| Fri 19 Jun 2009, 8:01 | | MTX - Metorex Limited - Related Party Transaction And Further Cautionary |
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MTX
MEMTX
MTX - Metorex Limited - Related Party Transaction And Further Cautionary
Announcement
METOREX LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1934/005478/06)
Share code: MTX
ISIN: ZAE000022745
Issuer code: MEMTX
("Metorex" or "the Company")
RELATED PARTY TRANSACTION AND FURTHER CAUTIONARY ANNOUNCEMENT
Metorex Chief Executive Officer, Terence Goodlace said-
"We are pleased to announce this transaction, which allows Shanduka to flip up
into Pan African Resources, bringing with it recognized broad-based black
economic empowerment credentials and streamlining the structure of the Pan
African group."
1. INTRODUCTION
Shareholders are referred to the announcement by Pan African Resources Plc
("PAR") dated 19 June 2009 ("the PAR Announcement") whereby shareholders of
PAR were advised of its intention to acquire the current 26% shareholding of
Shanduka Gold (Proprietary) Limited ("Shanduka Gold") in Barberton Mines
(Proprietary) Limited ("Barberton Mines"), in exchange for PAR issuing new
ordinary shares in the share capital of PAR to Shanduka Gold ("the Share
Exchange").
The new ordinary shares to be issued by PAR to Shanduka Gold will represent
21% of PAR`s enlarged issued share capital following implementation of the
Share Exchange.
Upon implementation of the Share Exchange, Barberton Mines will become a
wholly-owned subsidiary of PAR.
2. THE SHARE EXCHANGE
PAR, Shanduka Gold and Shanduka Resources (Proprietary) Limited ("Shanduka
Resources") (Shanduka Gold and Shanduka Resources together referred to as
"Shanduka"), have entered into a Share Exchange Agreement on 18 June 2009
("the Share Exchange Agreement") in terms of which Shanduka Gold will
subscribe for 295 751 549 new shares in PAR ("the Consideration Shares") at a
price of 80 cents per share. Accordingly, the transaction value of the Share
Exchange would be R 236 601 239.
Shanduka Gold will transfer its 26% shareholding in Barberton Mines to PAR.
The Share Exchange will replace and supersede the rights granted to Shanduka
Gold by PAR in terms of the Letter of Intent and Tripartite Agreements entered
into on 19 March 2007 and 31 August 2008, respectively.
The additional holding in Barberton Mines will be retained by PAR after the
Share Exchange.
Full details of the Share Exchange are set out in the PAR Announcement.
3. RELATED PARTY TRANSACTION
Mr Cyril Ramaphosa is a director of Barberton Mines (a subsidiary of PAR and
Metorex) and Shanduka Resources. Mr Ramaphosa also has a beneficial interest
in Shanduka Gold.
Shanduka Gold currently owns 26% of Barberton Mines.
Accordingly, the Share Exchange is deemed to be a related party transaction
for Metorex in terms of the Listings Requirements of the JSE Limited ("JSE").
Metorex will appoint an independent professional expert to provide an opinion
as to whether the Share Exchange is fair to Metorex shareholders.
A circular to shareholders setting out full details of the related party
transaction, including the opinion by the independent professional expert as
well as salient dates and times in terms of the general meeting of Metorex
shareholders to approve the Share Exchange, will be issued in due course.
4. BACKGROUND INFORMATION ON METOREX, PAR, THE SHANDUKA GROUP AND BARBERTON
MINES
4.1 Metorex
Metorex is an established mid-tier mining group that occupies a
unique position in the southern African mining industry. It
specialises in identifying, developing and profitably managing
mining projects. The Company`s current diversified portfolio
includes base-metal, gold and industrial minerals mines.
Metorex has evolved by assembling a portfolio of profitable mining
companies with a well-balanced commodity mix and good growth
prospects. The Company has a record of sustained profitability,
despite the cyclical nature of commodity prices.
4.2 PAR
PAR is an emerging mid-tier gold producer with significant
exploration targets focused on the acquisition and development of a
portfolio of gold deposits in favourable areas of Africa to enhance
shareholder value.
4.3 Shanduka Group
The Shanduka Group is a leading black owned and managed investment
holding company established in November 2000. The group`s investment
activities span the Resources, Financial Services, Property, Energy,
and Beverages sectors. Shanduka Resources has made a number of
investments in the precious metals, coal, steel, diamonds, mining
services, paper and forestry arenas. The Shanduka Group`s major
shareholders include the Ramaphosa Family Trust, the Lilitha
Consortium (a broad based women`s group), the Shanduka Foundation
(more than 65 000 historically disadvantaged individuals are
beneficiaries), management and staff, and financial institutions.
4.4 Barberton Mines
Barberton Mines comprises three operating mines, namely Fairview,
New Consort and Sheba, situated in the Magisterial District of
Barberton, Mpumalanga Province, Republic of South Africa, some 370km
east of Johannesburg and 47km south-west of Nelspruit.
