| Tue 2 Sep 2008, 12:45 | | WEZ - Wesizwe Platinum Limited - Detailed Announcement and Cautionary |
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WEZ
WEZ
WEZ - Wesizwe Platinum Limited - Detailed Announcement and Cautionary
Wesizwe Platinum Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2003/020161/06)
JSE code: WEZ & ISIN: ZAE000075859
(the "Company" or "Wesizwe")
DETAILED ANNOUNCEMENT AND CAUTIONARY REGARDING THE ACQUISITION OF 37%
PARTICIPATION INTEREST IN THE WESTERN BUSHVELD JOINT VENTURE ("WBJV") FROM ANGLO
PLATINUM LIMITED ("APL") AND FURTHER RATIONALISATION OF THE PILANESBERG COMPLEX
Highlights
- Wesizwe to acquire APL`s entire 37% participation interest in the WBJV in
exchange for 211,850,125 new ordinary Wesizwe consideration shares ("the
APL Transaction"); and
- Wesizwe to enter into a concurrent transaction with Platinum Group Metals
Limited ("PTM") ("the PTM Transaction") (collectively hereinafter referred
to as "the Proposed Transactions")
- The net effect of the Proposed Transactions results in:
- Wesizwe gaining 100% ownership of its core Frischgewaagd-Ledig Project
("the Wesizwe Project") (which includes the properties that were
formerly referred to as the WBJV`s Project 2 and Wesizwe`s Ledig
property); and
- Wesizwe retaining its 26% shareholding in the WBJV`s Projects 1 & 3
("the PTM Projects")
- APL to become a significant shareholder in Wesizwe
Introduction
In line with Wesizwe`s stated strategy of pursuing the logical consolidation and
rationalisation of platinum projects near and adjacent to the Wesizwe Project,
the Company has signed a term sheet with APL and PTM, which upon completion will
result in the rationalisation of the respective companies` assets within the
Pilanesberg Complex.
Please see www.wesizwe.co.za for a detailed diagram relating to the Proposed
Transactions.
As detailed below, the Proposed Transactions will consolidate full ownership of
the Wesizwe Project within Wesizwe, whilst the Company retains a 26%
shareholding in the PTM Projects. Wesizwe`s attributable platinum group metal
("PGM") resources increases from 13 million oz to 15.7 million oz while
attributable forecast production increases from 331,000 oz per annum to 415,000
oz per annum.
Wesizwe and PTM (which will hold the remaining 74% of the PTM Projects) will
work together to maximise the value of the projects in the local communities and
the two project teams will look at engineering synergies for cost and power
savings and reduced environmental impacts of the platinum mine plans of the
Wesizwe Project and the PTM Projects.
As part of the term sheet signed by the parties, APL will become a 26.6%
shareholder in Wesizwe.
Terms of the Proposed Transactions
The APL Transaction
Wesizwe has agreed, with effect from the date of successful fulfilment of the
conditions precedent, to acquire the 37% effective participation interest held
by APL`s wholly owned subsidiary Rustenburg Platinum Mines Limited ("RPM") in
the WBJV, for a consideration of R1.162 billion payable via the issue to RPM of
211,850,125 new ordinary shares in the share capital of Wesizwe ("Consideration
Shares").
APL has agreed to work with Wesizwe on efforts to place the Consideration Shares
with BEE partners designated by Wesizwe in order to promote the spirit, aims and
objectives of the Mineral and Petroleum Resources Development Act ("MPRDA") for
an agreed period.
The PTM Transaction
PTM will purchase RPM`s 37% participation interest in the PTM Projects from
Wesizwe for R785.5 million, which will be offset by the sale to Wesizwe of PTM`s
18.5% participation interest in the WBJV`s Project 2 (equivalent to
approximately 12% of the Wesizwe Project) for R376.9 million. The balance of
R408.6 million is payable in cash ("the Cash Component") and shall be applied to
Wesizwe`s contributions in respect of the capital costs of construction of the
PTM Projects. The Cash Component shall be payable to an escrow account for the
PTM Projects within six months of closing the PTM Transaction. If PTM fails to
honour this payment, Wesizwe shall be entitled to claw back approximately 19% of
the 37% interest in the PTM Projects sold to PTM.
