| Thu 29 Oct 2009, 9:57 | | CZA - Coal of Africa Limited - Coal announces proposed cash placing to raise |
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CZA
CZA
CZA - Coal of Africa Limited - Coal announces proposed cash placing to raise
up to approximately GBP59.6 M
Coal of Africa Limited
(previously, "GVM Metals Limited")
(Incorporated and registered in Australia)
(Registration number ABN 008 905 388)
JSE/ASX/AIM Share code: CZA
ISIN AU000000CZA6
("CoAL" or the "Company")
THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION,
RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED
STATES, CANADA, OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO MAY
CONSTITUTE A VIOLATION OF THE RELEVANT SECURITIES LAWS OF SUCH JURISDICTION
Neither this announcement nor any part of it constitutes an offer to sell or
issue or the solicitation of an offer to buy, subscribe or acquire any new
Ordinary Shares in any jurisdiction in which any such offer or solicitation
would be unlawful and the information contained herein is not for
publication or distribution, directly or indirectly, in or into the United
States, Canada, Japan or any jurisdiction in which such publication or
distribution would be unlawful.
COAL ANNOUNCES PROPOSED CASH PLACING TO RAISE UP TO APPROXIMATELY GBP59.6 M
CoAL continues its strategy of focusing on the acquisition, exploration and
development of thermal and metallurgical coal projects in South Africa. CoAL
announces today its proposed cash placing to raise up to approximately
GBP59.6m (the "Placing") and the proposed conditional acquisition of NuCoal
Mining (Pty) Limited ("NuCoal") for ZAR650m (the "Acquisition"). In
addition, CoAL announces its intention to seek admission to the Official
List of the UK Listing Authority and to trading on the Main Market of the
London Stock Exchange
HIGHLIGHTS
The proposed placing by CoAL of new ordinary shares (the "Placing Shares")
will be to institutional investors to raise up to GBP59.6m (before
expenses). Under the Placing, up to 59,867,731 new ordinary shares are
available to be placed representing approximately 14.52% of CoAL`s existing
issued Ordinary Shares. J.P. Morgan Cazenove Limited ("JPMC") is acting as
Global Co-ordinator and Sole Bookrunner, Evolution Securities Limited
("Evolution") is acting as joint lead manager and Mirabaud Securities LLP
("Mirabaud") is acting as co-lead manager (together, the "Managers").
The Company intends to use the net proceeds of the Placing to fund the
Acquisition, with the remainder being used for some or all of the following:
to increase logistics capacity (including the first instalment of capital
required to effect wagon acquisitions from Transnet Freight Rail), to
accelerate capital expenditure at the Vele and Makhado projects, to pursue
other smaller, opportunistic bolt on acquisitions of coal projects, and for
general working capital requirements. In the event that the Acquisition does
not complete, CoAL envisages using the proceeds to accelerate expansion of
logistic facilities at the Matola Terminal and Maputo port, for alternative
acquisitions and for general working capital.
CoAL also intends to move from the AIM Market ("AIM") and apply for a
primary listing and admission of its Ordinary Share capital to the Official
List of the UK Listing Authority and to trading on the Main Market of the
London Stock Exchange (the "LSE"). Work has commenced on the LSE listing
process and, as part of this, CoAL is currently considering changing its
country of incorporation. It is anticipated that a move to the Main Market
of the LSE as a primary listing will be concluded in H1 2010 and, upon
admission to the Main Market, CoAL`s listing on AIM would be cancelled. This
is based on the assumption that all elements of the re-domiciliation and
listing process can be satisfactorily concluded in this period.
ABOUT NUCOAL
NuCoal is a thermal coal producer with assets in South Africa in close
proximity to CoAL`s Mooiplaats mine. NuCoal`s Woestalleen Colliery, which
produces 2.5Mtpa of saleable coal for domestic and export markets, has off-
take contracts in place. NuCoal has two beneficiation plants, one fully
operational mine as well as one re-entering production in Q4 2009 and three
planned to commence production in 2010 (2) and 2013 (1).
The Acquisition, if completed, will transform CoAL into a multiple project
producer by adding five existing and future mining operations. The resultant
raising of CoAL`s profile may facilitate negotiating leverage with
suppliers, service providers, customers and authorities as CoAL becomes a
producer of scale. Additionally, there is potential to realise synergies
through blending the NuCoal product with Mooiplaats` product and through
transporting NuCoal`s product via CoAL`s rail and port capacity. NuCoal also
has a strong operational management team in place and CoAL intends to retain
key personnel.
Commenting on today`s announcement, Simon Farrell, Managing Director of CoAL
said:
"Today`s proposed placing and acquisition further underpin CoAL`s track
record in building a high quality mid-tier thermal and coking coal business.
The Company already benefits from a sizeable resource base, carefully
considered logistics and a high quality and supportive investor base
including its proposed off-take partners. The proposed acquisition of NuCoal
would, once completed, transform CoAL into a multi-site producer, well
placed to take advantage of the current strength in, and attractive outlook
for, global coal markets. Recognising the growing size of the Company and
its mining assets, its predominantly London focussed institutional investor
base and share trading liquidity, a move to the Main Market of the LSE
represents the logical next step in CoAL`s exciting development trajectory."
This summary should be read in conjunction with the full text of the
following announcement.
ANALYST PRESENTATION
Coal of Africa Ltd will be holding an analyst presentation today at 10.30am
prompt, at The Walbrook Club, 37a Walbrook, London, EC4N 8BS. If you would
like to attend, please contact Jos Simson on 0207 429 6603 or
jos@conduitpr.com.
A teleconference facility will also be available to dial into the conference
call today at 10:30am (GMT).
Details to access the conference call are as follows:
The Dial-in number in the UK will be: 0800 358 2705
Elsewhere, the Dial-in number will be: 0044 (0) 20 8609 0205
The Conference ID in all cases will be: 252058#
A copy of the presentation is available on the company`s website:
www.coalofafrica.com
CONTACTS
CoAL
Simon Farrell Tel: +61 (0) 417 985 383
Blair Sergeant Tel: +27 (0) 11 785 4518
J.P. Morgan Cazenove Tel: +44 (0) 20 7588 2828
Verne Grinstead
Neil Passmore
Evolution Securities Tel: +44 (0) 20 7071 4300
Simon Edwards
Chris Sim
Macquarie First South Advisers Tel: +27 (0) 11 583 2000
Melanie de Nysschen
Azure Capital Tel: +61 (0) 8 6263 0888
Geoff Ward
Ryan Rockwood
Conduit PR Tel: +44 (0) 20 7429 6603
Jos Simson
Leesa Peters
QUOTE
PROPOSED PLACING OF APPROXIMATELY GBP59.6M.
PROPOSED ACQUISITION OF NUCOAL FOR ZAR650M.
INTENTION TO MOVE TO THE OFFICIAL LIST OF THE UK LISTING AUTHORITY AND TO
THE MAIN MARKET OF THE LONDON STOCK EXCHANGE
1. INTRODUCTION
CoAL today announces its intention to raise up to approximately GBP59.6m
(before expenses based on yesterday`s closing share price of 99.5 pence) by
way of a placing of the Placing Shares. Under the Placing, up to 59,867,731
new ordinary shares are available to be placed, representing up to
approximately 14.52% of CoAL`s existing issued share capital. The proposed
issue of the Placing Shares will be at a price established through an
institutional bookbuilding process.
2. BACKGROUND TO AND REASONS FOR THE ACQUISITION
The Company has developed a reputation for successfully developing assets
within budget through the railing and sale of first coal from the Mooiplaats
project, which was acquired in 2007. CoAL has an attractive portfolio of
producing and development stage coking and thermal coal assets, suitable for
both domestic and export markets. In parallel with the development of its
mining operations and core assets, the Company has remained cognisant of the
importance of logistics, securing considerable supporting rail and port
capacity allocations to ensure production can be exported when required.
Whilst focussing on its existing asset portfolio, the CoAL management team
has also continually assessed complementary acquisition opportunities. As
part of this process, NuCoal was identified as having assets close to CoAL`s
with a similar logistical profile, both of which could improve significantly
by combination with CoAL. As part of the discussions with NuCoal management,
CoAL made available its rail and port logistical arrangements to NuCoal and
an exclusive option agreement for CoAL to acquire 100% of NuCoal was signed
on 21 August 2009. Detailed due diligence is ongoing. An agreement for the
acquisition of NuCoal was signed on 29 October 2009. Further details of the
acquisition are set out below.
CoAL`s Board of Directors believes the proposed acquisition of NuCoal will
strengthen the Company`s position as a multiple project South African coal
producer and will further enhance the Company`s significant growth profile,
delivering strong returns for shareholders in the medium to long term.
3. INFORMATION ON NUCOAL
NuCoal is a thermal coal producer with assets in South Africa in close
proximity to CoAL`s Mooiplaats mine. NuCoal`s Woestalleen Colliery, which in
the year ended 30 June 2009 produced 2.5Mt of saleable coal, produces
saleable coal for domestic and export markets, with some off-take contracts
in place. NuCoal has two beneficiation plants with a capacity, when fully
operational, of 4.2Mtpa, one fully operational mine as well as one re-
entering production in Q4 2009 and three entering production in 2010 (2) and
2013 (1). NuCoal`s fully operational mine is 49% owned by NuCoal although
NuCoal has 100% effective economic control through a life of mine management
contract.
The Woestalleen Colliery and plant produces at an average free-on-rail
("FOR") cost of approximately ZAR343/t, with 1.8Mt of saleable washed coal
being processed during the year ended 30 June 2009. The capacity of the
plant doubled in 2008 which allowed NuCoal to process some of the additional
run-of-mine ("ROM") tonnes generated by the now fully operational and
captive mine, Zonnebloem, which came into production in August 2008. This,
coupled with production from Klipbank, which came online in September 2007,
meant that bought-in tonnes were nil in the year ended 30 June 2009. The
increase in capacity and hence saleable tonnes, coupled with increases in
the revenue per saleable tonne has seen revenue increase by 94% and 214% in
year ended 30 June 2008 and year ended 30 June 2009 respectively.
Zonnebloem, with mining costs of approximately ZAR130/t, will continue to be
the major mine that provides ROM production to Woestalleen with anticipated
production in the current financial year of 3.3Mt. Zonnebloem produced 2.5Mt
in the year ended 30 June 2009 with a wash yield of 63%.
NuCoal also has three projects which are anticipated to come online in Q4
2009 (1) and 2010 (2); namely Opgoedenhoop (opencast and underground),
Klipbank (opencast and underground), (Klipbank complex); Hartogshoop; and
Klipfontein.
It is proposed that the board of NuCoal will resign in their capacity as
directors on completion of the acquisition but key operational staff are
expected to stay on including Chief Operating Officer, Paul Erskine, who has
been responsible for much of NuCoal`s development.
Additionally, as part of the Acquisition, CoAL intends to enter into a fixed
price hedging contract over all of NuCoal`s non-contracted saleable coal in
2010 and over a proportion in 2011 and 2012 to underpin the acquisition
cost.
