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Metorex Completes Etc Acquisition - Press Release
Metorex Limited
Registration number 1934/005478/06
Incorporated in the Republic of South Africa
Listed on the JSE Securities Exchange South Africa and London Stock Exchange
JSE alpha MTX ISIN ZAE000022745
Issuer code MEMTX
Further to the recent announcements in the press and the general meeting of
shareholders held on 21 May, Metorex confirm that they took effective management
and financial control of the ETC Complex from Avgold on 15 June 2003. The
following information is provided to shareholders regarding the completion of
that acquisition.
1. Payment for Acquisition
The payment for the acquisition was made on Friday, 13 June to Avgold. The
total amount of R255million was made up as below:
Payment from Metorex and other R150million
Shareholders
Bank Loan R105million
Total R255million
2. Individuals Shareholding Payments
The Metorex payment was partially funded by means of a vendor placing which
raised R90million. Those shares were listed on Tuesday, 17 June and were placed
at a price of R2.50 per share. The balance of the payment was made by Crew
Development Corporation and a limited payment was made by MCI. In terms of the
Shareholders" Agreement, Metorex will recoup all its funds prior to dividends
being paid. The financial structure of the company will reflect this structure.
3. Renaming of the Company
The purchase transaction comprised the purchase of the assets known as "The
ETC Division" from Avgold Limited. These assets have been placed into a company
named "Barberton Mines Limited" (BML). BML has entered into the various loan,
hedging and other transactions necessary to complete this agreement.
4. Hedging Transactions
In terms of the loan arrangements, the banks require that a proportion of
the future gold production be hedged to ensure capital and interest repayments
on the debt.
The debt to equity ratio of this transaction is 41% and the debt repayment
terms are over 6 years. The hedges that have been taken out to repay this debt
are summarized below:
Years 1 - 3 Inclusive A stabilized Contango Hedge;
Proportion of Production Approximately 70% of production (i.e. 177
kg/month)
Hedge Price R103 460 per Kilogram
The latter 3 years of the loan have been hedged at a lesser proportion and
are on the Contango line at the prices shown below:
Year 4 50% at R119 098/kg
Year 5 50% at R127 833/kg
Year 6 50% at R136 843/kg
The hedge structure takes account of cost inflation anticipated to occur in
the latter years of the contracts.
5. Production and Cost Structures
As shareholders are aware, the BML operations are the largest Archaean
greenstone operation in Southern Africa producing at an average grade of
approximately 10 grams per ton, which makes it one of the richer mines in South
Africa. The current operating costs of approximately R670/ton are high by
industry norms and reflect the complex infrastructure of the mine and scale of
operation. As detailed in the circular to shareholders, Metorex will be
attempting to improve the production levels and reduce the cash cost structures
on the mine.
Metorex" year-end is 30 June 2003. Accordingly, BML will have minimal
impact on earnings for the current year and the full benefit of the acquisition
will become evident in the forthcoming financial year.
6. Crew Reduces Its Shareholding
Crew Development Corporation (Crew) has reduced its shareholding in Metorex
Limited to approximately 5% with the sale of 20million shares to Rand Merchant
Bank Limited who the Board welcomes as a new institutional shareholder.
The Board is, however, pleased to announce that the Crew relationship will
continue through its direct shareholding in BML.
Johannesburg
18 June 2003
Date: 18/06/2003 05:24:04 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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