| Thu 25 Jul 2002, 0:00 | | New Mining Corporation Limited - Announcement |
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NEW MINING CORPORATION LIMITED - ANNOUNCEMENT
(Incorporated in the Republic of South Africa)
(Registration number 1933/004523/06)
JSE Share code: NEW ISIN: ZAE000017430
("NMC")
- ACQUISITION OF AN ADDITIONAL 7,3% INTEREST IN JCI LIMITED
- EXTENSION OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
1.1 NMC, led by Executive Chairman Sello Rasethaba, is an established and
recognised Black Empowerment Company in the resource and mining industry with
its main assets comprising various mineral rights, an existing investment in JCI
Limited ("JCI") of approximately 12% prior to the transactions announced by JCI
on 20 April 2002, as well as a 50% interest in Letseng Investment Holdings
(South Africa) (Proprietary) Limited, the holding company of the Letseng Diamond
mine in the Kingdom of Lesotho. It is NMC`s objective to develop and enhance its
profitability through the maintenance and ongoing development of meaningful
relationships and transformation partnerships in the resources and mining
industry through the involvement of its major shareholders, which include
Matodzi Mining and Energy, Midland Molefe Resources, Economic Equity Investments
and SACTWU.
1.2 It was announced in the press on 20 April 2002 that:
- the respective operations of JCI (formerly Consolidated African Mines
Limited) and JCI Gold Limited would be merged through a scheme of arrangement in
terms of section 311 of the Companies Act, 1973 (Act 61 of 1973), as amended
("the CAM/JCI Gold merger");
- JCI would undertake a rights offer to raise the required funding to
implement the CAM/JCI Gold merger ("the JCI rights offer"); and
- JCI would acquire a 40% interest in Letseng Investment Holdings (South
Africa) (Proprietary) Limited in consideration for 220 000 000 JCI shares and a
cash payment of US$6.5 million ("the Letseng acquisition").
1.3 It was further announced in the press on 4 July 2002 that all conditions
precedent to the CAM/JCI Gold merger had been fulfilled and that the merger
would be operative from Monday, 15 July 2002.
2. THE ACQUISITION
2.1 Further to the cautionary announcement published in the press on
4 July 2002, PSG Investment Bank Limited is authorised to announce that NMC has
entered into an agreement with Anglo South Africa Capital (Proprietary) Limited,
a wholly-owned subsidiary of Anglo American plc ("Anglo"), in terms of which NMC
will, subject to the conditions precedent set out in paragraph 7 below ("the
conditions precedent"), acquire from Anglo 126 834 740 JCI shares, constituting
7,3% of the issued share capital of JCI (after implementation of the CAM/JCI
Gold merger, the JCI rights offer and the Letseng acquisition), for a cash
purchase consideration of R63 417 370 ("the purchase consideration") ("the
acquisition"), with effect from the day after the fulfilment of the conditions
precedent.
2.2 Following on the implementation of the acquisition, NMC will hold 210 168
073 shares in JCI, constituting 12,1% of JCI`s enlarged issued share capital
after implementation of the CAM/JCI Gold merger, the JCI rights offer and the
Letseng acquisition.
3. NATURE OF BUSINESS OF JCI
JCI is a prominent, specialised resource finance house with interests in and
influence over local and international resource assets. Its main investments are
29% of Randgold & Exploration Company Limited, 43,1% of Western Areas Limited,
44,9% of Free State Development and Investment Corporation Limited and 40% of
Letseng Investment Holdings (South Africa) (Proprietary) Limited.
4. VOTING POOL ARRANGEMENT
A voting pool arrangement exists between NMC and BNC Investments (Proprietary)
Limited ("BNC") (the investment vehicle of the Kebble consortium, which will
hold a 15,4% interest in JCI after implementation of the CAM/JCI Gold merger,
the JCI rights offer and the Letseng acquisition). in terms of this voting pool
arrangement, NMC and BNC must agree on the way they vote their respective
interests in JCI from time to time.
