| Thu 7 May 2009, 14:55 | | GDO/AFO - Gold One/Aflease - Finalisation data abridged pre-listing |
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AFO
AFO GDO
GDO/AFO - Gold One/Aflease - Finalisation data, abridged pre-listing
statement of Gold One and general issue of shares for cash by Aflease
Gold One International Limited
(Previously BMA Gold Limited)
(Incorporated in Australia)
(Registration number 2009/000032/10)
(ACN: 094 265 746)
Share code on the JSE: GDO
ISIN: AU000000GDO5
("Gold One" or the "company")
Aflease Gold Limited
(Incorporated in the Republic of South Africa)
(Registration number 1984/006179/06)
JSE Share code: AFO
ISIN: ZAE000075867
International Prime QX (OTCQX): AFSGY
("Aflease")
Finalisation data, abridged pre-listing statement of Gold One and general
issue of shares for cash by Aflease
1. Introduction
Gold One is currently listed on the Australian Securities Exchange ("ASX").
On 21 January 2009, at a general meeting of the company ("general meeting"),
shareholders approved all the ordinary and special resolutions, including
the issue of fully paid shares in the company to the shareholders of Aflease
pursuant to a scheme of arrangement in terms of section 311 of the Companies
Act, 1973 (the "Act"), under which the company will acquire all of the
shares in Aflease ("scheme").
One of the resolutions approved at the general meeting was in respect of the
consolidation of the existing share capital of the company on a 20:1 basis.
Subsequent to the consolidation JSE Limited ("JSE") has granted a dual
inward primary listing of 661 014 266 fully paid ordinary Gold One shares,
which constitute all of the issued Gold One shares on the "Mining: Gold
Mining" sector of the JSE List. The shares will trade under the abbreviated
name GOLDONE with the share trading code "GDO" and ISIN AU000000GDO5, with
effect from the commencement of trading on the JSE on Monday, 18 May 2009
("listing"). Gold One will have its primary listing on the ASX and a dual
primary listing on the JSE.
2. Conditions precedent
Shareholders are referred to the announcement released on the Securities
Exchange News Service ("SENS") on 20 April 2009 and are advised that the new
auditors of Gold One - which auditors will be proposed at the company`s next
Annual General Meeting - have been approved by the JSE to be registered on
the JSE Register of Auditors and their advisors. All conditions precedent in
respect of the scheme and the listing have therefore been fulfilled.
3. Abridged pre-listing statement
This abridged pre-listing statement relates to the dual primary inward
listing of Gold One on the JSE with effect from the commencement of business
on Monday, 18 May 2009.
This abridged pre-listing statement does not constitute a full pre-listing
statement and is not an invitation to the public to subscribe for shares in
Gold One, but is issued in compliance with the Listings Requirements of the
JSE for the purpose of providing information to the public with regard to
Gold One. The abridged pre-listing statement contains extracts of the
salient details of Gold One, which extracts are more fully described in the
pre-listing statement of Gold One dated 19 December 2008 ("pre-listing
statement").
In compliance with the Australian Corporations Act, 2001 (Cth), a prospectus
in respect of the reinstatement to quotation of Gold One`s existing
securities, and quotation of its new securities, on the Official List of the
ASX was lodged with the Australian Securities and Investments Commission on
22 April 2009 ("prospectus"). The prospectus is available on the website of
the company hosted at www.bmagold.com.au, and also at www.gold1.co.za. The
prospectus is made available to shareholders for information purposes only.
4. Nature of business
Gold One is an Australian based gold exploration and development company
which is presently listed on the ASX, focused on the Twin Hills Gold project
in Central Eastern Queensland. Exploration is focused on increasing the
resources to a level sufficient to support a mining operation. Gold One also
maintains an active project generation programme that is aimed at leveraging
the experience and the global networks of its directors.
Aflease is a South African-based gold exploration and development company
which is listed on the JSE. It is a junior mining company currently
involved in exploration in South Africa, Namibia and Mozambique focusing on
the development of high margin, low technical risk, shallow underground gold
mines.
Upon implementation of the scheme between Aflease and its ordinary
shareholders, Gold One will acquire all of the issued shares of Aflease.