INCOME STATEMENT OF NUCOAL 1,2
Rands in 000s Year ended Year ended Year ended
30 June 30 June 2008 30 June 2009
2007 Actual Actual
Pro forma
Revenue 158,178 306,078 961,422
Cost of sales (120,637) (165,890) (385,202)
Gross profit 37,541 140,188 576,220
Other income (6,638) (5,932) (5,658)
Operating expenses (28,339) (64,088) (371,498)
EBITDA 2,564 70,168 199,064
Depreciation (10,704) (21,686) (41,183)
EBIT (8,140) 48,482 157,881
Net finance costs (2,668) (13,815) (20,013)
Profit before tax (10,808) 34,667 137,868
Tax 2,125 9,649 (3,080)
Profit after tax (8,653) 25,018 134,788
Key performance indicators
Revenue growth - 93.5% 214.1%
ROM tonnesCubed 1,078,581 1,538,990 3,507,607
Sales tonnes 895,111 1,297,932 2,502,787
Revenue (R/sales t) 177 236 384
Mining cost (R/ ROMt) 69 64 77
Gross profit (%) 23.7% 45.8% 59.9%
Operating expense as % of 17.9% 20.9% 38.6%
revenue
EBITDA % 1.6% 22.9% 20.7%
EBIT % (5.1)% 15.8% 16.4%
1 Source: Unaudited NuCoal management information
2 These figures exclude the results of Khanyisa Colliery, conditionally
disposed of in July 2009
3 Includes ROM tonnes and bought in ROM tonnes
BALANCE SHEET OVERVIEW OF NUCOAL 1,2
Rands in 000s Year ended Year ended Year ended
30 June 30 June 2008 30 June 2009
2007 Actual Actual
Actual
Property, plant and 14,949 73,215 94,652
equipment
Intangible assets 25,624 41,093 51,876
Investments in 43,000 25,873 88,282
subsidiaries
Loans and receivables 16,039 81,635 102,274
Deferred tax asset 8,021 - -
Total fixed assets 107,634 221,816 337,084
Inventories 2,728 5,776 38,413
Trade and other 10,362 33,313 60,896
receivables
Trade and other payables (16,036) (39,614) (103,230)
Working capital (2,946) (525) (3,921)
Provisions (513) (868) (1,700)
Trading capital employed 104,175 220,423 331,463
Debt items (91,617) (184,010) (239,724)
Cash and cash equivalents 4,995 (1,863) 54,863
Net assets 17,553 34,550 146,557
Share capital - - -
Retained income 17,552 34,550 146,557
Total equity 17,552 34,550 146,557
Key performance
indicators
Inventory days (based on 23 9 21
CoS)
Debtors days (based on 26 24 17
revenue)
Creditors days (based on (39) (60) (64)
CoS)
Net working capital days 10 (26) (26)
1 Source: Unaudited NuCoal management information
2 These figures exclude the results of Khanyisa Colliery, conditionally
disposed of in July 2009
4. PRINCIPAL TERMS OF THE ACQUISITION
CoAL has agreed to purchase NuCoal for ZAR650m, subject to the satisfaction
of suspensive conditions prior to 31 March 2010. These conditions
include conditions which are administrative in nature and the responsibility
of the current shareholders of NuCoal and relate to streamlining the legal
and ownership structure of NuCoal in order to affect the transfer of NuCoal
to the Company in an effective and efficient manner. Other conditions
include some which relate to the acquisition by NuCoal of certain mineral
interests
and the resolution of certain issues arising in the due diligence exercise
to the satisfaction of CoAL. Certain regulatory approvals are also required
to be obtained as part of this process. NuCoal`s shareholders and the
relevant regulatory authorities are currently progressing matters in order
to satisfy these conditions. In addition, the transaction remains subject
to satisfactory completion of CoAL`s due diligence. CoAL`s Board of
Directors has engaged external legal, accounting, technical and
taxation advisors who are conducting due diligence reviews in relation
to NuCoal. Findings from these reviews will be tabled to the Board, which
will make a final resolution to proceed with the acquisition of NuCoal upon
(and assuming) satisfactory conclusions.
Satisfaction of the suspensive conditions is expected by 31 March 2010. Many
of the conditions should be fulfilled before this date. However, the
consent required from South Africa`s Minister of Mineral Resources for
the change in ownership of NuCoal is anticipated to be the longest lead
time suspensive condition. Following this, the purchase consideration of
ZAR650m less an escrow amount of ZAR130m (being 20% of the
purchase consideration) shall be payable by CoAL to NuCoal`s shareholders
in cash. In order to provide CoAL with recourse for any breach of certain
key representations and warranties which NuCoal`s shareholders will provide
to CoAL pursuant to the transaction, CoAL will withhold the escrow amount
over a period of one year, releasing the balance of the purchase price
to NuCoal`s shareholders on the first anniversary of the closing date should
no claims be made.
Risk factors in relation to the Company and the NuCoal acquisition are set
out in Appendix B.
5. INFORMATION ON THE PLACING
5.1 Use of Proceeds.
The net proceeds of the Placing will be used to fund the ZAR650m
Acquisition with the remainder being used for some or all of the following:
to increase logistics capacity (including the first instalment of
capital required to effect wagon acquisitions from Transnet Freight Rail),
to accelerate capex at the Vele and Makhado projects, to pursue other
smaller, opportunistic bolt on acquisitions of coal projects, and for
general working capital requirements.
In the event that the Acquisition does not complete, CoAL envisages using
those proceeds earmarked for the Acquisition to accelerate expansion of
logistic facilities at the Matola Terminal and Maputo port, for
alternative acquisitions and for general working capital.
5.2 Details of the Placing Including Bookbuild and Settlement
It is proposed that the Placing will be undertaken by the placing of
new ordinary shares with institutional investors. Under the Placing, up
to 59,867,731 new ordinary shares are available to be placed. The proposed
issue of the Placing Shares will take place at a set price which will
be established through an institutional bookbuilding process.
JPMC is acting as Global Co-ordinator and Sole Bookrunner, Evolution is
acting as joint lead manager and Mirabaud is acting as co-lead manager.
The Placing will take place in accordance with and subject to the terms
and conditions set out in Appendix A of this announcement.
Participation in the bookbuild will only be available to persons who are
invited to participate by the Managers. To enter a bid into the
bookbuilding process, institutional investors will be required to
communicate their bid to JPMC, Evolution or Mirabaud, specifying the number
of Placing Shares which they wish to subscribe for and any price limit to
which their offer to participate is subject. The Placing Price will
ultimately be agreed by the Company and JPMC following closure of the
book. Institutions participating in the Placing will receive the Placing
Shares subject to the satisfaction of the conditions contained in, and the
non-termination of, the Placing Agreement. It is expected that the books
will close no later than 4:30p.m. (London time) on 29 October 2009 but may
be closed earlier or later at the discretion of the Company and JPMC.
An announcement detailing the Placing Price and the proceeds to be received
from the Placing will be made as soon as practicable after the close of
the bookbuilding process.
When admitted, the Placing Shares will be credited as fully paid and will
rank pari passu in all respects with the existing Ordinary Shares, including
the right to receive all dividends and other distributions declared, made
or paid after the date of their issue. Application will be made for the
Placing Shares to be admitted to trading on AIM, ASX and JSE.
It is currently expected that settlement for the Placing Shares through
CREST
as well as admission to trading on AIM will take place on 3 November 2009.
It
is expected that settlement for the Placing Shares being settled through
either CHESS or Strate, and admission to trading on each of the ASX and the
JSE,
is anticipated to take place on 5 November 2009.
Full details of the terms and conditions of the Placing are set out in
Appendix A to this announcement. Placees participating in the Placing will
be deemed to have read and understood the full terms and conditions relating
to the Placing set out in this announcement (including the Appendices to
this announcement) and to be participating on the basis that they accept
these terms and conditions in full.
5.3 Placing Authority
CoAL has a placement capacity to issue up to 59,867,731 new shares
representing up to 14.52% of its existing issued share capital.
6. ANNOUNCEMENT OF INTENTION TO SEEK A PRIMARY LISTING ON THE OFFICIAL LIST
OF THE UK LISTING AUTHORITY
CoAL intends to move from AIM and apply for a primary listing and admission
of its Ordinary Share capital to the Official List of the UK Listing
Authority and to trading on the Main Market of the LSE. Work has commenced
on the
LSE listing process and, as part of this, CoAL is currently considering
changing its country of incorporation. It is anticipated that a move to the
Main Market of the LSE as a primary listing will be concluded in H1 2010
and, upon admission to the Main Market, CoAL`s listing on AIM would be
cancelled. This is based on the assumption that all elements of the re-
domiciliation and listing process can be satisfactorily concluded in this
period. The Company has appointed advisers in this regard and will keep
shareholders informed as to progress.
Resource Estimation:
Resource estimations relating to the Company have been compiled, according
to the JORC and SAMREC codes, by Mr John Sparrow (Member of the South
African Council of Natural Science Professions ("SACNASP") 400109/03),
an independent geological and technical consultant with 26 years experience
in the Southern African and Australian regions. Mr Sparrow has sufficient
experience relevant to the assessment of this style of mineralization to
qualify as a Competent Person as defined in the JORC Code and has compiled
a number of Competent Person`s reports for various organisations for the
JSE, ASX and Toronto Stock Exchange. Mr Sparrow consents to the inclusion of
the information in this announcement in the form and context in which
it appears. The JORC Code is the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves and SAMREC is the
South African Code for the Reporting of Mineral Resources and Mineral
Reserves.
Information on NuCoal
The information on NuCoal has been provided by NuCoal`s management or is
taken from publicly available sources and has not been independently checked
or legally verified. To the fullest extent permitted by law, no
representation or warranty, express of implied, is given by or on behalf of
the Company as to the accuracy or completeness of the information.
IMPORTANT NOTICE
THE INFORMATION IN THIS PRESS RELEASE IS NOT FOR RELEASE, PUBLICATION
OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,
CANADA, JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION
OF THE RELEVANT LAWS OF SUCH JURISDICTION.
This announcement has been issued by and is the sole responsibility of
the Company. No representation or warranty, express or implied, is or will
be made as to, or in relation to, and no responsibility or liability is or
will be accepted by J.P. Morgan Cazenove Limited, Evolution Securities
Limited or Mirabaud Securities LLP or by any of their respective affiliates
or agents as to or in relation to, the accuracy or completeness of
this announcement or any other written or oral information made available to
or publicly available to any interested party or its advisers, and any
liability therefore is expressly disclaimed.
J.P. Morgan Cazenove is acting as Global Co-ordinator and Sole
Bookrunner , Evolution Securities Limited is acting as joint lead manager
and Mirabaud Securities LLP is acting as co-lead manager in connection with
the Placing. J.P. Morgan Cazenove Limited, Evolution Securities Limited
and Mirabaud Securities LLP, which are authorised and regulated by the
Financial Services Authority are acting for the Company in connection with
the Placing and no-one else and none of J.P. Morgan Cazenove Limited,
Evolution Securities Limited nor Mirabaud Securities LLP will be responsible
to anyone other than the Company for providing the protections afforded
to clients of J.P. Morgan Cazenove Limited, Evolution Securities Limited
and Mirabaud Securities LLP respectively nor for providing advice in
relation
to the Placing or any other matter referred to herein.
The distribution of this announcement and the Placing of the Placing Shares
in certain jurisdictions may be restricted by law. No action has been taken
by the Company, J.P. Morgan Cazenove or Evolution Securities Limited or
Mirabaud Securities LLP that would permit an offering of such shares
or possession or distribution of this announcement or any other offering
or publicity material relating to such shares in any jurisdiction where
action for that purpose is required. Persons into whose possession
this announcement comes are required by the Company, J.P. Morgan
Cazenove Limited, Evolution Securities Limited and Mirabaud Securities
LLP to inform themselves about, and to observe, such restrictions.
The information in this press release shall not constitute an offer to sell
or the solicitation of an offer to buy, nor shall there be any sale of,
the securities referred to herein in any jurisdiction in which such
offer, solicitation or sale would require preparation of further
prospectuses
or other offer documentation, or be unlawful prior to registration,
exemption from registration or qualification under the securities laws of
any such jurisdiction.
No public offer of securities of the Company is being made in Australia,
the United Kingdom, the United States, the Republic of South Africa
or elsewhere. The information in this press release does not constitute or
form a part of any offer or solicitation to purchase or subscribe for
securities in the United States. The securities mentioned herein have not
been, and will not be, registered under the United States Securities Act of
1933 (the "Securities Act"). The securities mentioned herein may not be
offered or sold in the United States except pursuant to an exemption from
the registration requirements of the Securities Act. There will be no
public offer of securities in the United States.
The information in this press release may not be forwarded or distributed to
any other person and may not be reproduced in any manner whatsoever.
Any forwarding, distribution, reproduction, or disclosure of this
information
in whole or in part is unauthorised. Failure to comply with this directive
may result in a violation of the Securities Act or the applicable laws of
other jurisdictions.
APPENDIX A
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY
OR INDIRECTLY IN OR INTO CANADA OR JAPAN OR ANY OTHER JURISDICTION IN OR
INTO WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION IS UNLAWFUL.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING.
THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR
INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER
STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS WITHIN
THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE
(DIRECTIVE 2003/71/EC) ("QUALIFIED INVESTORS"); (B) IN THE UNITED
KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE
PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING
WITHIN ARTICLE 19(1) OF THE UNITED KINGDOM FINANCIAL SERVICES AND MARKETS
ACT, 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); OR (II) ARE
PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH
COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; (C) IN
AUSTRALIA, PERSONS TO WHOM AN OFFER OF SECURITIES MAY BE MADE UNDER
SECTION 708(8) OR 708(11) OF THE AUSTRALIAN CORPORATIONS ACT; (D) IN
SOUTH AFRICA, THOSE PERSONS ENVISAGED UNDER AN OFFER DETAILED IN SECTION
144(b) OF THE SOUTH AFRICAN COMPANIES ACT NO 61 OF 1973; OR (E) PERSONS TO
WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER
BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS
AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS
WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO
WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES
IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH
RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR
SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
Persons who are invited to and who choose to participate in the Placing,
by making an oral or written offer to subscribe for Placing Shares
(the "Placees"), will be deemed to have read and understood this
Announcement, including this Appendix, in its entirety and to be making
such offer on the terms and conditions, and to be providing the
representations, warranties, acknowledgements, undertakings and
agreements contained in
this Appendix. In particular, each such Placee represents, warrants
and acknowledges that it is a Relevant Person (as defined above) and
undertakes that it will acquire, hold, manage or dispose of any Placing
Shares that are allocated to it for the purposes of its business. In
addition, Placees located in certain jurisdictions will be required to
execute investor letters in a form provided.
