| Wed 23 Jan 2013, 14:25 | | MINE RESTORATION INVESTMENTS LTD - Update on briquette programme |
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MRI 201301230022A
Update on briquette programme
MINE RESTORATION INVESTMENTS LIMITED
(formerly Capricorn Investments Holdings Limited)
Incorporated in the Republic of South Africa
Registration number 1987/004821/06
Share Code: MRI
ISIN Code: ZAE000164562
("MRI" or "the Company")
UPDATE ON COMPLETION OF THE ANTHRACITE BRIQUETTING PROJECT
(“BRIQUETTING PROJECT”)
1. Introduction
Shareholders are referred to the circular dated 2 April 2012
(“the circular”), wherein they were advised, inter alia, that
MRI had concluded an agreement with Water Utilities Limited
(“Water Utilities”), a BVI company incorporated in the United
Kingdom, and its holding company, Watermark Global PLC, an AIM
listed company, for the acquisition of Western Utilities
Corporation (Pty) Ltd (“WUC”), a wholly owned subsidiary
company of Water Utilities and the owner of a 51% interest in
Octavovox (Pty) Ltd, the company in which the briquetting
project, which will be the main commercial business of MRI, is
held (“the acquisition”). The acquisition was approved by MRI
shareholders on 30 April 2012.
The circular incorporated details of the briquetting project.
At the time of the circular it was anticipated that the
project would be completed shortly thereafter and that
production would be commissioned within 9 months, followed by
a three month ramp-up period to full production. The circular
also contained a profit forecast based on the time periods
documented above.
2. Update on completion of the briquetting project
Due to a number of factors it is currently expected that
commissioning will commence in April 2013 with full production
of the briquetting project commencing in June 2013.
The reasons for the delay are as follows:
2.1 The replacement of the preferred contractor for the
construction of the briquette rollers (which took place
during the course of completion) due to its failure to
deliver timeously and properly in terms of the
construction contract;
2.2 Price escalations exceeding initial allocations, which
led to scope changes;
2.3 A requirement to undertake additional studies and
reports, such as a geotechnical report, traffic impact
study, infiltration test work report and dam stability
report;
2.4 Changes to the EMP (Environmental Management Programme)
addendum – while the approval was expected to be imminent
it took longer than expected.
The delay has also impacted on the costs of the completion of
the briquetting project, which is expected to be covered by an
existing loan agreement with MRI’s two major shareholders:
Watermark Global Plc and Trinity Asset Management (Pty) Ltd.
The pilot plant work on the fines produced by the mine has
indicated that the Intellectual Property relating to the
binders to be used has produced stable briquettes which handle
well and adhere to the specified requirements with regards to
strength and water repulsion.
23 January 2013
Corporate Advisor: AfrAsia Corporate Finance (Pty) Ltd
Designated Advisor
Sasfin Capital (a division of Sasfin Bank Limited)
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