Aflease will no longer trade on the JSE as from commencement of trade on
Monday, 18 May 2009.
5. Operational update
5.1 Trinity transaction
On 13 January 2009, Aflease announced on SENS that Aflease and Trinity Asset
Management (Pty) Limited ("Trinity") had concluded the first tranche of 3
million Randgold & Exploration Company Limited ("Randgold") shares in
exchange for 30 million Aflease shares, in terms of the acquisition
agreement entered into between Aflease and Trinity on 25 November 2008
("Trinity agreement"). In the same announcement Aflease informed
shareholders that subsequent to the conclusion of the first tranche, Aflease
had successfully disposed of the 3 million Randgold shares at an average
price of R12.72 per Randgold share to Investec Limited.
The effect of the first tranche of the transaction was the raising of R38
million of additional capital for the company. Subsequent to the first
tranche, Aflease raised an additional R51 million through the issue of a
further 44,6 million Aflease shares to Trinity in terms of the Trinity
agreement. A total amount of R89 million in additional capital was therefore
raised by the company in terms of the Trinity agreement. The unaudited pro
forma financial information of the second tranche of the Trinity agreement
is set out in paragraph 8 below.
5.2 Sub Nigel
In a SENS announcement released on 28 January 2009, Aflease announced that
it had hoisted the first ore as scheduled from its recommissioned Sub Nigel
mine on the East Rand on 27 January 2009. Aflease informed shareholders that
the ore would be stockpiled at the company`s nearby Modder East operation
for processing from May 2009 when the Modder East plant is scheduled to go
into production. Shareholders were also advised that the new mine that
Aflease is developing at Modder East is on track for first production in the
last quarter of this year.
5.3 General issue of shares for cash
On 5 May 2009, Aflease issued an additional 32 829 610 shares at R1.34863
per share, constituting a 10% discount to the weighted average traded price
of Aflease shares measured over the 30 business days prior to the date the
general issue was agreed between Aflease and the subscribers to the issue
("general issue"). The general issue was implemented in terms of a general
authority granted by Aflease shareholders to the directors of Aflease in
terms of section 221 of the Act, at the annual general meeting of Aflease
held on 18 June 2008. An amount of R 44 million was raised in terms of the
general issue. The unaudited pro forma financial effects of the general
issue are set out in paragraph 8 below.
6. Business objectives and capital management
Gold One`s primary focus will be to ensure the successful development and
start up of the Modder East project, and to continue the development of the
Sub Nigel project. Capital spend priorities are to complete the processing
plant and to keep the development of the decline and return airway on
schedule. Modder East is scheduled to pour gold in the fourth quarter of
2009 and ramp up to full production over a three year period. Details of
these projects are set out in section 3.4.2 of the pre-listing statement. It
is the opinion of the directors that, on implementation of the scheme, Gold
One will have sufficient working capital to successfully commission the
process plant, commence production on schedule and begin to ramp up
production.
At the time of the announcement of the scheme in November 2008, Aflease
announced that it needed a further $18 million (ZAR120 million) in order to
fully fund the Modder East project. Since that time Aflease has raised
approximately $14 million (ZAR89 million) by issuing new shares under the
share swap transactions with Trinity that are described in section 7.2 of
the pre-listing statement and in paragraph 5.1 above. The company also
raised an additional $5 million (ZAR44m million) by way of the general issue
detailed in paragraph 5.3 above, primarily to keep the sinking of the shaft
on schedule in order to achieve production ramp up targets in 2010 and 2011.
The next capital objective of the company will be to strengthen its balance
sheet and progress its other projects (see section 3.4 of the pre-listing
statement for details of all of the company`s projects). As part of that
process, and as part of the ongoing capital management of the company, the
company will from time to time look to raise additional equity and
potentially reduce debt, provided that the commercial environment is such
that the company is able to do so on terms which the board considers to be
appropriate in the circumstances.
Further growth for the Gold One group will be both organic and through
mergers and acquisitions.
