| Thu 12 Jun 2008, 12:00 | | ARQ - Anooraq Resources Corporation - Pro Forma Financial Effects Of The |
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ARQ
ARQ
ARQ - Anooraq Resources Corporation - Pro Forma Financial Effects Of The
Proposed Acquisition And Withdrawal Of Cautionary Announcement
Anooraq Resources Corporation
(Incorporated in British Columbia, Canada)
(Registration number 10022-2033)
JSE share code: ARQ & ISIN: CA03633E1088
TSXV share code: ARQ & ISIN: CA03633E1088
AMEX share code: ANO & ISIN: CA03633E1088
("Anooraq" or "the Company")
PRO FORMA FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION BY ANOORAQ OF
CONTROLLING INTERESTS IN THE LEBOWA PLATINUM MINE AND IN ANOORAQ`S 50:50 JOINT
VENTURES WITH ANGLO PLATINUM LIMITED AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are referred to the joint announcement by Anooraq and Anglo
Platinum Limited ("Anglo Platinum") (together "the Parties") released on the
Securities Exchange News Service ("SENS") on 4 September 2007, which provided
details of the Transaction Framework Agreement entered into between the Parties,
and to Anooraq`s news release of 14 April 2008, which provided particulars of
the definitive agreements concluded with Anglo Platinum in respect of the
proposed acquisition of an effective 51% interest in the Lebowa Platinum Mine
("Lebowa"), an operating platinum group metals ("PGM") mine, together with an
additional 1% controlling interest in the Parties` current joint venture
projects, being the Ga-Phasha PGM Project ("Ga-Phasha"), Boikgantsho PGM Project
("Boikgantsho") and Kwanda PGM Project ("Kwanda") ("the Lebowa Transaction").
Lebowa, Ga-Phasha, Boikgantsho and Kwanda will be held through Richtrau No. 179
(Pty) Limited ("Holdco"), a new company which is to be renamed Bokoni Platinum
Holdings (Pty) Limited after the completion of the Lebowa Transaction and which
will itself be held as to 51% by Plateau Resources (Pty) Limited ("Plateau") (a
wholly owned subsidiary of Anooraq) and 49% by Rustenburg Platinum Mines Limited
("RPM") (a wholly owned subsidiary of Anglo Platinum.)
The acquisition price for the Lebowa Transaction is R 3.6 billion, payable in
cash. Anooraq intends to fund the purchase price, together with other funding
requirements related to the Lebowa Transaction, through a combination of debt
and equity. In this regard:
- Anooraq has executed a binding, credit approved term sheet with Standard
Chartered Bank to provide the Company with sole underwritten debt finance
of up to R 1.7 billion ("the Debt Finance Facility"). Details of the Debt
Finance Facility were set out in a Company news release dated 20 May 2008;
- the exercise of the 167 million common share purchase warrants issued to
the Pelawan Trust in December 2007 ("the Pelawan Warrants") will provide in
aggregate a further amount of R 1.586 billion. Details of the exercise of
the Pelawan Warrants were set out in a Company news release dated 14
December 2007. (As set out in the news release of 20 May 2008, Pelawan has
executed a credit approved term sheet with Standard Chartered Bank to
provide Pelawan with sole underwritten acquisition debt finance of up to R
700 million. Pelawan has advised that it will apply these funds towards
refinancing its existing bridge loan facility with Rand Merchant Bank.);
- it is expected that the balance of the financing required will be raised
through the issue of Anooraq common shares which will include issues to:
- the Bokoni Platinum Mine ESOP Trust (the share ownership trust
established for the benefit of employees of Lebowa and to which Anglo
Platinum will contribute an amount of approximately R 112 million for
purposes of subscription for Anooraq common shares); and
- the Anooraq Community Participation Trust (the share ownership trust
established for the benefit of the communities interested in or
affected by Anooraq`s operations and to which Anglo Platinum will
contribute an amount of approximately R 83 million for purposes of
subscription for Anooraq common shares).
Certain amendments ("the Amendments") are also being proposed to the current
arrangements between the Company and Pelawan. The Amendments are required in
order to harmonize the restrictions in the various agreements between Pelawan
and Anooraq with those in the shareholders` agreement entered into between
Plateau, RPM and Holdco and to allow for the completion and implementation of
the Lebowa Transaction. The JSE Limited ("the JSE") considers the Amendments to
comprise a related party transaction, due to the controlling interest held by
the Pelawan Trust in Anooraq, but to have no calculable financial effects.
3. Conditions precedent
The Lebowa Transaction is still subject to a number of conditions precedent,
including:
- completion of a due diligence investigation by Anglo Platinum, which
investigation has already been substantially progressed;
- the completion of the debt and equity capital raising processes by Anooraq in
order to fund the full purchase consideration for the Lebowa Transaction;
- Anooraq shareholder approval of all resolutions necessary to implement the
Lebowa Transaction, including approval of the Amendments;
- approval by the South African Competition Commission;
- consent by the United Kingdom Treasury for Anglo Platinum to undertake the
Lebowa Transaction;
- approval of certain transfers of mineral title relating to Ga-Phasha,
Boikgantsho and Kwanda by the South African Department of Minerals and Energy;
and
- other regulatory approvals including, to the extent necessary, those of the
South African Reserve Bank, the JSE, the TSX Venture Exchange and the American
Stock Exchange.
The Parties expect the Lebowa Transaction to close as soon as practicable
following the satisfaction or waiver of all conditions precedent.