This exchange of participation interests will result in PTM and Wesizwe holding
74% and 26% of the PTM Projects respectively, whilst Wesizwe will be the sole
owner of the Wesizwe Project.
Rationale for the Proposed Transactions
Wesizwe believes that the Proposed Transactions:
- Rationalise the overlapping mineral rights within the Pilanesberg Complex;
- Provide Wesizwe with an increase in PGM resources and attributable
production;
- Will assist further participation by Historically Disadvantaged South
Africans ("HDSA`s") in the platinum mining sector, in that APL has agreed
to work with Wesizwe on efforts to place the Consideration Shares with BEE
partners designated by Wesizwe in order to promote the spirit, aims and
objectives of the MPRDA for an agreed period;
- Allows Wesizwe to enjoy 100% control of the Wesizwe Project and also
provide a 26% participation interest in the PTM Projects;
- Will increase the overall BEE involvement in the region, in that BEE
participation in ounces, production and control has increased through the
Proposed Transactions;
- Provide a clear path for the capital markets to focus on each company
facilitated by the creation of two separate mines;
- Facilitate the efficient development of two new mines and the resultant
creation of approximately 6 000 new jobs;
- Will enhance community development and regional economic development
through co-operation in the joint holding company structures on training,
social development projects and surface rights. PTM and Wesizwe will be
able to agree on working together on these areas;
- Will allow continuation of close co-operation between the parties to
achieve cost savings in relation to engineering, environmental impact,
tailings, power and other facilities;
- Increases the focus of Wesizwe`s management on the Wesizwe Project and
allows all benefits from the Wesizwe Project to flow through to Wesizwe`s
shareholders; and
Further advances consolidation and rationalisation by Wesizwe.
Conditions precedent to the Proposed Transactions
The Proposed Transactions are subject to, inter alia, the fulfilment of the
following Conditions Precedent:
The APL Transaction
- Wesizwe and APL entering into definitive agreements on the APL Transaction,
within 60 days, ("APL definitive agreements") materially on the terms as
set out in the signed term sheet of 15 August 2008;
- Obtaining all necessary approvals from the South African Competition
authorities in terms of the Competition Act, 1998;
- Obtaining all required consents of the JSE Limited ("the JSE");
- Section 11 of the MPRDA transfer of title and/or Ministerial Consent to the
extent necessary;
- To the extent required, the approval of Wesizwe`s shareholders; and
- Obtaining the required approvals of the executives and/or the board of
directors of RPM, as may be applicable.
The PTM Transaction
- Wesizwe and PTM entering into definitive agreements ("PTM definitive
agreements") materially on the terms as are set out above within 60 days of
signature of the term sheet.
- Obtaining all necessary approvals from the South African Competition
authorities under the Competition Act, 1998;
- Obtaining all required consents of the JSE, the Toronto Stock Exchange and
the American Stock Exchange;
- Obtaining all Canadian and US regulatory approvals;
- To the extent required, the approval of the South African Reserve Bank;
- Section 11 of the MPRDA transfer of title and/or Ministerial Consent to the
extent necessary; and
- To the extent required, the approval of Wesizwe`s and PTM`s shareholders;
Cautionary
Although Wesizwe does not anticipate any material changes to the terms of the
APL definitive agreements or PTM definitive agreements ("the collective
agreements") which govern the Proposed Transactions, shareholders are advised to
exercise caution whilst dealing in the Company`s shares until the collective
agreements have been signed.
An announcement (including pro forma financial effects) will be made once the
collective agreements have been signed, and thereafter a circular will be sent
to all shareholders in due course.
Melrose, Johannesburg
02 September 2008
Sponsor:
Investec Bank Limited
Corporate advisor
Qinisele Resources (Pty) Limited
Legal advisor
Bell Dewar Hall
Date: 02/09/2008 12:45:04 Produced by the JSE SENS Department.
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