7. Prospects
In the opinion of the directors, Gold One is a growth-focused international
gold developer, with significant production potential, that will benefit
from:
7.1 an attractive portfolio of gold assets in Southern Africa and
Australia, including the Modder East mine on the East Rand of Gauteng
in South Africa which is close to production;
7.2 a gold resource of more than 13,6 million ounces (40,6m tonnes at 3,36
g/t for 4,38m ounces of measured and indicated material and 82,12m
tonnes at 3,73 g/t for 8,99m ounces of inferred material in South
Africa and 195,000 ounces of gold at 7,3 g/t Au including 70,000 ounces
of inferred material at 7,8 g/t Au in Australia) providing it with a
robust project pipeline and growth profile*;
7.3 a strong executive team with significant industry experience and a
diverse skills set;
7.4 access to global capital markets and increased liquidity given listings
on two key resource stock exchanges and share registers with strong
institutional compositions; and
7.5 the capability to grow into a mid-tier international precious metals
producer with a premium market rating.
* Mineral Resources have been reported in accordance with the
classification criteria of the Joint Ore Reserve Committee Code ("JORC
Code") and in compliance with section 12 of the Listings Requirements
of the JSE, the South African Code for Reporting of Exploration
Results, Mineral Resources and Mineral Reserves ("SAMREC Code") and the
South African Code for reporting of Mineral Asset Valuation ("SAMVAL
Code"). The revised resource estimate was prepared by Charles Muller,
B.Sc. (Hons), Pr.Sci.Nat., of Minxcon (Pty) Limited, an independent
geoscience consultant to Aflease. Charles Muller is a competent person
for the purposes of the JORC Code and the SAMREC Code. The resource
(excluding Sub Nigel 6) was audited by Mark Wanless of SRK Consulting,
who is a competent person for the purposes of the SAMREC Code. Mineral
Resources are not Ore Reserves and do not have demonstrated economic
viability. In respect of the Modder East Resources: BPLZ+BF and BPLZ
Pillars are quoted at a cut-off grade of 167 cmg/t; Channel+BF is
quoted at a cut-off grade of 379 cmg/t; UK9A is quoted at a cut-off
grade of 199 cmg/t; UK5A is quoted at a cut-off grade of 496 cmg/t.
8. Unuadited pro forma financial effects of Aflease for the period ended 31
December 2008
8.1 The table below summarises the unaudited pro forma financial effects on
net asset value ("NAV") per share, tangible net asset value ("TNAV") per
share, earnings per share and headline earnings per share of Aflease.
8.2 The unaudited pro forma financial effects have been prepared for
illustrative purposes only to reflect the financial information of Aflease
following the second tranche of the Trinity transaction and the financial
effects of the general issue of shares for cash. Because of its nature, the
unaudited pro forma financial effects may not give a fair reflection of
Aflease`s financial position, changes in equity and results of operations or
cash flows. The unaudited pro forma financial effects are the responsibility
of the Gold One directors.
Aflease Aflease Aflease Change %
Note 2 adjusted after Aflease
Note 3 Note 4 after /
Aflease
adjusted
Total number 556,151,869 600,771,869 633,601,479
of shares
Weighted 527,381,180 572,001,180 604,830,790
average number
of shares
NAV/share 44.80 49.95 54.35 8.8%
(cents)
TNAV/share 44.80 49.95 54.35 8.8%
(cents)
Loss per share
(cents)
- Basic (8.51) (7.85) (7.42) 5.5%
- Headline (8.51) (7.85) (7.42) 5.5%
Notes:
1. The pro forma financial effects are based on the accounting
policies adopted by Aflease, which are in accordance with
International Financial Reporting Standards ("IFRS"). It is
assumed that all changes and transactions described below are
effective on:
- 1 January 2008, for purposes of preparing the pro forma
financial effects on earnings per share and headline
earnings per share.
- 31 December 2008, for purposes of preparing the pro
forma financial effects on net asset value per share and
tangible net asset value per share.
2. The "Aflease" column has been extracted from the published
audited financial information of Aflease for the year ended
31 December 2008.
3. The "Aflease adjusted" column reflects the impact of
significant corporate action within Aflease after 31 December
2008 but prior to the general issue of shares for cash and
the implementation of the scheme. This action relates to the
issue of 44,620,000 shares to Trinity as described in
paragraph 5.1 above. It is assumed that the Aflease shares
were issued at R1.15 per share. The issue price of the
Aflease shares is based on the market value of the shares
received in exchange for the Aflease shares as determined by
the disposal of these shares in the market immediately
following the issue. Transaction costs of R350,000 are set
off against share capital.
