| Thu 17 Sep 2009, 12:13 | | MVL - Mvelaphanda Resources - Response to Claims by Former Shareholders of |
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MVL
MVL
MVL - Mvelaphanda Resources - Response to Claims by Former Shareholders of
Khumama Platinum (Pty) Limited (`Khumama Platinum") in the Financial Mail
of 17 September 2009
MVELAPHANDA RESOURCES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1980/001395/06)
Share code: MVL
ISIN: ZAE000050266
("Mvela Resources" or the "company")
RESPONSE TO CLAIMS BY FORMER SHAREHOLDERS OF KHUMAMA PLATINUM (PTY) LIMITED
(`KHUMAMA PLATINUM") IN THE FINANCIAL MAIL OF 17 SEPTEMBER 2009
Mvela Resources wishes to clarify various misleading claims made anonymously by
certain former shareholders of Khumama Platinum in the Financial Mail published
on 17 September 2009.
Background
In February 2004, Mvela Resources purchased Khumama Platinum for 9.275 million
fully paid shares in Mvela Resources, R80 million in cash and a possible upside
payment to be determined in accordance with a contractual formula. Khumama
Platinum`s sole assets were R100 in cash and the non-binding expectation that it
might be able to negotiate a 50/50 participating Joint Venture with Anglo
Platinum Limited ("Anglo Platinum") in respect of the Booysendal Project, on the
basis of a life-of-mine concentrate off-take agreement.
In terms of clause 19 of the 2004 Agreement, the upside (if any) is to be
determined in accordance with a contractual formula. This requires that the
Booysendal Project be valued in accordance with the technical and financial
parameters determined by Anglo Platinum in the Final Feasibility Study, as a
50/50 participating Joint Venture with Anglo Platinum, subject to a life-of-mine
concentrate off-take agreement in favour of Anglo Platinum.
In the event that one half of the real net present value, discounted at 12.5%
per annum (real) attributable to the joint venture, exceeds R600 million, then
the former Khumama Platinum shareholders are entitled to one half of the excess.
This entitlement is to be settled by the issue of additional fully paid shares
in Mvela Resources, priced at 90% of the 30 day VWAP ruling on the date of such
issue.
Full details of the 2004 Agreement were published in Mvela Resources` Annual
Reports and disclosed as a contingent liability in its Annual Financial
Statements. The full details are also available on Mvela Resources` website:
www.mvelares.co.za.
Process to date
Since it announced the acquisition of Anglo Platinum`s interest in Booysendal
from Anglo Platinum and the transfer of Booysendal to Northam Platinum Limited
("Northam Platinum") in September 2007, Mvela Resources has consistently
undertaken to ensure that the provisions of Clause 19 of the 2004 Agreement are
honoured despite the withdrawal of Anglo Platinum. Notwithstanding this, the
former shareholders of Khumama Platinum initiated arbitration proceedings under
the 2004 Agreement.
Mvela Resources offered to have the Final Feasibility Study currently being
completed by Northam Platinum, reviewed by an independent expert, who also would
calculate the upside (if any) due under Clause 19 of the 2004 Agreement. This
offer was rejected by the former shareholders of Khumama Platinum. Accordingly
the parties agreed that it was no longer possible to enforce Clause 19 of the
2004 Agreement and the Arbitrator has made an interim finding to that effect.
However, the transaction cannot be unwound.
As a result of this ruling, the Consortium now bears the onus of proving the
extent (if any) to which Mvela Resources has been enriched by the transaction.
In practise this requires that the amount (if any) which may be due under Clause
19 be calculated by reference to the Final Feasibility Study and the other
valuation terms as set out in Clause 19.
Johannesburg
17 February 2009
Sponsor
JP Morgan Equities
Date: 17/09/2009 12:13:58 Produced by the JSE SENS Department.
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