| Thu 21 Apr 2011, 14:51 | | SNU - Sentula Mining Limited - Sentula Mining and Shanduka Resources` coal |
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SNU
SNU
SNU - Sentula Mining Limited - Sentula Mining and Shanduka Resources` coal
assets merge to create a strong mid-tier coal producer and mining services
company
Sentula Mining Limited
Incorporated in the Republic of South Africa
(Registration number 1992/001973/06)
Share code: SNU ISIN: ZAE000107223
("Sentula" or "the Company")
PRESS RELEASE:
SENTULA MINING AND SHANDUKA RESOURCES` COAL ASSETS MERGE TO
CREATE A STRONG MID-TIER COAL PRODUCER AND MINING SERVICES
COMPANY
Johannesburg 21 April, 2011 -- Sentula Mining is pleased to announce that the
company has entered into an agreement with Shanduka Resources as a strategic
coal producer and empowerment partner.
The proposed transaction will be structured through the issue and allotment of
around 627 million new Sentula ordinary shares to Shanduka Resources, whereby
Sentula will acquire approximately 30% of the entire issued share capital of
Shanduka Coal as well as approximately 30% of the entire share capital of Kangra
Coal, held via the subsidiary Shanduka Coal Investments. Through this
transaction Shanduka Resources will control 51.9% of the new Group, for a total
consideration of nearly R2.1 billion.
The proposed transaction will create a company with a portfolio of exploration,
near-development and operational coal mining assets and will transform Sentula
from primarily being an operator of mining services and exploration drilling
businesses into a mid-tier mining services and coal mining company. The proposed
transaction will have the further benefit of increasing the diversity of the
merged entity`s earnings base, optimising the synergies between the mining
services businesses and these coal mines. This will establish a platform for the
growth of the combined coal portfolio.
The assets in the combined group will comprise an approximate 30% shareholding
in Shanduka Coal`s operating mines, Graspan Colliery, Middelburg Townlands
Colliery and Springlake, as well as an approximate 30% share in Kangra Coal`s
assets, which include operating colliery Savmore as well as its Richards Bay
entitlement. Through this transaction, Sentula will be invested in a portfolio
of producing coal assets with total resources of approximately 435m mineable
tonnes in-situ, and annual production of some 12,5mt. Additionally, the group
will have access to Kangra Coal`s approximate 2.0 mt of annual RBCT entitlement.
In addition to the portfolio of operating mines and resources, this strategic
deal introduces a credible and substantial Broad Based Black Economic
Empowerment partner, bolstering the group`s BEE credentials significantly. The
merged entity will be able to leverage off Shanduka`s brand and high quality
institutional backing and it will be competitively positioned to act as a
catalyst in the consolidation of the SA junior coal mining sector.
Robin Berry, CEO of Sentula said: "Consistent with our strategy, this
transaction will transform Sentula from primarily a mining services provider
into a mid-tier coal mining business. The combined assets in the new group will
be treble the size of our previous coal assets and it will create further
complementary opportunities to enable growth in contract mining services. By
partnering with Shanduka we believe that the broader group, with credible
empowerment credentials, provides a more robust platform for generating
sustainable shareholder value over the long-term."
The transaction is subject to conditions typical for a deal of this nature and
is expected to be concluded towards the end of July 2011, after shareholders
have voted at a general meeting and other necessary regulatory approvals have
been received, including the competition authorities.
Once the conditions precedent have been met and the transaction is approved by
the Competition Authorities, the Company will be renamed from Sentula to
"Shanduka Mining Limited" (or such other name as may be approved by Shanduka
Group) with effect from the effective date.
- ENDS -
For further information please contact:
Robin Berry (CEO) Sentula - 011 656 1303
Jacques de Bie College Hill - 011 447 3030
Notes to Editors:
* Sentula Mining has been listed on the Main Board of the JSE Limited ("JSE")
since 1993 under the "General Mining" sub-sector. It derives its income
from contract mining and rehabilitation, earthworks, drilling and blasting,
exploration drilling, crane hire and mining of its own coal assets. Through
its 100% owned subsidiary Geosearch, it has one of the larger exploration
drilling companies in Africa. The Company also holds a number of
prospecting rights, which are undergoing a regulatory and development
process.
* Shanduka Group, is a leading black-owned and managed investment holding
company founded by Mr Cyril Ramaphosa. Shanduka Group further encompasses
broad-based Black Economic Empowerment ("BEE") through a 10% equity
shareholding by a consortium of women, 3% by a consortium of men, as well
as a further 5% shareholding by community development trusts.
* Shanduka Resources a wholly owned subsidiary of Shanduka Group, in addition
to coal, is also invested in, inter-alia, platinum group metals, gold, base
minerals and mining services. Shanduka Resources` investments consist
mostly of minority shareholdings in different vehicles, which as a
consequence make it difficult for Shanduka Resources to grow its coal
mining business. Its long term strategy is to build a geographically
diverse, multi-commodity, black owned and managed resources and mining
company.
* Shanduka Resources` owns 30% of Shanduka Coal and 30% of Kangra Coal,
through its 100% subsidiary Shanduka Coal Investments.
* Shanduka Coal`s business is coal prospecting and mining. It is 30% owned by
Shanduka Resources and 70% owned by Glencore International AG a limited
liability private company. Through its subsidiaries, Shanduka Coal owns
100% of the operating mines, Graspan Colliery, Middelburg Townlands
Colliery and Springlake. Coal is sold both to the domestic market and
exported through the Richards Bay Coal Terminal.
* Shanduka Coal has over 115 million tonnes of total mineable resources in-
situ and produced 9.1 million ROM tonnes for the year ended 31 December
2010. The company generated almost R2.2 billion in revenue and EBITA of
R295 million.
* Shanduka Coal Investments holds a 30% stake in the issued share capital of
Kangra Coal and is a wholly-owned subsidiary of Shanduka Resources. Kangra
Coal`s business is coal prospecting and mining. The remaining 70% stake in
Kangra Coal is owned by Gas Naturale SDG SA. Kangra Coal`s assets comprise
one mining operation, Savmore Colliery and Richard`s Bay Coal Terminal
entitlement.
* Kangra Coal has over 320 million tonnes of total mineable resources in-situ
and 4.1 million tonnes Run of Mine production for the 12 months ended 31
December 2010. The company generated around R1.6 billion in revenue, EBITA
of R726 million.
Date: 21/04/2011 14:51:03 Produced by the JSE SENS Department.
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