This Announcement does not constitute an offer, and may not be used
in connection with an offer, to sell or issue or the solicitation of an
offer
to buy or subscribe for Placing Shares in any jurisdiction in which such
offer or solicitation is or may be unauthorised or unlawful. This
Announcement and the information contained herein is not for publication
or distribution, directly or indirectly, to persons in Canada or Japan or in
any jurisdiction in which such publication or distribution is unlawful.
Persons into whose possession this Announcement may come are required by
the Company to inform themselves about and to observe any restrictions
of transfer of this Announcement. No public offer of securities of the
Company is being made in Australia, the United Kingdom, the United States,
the Republic of South Africa or elsewhere.
In particular, the Placing Shares referred to in this Announcement have not
been and will not be registered under the Securities Act or the laws of
any state and may not be offered, sold, pledged or otherwise transferred
within the United States except pursuant to an exemption from, or as part
of a transaction not subject to, the registration requirements of the
Securities Act and applicable state laws.
The relevant clearances have not been, and nor will they be, obtained from
the securities commission of any province or territory of Canada; no
prospectus has been lodged with or registered by the ASIC or the
Japanese Ministry of Finance; and the Placing Shares have not been, and nor
will they be, registered under or offered in compliance with the securities
laws of any state, province or territory of Canada or Japan. Accordingly,
the Placing Shares may not (unless an exemption under the relevant
securities laws is applicable) be offered, sold, resold or delivered,
directly or indirectly, in or into Canada, Australia or Japan or any
other jurisdiction outside the United Kingdom.
The Placing Shares have not been approved or disapproved by the US
Securities and Exchange Commission, any State securities commission or
other regulatory authority in the United States, nor have any of the
foregoing authorities passed upon or endorsed the merits of the Placing
or the accuracy or adequacy of this Announcement. Any representation to
the contrary is a criminal offence in the United States.
Persons (including, without limitation, nominees and trustees) who
have a contractual or other legal obligation to forward a copy of this
Appendix or the announcement of which it forms part should seek
appropriate advice before taking any action.
NOTICE TO AUSTRALIAN RESIDENTS
This announcement is not a prospectus for the purposes of the
Australian Corporations Act and may not contain all of the information
that an Australian investor may find in a prospectus prepared in accordance
with the Australian Corporations Act which may be required in order to make
an informed investment decision regarding, or about the rights attaching
to, Placing Shares. As no prospectus will be lodged with ASIC or
otherwise prepared in accordance with the Australian Corporations Act in
respect of the Placing, the Placing Shares will only be offered or issued
to persons in Australia to whom an offer of shares for issue may be made
without a prospectus under Part 6D.2 of the Australian Corporations Act
or to persons outside Australia in accordance with the laws of any
other applicable jurisdiction. If you are located in Australia, you confirm
and warrant that you are a person to whom an offer of securities may be
made under section 708(8) or section 708(11) of the Australian Corporations
Act such that any offer or invitation to you does not require a prospectus
or other form of disclosure document under the Australian Corporations Act
and you agree that you will not offer to sell the Placing Shares to any
person that is not a sophisticated or professional investor under section
708(8) or section 708(11) of the Australian Corporations Act until the day
after a notice is lodged by the Company with the ASX that complies
with subsections 708A(5)(e) and (6) of the Australian Corporations Act.
NOTICE TO SOUTH AFRICAN RESIDENTS
This document is not a prospectus and is not to be construed as an offer
to the public in terms of the South African Companies Act No 61 of 1973.
NOTICE TO UK RESIDENTS
This Announcement is not a prospectus for the purposes of the Prospectus
Rules published by the UK Financial Services Authority ("FSA") and has not
been approved by, or filed with, the FSA. This Announcement contains no
offer
to the public within the meaning of Section 102B of the United Kingdom
Financial Services and Markets Act, 2000, the United Kingdom Companies Act,
2006 or otherwise.
NOTICE TO US RESIDENTS
THIS ANNOUNCEMENT MAY ONLY BE DISTRIBUTED (I) OUTSIDE THE UNITED STATES OR
(II) WITHIN THE UNITED STATES TO PERSONS WHO ARE ACCREDITED INVESTORS AND
WHO ARE ALSO QIBs. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF
THIS ANNOUNCEMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY
WITH THIS NOTICE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR
THE APPLICABLE LAWS OF OTHER JURISDICTIONS.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR
OTHER JURISDICTION OF THE UNITED STATES AND ARE BEING OFFERED SOLELY (1)
OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S OR (II) WITHIN THE
UNITED STATES TO PERSONS WHO ARE ACCREDITED INVESTORS WHO ARE ALSO QIBs
IN RELIANCE ON RULE 144A OR ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES.
Placees of the Placing Shares who are located in the US will be required to
make certain acknowledgements, representations, warranties and
agreements, contained in an investor letter, which letter shall contain,
among other things, an agreement not to reoffer, resell, pledge or
otherwise transfer the Placing Shares except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of
the Securities Act and in compliance with any State securities laws.
Passive Foreign Investment Company
No determination has been made as to whether or not the Company may be
treated as a "passive foreign investment company" ("PFIC") for U.S.
federal income tax purposes and there is a risk that the Company will be
treated as such. The Company will be treated as a PFIC if 75 percent or
more
of its gross income in a taxable year, including its pro rata share of the
gross income of any corporation in which it is considered to own, directly
or indirectly, 25 percent or more of the shares by value, is passive income
(as defined for U.S. federal income tax purposes). Alternatively, the
Company will be treated as a PFIC if at least 50 percent of the value of
its assets (within the meaning of the PFIC rules) in a taxable year,
averaged over the year, including its pro rata share of the value of
assets (within the meaning of the PFIC rules) of any corporation in which
it is considered to own 25 percent or more of the shares by value, are held
for the production of, or produce, passive income (as defined for U.S.
federal income tax purposes). If the Company is a PFIC, U.S. holders
(as defined below) of the Ordinary Shares may be subject to a number
of detrimental U.S. federal tax consequences, including but not limited
to accelerated recognition of income regardless of the timing of
distributions, interest charges on deferred income, recharacterisation of
gain on
the disposition of the Ordinary Shares as ordinary income, the denial of
any step-up in basis of the Ordinary Shares upon the death of a U.S.
holder, and the ineligibility of distributions for taxation at the
long-term capital gains rate as "qualified dividend income." Specifically,
if the Company were to be treated as a PFIC for any taxable year, a U.S.
holder would be required to allocate rateably over such U.S. holder`s
holding period any "excess distributions" received (i.e., the portion
of any distributions received on the Ordinary Shares in a taxable year in
excess of 125% of certain average historic annual distributions) and any
gain realized on the sale, exchange or other disposition of our Shares.
The amount allocated to the current taxable year would be subject to
U.S. federal income tax as ordinary income and the amount allocated to each
of the other taxable years would be subject to tax at the highest rate of
tax in effect for the applicable class of taxpayer for that year. An
interest charge for the deemed deferral benefit would be imposed with
respect
to the resulting tax attributable to each such other taxable year.
For this purpose a "U.S. holder" is a beneficial owner of Ordinary Shares
that is a United States person within the meaning of Section 7701(a)(30) of
the Internal Revenue Code and which includes an individual citizen or
resident (as determined for U.S. federal income tax purposes), a corporation
or other entity organized under the laws of the United States or any of
its political subdivisions and classified as a corporation for U.S.
federal income tax purposes, an estate the income of which is subject to
U.S. federal income taxation regardless of its source, or a trust if a
court within the United States is able to exercise primary jurisdiction over
the administration of the trust and one or more U.S. persons have the
authority to control all substantial decisions of the trust. Persons who
hold Ordinary Shares through one or more partnerships, trusts, estates or
other entities should consult with their own tax advisers as to how
the PFIC rules may apply to them.
The Company has not undertaken any analysis as to whether it is a PFIC for
U.S. federal income tax purposes. PFIC status is determined annually after
the close of the year in question. The Company makes no assurance that it
is not currently a PFIC, that it will not become a PFIC in the future, that
if it becomes a PFIC it will have timely knowledge or notify U.S. holders
of such, or that it will provide U.S. holders with information necessary
for such holders to make filings or elections in response to its PFIC
status (which elections might mitigate certain of the adverse U.S.
federal income tax consequences described above). The U.S. federal income
tax provisions regarding PFICs are very complex and are affected by
various factors in addition to those described above. U.S. holders of
Ordinary Shares are strongly encouraged to consult with their own tax
advisors about the PFIC rules in connection with purchasing,
holding, or disposing of Ordinary Shares.
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENCE HAS BEEN FILED UNDER CHAPTER 421 B OF THE NEW HAMPSHIRE REVISED
STATUTES ("RSA") WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A
SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE
OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE
OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421 B IS TRUE,
COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT
THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A
TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY
UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL
TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE
TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY
REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
DETAILS OF THE PLACING AGREEMENT AND THE PLACING SHARES
The Managers have entered into the Placing Agreement with the Company
under which the Managers have severally (and not jointly or jointly
and severally), on the terms and subject to the conditions set out
therein, undertaken to use their reasonable endeavours to procure
subscribers for the Placing Shares at the Placing Price.
The Placing Shares will, when issued, be credited as fully paid and will
rank pari passu in all respects with the existing issued Ordinary
Shares including the right to receive all dividends and other
distributions declared made or paid after the date of issue.
In this Appendix, unless the context otherwise requires, Placee means a
Relevant Person (including individuals, funds or others) on whose
behalf a commitment to subscribe for Placing Shares has been given.
APPLICATION FOR LISTING AND ADMISSION TO TRADING
Application will be made to the London Stock Exchange for admission to
trading of the Placing Shares to AIM. It is expected that Admission on AIM
will become effective and that dealings on AIM in the Placing Shares
will commence at 8.00 a.m. (London time) on 3 November 2009.
Application will be made to the ASX for quotation of the Placing Shares
on the ASX as soon as reasonably practicable following the issue of the
Placing Shares. It is expected that dealings on the ASX in the Placing
Shares will commence at 8.00 a.m. (Sydney time) on 5 November 2009.
Application will be made to the JSE for the Placing Shares to be
listed and admitted to trading on the Main Board of the JSE. It is expected
that admission will become effective and that dealings on the JSE in the
Placing Shares will commence at 9.00 a.m. (Johannesburg time) on 5
November 2009.
BOOKBUILD
The Managers will today commence an accelerated bookbuilding process in
respect to the Placing (the "Bookbuild") to determine demand for
participation in the Placing by Placees. This Appendix gives details
of the terms and conditions of, and the mechanics of participation
in, the Placing. No commissions will be paid to Placees or by
Placees in respect of any Placing Shares.
The Managers and the Company shall be entitled to effect the Placing
by such alternative method to the Bookbuild as they may, in their
sole discretion, determine.
Participation in, and principal terms of, the Placing
1 JPMC is acting as sole Bookrunner and as an agent of the Company.
Evolution is acting as joint lead Manager and Mirabaud is acting as co-lead
Manager, both as agents of the Company.
2 Participation in the Placing will only be available to persons who may
lawfully be, and are, invited to participate by the Managers. The Managers
and their respective affiliates or their respective agents are entitled to
enter bids as principal in the Bookbuild.
3 The Bookbuild will establish a single price in pounds sterling. An
Australian Dollar and a South African Rand price will be determined from
that pounds sterling price at an exchange rate to be determined at the sole
discretion of the Bookrunner. When submitting bids, Placees will be entitled
to choose whether they wish to settle in pounds sterling or Australian
Dollar or South African Rand, in each case payable to the Managers by all
Placees whose bids are successful (the "Placing Price"). The Placing Price
and the aggregate proceeds to be raised through the Placing will be agreed
between the Bookrunner and the Company following completion of the
Bookbuild. The Placing Price will be announced on a Regulatory Information
Service following the completion of the Bookbuild (the "Pricing
Announcement").
4 To bid in the Bookbuild, Placees should communicate their bid by
telephone to their usual sales contact at the Managers (the "Relevant
Manager"). Each bid should state the number of Placing Shares for which the
prospective Placee wishes to subscribe at either the pounds sterling,
Australian Dollar or South African Rand Placing Price, which is ultimately
established by the Company and the Bookrunner, or at prices in pounds
sterling, Australian Dollars or South African Rand up to a price limit in
pounds sterling, Australian Dollars or South African Rand specified in its
bid. Bids may be scaled down by the Bookrunner on the basis referred to in
paragraph 9 below.