4. The "Aflease after" column reflects the impact of the general
issue of shares for cash described in paragraph 5.3 above. It
is assumed that 32,829,610 shares are issued for net cash
proceeds of R44,2 million after transaction costs of R40,000.
Cash proceeds will be used for operating capital and as a
result no income impact on earnings is assumed. Adjustments
to the number of shares exclude the impact of 3,261,555
million shares issued by Aflease after 31 December 2008
relating mainly to the conversion of Aflease options into
shares and not relating to the general issue of shares for
cash.
9. Unaudited pro forma financial information of Gold One for the period
ended 31 December 2008
9.1 The table below summarises the unaudited pro forma NAV per share, TNAV
per share, earnings per share and headline earnings per share of Gold
One, as derived from the unaudited pro forma balance sheet and income
statement of Gold One. Together, these are referred to as the pro forma
financial information.
9.2 The unaudited pro forma financial information has been prepared for
illustrative purposes only to reflect the pro forma results of Gold One
after the implementation of the scheme and the replacement of the
Aflease convertible bonds with Gold One convertible bonds. Because of
its nature, the unaudited pro forma financial information may not give
a fair reflection of Gold One`s financial position, changes in equity
and results of operations or cash flows. The directors are of the
opinion that the combined entity is a going concern and have applied
the going concern principle in the preparation of the pro forma
financial information. The unaudited pro forma financial information is
the responsibility of the Gold One directors.
BMA Gold One
Aflease BMA adjusted after
after Note Note 3 Note 4 Note 5
2
Total
number of
shares 633,601,479 483,014,126 24,151,232 657,752,711
Weighted
average
number of
shares 604,830,790 455,393,191 22,769,660 656,371,139
NAV/share
(cents) 54.35 2.97 18.79 37.49
TNAV/share
(cents) 54.35 2.97 18.79 35.93
Loss per
share
(cents)
- Basic (7.42) (3.56) (71.27) (29.42)
- Headline (7.42) (2.75) (71.27) (29.42)
Notes:
1. The pro forma financial information is based on the
accounting policies adopted by Aflease, which are in
accordance with IFRS. It is assumed that all changes and
transactions described below are effective on:
- 1 January 2008, for purposes of preparing the pro forma
financial information on earnings per share and headline
earnings per share.
- 31 December 2008, for purposes of preparing the pro
forma financial information on net asset value per share
and tangible net asset value per share.
References to BMA in the notes below, refer to the Gold
One company prior to the implementation of the scheme.
2. The "Aflease after" column has been extracted from paragraph
8 above. It reflects the impact of significant corporate
action within Aflease after 31 December 2008 but prior to the
implementation of the scheme. This action relates to the
issue of 44,620,000 shares to Trinity as described in
paragraph 5.1 above and the general issue of shares for cash
described in paragraph 5.3 above.
3. The "BMA" column has been extracted from the published
audited financial information of BMA for the year ended 31
December 2008. Amounts have been converted from Australian
Dollar to Rand at the following assumed exchange rates:
- Income statement: R6.95: AUD1; and
- Balance sheet: R6.54: AUD1.
4. The "BMA adjusted" column reflects the impact of significant
corporate action within BMA and an accounting policy change
after 31 December 2008 but prior to the implementation of the
scheme. These actions include the following:
- A consolidation of BMA shares resulting in the reduction
of BMA shares in the ratio 20:1. Associated costs are
assumed to be part of the transaction costs associated
with the scheme; and
- Historically BMA has elected to capitalise exploration
costs in terms of Australian IFRS. Historically Aflease
has elected to expense exploration costs. The Aflease
accounting treatment will be elected post the scheme and
the capitalised exploration costs in BMA are therefore
expensed, resulting in a reduction in the 31 December
2008 carrying value of the BMA asset of R9,8 million.
