| Tue 23 Jul 2002, 0:00 | | Otr Mining Limited - Announcement Regarding A Spec |
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OTR MINING LIMITED - ANNOUNCEMENT REGARDING A SPECIFIC ISSUE OF SHARES FOR CASH
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
OTR MINING LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/006508/06)
Share code OTR ISIN ZAE000025830
Share code OTRO ISIN ZAE000033056
("OTR")
ANNOUNCEMENT REGARDING A SPECIFIC ISSUE OF SHARES FOR CASH
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Further to the cautionary announcement dated 31 May 2002, LPC Manhattan Sponsors
is authorised to announce the following:
The proposed acquisition by OTR of an interest in the RK1 project alluded to in
the above cautionary announcement, has now been fixed at 10%, and will be
structured as a sale at a nominal amount of R100, in terms of Heads of Agreement
signed on 15 July 2002 between OTR and GB Mining and Exploration S.A.
(Proprietary) Limited ("GB Mining"), the co-promoter of the RK1 project and part
of the controlling consortium of OTR. Aquarius Platinum Limited is GB Mining`s
joint venture partner in the RK1 project. At the date of this announcement the
RK1 project has not come on stream but is anticipated to be in production by
March 2003.
In the interim GB Mining has proposed to inject capital into OTR by way of a
specific issue of shares for cash, as discussed more fully in paragraph 2 below.
2. Specific issue of shares for cash
In order to ensure that OTR has sufficient working capital for a minimum period
of 12 months from the date of approval in general meeting of the specific issue,
GB Mining will subscribe for a total of 140 000 000 ordinary shares in OTR
(comprising 129 000 000 new ordinary shares and 11 000 000 ordinary shares,
which pertain to a previous transaction and are currently held in trust by OTR`s
attorneys ("the 11 000 000 shares")), by way of specific issues of shares for
cash ("the transaction") as follows:
* an initial 100 000 000 ordinary shares in OTR (comprising the 11 000 000
shares and 89 000 000 new ordinary shares), for a consideration of 2,5 cents per
share equating to R2 500 000. R2 000 000 of this amount has already been
advanced by GB Mining to OTR by way of loan account and will be capitalised into
new shares. The balance of R500 000 ("the initial tranche"), will be injected on
the second business day following the fulfilment of the conditions precedent set
out in paragraph 10 below (`the implementation date"); and
* a further 40 000 000 new ordinary shares to be issued at 2,5 cents per
share, equating in aggregate to R1 000 000. The amount will be injected in equal
tranches of R500 000 at the end of month 3 and 6 respectively, after the
implementation date ("the further injections").
The loan of R2 000 000 which has already been advanced, together with the
balance of the cash to be injected into OTR, amounting to R1 500 000 (being the
initial tranche plus the further injections), will be utilised, inter alia, to
pay off existing and anticipated creditor balances according to their respective
tenors, all expenses pertaining to OTR`s existing listing including the circular
to shareholders and option holders contemplated in this announcement, the
payment of the renewal of the Palmietfontein option referred to in paragraph 3
below, and the general running costs of OTR. No provision has been made for the
funding of any exploration work required in respect of Palmietfontein.
In addition GB Mining will repay a loan due to OTR amounting to R610 000 plus
interest at 10% thereon by no later than 30 September 2003, as discussed more
fully in paragraph 7 below.
3. Payment of the renewal of the Palmietfontein option
OTR owns 100% of the shares in and claims against Palmietfontein Holdings
(Proprietary) Limited which in turn has an option to acquire the Palmietfontein
farm and the mineral rights in respect thereof, for a total purchase
consideration of R5 million, which option expires in September 2002.
Discussions to renew the option for a period of two years at a cost of
approximately R150 000, are currently underway.
4. The acquisition by OTR of a 10% stake in RK1 (an unincorporated joint
venture partnership).
OTR will acquire with effect from a period of nine months after the second
business day after the fulfilment of the conditions precedent ("the effective
acquisition date"), a 10% stake in RK1. After the acquisition, the partnership
shall be constituted as follows: Aquarius Platinum Limited 50%, GB Mining 40%
and OTR 10%.
OTR is obliged in terms of the Heads of Agreement to cede the voting rights
attaching to such 10% interest to GB Mining for a period of 12 months from the
effective acquisition date. Thereafter GB Mining will have a right of first
refusal thereon at such purchase price and on such terms as a bona fide party
purchaser is willing to pay.
5. Change of control in OTR
The transaction will result in a change of control in OTR in that GB Mining will
hold a controlling interest in OTR after the issue of the first tranche of 100
000 000 ordinary shares. The Securities Regulation Panel ("the SRP") has ruled
that it will not enforce a mandatory offer to OTR shareholders, provided
independent OTR shareholders entitled to vote, waive their rights thereto in
general meeting. A resolution to waive the mandatory offer will accordingly be
included in the notice of general meeting.
6. Related party transaction
The transaction constitutes a related party transaction, as GB Mining is part of
the consortium which currently controls OTR and parties associated with it are
also shareholders of OTR. Accordingly, in terms of the Listings Requirements of
the JSE Securities Exchange South Africa ("the JSE"), neither GB Mining nor any
member of the consortium, nor any parties associated with the consortium will be
eligible to vote at the general meeting in respect of the resolutions pertaining
to the transaction.
