| Mon 14 Jul 2008, 16:12 | | LSO - Lesego Platinum Mining Limited - Abridged prospectus |
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LSO - Lesego Platinum Mining Limited - Abridged prospectus
Lesego Platinum Mining Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/005873/06)
Share code: LSO ISIN: ZAE000122792
Short name: Lesego
("Lesego Platinum" or "the Company")
ABRIDGED PROSPECTUS
This Prospectus is not an invitation to the public to subscribe for ordinary
shares with a par value of R0.001 each in the issued ordinary share capital of
Lesego Platinum ("Lesego Platinum Shares"), but is issued in compliance with the
South African Companies Act, 1973 (Act 61 of 1973) and the Listings Requirements
of the JSE Limited ("JSE"), for the purpose of providing information to invited
institutional investors, invited retail investors and clients of Barnard Jacobs
Mellet Private Client Services (Proprietary) Limited ("BJMPCS") ("Qualifying
Investors") relating to:
- an offer for subscription to Qualifying Investors of a maximum of 20 860 928
new Lesego Platinum Shares priced between R15.10 and R18.60 per share ("the
Offer for Subscription");
- an offer for sale by Umbono Platinum Mining (Proprietary) Limited ("Umbono
Platinum") and MinEx Projects (Proprietary) Limited ("Minex") to Qualifying
Investors of a maximum of 32 611 954 Lesego Platinum Shares priced between
R15.10 and R18.60 per share ("the Offer for Sale"),
(collectively, "the Private Placing"); and
- the subsequent listing of the entire issued ordinary share capital of Lesego
Platinum on the JSE ("the Listing").
The Listing is conditional upon the raising of a minimum amount of capital of
R315 000 000, before listing expenses, in terms of the Offer for Subscription.
The price at which Lesego Platinum Shares will be allocated to those persons
and/or entities selected from the Qualifying Investors that will participate in
the Private Placing ("the Private Placing Price"), will be determined based on
an analysis of market demand for the shares and will be released on SENS and
published in the press on Friday, 25 July 2008.
The JSE has granted a listing to Lesego in the Platinum and Precious Metals
sector under the abbreviated name "Lesego", share code: LSO, ISIN: ZAE000122792,
with effect from the commencement of business on Thursday,
31 July 2008 ("the Listing Date"), subject to obtaining the required shareholder
spread in terms of the Listings Requirements of the JSE.
1. Introduction to Lesego Platinum
Lesego Platinum is an independent emerging platinum company engaged in the
exploration and evaluation of the Phosiri Project, an Inferred Mineral Resource
on the Eastern Limb of the Bushveld Complex approximately 300km north east of
Johannesburg.
The Phosiri Project comprises the prospecting rights relating to the farms
Spelonk 478KS, Olifantspoort 479KS, Koppieskraal 475KS and Dal Josephat 461KS
("the Lesego Platinum Properties"), and the farms Eerste Regt 502KS ("Eerste
Regt") and Government Ground 503KS ("Goverment Ground"), located in South
Africa`s Limpopo Province.
Via Lesego Platinum`s direct and/or indirect attributable interests in the
prospecting rights relating to the Lesego Platinum Properties, Eerste Regt and
Goverment Ground, Lesego Platinum`s share of the Phosiri Project`s total
Inferred Mineral Resource of 27.76 Moz 3PGE + Au is 22.18 Moz 3 PGE + Au.
Lesego Platinum has put in place project development and management expertise in
order to further explore and evaluate the Phosiri Project. The capital raised
through the Private Placing will be used by Lesego Platinum for further drilling
with the aim of reclassifing some or all of its Inferred Mineral Resource as an
Indicated Mineral Resource and Measured Mineral Resource, undertaking further
exploration to test for possible shallower ounces and to undertake a full
bankable feasibility study.
2. The Phosiri Project
The Lesego Platinum Properties are located in Limpopo Province, South Africa,
approximately 300km north east of Johannesburg on the eastern side of a low
arcuate ridge known as the Phosiri Dome close to the northern end of the Eastern
Limb of the Bushveld Complex.
The Project is situated approximately 15km to the south west of Lebowa Platinum
Mine which is owned by Anooraq Resources Limited and some 20km east of Lonmin
Plc`s Limpopo operations. Also situated nearby is Platmin`s Mphahlele project
which Platmin has recently announced will be fast-tracked for a definitive
feasibility study. Access to the central portion of the Project area is via the
N1 national highway to the town of Mokopane, tarred regional roads and
approximately 8km of good quality gravel roads.