5 The Bookbuild is expected to close no later than 4.30 p.m. (London
time) on 29 October 2009 but may be closed earlier or later at the
discretion of the Bookrunner. The Managers may, in agreement with the
Company, accept bids that are received after the Bookbuild has closed. The
Company reserves the right to reduce or seek to increase the amount to be
raised pursuant to the Placing, in its absolute discretion.
6 Each Placee`s allocation will be confirmed to the Placee orally by the
Relevant Manager following the close of the Placing, and a conditional
contract note will be dispatched as soon as possible thereafter. The
Relevant Manager`s oral confirmation to such Placee will constitute an
irrevocable legally binding commitment upon such person (who will at that
point become a Placee) in favour of the Relevant Manager and the Company,
under which the Placee agrees to acquire the number of Placing Shares
allocated to it at the Placing Price on the terms and conditions set out in
this Appendix and in accordance with the Company`s constitution.
7 Each prospective Placee`s allocation and commitment will be evidenced
by a conditional contract note issued to such Placee by the Relevant
Manager. The terms of this Appendix will be deemed to be incorporated in
that contract note.
8 The Pricing Announcement shall detail the number of Placing Shares to
be issued and the Placing Price in pounds sterling as well as the Australian
dollar and South African Rand price derived from that pounds sterling price
at an exchange rate to be determined at the sole discretion of the
Bookrunner.
9 Subject to paragraphs 4 and 5 above, the Managers may choose to accept
bids, either in whole or in part, on the basis of allocations determined at
their discretion (in consultation with the Company) and may scale down any
bids for this purpose on such basis as it may determine. The Managers may
also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent
of the Company (i) allocate Placing Shares after the time of any initial
allocation to any person submitting a bid after that time and (ii) allocate
Placing Shares after the Bookbuild has closed to any person submitting a bid
after that time. The Managers each reserve the right not to accept bids or
to accept bids in part rather than in whole.
10 A bid in the Bookbuild will be made on the terms and subject to the
conditions in this Announcement and will be legally binding on the Placee on
behalf of which it is made and except with the Bookrunner`s consent will not
be capable of variation or revocation after the time at which it is
submitted. Each Placee will also have an immediate, separate, irrevocable
and binding obligation, owed to the Relevant Manager, to pay it (or as it
may direct) in cleared funds an amount equal to the product of the Placing
Price and the number of Placing Shares such Placee has agreed to acquire.
Each Placee`s obligations under this paragraph will be owed to the Relevant
Manager.
11 Except as required by law or regulation, no press release or other
announcement will be made by the Managers or the Company using the name of
any Placee (or its agent), in its capacity as Placee (or agent), other than
with such Placee`s prior written consent.
12 Irrespective of the time at which a Placee`s allocation pursuant to the
Placing is confirmed, settlement for all Placing Shares to be acquired
pursuant to the Placing will be required to be made at the relevant time, on
the basis explained below under "Registration and Settlement".
13 All obligations under the Bookbuild and Placing will be subject to
fulfilment of the conditions referred to below under "Conditions of the
Placing" and to the Placing not being terminated on the basis referred to
below under "Right to terminate under the Placing Agreement".
14 By participating in the Bookbuild, each Placee will agree that its
rights and obligations in respect of the Placing will terminate only in the
circumstances described below and will not be capable of rescission or
termination by the Placee.
15 To the fullest extent permissible by law, none of the Managers nor any
of their respective affiliates or agents shall have any liability to Placees
(or to any other person whether acting on behalf of a Placee or otherwise).
In particular, none of the Managers nor any of their respective affiliates
or agents shall have any liability (including to the extent permissible by
law, any fiduciary duties) in respect of the conduct of the Bookbuild
process or of such alternative method of effecting the Placing as the
Managers and the Company may agree.
16 Each prospective Placee who is purchasing the Placing Shares in the US
will be required to sign an investor letter to be provided by the Relevant
Manager.
CONDITIONS OF THE PLACING
The obligations of the Managers under the Placing Agreement in respect of
the Placing Shares are conditional on, inter alia:
(a) AIM Admission occurring not later than 8.00 a.m. (London time) on 3
November 2009 or such other date as may be agreed between the Company and
the Managers, not being later than 6 November 2009;
(b) the Company having lodged with the ASX an Appendix 3B announcement
conditional only on the issue of the Placing Shares by the business day
after the date of this Announcement (or such other date as may be agreed
between the Company and the Managers not being later than 6 November 2009);
(c) the JSE having confirmed to the Company in writing before the date of
AIM Admission (or such other date as may be agreed between the Company and
the Managers) the agreement of the JSE that the Placing Shares will be
eligible for listing on the JSE on the date of Admission (or such other date
as may be agreed between the Company and the Managers, not being later than
6 November 2009);
(d) the agreement between the Bookrunner and the Company of the Placing
Price and the number of Placing Shares to be issued as established in the
Bookbuild process;
(e) in relation to the conditional share purchase agreement between the
Company and the NuCoal Vendors regarding the acquisition by the Company of
the entire issued share capital of NuCoal Mining (Pty) Limited and its
subsidiaries there having occurred no default or breach by the Company or
any other party to the agreement of its terms and it not having been
terminated by any party by the time immediately prior to Admission;
(f) the warranties contained in the Placing Agreement being true and
accurate and not misleading on and as of the date of the Placing Agreement
and at AIM Admission as though they had been given and made on such dates by
reference to the facts and circumstances then subsisting; and
(g) in the opinion of the Bookrunner, acting in good faith, there having
been since the date of the Placing Agreement no material adverse effect (as
defined in the Placing Agreement), whether or not foreseeable at the date of
the Placing Agreement.
If (i) any of the conditions contained in the Placing Agreement in relation
to the Placing Shares are not fulfilled or waived by the Bookrunner by the
respective time or date where specified (or such later time or date as the
Company and the Bookrunner may agree), (ii) any of such conditions becomes
incapable of being fulfilled or (iii) the Placing Agreement is terminated in
the circumstances specified below, the Placing in relation to the Placing
Shares will lapse and the Placee`s rights and obligations hereunder in
relation to the Placing Shares shall cease and terminate at such time and
each Placee agrees that no claim can be made by the Placee against either
the Company or any of the Managers in respect thereof.
The Bookrunner may, in its absolute discretion and upon such terms as it
thinks fit, waive compliance by the Company with the whole or any part of
any of the Company`s obligations in relation to the conditions in the
Placing Agreement save that certain conditions, including the condition
relating to Admission taking place, may not be waived. Any such extension or
waiver will not affect Placees` commitments as set out in this Announcement.
Neither the Bookrunner nor the Company shall have any liability to any
Placee (or to any other person whether acting on behalf of a Placee or
otherwise) in respect of any decision it may make as to whether or not to
waive or to extend the time and /or date for the satisfaction of any
condition to the Placing nor for any decision they may make as to the
satisfaction of any condition or in respect of the Placing generally and by
participating in the Placing each Placee agrees that any such decision is
within the absolute discretion of the Bookrunner and the Company.
RIGHT TO TERMINATE UNDER THE PLACING AGREEMENT
The Bookrunner may, in its absolute discretion, at any time before
Admission, terminate the Placing Agreement by giving notice to the Company
in certain circumstances, including a breach of the warranties given to the
Managers in the Placing Agreement, the failure of the Company to comply with
obligations which are material in the Bookrunner`s opinion or, the
occurrence of a force majeure event which in the opinion of the Bookrunner,
is likely to prejudice the success of the Placing. Following Admission to
AIM, the Placing Agreement is not capable of rescission or termination to
the extent that it relates to the Placing or the Placing Shares.
By participating in the Placing, the Placees agree that the exercise by the
Bookrunner of any right of termination or other discretion under the Placing
Agreement shall be within the absolute discretion of the Bookrunner and the
Company and that they need not make any reference to Placees and that they
shall have no liability to Placees whatsoever in connection with any such
exercise.
NO PROSPECTUS
The Placing Shares are being offered to a limited number of specifically
invited persons only and will not be offered in such a way as to require
a prospectus in the United Kingdom, Australia, South Africa or in any
other jurisdiction. No offering document or prospectus has been or will
be submitted to be approved by the FSA, ASIC or registered in the South
African Companies and Intellectual Property Registration Office in relation
to the Placing and Placees` commitments will be made solely on the basis of
the information contained in this Announcement (including this Appendix
and Appendix 2). Each Placee, by accepting a participation in the
Placing, agrees that the content of this Announcement is exclusively
the responsibility of the Company and confirms that it has neither received
nor relied on any other information, representation, warranty, or statement
made by or on behalf of the Company or the Managers or any other person and
none of the Managers nor the Company nor any other person will be liable for
any Placee`s decision to participate in the Placing based on any
other information, representation, warranty or statement which the Placees
may have obtained or received and, if given or made, such
information, representation, warranty or statement must not be relied
upon as having been authorised by the Company, its officers or board
of directors. Each Placee acknowledges and agrees that it has relied on its
own investigation of the business, financial or other position of the
Company
in accepting a participation in the Placing, including the merits and
risks involved. The Company is not making any undertaking or warranty to
any Placee regarding the legality of an investment in the Placing Shares by
such Placee under any legal, investment or similar laws or regulations.
Each Placee should not consider any information in this Announcement to
be legal, tax or business advice. Each Placee should consult its own
attorney, tax advisor and business advisor for legal, tax and business
advice regarding an investment in the Placing Shares. Nothing in this
paragraph shall exclude the liability of any person for
fraudulent misrepresentation.
REGISTRATION AND SETTLEMENT
Settlement of transactions in the Placing Shares following Admission on
AIM, the
ASX and the JSE respectively, will take place:
- in respect of the Placing Shares to be held on the UK share register,
on a delivery versus payment basis in Depositary Interest form within CREST;
- in respect of Placing Shares to be held on the Australian share
register, on a delivery versus payment basis through CHESS; or
- in respect of Placing Shares to be held on the South African share
register, on a delivery versus payment basis in accordance with the rules of
Strate with the Bookrunner or its nominated affiliate or agent acting as
broker under the rules of Strate to manage settlement on behalf of the
Company.
The Company reserves the right to require settlement for and delivery of the
Placing Shares (or a portion thereof) to any Placee in any form it requires
if, in the Bookrunner`s opinion, delivery or settlement is not possible or
practicable within CREST, CHESS or Strate, as the case may be, or would not
be consistent with the regulatory requirements in the Placee`s jurisdiction.
Following the close of the Bookbuild for the Placing, each Placee allocated
Placing Shares in the Placing will be sent a conditional contract note
stating the number of Placing Shares to be allocated to it at the Placing
Price and settlement instructions.
Each Placee agrees that it will do all things necessary to ensure that
delivery and payment is completed in accordance with the standing CREST,
CHESS or Strate rules and regulations and settlement instructions that it
has in place with the Managers.
The Company will deliver the Placing Shares:
- in Depositary Interest form to a CREST account operated by the
Bookrunner as agent for the Company and the Bookrunner will enter its
delivery (DEL) instruction into the CREST system. The input to CREST by a
Placee of a matching or acceptance instruction will then allow delivery of
the relevant Placing Shares to that Placee against payment;
- in CHESS holdings as the Bookrunner directs in respect of the Placing
Shares which are to be allotted in uncertificated form and, in each case,
the Company will ensure that the same are enabled for settlement as soon as
practicable after Admission and in any event prior to the relevant Record
Date; or
- in Strate as the Bookrunner directs in respect of the Placing Shares
which are to be allotted in uncertificated form and, in each case, the
Company will ensure that the same are enabled for settlement as soon as
practicable after Admission and in any event prior to the relevant Record
Date.
It is expected that settlement will be on 3 November 2009 in CREST on a T+3
basis, on 5 November 2009 in CHESS on a T+3 basis and on 5 November 2009 in
Strate on a T+5 basis in each case in accordance with the instructions set
out in the conditional contract note.
Interest is chargeable daily on payments not received from Placees on the
due date in accordance with the arrangements set out above at the rate of
two percentage points above London Interbank Offered Rate as determined by
the Bookrunner.