5. RATIONALE FOR THE ACQUISITION
The rationale for the acquisition is to increase the holding of NMC in JCI to
approximately 12,1% (after implementation of the CAM/JCI Gold merger, the JCI
rights offer and the Letseng acquisition) to enable it to better achieve its
objectives and implement its strategy as referred to in paragraph 1.1 above.
6. FINANCIAL EFFECTS OF THE ACQUISITION
6.1 Set out below are the financial effects of the acquisition on the
earnings, headline earnings, net asset value and tangible net asset value per
NMC share, based on the assumptions that:
6.1.1 for purposes of the earnings and headline earnings per share
calculations:
- the acquisition was effective during the financial year ended
31 March 2002; and
- the purchase consideration was paid on 1 April 2001 and that such purchase
consideration was borrowed by NMC and attracted interest of 15% per annum during
the financial year ended 31 March 2002; and
6.1.2 for purposes of the net asset value and net tangible asset value per
share calculations, the acquisition was effected on 31 March 2002.
Audited Pro forma
Before After Change
(cents)(1) (cents) (%)
Loss per share (3,0)(2) (9,3) (210)
Headline loss per share (1,9)(3) (8,2) (332)
Net asset value per share at
31 March 2002 33,1(4) 33,1 -
Tangible net asset value per share
at 31 March 2002 33,1(4) 33,1 -
Notes:
(1) Extracted or compiled from the audited consolidated results of the NMC
group for the financial year ended 31 March 2002.
(2) Based on a weighted average number of 149 672 589 NMC shares in issue
during the financial year ended 31 March 2002 and on an attributable loss of R4
454 000 for the year then ended.
(3) Based on a weighted average number of 149 672 589 NMC shares in issue
during the financial year ended 31 March 2002 and on a headline loss of R2 813
000 for the year then ended.
(4) The net asset value and tangible net asset value per share before the
acquisition is based on the total shareholders` equity of R206,193 million at 31
March 2002 less the book value of the 130 million "A" Participating Convertible
Preference shares in issue of R90,606 million, but including the 200 million "B"
Participating Preference Shares in issue and the book value of R139,4 million in
respect of such preference shares, as these preference shares participate pari
passu with the ordinary shares in issue with regard to a return of capital on a
winding-up of NMC.
6.2 The negative effect on NMC`s historic pro forma earnings and headline
earnings per share is attributable to the fact that the acquisition does not
render JCI an associate of NMC and no dividend was declared by JCI in respect of
its financial year ended 31 March 2002. Accordingly, on a historic pro forma
basis, there would have been no earnings contribution attributable to the
acquisition, whilst NMC would have incurred interest on the funds borrowed to
finance the acquisition.
7. CONDITIONS PRECEDENT
7.1 The acquisition is subject to regulatory approvals of the acquisition being
received, to the extent required, from the JSE Securities Exchange South Africa
("the JSE") and the Securities Regulation Panel.
7.2 The acquisition is further subject to shareholder approval by NMC
shareholders in general meeting by no later than 15 September 2002.
8. CIRCULAR TO SHAREHOLDERS
A circular setting out details regarding the acquisition and incorporating a
notice of general meeting of NMC shareholders, is being prepared and will,
subject to approval by the JSE, be despatched to shareholders in due course.
9. EXTENSION OF CAUTIONARY ANNOUNCEMENT
The cautionary announcement published in the press on 4 July 2002 related, in
part, to the matters set out in this announcement. As that cautionary
announcement also related to negotiations in relation to other matters,
shareholders are advised to continue exercising caution in dealing in NMC shares
until a further announcement is made.
Johannesburg
25 July 2002
Investment bank
PSG Investment Bank
Reporting accountants
Charles Orbach & Company
Sponsor
RiverBank Sponsor Services (Pty) Ltd
Registration number 2000/025913/07
Attorneys
Tabacks
Date: 25/07/2002 05:51:27 PM Produced by the JSE SENS Department