2.1 Historical exploration in the area
The Phosiri Dome was formed by the uplifting of the floor rocks of the Bushveld
Complex which are believed to have been forced slowly upwards millions of years
ago under the influence of thermal and gravitational forces. The Merensky and
the UG2 Reefs generally dip in a westerly direction from the neighbouring Lebowa
Platinum Mine to the east of the Phosiri Dome and were it not for the formation
and uplifting action of the dome, the overlying Bushveld Complex lithologies
would be significantly deeper at several kilometres rather than their present
day depths which Lesego Platinum`s exploration programme has now revealed.
Whilst shallow resources are unlikely to be mineable, the upliftment also opens
up the potential for the Merensky and UG2 Reefs to be developed at depths of
less than 1 000 metres, a possibility that the Company will investigate in the
future.
A number of other companies have explored the area around the Phosiri Dome since
prior to 1982 in their individual capacities and in many cases as joint venture
partners, including Anglovaal Mining Limited, General Mining, Metals and
Minerals Limited, Trojan Exploration Company, BHP Minerals International
Exploration Inc, Pan Palladium Limited, MinEx and Platinum Mining Ventures. The
majority of these exploration activities were however focused on the area to the
south of the dome.
2.2 The Lesego Platinum Properties
The prospecting rights in respect of the Lesego Platinum Properties are held
solely by Lesego Platinum in terms of prospecting right 228/2006 issued on 16
May 2006.
2.3 Eerste Regt
Notarial Prospecting Right 83/2008 in respect of platinum group metals and
associated minerals on Eerste Regt, was granted to Khumo Mining and Investments
(Proprietary) Limited ("Khumo Mining") and Sekoko Resources (Proprietary)
Limited ("Sekoko Resources") to be converted into a new company known as Sweet
Sensation 79 (Proprietary) Limited ("Sweet Sensation") (a company in which Khumo
Mining and Sekoko Resources each held 50% of the shares). The prospecting right
was executed on 21 November 2006.
In terms of an agreement between Sekoko Resources and Umbono Platinum, Umbono
Platinum acquired a 45% shareholding in Sweet Sensation from Sekoko Resources
for an amount of R13.5 million. On 16 February 2007 Umbono Platinum ceded and
assigned its interests in and to the agreement to Lesego Platinum. Although the
transaction did not constitute a sale of a controlling interest in Sweet
Sensation, the parties applied for, and obtained, consent in terms of section
11(1) of the MPRDA in respect thereof.
In terms of an agreement between Lesego Platinum and Sekoko Resources, Lesego
Platinum agreed to acquire Sekoko Resources` remaining 5% shareholding in Sweet
Sensation in exchange for ordinary shares in Lesego Platinum to the value of R8
million. The issue price of the shares will be the Private Placing Price. The
shares will be issued to Sekoko Resources at the time of the Private Placing,
pursuant to the general authority granted to the directors to allot and issue
authorised but unissued shares.
2.4 Government Ground
Notarial Prospecting Right 107/2006 was granted to Dyondisani and Bolotola in
respect of all minerals on inter alia Government Ground. The prospecting right
was executed on 8 February 2006.
In terms of an agreement between Three Diamond Trading 397 (Proprietary) Limied
and Lesego Platinum ("the DBMR/Lesego Platinum Agreement"), Lesego Platinum
agreed to include Government Ground in its broader exploration programme in
return for a 40% interest in the Government Ground prospecting right.
Confirmation of Lesego Platinum`s entitlement to a 40% interest in the
Government Ground prospecting right was received from DBMR on 5 March 2008.
Furthermore, in terms of DBMR/Lesego Platinum Agreement, following the listing,
Lesego Platinum will have the first right to acquire the remaining 60% interest
in the Government Ground prospecting right in return for Lesego Platinum Shares
which will be issued to DBMR at the Private Placing Price. The purchase
consideration payable for the remaining 60% of this right will be determined by
Lesego Platinum and DBMR based on a per-ounce PGE resource valuation appropriate
for the stage, certainty and depth characteristics of the Government Ground
resource.
Ministerial consent in terms of section 11 of the MPRDA is required to implement
the transactions contemplated in the DBMR/Lesego Platinum Agreement.
