| Tue 20 Jul 2010, 15:22 | | CMO - Chrometco Limited - Update in respect of conditional sale of Rooderand and |
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CMO
CMO
CMO - Chrometco Limited - Update in respect of conditional sale of Rooderand and
cautionary
CHROMETCO LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/026265/06)
(JSE Code: CMO ISIN: ZAE000070249)
("Chrometco" or "the company")
FURTHER UPDATE ON AND CLARIFICATION IN RESPECT OF THE CONDITIONAL SALE OF
ROODERAND AND CAUTIONARY ANNOUNCEMENT
BACKGROUND AND UPDATE
Further to and in clarification of the announcements published on 27 September
2007, 25 March 2008, 10 November 2008, 9 December 2008 and 1 June 2009,
shareholders are advised that Chrometco is still in the process of finalising
the conditional sale of the group`s Rooderand assets. In terms of the sale
agreement entered into in 2007, Chrometco envisages selling its equity holdings
in its two wholly owned subsidiaries, Korpo Trust (Pty) Ltd and Rooderand Chrome
(Pty) Ltd (through which it holds the Rooderand assets)for R62 million to DCM
Chrome (Pty) Ltd ("DCM"). The selling price is reduced by payments made by DCM
in terms of the mining and management agreement pursuant to which DCM is
presently mining the Rooderand assets.
The sale agreement has always been and remains subject to conditions precedent,
the following of which remain outstanding:
- Conversion of the old order mining rights, relevant to the Rooderand
assets, to new order mining rights;
- Ministerial approval for the transfer of the rights; and
- Chrometco shareholder approval (if necessary).
In terms of the mining and management agreement, pursuant to which DCM is mining
the Rooderand assets, DCM is obliged to pay Chrometco an amount equal to R13
million annually for the right to mine and for mining activities at Rooderand.
Chrometco received the first payment in December 2007, as well as two subsequent
payments in December 2008 and 2009. These payments have been received in terms
of the mining and management agreement. The mining and management agreement
terminates on the earlier of the fulfilment of all the conditions precedent to
the conditional sale on 3 December 2011. The total amount of payments to be made
under the mining and management agreement is limited to R62m.
Should the conditions precedent to which the sale agreement is subject not be
fulfilled, then Chrometco will investigate other opportunities in relation to
the residual value of the Rooderand assets.
DOCUMENTATION
Chrometco has now been advised that the transaction is a category one
transaction in terms of the JSE Listings Requirements and therefore requires
shareholder approval at a general meeting, both in terms of the JSE listing
requirements, as well as in terms of the Companies Act. Shareholders are
therefore advised accordingly.
A circular setting out the terms of the transaction and convening a general
meeting of Chrometco shareholders is in the process of being prepared and will
be posted to shareholders in due course.
CAUTIONARY
In view of the above, shareholders are advised to act with caution when trading
in their Chrometco shares until a further announcement is made.
DATE: 20 JULY 2010
Designated Advisor
Sasfin Capital
A division of Sasfin Bank Limited
Date: 20/07/2010 15:22:01 Produced by the JSE SENS Department.
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