This also results in impairment costs of R3,7 million
being reclassified as exploration expenses in BMA
earnings and an equivalent adjustment to BMA headline
earnings.
5. The "Gold One after" column reflects the impact of the
business combination as proposed in the scheme. IFRS 3
Revised: Business Combinations is effective for the financial
year ending 31 December 2010 but earlier adoption is
permitted. Gold One will elect to early adopt IFRS 3 Revised
Business Combinations. The following is assumed and takes
into consideration the accounting principles relating to
reverse acquisitions in terms of IFRS 3 Revised: Business
Combinations:
- Aflease assets, liabilities and shareholders` equity are
carried forward into BMA at their historic values.
- The issue, in terms of the scheme, of 633,601,479 BMA
shares in a 1:1 ratio to Aflease shares.
- The deemed acquisition value of BMA is R38,6 million.
This value is based on the number of issued shares in
BMA before the scheme, the relative number of scheme
shares and the market capitalisation of Aflease prior to
the scheme based on an Aflease share price of R1.60. The
actual deemed acquisition value of BMA will be based on
the market value of the Aflease shares which would have
had to be issued to give the BMA shareholders the same
percentage equity interest in the combined entity that
results from the reverse acquisition at the acquisition
date.
- The BMA acquisition value less the value of recognised
BMA assets and liabilities amounts to R34,1 million and
is allocated to undeveloped properties. It is assumed
that the historic book value of BMA assets and
liabilities reflect their fair value, except for
capitalised exploration costs, which is assumed not to
be capitalised in BMA in the future (refer note 4
above). A formal purchase price allocation assessment
has not yet been performed. Based on a preliminary
assessment, the R34,1 million is allocated to mineral
resources, which will be amortised over the life of
mine, once mining commences. The asset for mineral
resources is assumed to be carried at full value within
undeveloped properties as mining has not yet commenced.
The fair value of the consideration transferred and the
fair value of the identifiable assets acquired and the
liabilities assumed in terms of IFRS 3 Revised: Business
Combinations, will need to be determined at the
acquisition date. This will impact the eventual fair
value and nature of identified assets, intangible assets
and the value of the resulting goodwill, as applicable.
These assets will be subject to normal impairment
testing.
- A deferred tax liability of R10,2 million on the mineral
resources is calculated at the Australian company tax
rate and is allocated to goodwill. The allocation to
goodwill is a revised assumption compared to the
assumption applied in the pro forma financial
information based on the 30 June 2008 financial results
previously published in the pre-listing statement.
- Remaining transaction costs amount to R36,4 million and
are non-recurring. Costs associated with the issue of
shares of R7 million are set-off against share capital
while other transaction costs are expensed in terms of
IFRS 3 Revised: Business Combinations. The interest
impact of cash outflows is assumed at 10 percent before
tax. The total transaction costs are estimated at R47,3
million. R10,9 million of these costs have been expensed
prior to 31 December 2008, leaving R29,4 million still
to be expensed.
- Charges for IFRS2: Share-based payments relating to the
replacement of Aflease share options with Gold One share
options are assumed to be the same as reported. Charges
for IFRS2: Share-based payments will have to be
calculated as at reporting periods.
- The Aflease convertible bonds will be replaced with Gold
One convertible bonds with adjustments to certain terms
and conditions. The fair value of the convertible bonds
will have to be calculated at the effective date of the
transaction. A fair value adjustment, being the
difference between the Aflease convertible bonds and the
replacement Gold One convertible bonds, which will
increase the carrying value of the liabilities, is
assumed at R100 million based on a preliminary
calculation and is charged to the income statement.
While fair value movements are accounted on an ongoing
basis, the nature of this charge to the income statement
is non-recurring as it relates directly to the
replacement of the convertible bonds. The Gold One
convertible bonds will need to be fair valued at each
reporting date and any movement will be charged or
released through the income statement. For purposes of
the presentation of the pro forma earnings, no further
fair value movements since 31 December 2008, have been
assumed.
- The number of shares at 31 December 2008 and the
weighted average number of shares for the period then
ended are for the Gold One legal entity after
implementation of the scheme. Effectively one previous
share in Aflease is equivalent to one Gold One share per
the "Gold One after" column. Adjustments to the number
of shares exclude the impact of 3,261,555 million shares
issued by Aflease after 31 December 2008 relating mainly
to the conversion of Aflease options into shares and not
relating to the scheme.