2.5 Surface rights
Lesego Platinum does not own the surface rights to the Lesego Platinum
Properties, Eerste Regt or Government Ground. The registered surface right
owners have been identified as follows:
- Frank Maisela is the registered surface owner of Dal Josephat;
- the Mphahlele Traditional Community (previously known as the Bakgaga Ba-
Mphahlele Tribe) are the surface owners of Spelonk and Koppieskraal;
- the Government of Lebowa is the registered surface owner of Olifantspoort and
the property is occupied by the Mphahlele Traditional Community; and
- the surface ownership of Eerste Regt and Government Ground is registered in
the name of the Government of Lebowa, but the Tau-Mankotsana Community has
submitted a Land Claim for both of these properties and are reportedly lawfully
residing on these properties. The Baroka Ba-Newana community occupy a small
portion of Eerste Regt.
The Commission for Restitution of Land Rights has noted land claims on
Olifantspoort, Eerste Regt and Goverment Ground which are still under
investigation.
Lesego Platinum continuously engages with the owners, residents and other
interested parties described above and has established collective community
forums and committees that meet regularly to discuss the development of the
Phosiri Project. These forums are useful in addressing immediate community
issues and concerns as well as identifying areas where sustainable community
involvement can be introduced. This latter area will become increasingly
important as Lesego Platinum approaches the feasibility stage of the Project.
2.6 Disposed rights
In addition to the prospecting rights relating to the Phosiri Project, Lesego
Platinum held prospecting rights relating to other farms on the Northern Limb of
the Bushveld Complex.
All of the disposed rights have been sold prior to the last practicable date
prior to the finalisation of the Prospectus being Monday, 7 July 2008, and will
be ceded to the respective purchasers thereof as soon as reasonably possible
after the receipt of the required consent in terms of section 11 of the MPRDA.
2.7 Lesego Platinum`s exploration programme to date
During September 2006, Lesego Platinum commenced with an exploration programme
and contracted MSA Geoservices (Proprietary) Limited to manage and implement the
programme which was designed with the following key objectives:
- confirmation of the depth and continuity of the Merensky Reef and UG2 Reef
horizons by means of a two-dimensional seismic survey programme;
- confirmation of the reflectors observed in the seismic survey programme by
undertaking a limited drilling programme;
- assessment of the character of the reefs and the provision of an estimate of
the likely widths and PGE grades by obtaining between 20 and 40 intersections of
the Merensky and UG2 Reefs; and
- generation of a South African Minerals Resource Committee compliant Inferred
Mineral Resource using all of the information gathered.
The exploration programme confirmed the upliftment of the Merensky and UG2
Reefs, on the eastern side of the Phosiri Dome and that the Phosiri Project is a
significant host of both the Merensky and UG2 Reef horizons. Early indications,
supported by geological mapping and geophysics, are that the reefs are
relatively flat and undisturbed.
Using the results of this programme, the Phosiri Project area was split into two
areas, a relatively flat deeper block for which an Inferred Mineral Resource has
been defined and a steeply dipping block which requires investigation.
The block containing the resource dips at between 10 and 14 degrees. The
delineated resource dips from a depth of 1 100 metres below surface, to a
maximum of 2 300 metres on the UG2 Reef, and 2 000 metres below surface for the
Merensky Reef. The Phosiri Project joins a growing number of PGM projects that
have, or are proposed to be developed below 1 000 metres in depth. Currently, at
least 13 South African PGM operations are mining, sinking, or have approval for
shafts significantly below 1 000 metres below surface, the majority at resource
grades below Phosiri`s recorded Inferred Resource grades.
The Inferred Mineral Resources of Lesego Platinum at 31 December 2007, based on
the Lesego Rights (i.e. its 100% interest in the Lesego Platinum Properties, its
50% attributable share in Eerste Regt and its 40% attributable share in
Government Ground), are provided in the table below:
Ave reef 3PGE+ 5PGE+ Moz Moz
width Tonnage Au Au Ni Cu 3PGE+ 5PGE+
Property Reef (m) (Mt*) (g/t) (g/t) (%) (%) Au Au
Lesego Platinum Merensky 1.47 41.06 6.08 6.63 0.20 0.13 8.03 8.75
Properties UG2 1.18 39.82 6.79 7.94 0.12 0.06 8.69 10.17
Eerste Regt Merensky 1.47 13.28 6.08 6.63 0.20 0.13 2.60 2.83
UG2 1.18 11.96 6.79 7.94 0.12 0.06 2.61 3.05
Government Merensky 1.47 0.67 6.08 6.63 0.20 0.13 0.13 0.14
Ground UG2 1.18 0.55 6.79 7.94 0.12 0.06 0.12 0.14
107.34 6.43 7.27 0.16 0.10 22.18 25.08
*Tonnage discounted by 17% for geological losses.