Each Placee is deemed to agree that, if it does not comply with these
obligations, the Bookrunner may sell any or all of the Placing Shares
allocated to that Placee on such Placee`s behalf and retain from the
proceeds, for the Bookrunner`s account and benefit, an amount equal to the
aggregate amount owed by the Placee plus any interest due thereof. The
relevant Placee will, however, remain liable for any shortfall below the
aggregate amount owed by it and may be required to bear any stamp duty or
stamp duty reserve tax (together with any interest or penalties) which may
arise upon the sale of such Placing Shares on such Placee`s behalf.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees should ensure that the conditional contract note is copied and
delivered immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee`s name or that of its
nominee or in the name of any person for whom a Placee is contracting as
agent or that of a nominee for such person, such Placing Shares should,
subject as provided below, be so registered free from any liability to UK
stamp duty or stamp duty reserve tax.
REPRESENTATIONS AND WARRANTIES
By participating in the Placing each Placee (and any person acting on
such Placee`s behalf) makes the following representations,
warranties, acknowledgements, undertakings and agreements (as the case may
be) to the Company and to the Managers:
1 represents and warrants that it has read and understood this
Announcement, including the Appendices, in its entirety;
2 acknowledges that no offering document or prospectus has been prepared
in connection with the placing of the Placing Shares and represents and
warrants that it has not received a prospectus or other offering document in
connection therewith;
3 acknowledges that neither the Managers nor the Company nor any of their
affiliates or agents nor any person acting on behalf of any of them has
provided, and will not provide it, with any information or material
regarding the Placing Shares or the Company other than this Announcement;
nor has it requested any of the Managers, the Company, any of their
affiliates or agents or any person acting on behalf of any of them to
provide it with any such information or material;
4 acknowledges that the content of this Announcement is exclusively the
responsibility of the Company and that none of the Managers nor any person
acting on their respective behalf has or shall have any liability for any
information, representation or statement contained in this Announcement or
any information previously published by or on behalf of the Company and will
not be liable for any Placee`s decision to participate in the Placing based
on any information, representation or statement contained in this
Announcement, prospectus or otherwise. Each Placee further represents,
warrants and agrees that the only information on which it is entitled to
rely and on which such Placee has relied in committing itself to acquire the
Placing Shares is contained in this Announcement and any information
previously published by the Company by notification to a Regulatory
Information Service, such information being all that it deems necessary to
make an investment decision in respect of the Placing Shares and that it has
neither received nor relied on any other information given or
representations, warranties or statements made by any of the Managers or the
Company and neither the Managers nor the Company will be liable for any
Placee`s decision to accept an invitation to participate in the Placing
based on any other information, representation, warranty or statement. Each
Placee further acknowledges and agrees that it has relied on its own
investigation of the business, financial or other position of the Company in
deciding to participate in the Placing;
5 acknowledges that the Ordinary Shares are listed, admitted to trading
or quoted (as the case may be) on the ASX, AIM and the JSE and the Company
is therefore required to publish certain business and financial information
in accordance with the rules of such exchanges (collectively, the "Exchange
Information"), which includes a description of the nature of the Company`s
business and the Company`s most recent financial statements, and similar
statements for preceding financial years, and that it is able to obtain or
access the Exchange Information without undue difficulty;
6 acknowledges that neither the Managers nor any person acting on their
behalf nor any of their affiliates or agents has or shall have any liability
for the Exchange Information, any publicly available or filed information or
any representation relating to the Company, provided that nothing in this
paragraph excludes the liability of any person for fraudulent
misrepresentation made by that person;
7 acknowledges that it is not, and at the time the Placing Shares are
acquired will not, be a resident of Canada or Japan, and that the Placing
Shares have not been and will not be registered under the securities
legislation of Canada or Japan and, subject to certain exceptions, may not
be offered, sold, taken up, renounced or delivered or transferred, directly
or indirectly, within those jurisdictions;
8 unless otherwise specifically agreed with the Managers, represents and
warrants that it is, or at the time the Placing Shares are acquired that it
will be, the beneficial owner of such Placing Shares, or that the beneficial
owner of such Placing Shares is not a resident of Canada or Japan;
9 acknowledges that the Placing Shares have not been and will not be
registered under the securities legislation of Canada or Japan and, subject
to certain exceptions, may not be offered, sold, taken up, renounced or
delivered or transferred, directly or indirectly, within those
jurisdictions;
10 represents and warrants that the issue to it, or the person specified
by it for registration as holder, of Placing Shares will not give rise to a
liability under any of sections 67, 70, 93 or 96 of the Finance Act, 1986
(depositary receipts and clearance services) and that the Placing Shares are
not being acquired in connection with arrangements to issue depositary
receipts or to transfer Placing Shares into a clearance system;
11 represents and warrants that it has complied with its obligations in
connection with money laundering and terrorist financing under the United
Kingdom Proceeds of Crime Act, 2002, the United Kingdom Terrorism Act, 2003
and the United Kingdom Money Laundering Regulations, 2007 and the equivalent
Australian and South African legislation (the "Regulations") and, if making
payment on behalf of a third party, that satisfactory evidence has been
obtained and recorded by it to verify the identity of the third party as
required by the Regulations;
12 if a financial intermediary, as that term is used in Article 3(2) of
the Prospectus Directive, represents and warrants that the Placing Shares
purchased by it in the Placing will not be acquired on a non-discretionary
basis on behalf of, nor will they be acquired with a view to their offer or
resale to, persons in a member state of the European Economic Area which has
implemented the Prospectus Directive other than Qualified Investors, or in
circumstances in which the prior consent of the Managers has been given to
the offer or resale;
13 represents and warrants that it has not offered or sold and, prior to
the expiry of a period of six months from Admission, will not offer or sell
any Placing Shares to persons in the United Kingdom, except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
business or otherwise in circumstances which have not resulted and which
will not result in an offer to the public in the United Kingdom within the
meaning of section 85(1) of the FSMA;
14 represents and warrants that it has not offered or sold and will not
offer or sell any Placing Shares to persons in the European Economic Area
prior to Admission except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their business or otherwise in circumstances
which have not resulted in and which will not result in an offer to the
public in any member state of the European Economic Area within the meaning
of the Prospectus Directive;
15 represents and warrants that it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the
meaning of section 21 of the FSMA) relating to the Placing Shares in
circumstances in which section 21(1) of the FSMA does not require approval
of the communication by an authorised person;
16 represents and warrants that it has complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it in
relation to the Placing Shares in, from or otherwise involving, the United
Kingdom;
17 represents and warrants that if it resides in a member state of the
European Economic Area it is a Qualified Investor within the meaning of the
Prospectus Directive;
18 represents and warrants that it has complied and will comply with all
applicable provisions of the Australian Corporations Act (including relevant
insider trading provisions) and the ASX Listing Rules in relation to the
Placing Shares;
19 agrees that it must comply with all applicable provisions of the
Australian Foreign Investments and Takeovers Act, 1975 (Cth) in relation to
the Placing Shares;
20 represents and warrants that its participation in the Placing will not
cause its aggregate shareholding in the Company to be 20% or more of the
issued share capital of the Company;
21 represents and warrants that it is not a `related party` of the Company
as that term is defined in section 228 of the Australian Corporations Act
and/or the ASX Listing Rules, (or if it is a `related party` of the Company,
that its acquisition of Placing Shares would not require the Company to
obtain the approval of its shareholders under section 208(1)(a) of the
Australian Corporations Act);
22 represents and warrants that if it resides in the United Kingdom it is
a Qualified Investor within the meaning of the Prospectus Directive and a
person (a) who has professional experience in matters relating to
investments and fall within article 19(5) (investment professionals) of the
Order, or (b) who falls within article 49(2)(a) to (d) (high net worth
companies, unincorporated associations etc) of the Order;
23 represents and warrants that if it resides in Australia it is a person
to whom an offer of securities may be made under section 708(8) or section
708(11) of the Australian Corporations Act and agrees that it will not offer
to sell the Placing Shares to any person that is not a sophisticated or
professional investor under section 708(8) or section 708(11) of the
Australian Corporations Act until the day after a notice is lodged by the
Company with ASX that complies with subsections 708A(5)(e) and (6) of the
Australian Corporations Act;
24 represents and warrants that if it resides in the Republic of South
Africa it qualifies as an addressee described in section 144(b) of the South
African Companies Act No 61 of 1973;
25 represents and warrants that it and any person acting on its behalf is
entitled to acquire the Placing Shares under the laws of all relevant
jurisdictions and that it has all necessary capacity and has obtained all
necessary consents and authorities (including without limitation any and
all approvals that may be required for the purposes of the South African
Exchange Control Regulations, 1961) to enable it to commit to this
participation in the Placing and to perform its obligations in relation
thereto (including, without limitation, in the case of any person on whose
behalf it is acting, all necessary consents and authorities to agree to the
terms set out or referred to in this Announcement) and will honour such
obligations, and it has had access to such financial and other information
concerning the Company and the Placing shares as it deems necessary in
connection with its decision to purchase the Placing Shares;
26 where it is acquiring Placing Shares for one or more managed accounts,
represents and warrants that it is authorised in writing by each managed
account (a) to acquire the Placing Shares for each managed account; (b) to
make on its behalf the representations, warranties, acknowledgements,
undertakings and agreements in this Appendix and the announcement of which
it forms part; and (c) to receive on its behalf any investment letter
relating to the Placing in the form provided to you by any of the Managers;
27 undertakes that it (and any person acting on its behalf) will make
payment for the Placing Shares allocated to it in accordance with this
Announcement on the due time and date set out herein, failing which the
relevant Placing Shares may be placed with other placees or sold as the
Bookrunner may in its sole discretion determine and without liability to
such Placee;
28 acknowledges that none of the Managers, nor any of their respective
affiliates, nor their respective agents nor any person acting on behalf of
any of them, is making any recommendations to it, advising it regarding the
suitability of any transactions it may enter into in connection with the
Placees and that participation in the Placing is on the basis that it is not
and will not be a client of any of the Managers and that none of the
Managers have any duties or responsibilities to it for providing the
protections afforded to their respective clients or customers or for
providing advice in relation to the Placing nor in respect of any
representations, warranties, acknowledgements, undertakings or indemnities
contained in the Placing Agreement nor for the exercise or performance of
any of its rights and obligations thereunder including any rights to waive
or vary any conditions or exercise any termination right;
29 undertakes that the person whom it specifies for registration as holder
of the Placing Shares will be (a) itself or (b) its nominee, as the case may
be. Neither the Managers nor the Company will be responsible for any
liability to stamp duty or stamp duty reserve tax resulting from a failure
to observe this requirement. Each Placee and any person acting on behalf of
such Placee agrees to participate in the Placing and it agrees to indemnify
the Company and the Managers in respect of the same on the basis that the
Placing Shares will be allotted to the CREST, CHESS or Strate stock account
of the Bookrunner or its affiliate or agent who will hold them as nominee on
behalf of such Placee until settlement in accordance with its standing
settlement instructions;
30 acknowledges that any agreements entered into by it pursuant to these
terms and conditions shall be governed by and construed in accordance with
the laws of England and Wales and it submits (on behalf of itself and on
behalf of any person on whose behalf it is acting) to the exclusive
jurisdiction of the English courts as regards any claim, dispute or matter
arising out of any such contract, except that enforcement proceedings in
respect of the obligation to make payment for the Placing Shares (together
with any interest chargeable thereon) may be taken by the Company or the
Managers in any jurisdiction in which the relevant Placee is incorporated or
in which any of its securities have a quotation on a recognised stock
exchange;
31 acknowledge that time shall be of the essence as regards obligations
pursuant to this Appendix to the Announcement;
32 agrees that the Company and the Managers and their respective
affiliates and agents and others will rely upon the truth and accuracy of
the foregoing representations, warranties, acknowledgements, undertakings
and agreements which are given to the Managers on their own behalf and on
behalf of the Company and are irrevocable, and with respect to any of the
representations, warranties, acknowledgements, undertakings and agreements
deemed to have been made by a purchaser of the Placing Shares as a fiduciary
or agent for one or more investor accounts, it has sole investment
discretion with respect to each such account and it has full power and
authority to make the foregoing representations, warranties,
acknowledgements, undertakings and agreements on behalf of each such
account;
33 agrees to indemnify and hold the Company and the Managers and their
respective affiliates and agents harmless from any and all costs, claims,
liabilities and expenses (including legal fees and expenses) arising out of
or in connection with any breach of the representations, warranties,
acknowledgements, agreements and undertakings in this Appendix and further
agrees that the provisions of this Appendix shall survive after completion
of the Placing;
34 represents and warrants that it is an institution which (a) has such
knowledge and experience in financial and business matters and expertise in
assessing credit, market and all other relevant risks as to be capable of
evaluating, and has evaluated independently, the merits, risks and
suitability of its investment in the Placing Shares, and (b) it and any
accounts for which it is acting are each able to bear the economic risk of
such investment, and are each able to sustain a complete loss of any
investment in the Placing Shares;
35 represents and warrants that it is either (a) outside the United States
and has not purchased the Placing Shares as a result of any directed selling
efforts within the meaning of Rule 902(c) of Regulation S or (b) an
Accredited Investor who is also a QIB who is purchasing the Placing Shares
for its own account, or for the account of one or more persons who are
Accredited Investors and QIBs, and is aware, and each beneficial owner of
such Placing Shares has been advised, that the sale of such Placing Shares
to it is being made in reliance on Rule 144A or another exemption from the
registration requirements of the Securities Act for its own account or for
the account of one or more other investors who are Accredited Investors and
who are also QIBs for which it is acting as a duly authorised fiduciary or
agent, in each case for investment, and not with a view to, or for offer or
sale in connection with, any distribution thereof within the meaning of the
Securities Act and has not purchased the Placing Shares as a result of
"general solicitation" or "general advertising" (within the meaning of Rule
502(c) under the Securities Act), including advertisements, articles,
research reports, notices or other communications published in any
newspaper, magazine, on a website or in or on any similar media, or
broadcast over radio or television, or any seminar or meeting whose
attendees have been invited by general solicitation or general advertising;
36 understands and acknowledges that the Placing Shares are being offered
in a transaction not involving any public offering in the United States
within the meaning of the Securities Act and that the Placing Shares have
not been and will not be registered under the Securities Act or the
securities laws of any State in the United States. It agrees that the
Placing Shares may not be reoffered, sold, pledged or otherwise transferred,
and that it will not directly or indirectly reoffer, sell, pledge or
otherwise transfer the Placing Shares, except in an offshore transaction in
accordance with Rule 903 or 904 of Regulation S and that such offer, sale,
pledge or transfer must, and will, be made in accordance with any applicable
securities laws of any State or other jurisdiction of the United States;
37 understands that no representation has been, is being or will be made
by the Company as to the availability of an exemption from the registration
for the reoffer, resale, pledge or transfer of the Placing Shares in
accordance the Securities Act; and
38 understands that the Placing Shares are "restricted securities" within
the meaning of Rule 144(a)(3) under the Securities Act and that, for so long
as they remain "restricted securities" within the meaning of Rule 144(a)(3)
under the Securities Act, they may not be deposited into any unrestricted
depositary facility established or maintained by a depositary bank.
