| Tue 2 Sep 2008, 9:33 | | SAM - Samroc - Conditional acquisition of Coal Exploration assets proposed |
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SAM
SAM
SAM - Samroc - Conditional acquisition of Coal Exploration assets proposed
unbundling of shares in Pioneer Coal Limited further cautionary announcement
SA MINERAL RESOURCES CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
Share code: SAM ISIN: ZAE000110029
("Samroc"")
* CONDITIONAL ACQUISITION OF COAL EXPLORATION ASSETS
* PROPOSED UNBUNDLING OF SHARES IN PIONEER COAL LIMITED
* FURTHER CAUTIONARY ANNOUNCEMENT
Introduction
Samroc shareholders are advised that the directors of Samroc are considering
proposals in terms of which:
* Samroc`s Greenhills Manganese Sulphate business ("Greenhills") will be
acquired by a subsidiary of Samroc, Bushveld Pioneer (Pty) Limited
("Bushveld Pioneer");
* A newly formed company, Pioneer Coal Limited ("Pioneer Coal") will acquire
Bushveld Pioneer from Samroc in exchange for shares in Pioneer Coal;
* All the shares in Pioneer Coal held by Samroc will be distributed to Samroc
shareholders by way of an unbundling in terms of section 46 of the Income
Tax Act, 1962 (Act 58 of 1962, as amended), on the basis of one Pioneer
Coal share for each Samroc share held ("the unbundling");
* Immediately after the unbundling, Pioneer Coal will acquire three mineral
exploration companies which hold a number of mineral exploration rights on
farms situated mainly in Limpopo and Mpumalanga ("the coal exploration
companies"); and
* An application will be made for the listing of Pioneer Coal on the JSE
Limited ("the JSE").
(collectively, "the transactions").
Reasons for the transactions
On 26 March 2008 Samroc announced it had reached agreement to invest in certain
oil exploration rights in the Democratic Republic of the Congo ("the Oil
Concessions"). Following this transaction, the directors of Samroc have decided
to focus the business of Samroc on that of the exploration and development of
oil and gas resources and, if possible, to dispose of Greenhills.
During the months following the announcement of the Oil Concessions transaction,
Samroc received numerous proposals to invest in other minerals-related ventures,
inter alia, the abovementioned coal exploration companies. The directors of
Samroc decided that the coal exploration companies held strong potential for the
shareholders of Samroc and accordingly decided to acquire the coal exploration
companies for the benefit of Samroc shareholders via Pioneer Coal, and at the
same time, to dispose of Greenhills and Bushveld Pioneer to Pioneer Coal, which
would hold them until a third party buyer was found.
The unbundling will allow investors to attribute appropriate separate ratings to
their holdings in Samroc and Pioneer Coal. It is expected that this will unlock
any potential discount that may eventuate by retaining both companies under a
single share structure. It will also enable the companies to develop separate
management and funding structures that will be appropriate for the businesses
they operate.
The coal exploration companies
Pioneer Coal has provisionally agreed to acquire all the shares and loan
accounts in Mudengu Resources Holdings (Pty) Limited, Bono Lithihi Investments
Group (Pty) Limited and Solar Spectrum Trading 365 (Pty) Limited ("the
acquisition"). The coal exploration companies hold New Order Prospecting Rights
over, inter alia, some 35 farms totalling 48 160 hectares in the recognised
Limpopo and Soutpansberg coalfields, and have applied for rights on 4 farms
totaling 11 100 hectares in the Mpumalanga coalfield. Pioneer Coal has mandated
Venmyn Rand (Pty) Limited to complete a Competent Person`s report in terms of
SAMREC requirements.
The vendors of the coal exploration companies are, in the main, black persons
including broadly based black organisations, led by Messrs Thaba Mufamadi and
Ofhani Phaswana, who will join the board of Pioneer Coal.
It is intended that in conjunction with the unbundling and acquisition, Pioneer
Coal will raise an appropriate amount of cash ("the capital raising"). Following
the capital raising, it is expected that Pioneer Coal will be majority black
owned.
Suspensive conditions
The transactions are subject to the fulfilment of a number of suspensive
conditions, inter alia:
* Samroc and Pioneer Coal board approval;
* Samroc shareholder approval;
* Regulatory approvals, including those of the JSE and Exchange Control
authorities;
* Completion of a Competent Person`s report on the coal exploration assets;
* Completion by Pioneer Coal of a due diligence investigation into the coal
exploration companies; and
* Completion of the capital raising.
Further cautionary announcement
In the light of the above and further to the cautionary announcements the last
of which was dated 5 August 2008, Samroc shareholders are advised to continue to
exercise caution when dealing in their Samroc shares until a further
announcement is made.
Further enquiries regarding this announcement may be made to Mr R Vela on 011
312 9330.
Woodmead
2 September 2008
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Corporate adviser to Samroc
Lonsa
Legal adviser to Samroc
Deneys Reitz
Date: 02/09/2008 09:33:01 Produced by the JSE SENS Department.
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