upon the fulfilment
of, inter alia, the following conditions precedent by Tuesday, 30 October
2007:
- the satisfactory conclusion by Great Basin Gold of a due diligence
investigation into the business and affairs of Tranter and the
shareholders of Tranter;
- the required regulatory approvals being obtained for the proposed
transaction in Canada, South Africa and any other relevant
jurisdiction, including:
- approvals from the Toronto Stock Exchange ("TSX"), the American
Stock Exchange and the JSE, to the extent required; and
- approvals from the directors of Great Basin Gold and Tranter;
- the subscription by Investec for the Tranter Burnstone preference
shares, in terms of the preference share facility; and
- the payment by GFIMSA of R80 million to Tranter Burnstone in terms of
the Gold Fields agreement
(collectively, "the conditions precedent").
5. TSX AND JSE LISTINGS REQUIREMENTS
As set out in the JSE Listings Requirements in respect of listings by
external companies, the exchange on which the primary listing resides takes
precedence in the enforcement of any listings requirements ahead of the
exchange on which the secondary listing resides.
The TSX has confirmed that, as the number of new Great Basin Gold shares to
be issued by Great Basin Gold in respect of the acquisition of the new
Southgold shares comprises less than 25% of the Great Basin Gold shares in
issue prior to the implementation of the proposed transaction, the proposed
transaction does not require approval from Great Basin Gold`s shareholders.
6. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Having regard to the details provided in this announcement, Great Basin
Gold shareholders are no longer required to exercise caution when dealing
in their Great Basin Gold shares. Great Basin Gold shareholders will be
informed once all the conditions precedent as set out in paragraph 4 above
have been fulfilled.
14 August 2007
Sandton
Corporate advisor to Great Basin Gold
T-Corporate
Sponsor
Nedbank Capital
Corporate law advisor to Great Basin Gold
Falcon Inc Attorneys
Corporate advisor to Tranter
PricewaterhouseCoopers Corporate Finance
Corporate law advisor to Tranter
Bell Dewar Hall
Funders to Tranter
Investec Capital Markets
Independent expert
Venmyn Rand
Date: 14/08/2007 16:00:01 Produced by the JSE SENS Department.
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