| Fri 3 Sep 2010, 13:15 | | MMH - Miranda Mineral Holdings Limited - Capital raising by way of a general |
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MMH
MMH
MMH - Miranda Mineral Holdings Limited - Capital raising by way of a general
issue of shares for cash and claw-back offer; and further cautionary
announcement
Miranda Mineral Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1998/001940/06)
Share code: MMH
ISIN: ZAE000074019
("Miranda" or "the Company" or "the Group")
ANNOUNCEMENT REGARDING:
* CAPITAL RAISING BY WAY OF A GENERAL ISSUE OF SHARES FOR CASH AND CLAW-BACK
OFFER; AND
* FURTHER CAUTIONARY ANNOUNCEMENT
1 Introduction
The board of directors of Miranda is pleased to announce the details behind a
two-stage capital raising program, in terms of which it has secured a minimum
amount of R98,3 million in equity funding for the development of the Group`s
portfolio of mining, development and exploration assets.
2 Background and Rationale
Miranda has reached a definitive moment in its history and development. Since
its listing on the JSE Limited ("the JSE") in December 2005, the Group has to
date raised capital on only three occasions through the issuance of the 15% of
shares annually placed under the control of directors by shareholders. The
current capital raising initiative with Global PS Telecom Investment Company
Limited ("Global PS"), described in paragraph 5 below, reflects both the
exciting nature of the Group`s prospects in South and Southern Africa, as well
as the extent of the capital required to explore and develop these minerals and
energy prospects in the short- to medium-term.
The Company`s board of directors is particularly pleased that Miranda has been
able to secure the issue of shares for cash ("Cash Issue"), referred to in
paragraph 3 below, and the proposed Claw Back Offer ("Claw Back Offer"),
referred to in paragraph 4 below, in the midst of a challenging financial market
and environment for junior mining and exploration companies. Such success bears
testimony to the extent of development that has already taken place in the
existing asset portfolio of the Group, most notably, the Group`s coal exposure
in the KwaZulu Natal ("KZN") coal fields of South Africa, held through Miranda`s
wholly-owned subsidiary, Miranda Coal (Proprietary) Limited ("Miranda Coal").
The directors are of the opinion that the global fundamentals supporting the
demand for commodities, in particular, anthracitic and metallurgical coal, will
remain strong for the foreseeable future. Accordingly, in order to position
Miranda financially and strategically to take advantage of anticipated coal
market opportunities and to accelerate ongoing development of the Company`s
various mineral assets, the directors have resolved to facilitate the raising of
additional capital for the Group through the Cash Issue and the Claw Back Offer.
3 Cash Issue
On 26 August 2010, following an extensive road show by directors, agreement was
reached between the Company and Global PS, whereby Global PS has been allotted
and issued a total of 37 110 074 new ordinary shares in the Company at a Cash
Issue price of 62,62 cents per share. The Cash Issue price per share represents
a premium of 10% over the volume weighted average traded price of Miranda shares
on the JSE for the 30 business days prior to the date on which the terms of the
Cash Issue was settled, being 24 August 2010. Total capital received from the
Cash Issue is R23 238 328,34.
The Cash Issue was implemented in accordance with the general authority to issue
shares for cash granted to the directors of the Company at Miranda`s annual
general meeting held on 15 January 2010. The Cash Issue represents 15% of the
issued share capital of Miranda prior to the issue and will increase Miranda`s
issued share capital from 247 400 494 shares to 284 510 568 shares. The shares
comprising the Cash Issue rank pari passu in all respects with the other
existing issued shares of Miranda and have been admitted to listing on the JSE
with effect from 6 September 2010.
4 Claw Back Offer
As referred to in paragraph 2 above and as the second stage of the capital
raising program, the directors have resolved to implement a Claw Back Offer. In
this respect, the Company has reached agreement with Global PS in terms of which
it has secured further equity funding of a minimum amount of R75.1 million. The
salient features and terms and conditions of the Claw Back Offer agreement with
Global PS provide, inter alia, as follows:
- the remaining authorised but unissued share capital of the Company
following implementation of the Cash Issue, namely 115 489 432 ordinary
shares, has been pre-placed with Global PS, who will act as the "placee" to
the Claw Back Offer;
- the Claw Back Offer will be structured so as to ensure that Global PS will
hold no more than 34,99% of the issued share capital of Miranda after its
implementation;
- the Claw Back Offer will take place at a subscription price of 73 cents per
share; and
- the Claw Back Offer is subject to the usual regulatory approvals, including
that of the JSE, the South African Reserve Bank and the Securities
Regulation Panel to the extent required.