Placees should note that they will be liable for any stamp duty and all
other stamp, issue, securities, transfer, registration, documentary or other
duties or taxes (including any interest, fines or penalties relating
thereto) payable outside the UK by them or any other person on the
subscription by them of any Placing Shares or the agreement by them to
acquire any Placing Shares.
Each Placee, and any person acting on behalf of the Placee, acknowledges
that none of the Managers owe any fiduciary or other duties to any Placee in
respect of any representations, warranties, undertakings, acknowledgements,
agreements or indemnities in the Placing Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and
agrees that the Managers or any of their respective affiliates or agents
may, at their absolute discretion, agree to become a Placee in respect of
some or all of the Placing Shares.
When a Placee or person acting on behalf of the Placee is dealing with the
Managers, any money held in an account with any of the Managers, on behalf
of the Placee and/or any person acting on behalf of the Placee will not be
treated as client money within the meaning of the rules and regulations of
the FSA made under the FSMA. The Placee acknowledges that the money will not
be subject to the protections conferred by the client money rules; as a
consequence, this money will not be segregated from the relevant Manager`s
money, as the case may be, in accordance with the client money rules and
will be used by the Managers in the course of their own respective
businesses and the Placee will rank only as a general creditor of the
Managers.
If the Company or any of the Managers their respective affiliates or agents
request any information about a Placee`s agreement to acquire Placing
Shares, including, without limitation, any information required by the South
African Reserve Bank for the Placing Shares to be settlement in Strate and
any evidence supporting the representations and warranties given above, such
Placee shall (and it undertakes to) promptly disclose it to them.
All times and dates in this Announcement may be subject to amendment. The
Managers shall notify the Placees and any person acting on behalf of the
Placees of any changes.
APPENDIX B
RISK FACTORS
Prospective investors should be aware that an investment in the Company
involves a high degree of risk and should only be made by those with the
necessary expertise to appraise the investment. The following are considered
by the Company to be the risk factors which are specific to the Company and
its subsidiaries (together the "Group") and its industry and which are
material to taking investment decisions in the Ordinary Shares and should be
read in conjunction with the other information contained in this
announcement. Such factors are not intended to be presented in any assumed
order of priority. The list below does not purport to be an exhaustive list.
Additional risks and uncertainties not presently known to the Company, or
which it currently believes to be immaterial, may also have an adverse
effect on the Group.
An investment in the Company is only suitable for financially sophisticated
investors who are capable of evaluating the merits and risks of such an
investment and who have sufficient resources to be able to bear any losses
which may arise therefrom (which may be equal to the whole amount invested).
No representation is or can be made as to the future performance of the
Group and there can be no assurance that the Company will achieve its
objectives.
COMPANY SPECIFIC RISKS - EXPLORATION, DEVELOPMENT AND PRODUCTION
The Group`s mining operations are subject to the normal risks of mining, and
its profits are subject to numerous factors beyond the Group`s control.
Certain of these risk factors are set out below.
Mineral reserves and resources estimates
The estimating of mineral reserves and mineral resources is a subjective
process and the accuracy of reserve and resource estimates is a function of
the quantity and quality of available data and the assumptions used and
judgments made in interpreting engineering and geological information. There
is significant uncertainty in any reserve or resource estimate and the
actual deposits encountered and the economic viability of mining a deposit
may differ materially from the Group`s estimates. The exploration of mineral
rights is speculative in nature and is frequently unsuccessful. The Group
may be unable to successfully discover and/or exploit reserves.
Estimated mineral reserves or mineral resources may have to be recalculated
based on changes in metals prices, further exploration or development
activity or actual production experience. In addition, by their very
nature, resource estimates are imprecise and depend to some extent on
interpretations, which may prove to be inaccurate. As further information
becomes available through additional fieldwork and analysis the estimates
may change. This could result in alterations to development and mining plans
which may, in turn, adversely affect the Group`s operations. It could also
have a material adverse effect on estimates of the volume or grade of
mineralization, estimated recovery rates or other important factors that
influence reserve or resource estimates. There can be no assurance that any
resources recovered can be brought into profitable production. Market price
fluctuations, increased production costs or reduced recovery rates, or other
factors may render the present estimated or inferred resources of the Group
uneconomical or unprofitable to develop at a particular site or sites.
Exploration, project development and mining risks
Exploration for mineral resources involves many risks and hazards including
environmental hazards (including discharge of pollutants or hazardous
chemicals), industrial accidents, occupational and health hazards,
unscheduled plant shutdowns or other processing problems, technical
failures, labour force disruptions, the unavailability of materials and
equipment or exploration, production or supply infrastructure, unusual or
unexpected rock formations, pit slope failures, changes in the regulatory
environment, weather conditions, cave-ins, rock bursts, water conditions and
stock losses. Such occurrences could result in damage to, or destruction
of, production facilities, personal injury or death, environmental damage,
delays in mining, increased production costs and other monetary losses and
possible legal liability to the owner or operator of the mine. The Group may
become subject to liability for pollution or other hazards against which it
has not insured or cannot insure, including those in respect of past mining
activities for which it was not responsible.
Ability to exploit successful discoveries
It is possible that the Group may not be able to exploit commercially viable
discoveries in which it holds an interest and few properties that are
explored are ultimately developed into producing mines.
Exploration may require external approvals or consents from relevant
authorities and the granting of these approvals and consents is beyond the
Group`s control. The granting of such approvals and consents may be
withheld for lengthy periods, not given at all, or granted subject to the
satisfaction of certain conditions which the Group cannot or may consider
impractical or uneconomic to seek to meet. As a result of such delays, the
Group may incur additional costs and losses, reduced revenue or lose part or
all of its equity in a licence.
If the relevant approvals and consents are granted, there can be no
assurance that any mineralisation discovered will result in proven and
probable reserves being attributed to the Company. If reserves are
developed, it can take a number of years from the initial phases of drilling
until production is possible, during which time the economic feasibility of
production may change. Substantial expenditures are required to establish
the viability of coal reserves through drilling and, in the cases of new
properties, to construct mining and processing facilities. As a result of
these uncertainties, no assurance can be given that the exploration
programmes undertaken by the Company will result in any new commercial
mining operations being brought into operation.
Production estimates
The Group cannot give any assurance that it will achieve its production
estimates. The failure of the Group to achieve its production estimates
could have a material and adverse effect on any or all of its future cash
flows, results of operations and financial condition. These production
estimates will be dependent on, among other things, the accuracy of mineral
reserve and resource estimates, the accuracy of assumptions regarding ore
grades and recovery rates, ground conditions and physical characteristics of
ores, such as hardness and the presence or absence of particular
metallurgical characteristics and the accuracy of estimated rates and costs
of mining and processing.
The Group`s actual production may also vary from its estimates for a variety
of reasons, including, adverse operating conditions (such as unexpected
geological conditions, fire, weather, accidents), compliance with
governmental requirements, labour and safety issues, delays in installing or
repairing plant and equipment, inability to complete, or lack of success of,
capital development and exploration drilling.
Future capital requirements
Further funds will be required to develop the Group`s projects, to take
advantage of opportunities for acquisitions, joint ventures or other
business opportunities and to meet any unanticipated liabilities or expenses
which the Group may incur. The Group may seek to raise further funds through
equity or debt financing, joint ventures, production sharing arrangements or
other means. Failure to obtain sufficient financing for the Group`s
activities and future projects may result in delay or indefinite
postponement of exploration, development or production on the Group`s
properties or even loss of a property interest (including any prospecting or
mining right). There can be no assurance that additional finance will be
available when needed or, if available, the terms of the financing might not
be favourable to the Group and might involve substantial dilution to
shareholders.
Environmental regulation
The Group`s operations are subject to existing and possible future
environmental and health and safety legislation, regulations and actions
which could impose significant costs and burdens on the Group (the extent of
which cannot be predicted) both in terms of compliance and potential
penalties, liabilities and remediation or decommissioning costs. Breach of
any environmental obligations could result in penalties and civil
liabilities and/or suspension of operations, any of which could adversely
affect the Group.
Mining operations have inherent risks and liabilities associated with damage
to the environment and the disposal of waste products occurring as a result
of mineral exploration and production. Laws and regulations involving the
protection and remediation of the environment are constantly changing and
are generally becoming more restrictive. Approval is required for land
clearing and for ground disturbing activities. Delays in obtaining such
approvals can result in the delay to anticipated exploration programmes or
mining activities.
Equipment and availability
The current and foreseeable levels of global exploration and development
activity are such that equipment utilisation rates are high, and the Group
will be in a competitive environment in relation to sourcing appropriate
equipment. If it is unable to source appropriate equipment economically or
at all then this would have a material adverse effect on the Company`s
financial or trading position.
Volatility of prices for mineral and other commodities
The supply, demand and prices for commodities are volatile and are
influenced by factors beyond the Group`s control. These factors include
global demand and supply, exchange rate, interest and inflation rates and
political events. A significant prolonged decline in commodity prices could
impact the viability of some of the Group`s exploration activities.
Economic and political risks
Whilst the Group will make every effort to ensure it has robust commercial
agreements covering its activities, there is a risk that the Group`s
activities are adversely impacted by economic and political factors such as
the imposition of additional taxes and charges, cancellation or suspension
of licences, expropriation, war, terrorism, insurrection and changes to laws
governing mineral exploration and operations. There is also the possibility
that the terms of any licence the Group holds (including any favourable tax
provisions) may be changed.
COMPANY SPECIFIC RISKS - RISKS RELATING TO THE BUSINESS
Government regulation
The Group`s exploration activities, development projects and any future
mining operations are subject to laws and regulations in South Africa
governing the acquisition and retention of title to mineral rights, mine
development, health and worker safety, employment standards, waste disposal,
protection of the environment, and protection of endangered and protected
species and other matters. It is possible that future changes in applicable
laws, regulations and agreements, or changes in their enforcement,
regulatory interpretation or application could result in changes to legal or
practical requirements or the terms of existing permits, rights and
agreements applicable to the Group or its projects, which could have a
material and adverse impact on the Group`s current exploration activities,
planned development projects or future mining operations, including by
requiring the Group to cease, materially delay or restrict exploration,
development or mining operations.