6. Diluted earnings per share are anti-dilutive.
10. Directors
Details of the directors of Gold One on implementation of the scheme are set
out below:
Name, age and Business address Proposed
nationality function
Executive
Neal John First Floor, 45 President and
Froneman(49) Empire Road Chief Executive
(South African) Parktown Officer
2193
Christopher Damon First Floor, 45 Chief Financial
Chadwick (40) Empire Road Officer
(South African) Parktown
2193
Non-Executive
Mark Kenneth Wheatley Level 3, 100 Non-executive
(46) Mount Street chairman
(Australian) Sydney
NSW
2060
Kenneth John Winters Level 3, 100 Non-executive
(61) Mount Street director
(Australian) Sydney
NSW
2060
Kenneth Victor 85 Otto Street Non-executive
Dicks(69) Wilkoppies director
(South African) Klerksdorp
2571
Sandile Swana (40) Building 3, Non-executive
(South African) Visiomed Office director
Park
269 Beyers Naude
Drive
Northcliff
2195
Barry Davison (63) 26 Egret Lane Non-executive
(South African) Steenberg Estate director
Tokai, Cape Town
7945
William Harris (72) 651 Boardman Non-executive
(American) Street, director
Sheffield, MA
01257, United
States
11. Salient dates and times
2009
Last day to trade ordinary shares on the
JSE in order to be recorded in the
register on the consideration record Friday, 15 May
date
Suspension of Aflease`s listing on the
JSE from the commencement of trading Monday,
on the JSE 18 May
Gold One ordinary shares will be listed
and trading will commence on the JSE at
the commencement of trading on the JSE
under JSE code "GDO" and ISIN Monday,
AU000000GDO5 18 May
Consideration record date, being the
date on which Aflease ordinary
shareholders must be recorded in the
register in order to be eligible to Friday, 22 May
receive the scheme consideration
Operative date of the scheme, from the Monday,
commencement of trading on the JSE 25 May
Share certificates in respect of the
scheme consideration will be posted to
certificated scheme participants who
have surrendered their documents of
title on or prior to 12pm on Friday, 22 Monday,
May 2009 on or about 25 May
Dematerialised scheme participants will
have their accounts held at their CSDP
or broker credited and updated with the Monday,
scheme consideration 25 May
Termination of Aflease`s listing on the Monday,
JSE, from the commencement of trading 25 May
Notes:
1. The abovementioned times are South African times and are
subject to change. Any change to the above dates and times
will be agreed upon by Gold One and Aflease and advised to
Aflease ordinary shareholders by release on SENS and
publication in the press.
2. If you wish to rematerialise or dematerialise your ordinary
shares, please contact your CSDP or broker. However, no
dematerialisation or rematerialisation in the name of Aflease
will take place after Friday, 15 May 2009. Dematerialisation
or rematerialisation of Gold One shares will again take place
from Monday, 25 May 2009. Only dematerialised ordinary shares
may be traded on the JSE.
12. Copies of the full pre-listing statement
Copies of the full pre-listing statement are available in English only and
may be obtained during normal business hours at the following addresses:
- the South African representative office of Gold One, First
Floor, 45 Empire Road, Parktown, 2193;
- Macquarie First South Advisers (Pty) Limited, The Place,
South Wing, 1 Sandton Drive, Sandown, 2196; and
- Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Johannesburg, 2001,
from today, Thursday, 7 May 2009 to Monday, 18 May 2009.
Johannesburg
7 May 2009
South African Corporate adviser and Sponsor
Macquarie First South Advisers (Pty) Limited
Australian Corporate adviser
Hartleys Limited
Attorneys to Aflease (South Africa)
Deneys Reitz Inc
Legal counsel to Gold One (Australia)
Blake Dawson
Legal counsel to the South African Corporate adviser and Sponsor
Edward Nathan Sonnenbergs Inc
Independent technical expert
SRK Consulting
Date: 07/05/2009 14:55:01 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.