In addition an independent expert acceptable to the JSE will be required to
issue an independent opinion on the transaction, which opinion will be included
in the circular to OTR shareholders and options holders referred to in paragraph
11 below.
7. Settlement of loan claim due to OTR by GB Mining
GB mining is indebted to OTR in the amount of R610 000, which amount was
advanced in November 2000. The loan shall be repaid by GB Mining on or before 30
September 2003, together with interest thereon calculated at 10% per annum from
the date of the advance until the date of repayment, both dates inclusive.
8. Financial effects of the transaction
The pro forma financial effects of the transaction on an OTR shareholder after
the transaction, are based on the reviewed interim audited results in respect of
the six-month period ended 28 February 2002, and are provided for illustrative
purposes only, and because of their nature, may not fairly reflect the results
of OTR after the transaction. The figures in the "Before" column have been
extracted from the interim results. The pro forma financial effects have been
prepared in accordance with Generally Accepted Accounting Practice on a basis
consistent with the accounting policies utilised in respect of the six-month
period ended 28 February 2002.
Reviewed
28 February 2002 Pro forma %
Before(1) After(1) change
Loss per share (cents) (55,1) (15,0)(2,3) 72,8
Headline loss per share (cents) (2,5) (0,6)(2,3) 75,6
Net asset value per share (cents) 3,6 2,8 (4) (22,2)
Net tangible asset value per
share (cents) 0,5 (5) 1,9 (4,5) 304,6
Fully diluted loss per share (cents) (29,8) (11,9)(2,3,7) 59,9
Fully diluted headline loss
per share(cents) (0,4) (0,1)(2,3,7) 75,4
Fully diluted net asset value
per share (cents) 24,1 11,2 (4,6) (53,5)
Fully diluted net tangible asset
value per share (cents) 22,4 10,5 (4,5,6) (53,0)
Number of shares in issue(undiluted)
(closing and weighted) 52 764 586 192 764 586
Number of shares in issue (fully diluted)
(closing and weighted) 94 529 172 234 529 172
Notes:
1. All the calculations in the "Before" column have been based on the closing
number of shares in issue at 28 February 2002, together, where applicable, with
the assumed conversion of the options (a total of 41 764 586 of which are in
issue), in determining fully diluted loss and headline loss per share. The
calculations in the "After" column have also similarly used the closing number
of shares at 28 February 2002 as a starting point.
2. Based on the assumption that the aggregate cash of R3,145 million received
from GB Mining (being R3,5 million less an amount of R355 000 which was advanced
at 28 February 2002), had been received in full on 1 September 2001 and had
earned interest at 9% per annum, before and after taxation, for the full period
of six months.
3. Based on the assumption that the total number of 140 000 000 new ordinary
shares were issued on 1 September 2001 for the full period of six months.
4. Net asset value and net tangible asset value per share have been
calculated on the assumption that 140 000 000 new ordinary shares were issued
and the cash amounting to R3,145 million had been received on 28 February 2002.
5. Mining rights valued at R1,645 million have been excluded in the
calculation of net tangible asset value per share on both an undiluted and fully
diluted basis.
6. Fully diluted net asset value and net tangible asset value per share were
calculated based on the assumption that the 41 764 586 options that were issued
to OTR shareholders have all been exercised at the exercise price of 50 cents
per unit, equating to R20,8 million and converted into ordinary shares at 28
February 2002.
7. Fully diluted loss and headline loss per share were calculated based on
the assumption that the options had been converted on 1 September 2001 and
interest of 9% before and after taxation was earned on the cash generated from
the assumed conversion of the options.
9. Reconstitution of the OTR board of directors
Should the requisite majority of shareholders approve the transaction, the
board of OTR will be reconstituted. The current board of directors comprising
Messrs G de Decker, A Gardner and R van Zanten will resign from the
implementation date.
10. Conditions precedent
The transaction is conditional upon the fulfilment of the following conditions
precedent by no later than 18 September 2002 or such extended date as GB Mining
and OTR may agree in writing:
* approval of the circular including the notice of general meeting by the JSE
and the SRP;
* approval of any other regulatory authority such as the Exchange Control
Division of the South African Reserve Bank, if appropriate;
* approval by the JSE of the listing of the new ordinary shares to be issued
in terms of the specific issues of shares for cash;
* the approval in general meeting by OTR shareholders entitled to vote, of the
transaction and matters pertaining thereto;
* the waiver by OTR shareholders entitled to vote, of the mandatory offer to
shareholders in terms of Rule 8.7 of the SRP Code on Takeovers and Mergers; and
* the registration of the special resolutions by the Registrar of Companies.
11. Withdrawal of cautionary announcement and preparation of circular to
shareholders and option holders
The cautionary announcement dated 31 May 2002 has accordingly been withdrawn. A
circular to shareholders and option holders, providing full details of the
transaction and convening a general meeting of OTR shareholders and option
holders, is currently being prepared and will be mailed, subject to the
approvals of the JSE and SRP, in due course.
Fourways
23 July 2002
Sponsor
LPC Manhattan Sponsors (Pty)Ltd
(Registration number 1999/024792/07)
Attorneys
Fluxmans Attorneys Inc
(Registration number 2000/024775/21)
Date: 23/07/2002 02:50:10 PM Produced by the JSE SENS Department
