| Thu 27 Sep 2007, 9:10 | | CMO - Chrometco - Sale Of Rooderand And Withdrawal |
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CMO
CMO
CMO - Chrometco - Sale Of Rooderand And Withdrawal Of Cautionary
CHROMETCO LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/026265/06)
(JSE Code: CMO & ISIN: ZAE000070249)
("Chrometco" or "the Company")
SALE OF ROODERAND AND WITHDRAWAL OF CAUTIONERY
Introduction
River Group is authorised to announce that Chrometco has sold its Rooderand
chrome project to DCM Chrome (Pty) Ltd, a private company for R60 million,
in cash, subject to the conditions precedent outlined below which will
determine the effective date.
Nature of Asset and Rationale
Chrometco`s core focus is to identify, assess, acquire and develop niche
mineral and commodity opportunities in exploration, mining, concentration
and beneficiation and trading throughout Africa.
Current potential exploration projects are in the copper, cobalt, tin and
gold sectors. Chrometco is currently concentrating on securing mineral
rights in the Democratic Republic of Congo and raising capital. Chrometco
has recently acquired rights to prospect and exploit minerals (tin, copper,
cobalt) on five concessions totaling in-excess of 29,000 hectares of highly
prospective property in the DRC. The funds from this transaction will be
utilised to further the current projects of the company as described above.
Rooderand is on the western limb of the Bushveld complex, which is rich in
platinum and chrome. Chrometco has in the past year, received numerous
expressions of interest from international bidders for Rooderand. The farm
Rooderand covers an area of 534.6ha and is underlain by three commercially
viable chrome-bearing horizons, the LG6, the LG5 and the MG4 chromitite
layers. South Africa`s Bushveld chromite reserves constitute 75% of global
reserves.
Chrometco acquired the Rooderand mining rights in early 2004; when
Chrometco listed in August 2005 the intention was to undertake further
exploration work on portion 2 of this farm, with the ultimate aim of
proving-up chromite mineral tonnage. Chrometco drilled 2 core drill holes
and 24 percussion drill holes, and in doing this identified the outcrop of
the MG 4 seam over a strike length of 1,2 kilometres. Chrometco opened a
bulk sample pit and undertook limited laboratory evaluation of the MG 4
chrome seam material. Previous mining took place on the adjacent property
which is up-dip of Chrometco`s Rooderand portion 2.
Chrometco did not undertake a feasibility study on developing a chrome
mine. No further geological work on Rooderand has taken place during the
current financial year due to the offer to purchase. Chrometco was in the
unique situation of holding a valid mining license on an undeveloped
property with significant geological information available on its chromite
resource at Rooderand.
Financial Effects
The table below sets out the pro forma financial effects of the
transaction, based on Chrometco`s consolidated audited results for the year
ended 28 February 2007. The financial effects are presented for
illustrative purposes only and because of their nature may not give a fair
reflection of the Company`s results, financial position and changes in
equity after the transaction.
It has been assumed for purposes of the pro forma financial effects that
the above transactions took place with effect from 1 March 2006 for income
statement purposes and 28 February 2007 for balance sheet purposes. The
directors of Chrometco are responsible for the preparation of the financial
effects, which have not been reviewed by the auditors.
Before After %
Change
Loss per share (cents) (2,79) (2,07) 25,81
Headline loss per share (cents) (2,79) (2,07) 25,81
Weighted number of shares
in issue (`000) 148 851 190,592 28,04
Net asset value per share (cents) (0,13) 41,91 32 238,46
Net tangible asset value
per share (cents) (0,13) 41,91 32 238,46
The "Before" financial information has been extracted, without adjustment
from the published audited results of Chrometco for the year ended 28
February 2007.
The "After" column represents the effects of the sale of Rooderand for R
60million cash, as well as the results of the capital raising as published
on SENS 26 April 2007 all of which has been accounted for on the NAV and
TNAV above as an asset, it has been assumed for income tax purposes that no
interest was received or tax paid as the company has an assessed loss.
The "% Change" column compares the "After" column to the "Before" column.
Conditions Precedent
This transaction is subject to the following conditions:
- Conversion of Chrometco`s "old Order" mining rights to "new order"
rights and ministerial approval of the transfer of the rights by no later
than 30 November 2007;
- The requisite Competition Authority and, SARB; and
- Completion of the due diligence by the purchaser.
Categorisation and Withdrawal of Cautionary
Shareholders are advised that this is a category three transaction. The
cautionary is therefore withdrawn and caution is no longer required to be
exercised by shareholders when dealing in their securities.
27 September 2007
Johannesburg
Corporate and Designated Advisor
River Group
Date: 27/09/2007 09:10:55 Produced by the JSE SENS Department.
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