5. RATIONALE
The rationale for the Share Exchange is to:
- enable the entire PAR group to benefit from Shanduka Gold`s Black
Economic Empowerment credentials;
- enhance PAR group earnings and attributable gold production;
- streamline the PAR group structure; and
- give effect to the flip-up that was contemplated when PAR acquired its
interest in Barberton Mines from Metorex.
6. CONDITIONS PRECEDENT
As set out in the PAR Announcement, the implementation of the Share Exchange
Agreement is subject to the fulfilment of the following conditions precedent,
by no later than 30 September 2009:
- to the extent required, the approval of the Share Exchange by Metorex and
PAR shareholders in general meeting, are obtained;
- all regulatory and other approvals that may be required, including, but
not limited to, those pertaining to the JSE, the Securities Regulation
Code on Takeovers and Mergers and the Rules of the Securities Regulation
Panel ("the SRP Code") and the Minister of Minerals and Energy in terms
of the Mineral and Petroleum Resources Development Act No 28 of 2002, are
obtained;
- the admission to trading of the Consideration Shares on the Alternative
Investment Market ("AIM") of the London Stock Exchange and approval by
the JSE for the listing of the Consideration Shares on the Alternative
Exchange operated by the JSE;
- the directors of PAR, in consultation with its Nominated Adviser,
determining that the terms of the Share Exchange are fair and reasonable
to Pan African shareholders in accordance with AIM Rule 13;
- to the extent required, Metorex obtaining a fairness opinion from an
independent professional expert stating that the Share Exchange is fair
to the shareholders of Metorex;
- the members of Shanduka Gold passing a special resolution in terms of the
South African Companies Act, authorising the disposal of Shanduka Gold`s
interest in Barberton Mines to PAR and the registration of such
resolution by the Companies and Intellectual Property Registration
Office; and
- such other statutory and regulatory approvals as are customary to a
transaction of this nature.
To the extent that any regulatory approvals in terms of (1) the Mineral and
Petroleum Resources Development Act No 28 of 2002 and (2) the SRP Code, are
not required, PAR and Shanduka may waive the conditions precedent relating
such approvals.
The remaining conditions precedent are incapable of being waived.
7. EFFECTIVE DATE
In terms of the Share Exchange Agreement, the effective date of the Share
Exchange will be first business day after the date upon which the last of the
Conditions Precedent, as set out in paragraph 6 above, are fulfilled or
waived, as the case may be.
8. PRO FORMA FINANCIAL EFFECTS
The unaudited pro forma financial effects as out below have been prepared for
illustrative purposes only to assist the shareholders of Metorex to assess the
impact of the Share Exchange on the earnings per share ("EPS"), diluted
earnings per share ("DEPS"), headline earnings per share ("HEPS"), diluted
headline earnings per share ("DHEPS"), net asset value per share ("NAVPS") and
tangible net asset value per share ("TNAVPS") of Metorex had the Share
Exchange occurred on 1 July 2008 for income statement purposes and 31 December
2008 for balance sheet purposes.
These unaudited pro forma financial effects have been disclosed in terms of
the Listing Requirements of the JSE and because of their nature may not fairly
present Metorex`s financial position, changes in equity, results of operations
or cash flows.
The unaudited pro forma financial effects have not been reviewed or reported
on by the Company`s auditors and are the responsibility of the directors of
Metorex.
Unaudited Pro forma Change
Notes before the after the (%)
Share Share
Exchange Exchange
EPS (cents) 1 42.09 49.10 16.65
DEPS (cents) 1 41.88 48.90 16.76
HEPS (cents) 1 48.21 49.82 3.34
DHEPS (cents) 1 47.96 49.56 3.34
NAVPS (cents) 2 843.61 856.64 1.54
TNAVPS (cents) 2 805.58 854.76 6.10
Weighted average number of shares 379 304 379 304 0
in issue (000)
Weighted average diluted number of 381 283 381 283 0
shares in issue (000)
Number of shares in issue (000) 613 077 613 077 0
Notes:
1. The EPS, DEPS, HEPS and DHEPS, as set out in the "before" column of
the table, are based on Metorex`s consolidated unaudited interim
results as at 31 December 2008 as published on SENS on 3 March 2009.
2. The NAVPS and TNAVPS, as set out in the "before" column of the
table, are based on Metorex`s consolidated unaudited interim results
as at 31 December 2008 as published on SENS on 3 March 2009.
3. The unaudited pro forma financial effects have been prepared in
accordance with International Financial Reporting Standards and are
consistent with the accounting policies applied by Metorex for the
financial year ended 30 June 2008.
9. FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are advised that Metorex remains involved in negotiations which
may have a material effect on the price of the Company`s securities.
Accordingly, shareholders should continue to exercise caution when dealing in
their Metorex securities until a further announcement is made.
Rosebank
19 June 2009
Sponsor and Corporate Advisor to Metorex Attorneys to Metorex
Barnard Jacobs Mellet Corporate Finance Cliffe Dekker Hofmeyr Inc.
(Pty) Limited
Attorneys to Shanduka
Werksmans Attorneys
Date: 19/06/2009 08:01:02 Produced by the JSE SENS Department.
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