Where required, obtaining necessary permits or rights to conduct exploration
or mining operations can be a complex and time consuming process and there
can be no assurance that any necessary permits or rights will be obtainable
on acceptable terms, in a timely manner, or at all. The costs and delays
associated with obtaining necessary permits or rights and complying with
these permits or rights and applicable laws and regulations could stop,
delay or restrict the Group from proceeding with exploration activities or
with development or future mining operations. Any failure to comply with
applicable laws, regulations, permits or rights, even if inadvertent, could
result in the material interruption or restriction of exploration
activities, development or mining operations, or fines, penalties or other
liabilities.
The South African government has passed the Mineral and Petroleum Resources
Royalty Act (the "Royalty Act"). The Royalty Act aims to impose a royalty
on mining companies in favour of the National Revenue Fund on the transfer
of mineral resources. It will come into effect on 1 March 2010. Royalties
imposed differ between refined and unrefined mineral resources but in both
instances are based on a percentage of gross sales, derived from a pre-
determined formula measuring the ratio of earnings before interest and tax
and the gross revenue realised. Coal is generally unrefined and according
to the legislation the royalty to be imposed will be gross sales multiplied
by a percentage determined according to a formula which should not exceed 7
per cent. There is, however, uncertainty regarding interpretation of the new
legislation.
The ability of the Company, and its South African subsidiaries and their
operations, to transfer cash out of South Africa and to enter into
agreements which require or potentially require the transfer of cash out of
South Africa (for example through payment of the purchase price or in the
event of a breach of warranties given) is subject to South African exchange
control regulations. The South African Reserve Bank ("SARB"), and in
particular its Exchange Control Department ("ECD"), has been delegated the
authority to administer the South African exchange control system. The ECD
has wide discretion that is exercised in accordance with the exchange
control regulations and the exchange control rulings in line with the policy
guidelines laid down by the South African Minister of Finance. Certain banks
have been appointed as authorised dealers in terms of the exchange control
regulations and these authorised dealers assist the ECD in administering the
exchange control system, their authority being regulated by the exchange
control rulings. All applications to the ECD must be made though an
authorised dealer. Any cash flows from South Africa are regulated by
exchange control regulations. There can be no assurance in the event that
the Company makes an application to the SARB for a transfer of funds out of
South Africa or enter into an agreement that such transfer will be approved,
in which case any restrictions placed on the Company in respect of any such
transfer or agreement may have a material adverse effect on the Group`s
business, operating results and financial condition.
The South African Government has passed the Mineral and Petroleum Resources
Development Amendment Act, 2008 which has not yet commenced. Once it
commences, which date is presently unknown, this will require any change in
the shareholding of mining concessions and a change of control of those held
(directly or indirectly) by quoted companies (which were previously
exempted) to be submitted to the South African Minister of Mineral Resources
for approval. This may cause additional delay and complication in the
completion of transactions involving the Company`s assets. Any such consent
would be subject to the Minister being satisfied regarding the Broad-Based
Black Economic Empowerment ("BBBEE") arrangements in place, as well as the
new shareholder being in a position to support the holder, if necessary, to
ensure the holder can still meet the requirements that were met when the
right was issued and the terms and conditions of the licence. These include
financial and technical capability.
Title
The acquisition and retention of title to mineral rights is a detailed and
time-consuming process. Title to, and the area of, mineral resource claims
may be disputed or challenged. Although the Group believes it has taken and
is taking reasonable measures to secure title to its projects, there is no
guarantee that title to its projects will be granted, that prospecting
rights will be converted into mining rights or that title will not be
challenged or impaired. Any successful challenges to the title of the
Group`s projects could stop, materially delay or restrict the Group from
proceeding with exploration activities, any development, or future mining
operations.
Certain of the Group`s mining rights and prospecting rights may from time to
time have technical defects, errors or breaches, have not been registered
with the applicable authority or may have consents or approvals outstanding.
These include, for instance, outstanding consents ("Section 11 Consents") in
terms of section 11 of the Mineral and Petroleum Resources Development Act,
2002 ("MPRDA") and/or outstanding registration of Section 11 Consents at the
Mining and Petroleum Titles Registration Office ("MPTRO") established in
terms of the Mining Titles Registration Act 1967, ("MTRA") and/or
discrepancies in related documentation, including in relation to the
Mooiplaats, Vele and Makhado projects. Whilst the Company believes that
these are primarily administrative in nature, and written notice must be
given prior to cancellation or suspension of the relevant rights, there can
be no guarantee that the rights in question will not be cancelled,
suspended, revoked or otherwise impaired and any such cancellation,
suspension, revocation or impairment to the rights comprising the Group`s
projects could stop, materially delay or restrict the Group from proceeding
with exploration activities, mining activities, any development, or future
mining operations.
Most of the Company`s mineral rights have been acquired through acquisition
of the shares of existing holders or the mineral interests of existing
holders. In certain cases administrative matters remain outstanding which
are required to complete the record of the acquisition process, including in
relation to the Mooiplaats, Vele and Makhado projects. Whilst the Company
believes these are administrative in nature, there can be no guarantee that
the process of recording the acquisitions will be completed, nor is there a
guarantee that as a result of any such non-completion the Group`s projects
will not stop, be materially delayed or that the Company will not be
restricted from proceeding with exploration activities, mining activities,
any development, or future mining operations.
BBBEE
The MPRDA introduced a broad based socio economic charter (the "Mining
Charter") which sets out a framework, targets and timetable for affecting
the entry of historically disadvantaged South Africans ("HDSA") into the
mining industry in South Africa (which is also known as the BBBEE
legislation). The implementation and administration of the Mining Charter
is in its infancy and the long term implications for mining companies,
including the Company, are still unfolding. The MPRDA gives the South
African Minister of Mineral Resources a discretion when considering a
licence application regarding the BBBEE structure to be implemented by an
applicant. In general, the Mining Charter refers to targets of 15% of
equity or attributable units of production vesting in HDSA hands within five
years from the commencement of the MPRDA (i.e. by 30 April 2009) and 26% of
equity or attributable units of production vesting in HDSA hands within ten
years from the commencement of the MPRDA (i.e. by 30 April 2014). Specific
commitments which a company has made regarding HDSA ownership are generally
recorded as a condition of the mineral rights granted by the South African
Minister of Mineral Resources. The Company has not yet met the 15% BBBEE
participation threshold. However, although formal agreements have not yet
been signed, the Company has finalised the terms of an in-principle
transaction with Firefly Investments 163 (Pty) Limited (a company wholly
owned and controlled by HDSAs) which is expected to be implemented if the
Department of Mineral Resources confirms that it will ensure compliance by
the Company with the Mining Charter. Implementation of the proposed
transaction will depend on, among other things, the approval of the
Australian Foreign Investment Review Board.
Although the Company has a BBBEE strategy and intends to comply with the
Mining Charter or any requirement imposed by the South African Minister of
Mineral Resources going forward, no assurance can be given that it will be
able to achieve the objectives of the Mining Charter at all times, including
the 15% or 26% (by 30 April 2014) ownership target. Furthermore, no
assurance can be given that the Company`s ownership interests in its
underlying assets will not change materially, or that the extent and
composition of its BBBEE partners will not change from time to time. Non-
compliance with any specific condition contained in a mineral right
regarding HDSA ownership may result in enforcement action and could
ultimately result in the withdrawal of the mineral right by the South
African Minister of Mineral Resources.
Land claims
Certain of the areas over which mineral rights have been granted to the
Company are the subject of land claims in terms of the South African
Restitution of Land Rights Act, 1994 by indigenous former inhabitants which
if successful or if settled could result in significant costs or burdens for
the Company. Generally a claim is made only to the surface rights attaching
to the land and not to the mineral rights as well, however the legal
position on the question whether a claim under the South African Restitution
of Land Rights Act could include mineral rights is not clear. South African
case law decided before the MPRDA took effect indicates that a claim under
the South African Restitution of Land Rights Act may include mineral rights.
The substantial change to the South African mining and mineral law regime
brought about by the MPRDA may arguably prevent a claim in respect of the
mineral rights. If a land claim is settled in favour of the claimants this
should not stop mining or prospecting operations as the mineral rights
holder has statutory rights relating to accessing the land but there may be
a delay while access terms and conditions are negotiated with any new land
owner. The Company should receive fair value compensation from the
Government for any land or mineral rights which are given to claimants,
although the amount of such compensation will form part of any settlement
negotiations and may not match the values attributed by the Company thereto.
Settlement of a land claim over an area for which the company holds mining
rights but no surface rights may nevertheless require the Company to
participate in the settlement and to find and fund alternative land for the
claimants the interests of securing the mining areas.
Future transactions and financing
The Group plans to develop existing, and acquire new, interests through
acquisitions, joint ventures and other strategic alliances (including, for
example, the Rio Tinto joint venture and farm swap, the NuCoal acquisition
and the Vele acquisition - see below). However, there can be no assurance
that any such transactions can be concluded on acceptable terms or at all or
that conditions to which such transactions may be subject will be satisfied.
Future transactions may also require payments to be made and exploration
expenditures to be incurred. The only potential sources of funding currently
available to the Group are through the issue of additional equity and/or
debt capital or through bringing in a partner to fund the exploration and
development costs on investments it may acquire. There is no assurance that
the Group will be successful in raising sufficient funds or attracting a
suitable partner to enable it to meet its obligations under its agreements.
Rio Tinto farm swap and joint venture
The Company has entered into a farm swap (exchange of prospecting rights)
agreement (the "FS Agreement") with the Rio Tinto group relating to the
Company`s Makhado project. The FS Agreement (and the application for a New
Order Mining Right) is conditional on, inter alia, approval being granted by
the South African Minister of Mineral Resources for the transfer and cession
of relevant prospecting rights and interests in such prospecting rights
under section 11 of the MPRDA, consents required in terms of the South
African Competition Act, 1998 and South African exchange control
regulations, execution of certain further documentation and any outstanding
board or shareholder approvals. There can be no guarantee that such approval
will be granted. If the FS Agreement does not proceed to completion, this
may impact the viability of the Company`s Makhado project. In addition, the
Company has entered into a memorandum of understanding in relation to a
joint venture relating to the Company`s Makhado project. There can be no
guarantee that such joint venture will proceed.
NuCoal acquisition
The Company has entered into a conditional agreement to acquire the entire
issued share capital of NuCoal (the "NuCoal Acquisition Agreement"). The
NuCoal Acquisition Agreement is conditional on, among other things,
conditions which are administrative in nature and which are the
responsibility of the current shareholders of NuCoal and relate to
streamlining the legal and ownership structure of NuCoal in order to effect
the transfer of NuCoal to the Company in an effective and efficient manner.
Other conditions include some which relate to the acquisition by NuCoal of
certain mineral interests and the resolution of certain issues arising in
the due diligence exercise to the satisfaction of the Company. Certain
regulatory approvals are also required to be obtained by as part of this
process including SARB approval and approval being granted by the South
African Minister of Mineral Resources in terms of section 11 of the MPRDA.
A number of the conditions to the NuCoal Acquisition Agreement are outside
of the control of the Company and so there can be no guarantee that all of
these conditions will be satisfied and that the NuCoal Acquisition Agreement
will proceed to completion.
Vele acquisition
The Company owns 80% of Limpopo Coal Company (Pty) Limited ("Limpopo Coal")
(the company that owns the Vele coking coal project) and has entered into a
binding agreement to acquire the remaining 20% interest in Limpopo Coal held
by Tranter Holdings (Pty) Limited. This agreement (and the acquisition
contemplated by it) is conditional on, among other things, SARB approval and
the granting of a New Order Mining Right to Limpopo Coal. There can be no
guarantee that SARB approval will be obtained or that the New Order Mining
Right will be granted.
Infrastructure - port allocation, rail access and power supply
The Company has secured long term port allocation for the export of coal
through the Maputo port terminal in Mozambique. Any future allocation to
accommodate any increased production will depend on a number of factors
including, without limitation, expansion of the port terminal. Although the
owners of the Maputo port terminal have announced potential future
expansion, there can be no guarantee that such expansion will take place.
The Company is obliged to notify to the Maputo port terminal the anticipated
tonnage for the coming year and to the extent that there is any delay in any
of the Group`s projects or production is lower than expected the Company may
be left with "take or pay" costs on the excess notified capacity.
The Company has entered into an agreement with Transnet Freight Rail (a
division of the South African government owned rail and freight
organisation) for the transportation of coal by rail from the Company`s
operations in South Africa to the Matola Terminal in Maputo, Mozambique. Any
non performance by Transnet Freight Rail of such agreement or dispute
between the South African and Mozambique governments in relation to the
cross border rail link may materially and adversely impact the Company`s
operations.
The Group depends on the reliable and continuous delivery of sufficient
quantities of power to its mines. South Africa has experienced and
continues, to a limited extent, to experience widespread and prolonged power
outages, also known as load shedding. The Group has power generators for use
in the event of a power outage. However, should a serious failure of basic
infrastructure take place or high occurrences of power outages across the
country continue, exploration, development and production at the Group`s
operations in South Africa could be materially and adversely impacted.
