ANNOUNCEMENT OF JOINT VENTURE AND WITHDRAWAL OF CAUTIONARY
Further to the cautionary announcement of 21 August 2001 shareholders are
provided with the following additional information. Shareholders are
advised that, as the transaction, which was the subject of the cautionary
announcement, has now been announced, caution is no longer required.
Joint Venture with Westcats
Viking is pleased to announce a joint venture with Westcats (Westbury
Alloys) a Delaware corporation. Westcats is a wholly owned division of
Westbury Metals Group Incorporated (Westbury). The new venture, Viking
Platinum (Viplats), will be owned 75% by Viking and 25% by Westbury.
Viking Platinum will acquire selected assets of the auto catalyst and
platinum trading divisions of Westcats for an amount of $1 million
(approximately R9m million) payable in cash. The joint venture agreement
is subject to financing arrangements and regulatory approvals.
The effect of the proposed joint venture on the net assets of the company is
immaterial whilst it is expected that it will have a significant positive
effect on earnings.
Viking Platinum
The joint venture combines the financial resources and derivative expertise
of Viking with the expertise of Westbury in the field of purchasing auto
catalysts and processing of PGMs from these catalytic converters. The
company will collect and process auto catalytic converters to extract
platinum, palladium and rhodium. PGM prices are hedged and enhanced in the
derivative market. Production, based on this year's turnover, is estimated
at 110 000 ounces of platinum group metals (PGMs) for 2002. There is
significant growth potential in this market. Viking Platinum will trade
under the name of VIPLATS.
Background on Westcats
Westcats was established in 1998 and since inception the semi-annual volume
has increased sixfold. Westcats has an exclusive supply agreement with the
largest platinum mining operation in North America, Stillwater Mining
Company listed on the New York Stock Exchange. Westcats act as the
exclusive supplier to Stillwater of processed automobile catalytic converter
secondary material, supplementing Stillwater's production of primary PGMs.
Recent capital injections have doubled the facility.
Conclusion
Estimates indicate that the business will produce significant cash flow. A
new smelter will add significantly to the bottom line and this value add is
part of the future expansion plans. Viking has identified further possible
opportunities in this industry in the US and Europe and look forward to the
exciting prospect of growing Viking Platinum.
2nd October 2001
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
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