4. Pro forma financial effects of the Lebowa Transaction
The pro forma financial effects of the Lebowa Transaction, which are presented
below in compliance with the JSE Limited Listings Requirements, are the
responsibility of the board of Anooraq and are presented for illustrative
purposes only to provide information on how the Lebowa Transaction might have
impacted on the reported financial information of the Company if it had been
implemented in the three months ended 31 March 2008. Because of their nature,
the pro forma financial effects may not give a fair indication of the Company`s
financial position at 31 March 2008 or its future earnings.
The assumptions set out below do not comprise forward-looking information and
should not be taken as projections or forecasts, and are merely disclosed as
required by the JSE.
These pro forma financial effects have been prepared in accordance with Canadian
Generally Accepted Accounting Practice.
Before the After the % change
Lebowa Lebowa
Transaction (1) Transaction(2)
(Loss)/Earnings per C$ (0.006) C$ 0.027 n/a
Anooraq common share
for the 3 months ended
31 March 2008 (cents)
C$ (0.011) C$ 0.026 n/a
Headline (loss)/
earnings per Anooraq
common share for the 3
months ended 31 March
2008 (cents)
C$ 0.020 C$ 0.773 3 741
Net asset value per
Anooraq common share at
31 March 2008 (cents)
Net tangible asset C$ 0.016 C$ 0.586 3 495
value per Anooraq
common share at 31
March 2008 (cents)
185 217 912 379 879 829 105.6
Weighted average number
of Anooraq common
shares in issue for the
period
185 230 007 379 891 924 105.6
Number of Anooraq
common shares in issue
at the end of the
period
Notes:
1. The figures in this column are extracted from the unaudited financial
results of the Company for the 3 months ended 31 March 2008 as released on
SENS on 16 May 2008.
2. The figures in this column reflect the implementation of the Lebowa
Transaction and are based on:
a. the unaudited financial results of the Company for the 3 months ended
31 March 2008 as set out in the previous column; and
b. the unaudited financial results of Richtrau No. 177 (Pty) Limited
("New Opco"), the entity which acquired the business and operations of
Lebowa with effect from 1 January 2008, for the 3 months ended 31
March 2008.
3. For purposes of the (loss)/earnings and headline (loss)/earnings per
Anooraq common share, an average CAD$/R exchange rate for the three months
ended 31 March 2008 of 0.1334 was used and it was assumed that:
a. the Lebowa Transaction had been in effect for the 3 months ended 31
March 2008;
b. the purchase consideration of R 3.6 billion was funded through:
- the exercise of the Pelawan Warrants at a price of CAD$ 1.35 per
common share which amounts to CAD$ 225 million (approximately R
1.586 billion);
- the Debt Finance Facility in an amount of R 1.5 billion; and
- the issue of approximately 18 million common shares at a price of
C$ 4.17 per common share (being the volume weighted average
traded price of Anooraq common shares for the 30 days ended 31
December 2007) for an amount of CAD$ 75 million (approximately R
594.7 million). This includes the issues of approximately 3.5
million common shares to the Bokoni Platinum Mine ESOP Trust and
2.6 million common shares to the Anooraq Community Participation
Trust;
c. an additional amount of approximately R 319.27 million was raised
through the issue of a further 9.6 million common shares which was
used to:
- settle the loan to Anooraq from Anglo Platinum of R 70.5 million;
- settle costs associated with the Lebowa Transaction which were
assumed to amount to CAD$ 15.5 million (approximately R 116
million)(which amount was capitalised to the mineral property
rights); and
- provide working capital; and
d. no repayments of the Debt Finance Facility were made during the
period.
4. For purposes of net asset value and net tangible asset value per common
share, it was assumed that the Lebowa Transaction had been implemented on
31 March 2008. The CAD$/R exchange rate at 31 March 2008 of 0.1262 was
applied. It was assumed that the funding was undertaken on the same basis
as set out in note 3 above.
5. Withdrawal of cautionary
Shareholders are referred to the latest cautionary announcement dated 13 May
2008 and are advised that, having regard to the disclosures made in this
announcement, caution is no longer required to be exercised by shareholders when
dealing in Anooraq common shares.
Sandton
12 June 2008
Corporate adviser and sponsor
QuestCo
Transaction adviser
Standard Bank
South African Counsel
Cliffe Dekker
For further information please contact:
Anooraq (South Africa) +27 11 883 0831
Joel Kesler, Head of Business Development
Anooraq (North America)
Investor Relations +1 604 684 6365
Toll free +1 800 667 2114
Cautionary and Forward Looking Information
This release includes certain statements that may be deemed "forward looking
statements". All statements in this release, other than statements of
historical facts, that address potential acquisitions, future production,
reserve potential, exploration drilling, exploitation activities and events or
developments that Anooraq expects are forward looking statements. Anooraq
believes that such forward looking statements are based on reasonable
assumptions, including assumptions that: the Lebowa transaction will complete;
Lebowa will continue to achieve production levels similar to previous years; the
planned Lebowa expansions will be completed and successful; Anooraq will be able
to secure future debt and equity financing on favourable terms; and the Ga-
Phasha and Platreef Project exploration results will continue to be positive.
Forward looking statements however, are not guarantees of future performance and
actual results or developments may differ materially from those in forward
looking statements. Factors that could cause actual results to differ
materially from those in forward looking statements include market prices,
exploitation and exploration successes, changes in and the effect of government
policies with respect to mining and natural resource exploration and
exploitation and continued availability of capital and financing, and general
economic, market or business conditions. Investors are cautioned that any such
statements are not guarantees of future performance and those actual results or
developments may differ materially from those projected in the forward looking
statements. For further information on Anooraq, investors should review the
Company`s annual information form filed on SEDAR at www.sedar.com or in form 20-
F with the United States Securities and Exchange Commission and its other home
jurisdiction filings that are available at www.sedar.com.
Date: 12/06/2008 12:00:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