It should be noted that, from a grade and tonnage perspective, an independent
statistical study suggested that the existing drilling results were sufficient
to classify the UG2 resources as an Indicated Mineral Resource. However the
physical geological attributes, such as geological structures and facies
variations, will require additional infill drilling to achieve a similar level
of confidence and consequently the Inferred Mineral Resource category has been
applied to the UG2 resources at this stage of exploration.
3. Prospects of Lesego Platinum and purpose of the Listing
Lesego Platinum has a long-term goal of becoming an independent, viable long-
life mining company. It intends performing further exploration activities with
the intention of increasing the geological confidence of the existing Inferred
Mineral Resources and to investigate the potential of other identified areas of
the Phosiri Project to generate additional PGE mineral resources.
The main purposes of the Private Placing and the Listing are to:
- raise capital for the further drilling, exploration and a bankable feasibility
study as more fully set out below;
- enhance investor awareness of Lesego Platinum and to facilitate direct
investment in Lesego Platinum;
- provide Lesego Platinum with access to further capital, if required, to
advance its assets to production;
- provide investors with an orderly market for the trading of Lesego Platinum
Shares.
The planned exploration programme culminating in a bankable feasibility study
can be summarised as follows:
- aeromagnetic and radiometric surveys of the entire project area;
- a programme of investigation, mainly trenching and drilling, aimed at the
steeply dipping block on the flank of the Phosiri Dome; and
- additional closely-spaced resource drilling on the deeper, relatively flat
block in order to increase the confidence in the Mineral Resources and upgrade
these to Indicated and Measured Resource categories. This will be the main focus
of work between 2008 and 2010.
The Board is of the opinion that the prospects of Lesego Platinum are promising
and, within 36 months, will result in a level of confidence that will allow for
the design, financing and construction of a long-life platinum mine. The
timeline to first production may be reduced by the success of defining a mineral
resource at depths of less than 1 000 metres. In addition, it remains an
important objective of management to seek opportunities which offer shallow,
preferably shallow dipping, ounces, which would enable an earlier production
date.
4. The Private Placing
The Private Placing is made up of:
- an Offer for Subscription to Qualifying Investors of a maximum of 20 860 928
new Lesego Platinum Shares priced between R15.10 and R18.60 per share;
- an Offer for Sale to Qualifying Investors by Umbono Platinum and MinEx of a
maximum of 32 611 954 Lesego Platinum Shares priced between R15.10 and R18.60
per share.
The Private Placing will result in a maximum of 51 225 513 shares being placed
with investors which is expected initially to be approximately 43% of the issued
share capital of the Company.
The Lesego Platinum Shares issued in terms of this Prospectus will rank pari
passu in all respects with the existing Lesego Platinum Shares in issue.
The basis for allocation of the Lesego Platinum Shares will be determined by
BJMPCS, in its sole discretion after consultation with the directors of Lesego
Platinum.
The proceeds from the Private Placing will be first applied to the Offer for
Subscription which will provide Lesego Platinum with the necessary capital for
the further development of its assets. Thereafter, the proceeds will be applied
to the Offer for Sale which will allow Umbono Platinum and MinEx to partially
realise their investment in Lesego Platinum, so as to ensure that the public
spread requirements of the JSE are met without overcapitalising the Company with
funding.
5. Directors
The full names, qualifications, nationalities, ages, business addresses and
functions of the directors of Lesego are set out below:
Full name, qualification,
nationality and age Business address Function
Phiwayinkosi Gift Mbuyazi The Isle of Houghton Chief Executive Officer
BSc (Elec Eng), BA (PPE) 3rd Floor
South African Old Trafford No 4
(37) Boundary Road
Houghton
2198
Roy Aubrey Pitchford 90 Long Acre Chairman
FCCA, CA(Z) London Non-executive Director
Zimbabwean England
(57) WC2E 9RA
Jeneen Catherine Galbraith PO Box 12391 Non-executive Director
CA (SA) CMA (UK) Mill Street
South African 8010
(38)
Phumzile Langeni 85 Protea Road Non-executive Director
BCom (Acc) Kingsley Park, Block A
South African Chislehurston
(34) Johannesburg
2196
Nambita Sinazo Mazwi Airways Park Non-executive Director
BProc LLB, Dip Company Law Jones Road
South African OR Tambo International
(34) Johannesburg
Jayendra Naidoo 3rd Floor, South Wing Non-executive Director
BProc 160 Jan Smuts Avenue
South African Rosebank
(47) Johannesburg
2196
William Alan Nairn 87 Central Avenue Non-executive Director
BSc (Min Eng) Atholl
South African 2196
(63)
Kerwin Rana The Isle of Houghton Non-executive Director
BSc (Chem Eng), 3rd Floor
Pr. Eng. (ECSA), Old Trafford No 4
Wits Business School Boundary Road
(MAP42), Houghton
Gibbs Institute of 2198
Business Science (LDP)
London Business School (SEP61)
South African
(37)
Michael James Scott 16 North Road Technical Director
BSc (Hon) (Geol), Dunkeld West
MSc (Min Eng), 2196
Bus Dip
South African
(67)
Oskar Kurt Helmut Steffen 265 Oxford Road Non-executive Director
BSc (Eng), MSc (Eng), Illovo
PhD (Eng) 2196
South African
(67)
6. Share capital
At the listing date the authorised share capital of Lesego will comprise 1 000
000 000 ordinary shares with a par value of R0.001 each.