Proposed move to the Main Market of the LSE
The Company has commenced work on its proposed move from AIM to the Main
Market of the LSE and, as part of this, may change its country of
incorporation. However, there can be no guarantee that this process will be
completed within the anticipated timeframe or at all. There can also be no
assurance that any proposal relating to such process will not have potential
adverse tax, regulatory or other consequences for certain shareholders or
that, whether as a result of any such adverse consequences or otherwise, any
such proposal will receive all necessary shareholder, regulatory or other
approvals.
Major shareholders and conflicts of interest
The Company has a number of major shareholders. Whilst the Board has set up
a procedure to deal with potential conflicts of interest (whereby
potentially conflicted directors are required to abstain from relevant
discussions and votes), there can be no assurance that conflicts will not
arise or that, if they do, they can be successfully overcome. Further, the
Company is party to certain agreements which contain consent requirements
regarding certain material decisions such as issues of shares, changes in
share capital structure or material borrowings, acquisitions, disposals or
changes in business. To the extent such agreements remain outstanding,
refusal of such consents might materially impair or prevent the Company from
pursuing its plans.
Insurance
The Company`s insurance coverage may prove inadequate to satisfy potential
claims and losses. Further, the Group may become subject to liabilities that
cannot be insured against or against which it may elect not to be insured
fully or at all because of high premium costs.
Litigation
Legal proceedings may arise from time to time in the course of the Group`s
business. The Company cannot preclude the possibility that litigation may be
brought against it or other companies in the Group.
The Company is subject to certain existing claims, including a claim
regarding an entitlement to be issued shares in the Company. Whilst the
Company does not believe these claims to be well founded or material, there
can be no assurance that such claims will not be successful or that, if
successful, they will not have an adverse impact upon the Company or other
adverse effects that may not have been anticipated.
Joint ventures
Members of the Group hold interests in joint ventures and may pursue
further joint venture opportunities in the future. Joint ventures may
involve special risks associated with the possibility that the joint
venture partners may: (i) have economic or business interests or targets
that are inconsistent with those of the Group; (ii) take action contrary to
the Group`s policies or objectives with respect to their investments, for
instance by veto of proposals in respect of joint venture operations; (iii)
be unable or unwilling to fulfil their obligations under the joint venture
or other agreements; or (iv) experience financial or other difficulties.
Any of the foregoing may have a material adverse effect on the results of
operations or financial condition of the Group. In addition, the
termination of certain of these joint venture agreements, if not replaced
on similar terms, could have a material adverse effect on the results of
operations or financial condition of the Group.
HIV/AIDS
HIV/AIDS is prevalent in Africa. Employees or contractors of the Group in
South Africa may have or could contract the potentially deadly virus. The
prevalence of HIV/AIDS could cause lost employee man-hours and loss of
personnel who are trained and experienced in mine exploration and extraction
activities.
Currency risk
The Company reports its results in Australian Dollars, whilst the majority
of its costs are in South African Rand and revenues are in US Dollars. This
may result in additions to the Company`s reported costs or reductions in the
Company`s reported revenues.
Dependence on key personnel
There can be no assurance that the Group will be able to manage effectively
the expansion of its operations or that the Group`s current personnel,
systems, procedures and controls will be adequate to support the Group`s
operations. Any failure of management to manage effectively the Group`s
growth and development could have a material adverse effect on the Group`s
business, financial condition and results of operations.
The Group`s business is dependent on retaining the services of a small
number of key personnel of the appropriate calibre as the business develops.
The success of the Group is, and will continue to be to a significant
extent, dependent on the expertise and experience of the directors and
senior management. Whilst the Group has entered into contractual
arrangements with the aim of securing the services of the existing
management team, the retention of their services cannot be guaranteed.
Accordingly, the loss of key personnel could have an adverse effect on the
Group.
No geographical diversification
The Group`s key projects are all located in South Africa. Any circumstance
or event which negatively impacts the ownership or development of mining
projects in South Africa could materially affect the financial performance
of the Company and more significantly than if it had a more diversified
asset base.
Service providers and contractors
The Group is unable to predict the risk of: insolvency, non-performance of
contracts or other managerial failure by, or unionization of, any of the
customers or contractors or other suppliers or service providers (including,
without limitation, off-takers) of the Group in connection with its current
or future exploration, development, production or other activities. Any of
the foregoing may have a material adverse effect on the results of
operations or the financial condition of the Company. In addition, the
termination of these arrangements, if not replaced on similar terms, could
have a material adverse effect on the results of operations or the financial
condition of the Company.
GENERAL RISKS
The activities of the Group are also subject to the usual commercial risks
and factors such as competition and economic conditions may generally affect
the Group`s ability to generate income or achieve its objectives.
Trading and liquidity in the Ordinary Shares
An investment in the Ordinary Shares is highly speculative and subject to a
high degree of risk. The price of publicly quoted securities can be volatile
and is dependent upon a number of factors, some of which are general market
or sector specific and others that are specific to the Company. Only those
who can bear the risk of the loss of their entire investment should invest.
Notwithstanding the fact that an application will be made for the Ordinary
Shares to be traded on AIM and the JSE and quoted on the ASX, this should
not be taken as implying that there will be a "liquid" market in the
Ordinary Shares and an investment in the Ordinary Shares may be difficult to
realise. In addition, the price at which the Ordinary Shares will be traded
and the price at which investors may realise their investment will be
influenced by a large number of factors, some specific to the Group and its
operations and some which may affect quoted companies generally.
The market for shares in small to medium size public companies, such as the
Company, is less liquid than for larger public companies. The Group is
aiming to achieve capital growth and, therefore, Ordinary Shares may not be
suitable as a short-term investment; a prospective investor should not
consider such purchase unless he is certain he will not have to liquidate
his investment for an indefinite period of time. The share price may be
subject to greater fluctuation on small volumes of shares, and thus the
Ordinary Shares may be difficult to sell at a particular price. The value of
the Ordinary Shares may go down as well as up. The market price of the
Ordinary Shares may not reflect the underlying value of the Company`s net
assets. Investors may therefore realise less than their original investment
or sustain a total loss of their investment.
Force majeure
The Group`s projects now or in the future may be adversely affected by risks
outside the control of the Group including labour unrest, civil disorder,
war, subversive activities or sabotage, fires, floods, explosions or other
catastrophes, epidemics or quarantine restrictions.
General economic conditions
Market conditions, particularly those affecting resource companies, may
affect the ultimate value of the Company`s share price regardless of
operating performance. The Company could be affected by unforeseen events
outside its control, including, natural disasters, terrorist attacks and
political unrest and/or government legislation or policy. Market perception
of resource companies may change which could impact on the value of
investors` holdings and impact on the ability of the Company to raise
further funds by an issue of further shares in the Company. General economic
conditions may affect exchange rates, interest rates and inflation rates.
Movements in these rates will have an impact on the Company`s cost of
raising and maintaining debt financing.
Investment
The value of an investment in the Company could, for a number of reasons go
up or down. There is also the possibility that the market value of an
investment in the Company may not reflect the true underlying value of the
Company.
Taxation
Any change in the Group`s tax status or the tax applicable to holding
Ordinary Shares or in taxation legislation or its interpretation, could
affect the value of the investments held by the Group, affect the Company`s
ability to provide returns to shareholders and/or alter the post-tax returns
to shareholders.
Passive Foreign Investment Company
Please refer to Appendix A, "NOTICE TO US RESIDENTS", "Passive Foreign
Investment Company" for a detailed description regarding the risks of the
Company being treated as a "passive foreign investment company" ("PFIC") for
U.S. federal income tax purposes.
Forward looking statements
This announcement contains forward looking statements, including, without
limitation, statements containing the words "believe", "anticipated",
"expected" and similar expressions. Such forward looking statements involve
unknown risk, uncertainties and other factors which may cause the actual
results, financial condition, performance or achievement of the Group, or
industry results to be materially different from any future results,
performance or achievements expressed or implied by such forward looking
statements.
Give these uncertainties, prospective investors are cautioned not to place
any undue reliance on such forward looking statements. To the extent
lawfully permitted, the Company disclaims any obligations to update any such
forward looking statements in this document to reflect future events or
developments.
DEFINITIONS
In addition to those terms otherwise defined in this document, the following
expressions have the following meaning unless the context otherwise
requires:
Accredited Investor accredited investors as defined in Rule 501(a) of
Regulation D
Admission the admission by the London Stock Exchange of the
Placing Shares to trading on AIM becoming effective
in accordance with the AIM Rules
AIM the AIM market operated by the London Stock Exchange
AIM Rules the current rules published by the London Stock
Exchange applicable to companies with a class of
listed securities admitted to trading on AIM
Announcement this announcement (including the appendix to this
announcement)
ASIC the Australian Securities & Investments Commission
ASX ASX Limited (ACN 008 624 691), a company registered
under the Australian Corporations Act and, where the
context permits, the Australian Securities Exchange
operated by ASX Limited
ASX Listing Rules the Listing Rules of the ASX and any other rules of
ASX which are applicable while the Company is
admitted to the Official List of ASX
Australian Corporations the Corporations Act 2001 (Cth) of Australia and any
Act Class Orders issued by ASIC
A$ or Australian the lawful currency of Australia
Dollars
Bookrunner JPMC
certificated or in where a share or other security is not in
certificated form uncertificated form
CHESS the Clearing House Electronic Subregister System
CREST the relevant system, as defined in the CREST
Regulations (in respect of which Euroclear UK &
Ireland Limited is the operator as defined in the
CREST Regulations)
Depositary Interests or independent securities constituted under English law
DIs and issued or to be issued by the Depositary in
respect, and representing on a 1 for 1 basis,
underlying Ordinary Shares which may be held or
transferred through the CREST system
Evolution Evolution Securities Limited
European Economic Area the European Union, Iceland, Norway and
Liechtenstein
FSA the Financial Services Authority
FSMA the Financial Services and Markets Act 2000
JPMC J.P. Morgan Cazenove Limited
JSE JSE Limited, a public company incorporated with
limited liability under the laws of the Republic of
South Africa, with registration number
2005/022939/06 and licensed as an exchange under the
South African Securities Services Act, No 36 of
2004, as amended, often referred to as the
"Johannesburg Stock Exchange``
London Stock Exchange the London Stock Exchange plc
or LSE
Managers JPMC, Evolution and Mirabaud;
Mirabaud Mirabaud Securities LLP
NuCoal Vendors means Troy Holdings & Investments Inc, Kusile Mining
(Proprietary) Limited and Nucoal Holdings
(Proprietary) Limited
Ordinary Shares ordinary shares in the share capital of the Company
Placee any person (including individuals, funds or
otherwise) by whom or on whose behalf a commitment
to acquire Placing Shares has been given
Placing the placing of the Placing Shares with Placees to be
effected by the Managers on the terms and subject to
the conditions set out in the Placing Agreement
Placing Agreement the placing and underwriting agreement dated 29
October 2009 among the Company and the Managers in
respect of the Placing
Placing Price the price per Ordinary Share at which the Placing
Shares are placed, such price being determined as
part of the Bookbuild
Placing Shares up to 59,867,731 Ordinary Shares to be issued
pursuant to the Placing
pounds sterling, GBP or the lawful currency of the United Kingdom
GBP
Prospectus Directive the Directive of the European Parliament and of the
Council of the European Union 2003/71/EC
QIB qualified institutional buyer, as defined in Rule
144A under the Securities Act
Rand or South African the lawful currency of the Republic of South Africa
Rand
Record Date the Australian Record Date, the UK Record Date
and/or the South African Record Date, as applicable
Regulation D Regulation D under the Securities Act
Regulation S Regulation S under the Securities Act
Regulatory Information one of the regulatory information services approved
Service by the London Stock Exchange for the distribution to
the public of AIM announcements and shall include
the services through or ways in which announcements
are released by the Company on or to the ASX or the
JSE
Rule 144A Rule 144A under the Securities Act
Securities Act the US Securities Act of 1933, as amended
Strate Strate Limited, a company duly registered and
incorporated in the Republic of South Africa under
registration number 1998/02224/06, licensed as a
central securities depository under the South
African Securities Services Act, 2004
United Kingdom or UK the United Kingdom of Great Britain and Northern
Ireland
United States or US the United States of America, its territories and
possessions, any state of the United States and the
District of Columbia
UNQUOTE
29 October 2009
Sponsor
Macquarie First South Advisers (Pty) Limited
Date: 29/10/2009 09:57:21 Produced by the JSE SENS Department.
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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,
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