| Tue 31 Aug 2010, 10:15 | | LAB - Labat Africa Limited - Pro Forma financial effects of the acquisition of |
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LAB
LAB
LAB - Labat Africa Limited - Pro Forma financial effects of the acquisition of
Primrose Gold Metallurgical operation and ERPM Gold Metallurgical operation and
withdrawal of cautionary
LABAT AFRICA LIMITED
Incorporated in the Republic of South Africa)
(Registration number: 1986/001616/06)
Share Code: LAB ISIN: ZAE000018354
("Labat" or "the company")
PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION OF PRIMROSE GOLD METALLURGICAL
OPERATION AND ERPM GOLD METALLURGICAL OPERATION AND WITHDRAWAL OF CAUTIONARY
Further to the announcements dated 20 July 2010, 23 July 2010 and 16 August
2010, all relating to an agreement to acquire the gold processing and smelting
operations known as Primrose Gold Metallurgical as well as ERPM Gold
Metallurgical from Primrose Gold Mines (Pty) Limited, a wholly owned subsidiary
of Aurora Empowerment Systems (Pty) Limited, for a purchase consideration of R38
000 000 through the issue of 38 000 000 Labat ordinary shares at R1.00 per
share, the pro forma effects have been based on the reviewed condensed
consolidated results of Labat for the year ended 28 February 2010 and are set
out in the table below.
The financial effects are presented for illustrative purposes only and because
of their nature may not give a fair reflection of the Company`s results,
financial position, cash flows and changes in equity after the transaction. It
has been assumed that for the purposes of the pro forma financial effects, the
transaction took place as at 28 February 2010 for the statement of financial
position, and for the period 1 March 2009 to 28 February 2010, for the statement
of comprehensive income. The directors of Labat are solely responsible for the
preparation of the financial effects.
Before After %
Change
Net asset value per share (cents) (NAV) (25.6) (5.3) 79.32%
Net tangible asset value per share (25.6) (5.3) 79.32%
(cents) (NTAV)
Loss per share (cents) (16.9) (8.4) 50.14%
Headline loss per share (cents) (8.2) (1.2) 85.80%
Number of shares in issue 197 235 19.27%
155 155
Weighted number of shares in issue 197 235 19.27%
155 155
Assumptions:
1 The "Before" column information has been extracted, without adjustment from
Labat`s published reviewed condensed consolidated financial results for the
year ended 28 February 2010;
2 The figures above represent the pro forma financial effects of the
transaction, which has been accounted for in terms of IFRS 3 (revised):
Business Combinations;
3 Earnings per share and Headline earnings per share effects are based on the
following principal assumptions:
(i) the transaction was effective on 01 March 2009;
(ii) Primrose results have been based on the most recent management
financial information for the period from 01 February 2010 to 31 July
2010. These results have been inspected by Labat`s auditors, Ngubane
Zeelie Inc and are in the process of being reviewed;
(iii) as the management financial information represent a six month period
and the transaction is reported for a twelve month period, the
reviewed management financial information has been annualised, to
represent a twelve month period;
(iv) management regards the fair value of the plant acquired to be no less
than the purchase price, and no recognition of intangible assets
apply; and
(v) a notional provision has been made for income tax at 28% on profit
from the new business.
4 NAV and NTAV per share effects are based on the following principal
assumptions:
(i) the proposed transaction took effect on 28 February 2010;
(ii) the recognition of the tangible and identifiable intangible assets is
based on a provisional basis, with the allocation of the purchase price to
the assets acquired, on a fair value basis, for IFRS 3 (revised) accounting
purposes. In terms of IFRS 3(revised):Business Combinations, the fair value
exercise will be finalised within twelve months of the effective date of
the transaction and any appropriate adjustments, if required, will be made.
CONDITIONS PRECEDENT
At the date of this announcement, this transaction was still subject to the
approval of shareholders in general meeting.
WARRANTIES
The agreements concluded for the transaction contain general warranties and
undertakings inherent in and usual to transactions of such nature. No warranties
or undertakings are provided which are unusual or are of an onerous nature.
DOCUMENTATION
Shareholders are advised that a circular to shareholders is in the process of
being prepared and will be forwarded to shareholders in due course.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the previous cautionary announcement published on
SENS on 15 July 2010, and are advised that the cautionary announcement is now
withdrawn.
Johannesburg
31 August 2010
Transaction Advisor
Arcay Moela Sponsors (Proprietary) Limited
Date: 31/08/2010 10:15:01 Produced by the JSE SENS Department.
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