The Company will have an issued share capital of between R121 525 and R117 499
comprising between 121 524 739 and 117 499 592 ordinary shares, respectively,
with a par value of R0.001 each and a share premium account of between R348 156
631 and R348 160 636 assuming that R10.27 million of listing costs have been
written off against share premium.
7. Stabilising Manager
Umbono Platinum and Minex have granted BJM Securities, as Stabilising Manager,
the right to enter into a scrip-lending agreement with them for a number of
shares not exceeding 15% of the total number of Private Placement Shares
("Stabilising Shares"). The Stabilising Manager has also been granted the right
to sell the Stabilising Shares into the Private Placing, thereby creating a
short position for the Stabilising Manager. The Stabilising Manager furthermore
has a right to purchase the Stabilising Shares from the Sellers at a price equal
to the Private Placing Price, to cover the short position. In order to close out
this covered short position, the Stabilising Manager may effect transactions
with a view to supporting the market price of Lesego Platinum Shares at a level
higher than that which might otherwise prevail for a limited period after the
commencement of trading. However, there is no obligation for the Stabilising
Manager to do so. If commenced, any such stabilising action may be discontinued
at any time by giving two business days` notice to the JSE. Under no
circumstances will any such stabilising action be continued beyond 30 calendar
days after the Listing Date. The Stabilising Manager will act as the sole
stabilising manager in connection with the Private Placing. Save as required by
the Listings Requirements, the Stabilising Manager does not intend to disclose
to the public the extent of any stabilising transactions.
No stabilising action will be undertaken to the extent that it will result in
the minimum spread requirements as set out in the Listings Requirements, not
being met.
Prior to the Private Placing, there has been no public market for the Lesego
Platinum Shares and no assurance can be given that an active market will develop
or that Lesego Platinum Shares will trade above the Private Placing Price.
8. Copies of the Prospectus
Copies of the Prospectus are only available in English and may be obtained
during normal business hours from today until Wednesday, 23 July 2008 from:
Lesego Platinum Mining Limited The Isle of Houghton
3rd Floor, Old Trafford No 4
Boundary Road
Houghton
2198
9. Salient dates and times
2008
Opening date of the Private Placing for South African
Qualifying Investors (08:00) Tuesday, 15 July
Closing date for invited retail investors and clients
of BJMPCS to provide BJM with completed applications (17:00) Tuesday, 22 July
Closing date for irrevocable indications of interest from
invited institutional investors (17:00) Wednesday, 23 July
Allocation Thursday, 24 July
Private Placing Price released on SENS Friday, 25 July
Private Placing Price published in the South African press Friday, 25 July
Completed allocations communicated to CSDP Friday, 25 July
Settlement date and proposed listing date on the JSE (09:00) Thursday, 31 July
All dates and times are subject to change and any changes will be released on
SENS and published in the press.
Johannesburg
14 July 2008
Bookrunner, Lead Corporate Advisor and Sponsor
BARNARD JACOBS MELLET CORPORATE FINANCE (PTY) LIMITED
Transfer Secretaries
LINK MARKET SERVICES SOUTH AFRICA (PTY) LIMITED
Corporate Advisor
UMBONO FINANCIAL SERVICES
Independent Reporting Accountants and Auditors
BDO Spencer Steward (Jhb) Inc
Chartered Accountants (SA)
Registered Auditors
Investor Relations Advisor
RUSSEL AND ASSOCIATES
Techno-Economic Advisor and Competent Person
VENMYN
Attorneys
DENEYS REITZ ATTORNEYS
Date: 14/07/2008 16:12:01 Produced by the JSE SENS Department.
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