The directors advise that:
- in terms of the Claw Back Offer, shareholders of the Company will be able
to participate in the Claw Back Offer by exercising their pre-emptive
rights at the Claw Back Offer price of 73 cents per share;
- the maximum possible amount to be raised in terms of the Claw Back Offer is
R84,3 million, which will require shareholders holding or representing at
least 12 639 506 shares deciding to follow or "claw-back" their rights;
- the exact terms of the Claw Back Offer are still the subject of
finalisation and discussion with relevant role players and regulatory
authorities; and
- further information and a detailed announcement relating to the Claw Back
Offer will be communicated to shareholders as soon as possible.
5 Background on Global PS
Global PS, an international investment group based in Dubai, identified Miranda
as its preferred investment vehicle through which to establish meaningful
exposure to exploration and near-production mining assets in South and Southern
Africa. "Miranda`s pipeline of projects, current emphasis on coal, which is a
commodity in high demand internationally, as well as its diversified mineral
portfolio were all aspects that excited Global PS," stated Dr Thaksin
Shinawatra, chairman of Global PS. Global PS also supports Miranda`s business
strategy of developing its mineral asset base in clearly identified, individual
business silos as a pre-cursor to realising value for shareholders by spinning
out each of the businesses separately at the appropriate time.
Global PS follows an active investment strategy and the Company`s board of
directors is excited to work with its new investment partner. Potential areas
of co-operation already identified include strengthening of the Company`s board
of directors with technical expertise, utilising Global PS`s access to debt and
structured funding for mining projects nearing the production stage, and the
identification of additional mining and exploration investment targets.
6 Application of Proceeds
The Company intends to utilise the funds raised through the Cash Issue and Claw
Back Offer in the following manner:
- the Board previously communicated its efforts to unlock value for
shareholders through a transaction at the Miranda Coal level (please refer
to the shareholder newsletters on the Miranda website, the details of which
is provided at the foot of this announcement). The capital raised will be
utilised in part to fund this corporate action and to ensure an optimal
trade-off between value and timing for Miranda shareholders;
- Sesikhona Colliery, the Group`s first project with a Mining Right, is close
to commencing with mining at its 3,7 million tonne first phase, open pit
anthracite resource. The funds raised with Global PS will provide working
capital flexibility for Sesikhona, particularly during the early stages of
mining;
- a feasibility study of the open pit sections of the Group`s Uithoek and
Burnside lease areas has been planned to commence next month;
- capital will be allocated to the ongoing development of Miranda Coal`s
pipeline of exploration projects in KZN. Miranda has identified nine
prospective areas and has embarked on a systematic process of
prioritisation and consolidation;
- Miranda also holds majority interests in significant coal and diamond
prospecting licenses in Botswana and has approved an 18-month exploration
program in these areas; and
- the Board continues to assess the Group`s interests, as well as acquisition
opportunities, in coal, base and industrial minerals, precious metals and
diamonds.
7 Financial Effects of the Cash Issue
The unaudited pro forma financial effects of the Cash Issue in the table below,
are the responsibility of the directors and are provided for illustrative
purposes only to show the effect thereof on earnings and headline earnings per
share, as if the cash issue had taken effect on 1 September 2009, and on net
asset value and net tangible asset value per share, as if the cash issue had
taken effect on 28 February 2010. Because of their nature, the unaudited pro
forma financial effects may not give a fair presentation of the group`s
financial position and performance. The pro forma financial effects are
presented in a manner consistent with the format and accounting policies adopted
by Miranda.
Before the After the %
Cash Issue Cash Issue Change
(1) - pro
forma
(2&3)
Basic loss (cents per share) 3.0 2.6 -13.3
Headline loss (cents per share) 3.0 2.6 -13.3
Weighted average number of shares 247 400 284 511 +15.0
in issue, 6 months (`000)
Net asset value (cents per share) 138.0 128.2 -7.1
Net tangible asset value (cents 1.4 9.3 +615.4
per share)
Closing number of shares in issue 247 400 284 511 +15.0
(`000)
Notes:
(1) The "Before the issue" figures are based on Miranda`s published and
unaudited interim financial results for the 6 months ended 28 February
2010.
(2) The "Pro forma after the issue" column is based on the assumption that the
issue was effective on 1 September 2009 for basic loss per share and
headline loss per share. It is assumed that the proceeds will be utilised
for capital expenditure and working capital and will therefore not affect
earnings for the period. Losses per share, however, will be diluted by the
new number of shares in issue.
(3) The "Pro forma after the issue" column is based on the assumption that the
issue was effective on 28 February 2010 for NAV and NTAV purposes.
8 Further Cautionary Announcement
Further to the cautionary announcement dated 20 August 2010, shareholders are
advised that the discussions referred to therein, and which may have a material
effect on the price of the company`s securities, are ongoing.
Accordingly shareholders are advised to continue exercising caution when dealing
in the Company`s securities until a further announcement is made.
Centurion
3 September 2010
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Corporate adviser
Touchstone Capital (Pty) Ltd
Legal adviser
Thomson Wilks Inc
Website: www.mirandaminerals.com
Date: 03/09/2010 13:15:00 Produced by the JSE SENS Department.
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