| Tue 26 Feb 2008, 12:57 | | SAM - SA Mineral - Proposed acquisition & cautionary announcement |
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SAM
SAM
SAM - SA Mineral - Proposed acquisition & cautionary announcement
SA MINERAL RESOURCES CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
Share code: SAM
ISIN: ZAE000012019
("Samroc" or "the company")
* PROPOSED ACQUISITION OF OIL CONCESSIONS BY SAMROC
* PROPOSED DISTRIBUTION IN SPECIE OF SHARES IN A SAMROC SUBSIDIARY
* CAUTIONARY ANNOUNCEMENT
1. Introduction
Samroc shareholders are advised that the directors of Samroc are considering
proposals in terms of which, subject to a number of conditions precedent:
* Samroc will acquire an interest in at least one oil concession in the
Albertine Graben area of the Democratic Republic of the Congo ("DRC")
("the oil concessions") and will apply to the JSE Limited ("JSE") for
a transfer of listing to the "Oil and Gas" sector of the JSE List;
* Samroc will convert its wholly-owned subsidiary, Bushveld Pioneer
(Pty) Limited ("Bushveld Pioneer") into a public company. Bushveld
Pioneer will acquire Samroc`s existing manganese sulphate business in
its entirety, and Samroc will distribute the entire share capital of
Bushveld Pioneer to Samroc shareholders by way of a dividend in
specie; and
* Bushveld Pioneer will acquire interests in a number of mineral
exploration rights in South Africa and will apply for a listing on the
JSE in the "General Mining" sector of the JSE List.
2. The oil concessions
The oil concessions are located in the Albertine Graben, which is part of the
Rift Valley and is situated in the area of Lake Albert, which is on the boundary
between the DRC and Uganda. Bituminous shales are known to be present in the
Albertine Graben and are known to be mature, as evidenced by numerous oil seeps
and recent positive drill results in adjacent oil concessions. Notwithstanding
the existence of positive evidence in the region, shareholders are advised that
oil exploration prospects of this nature are highly risky and will remain so
until the resources are satisfactorily proven. Should they be successfully
proven, however, the accretion of value becomes exponential.
The oil concessions are held by South Africa Congo Oil Company (Pty) Limited
("SacOil"), which in turn is owned by Divine Inspiration Group (Pty) Limited
("Divine"), Encha Group Limited ("Encha") and Riccla 1758 (Pty) Limited
("Riccla"). It is proposed that, subject to a number of approvals, Samroc will
acquire the entire issued share capital and loan accounts of SacOil for a price
yet to be determined, which will be settled by the issue of new ordinary shares
in Samroc ("the SacOil transfer").
Encha controls directly and indirectly approximately 65% of the issued shares in
Samroc. Riccla holds approximately 11% of Samroc. Accordingly, the SacOil
transfer will be categorised both as a Category 1 transaction and as a related
party transaction in terms of the JSE Listings Requirements. As such, it will
require an opinion from an independent expert and approval by shareholders,
excluding Encha and Riccla, in general meeting.
It is intended in due course to change the name of Samroc to South Africa Congo
Oil Company Limited to reflect its new direction. Control of Samroc will change
to control by the current shareholders of SacOil but control, indirectly, of
SacOil will not change as a result of the SacOil transfer. The objective of the
SacOil transfer is to raise capital for the exploration work programme.
3. Bushveld Pioneer
Bushveld Pioneer is a dormant subsidiary of Samroc. It is proposed that it will
acquire Samroc`s existing manganese sulphate manufacturing business, convert to
a public company, and restructure its share capital. Its shares will then be
distributed to Samroc shareholders on the basis of one ordinary share in
Bushveld Pioneer for one share in Samroc ("the distribution").
The distribution will be subject inter alia to the approval of Samroc
shareholders in general meeting, and to the granting of a listing by the JSE of
the shares in Bushveld Pioneer.
4. Background and rationale
Samroc was restructured and recapitalised at the end of 2007. In the circular to
shareholders dated 8 November 2007 it was stated that Samroc would focus on
acquiring mineral prospects, taking them up the value chain, and entering into
joint venture agreements with recognised operators to turn such resources into
account. The current initiative is intended to pursue a strategy that will
translate Samroc into a Pan African controlled oil and gas focused company with
exploration and, in time, oil and gas producing assets in Africa.
The purpose of the distribution of shares in Bushveld Pioneer is to enable
investors to hold separate investments in the oil exploration interests to be
acquired by Samroc on the one hand and on the other hand in the other mineral
exploration interests that will be acquired by Bushveld Pioneer.
5. Further announcements and board changes
Further announcements will be made on the conclusion of agreements relating to
the SacOil transfer and the distribution.
It is intended to reconstitute the Samroc board of directors in due course to
reflect the company`s new strategy.
6. Cautionary announcement
In the light of the above, Samroc shareholders are advised to exercise caution
when dealing in their Samroc shares until a further announcement is made.
Woodmead
26 February 2008
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Corporate adviser to Samroc
Lonsa
Date: 26/02/2008 12:57:01 Produced by the JSE SENS Department.
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