| Tue 5 Mar 2002, 0:00 | | Amlac Limited - Important Announcement And Further |
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Announcement
AMLAC LIMITED
(Registration Number 1995/008727/06)
(Incorporated In The Republic Of South Africa)
JSE CODE : ALC
ISIN NO : ZAE0000111821
("Amlac")
IMPORTANT ANNOUNCEMENT AND FURTHER CAUTIONARY
Introduction
Further to the cautionary announcements of 7 February 2002 and 26
February 2002, the Board of Directors of Amlac wishes to advise
shareholders that a Memorandum Of Understanding ("MOU") was
entered into on Saturday 2 March 2002 in Indonesia. The parties to
the MOU are The Promotion and Investment Board of Riau Province
and a consortium led by Amlac ("the consortium").
The Consortium
The members of the consortium include, amongst others, Amlac and
Zonkizizwe Investments (Pty) Limited, both empowerment focussed
companies of South Africa, BAE Systems of the UK and Yatic
Corporation Limited of Saudi Arabia.
Memorandum of understanding
The MOU provides, amongst others, that Amlac may, inter alia,
develop opportunities in oil and gas production in the Coastal
Plains of Pekanbaru ("CPP") and other wells in Riau Province.
Pursuant to the MOU, the Province of Riau has effectively granted
Amlac an option to take over the operating lease on Block CPP1,
currently producing 50 000 barrels of crude a day, subject to
certain conditions precedent and requirements. These include the
obligation of the consortium to fund the specific project, to
utilise Riau Province's human resource for the project, to make
infrastructural contributions on a defined basis, and to submit
feasibility studies for the project (for which Riau Province will
provide all available data).
Furthermore, the conclusion of the operating agreement is subject
to Amlac completing a satisfactory due diligence prior to 1 May
2002. Should the due diligence be satisfactory, the operating
agreement will be signed, with an anticipated effective date of 1
August 2002, and a 3-month handover period will commence 1 May,
2002.
Financial Arrangements
The consortium members have arranged the necessary financing
requirements of the project for implementation costs and
guarantees.
Implications
The agreement will be a significant international milestone in
technology and resource development co-operation between parties
from Indonesia, Saudi Arabia, South Africa and the European Union.
Once the operating agreement commences in August this year, it is
anticipated that significant foreign exchange earnings could flow
to Southern Africa from oil and fuel importing and exporting, as
well as additional refinery business for the area.
Further Cautionary
It is premature to estimate the probable effects on the
profitability of Amlac until the conditions precedent and final
feasibility and competent persons' assessments have been
concluded. Shareholders are therefore advised to continue to
exercise caution in dealing with their Amlac shares, until a
detailed announcement is made.
5 March 2002
Sponsor and Corporate Finance Advisor
The Janus Corporation (Pty) Ltd
Attorneys
Melamed & Hurwitz Inc
