SALLIES LIMITED
Incorporated in the Republic of South Africa.
Registration number 1903/001879/06
Share code: SAL.
ISIN: ZAE000022588
TRADING UPDATE
1. Capital raising exercise
In line with the performance improvement plan currently being implemented, the
board has resolved to raise some R30 million by means of a rights offer. It is
hoped that this exercise can be completed within the next three months;
shareholders will be advised of the details in due course. The proceeds of the
proposed rights offer will be used to pay down the group"s debt and also to
increase the plant output at the Witkop operation from 350 to 550 tons per day.
This production expansion is designed to satisfy long-term contracts, certain of
which were recently confirmed at increased price levels.
2. Current production optimised
The performance improvement measures detailed with the publication of the
interim results on 26 March 2003 are having the intended effect, and Witkop is
now consistently achieving its target volumes as well as a higher quality of
export-grade fluorspar.
3. Relocation of head office
The group"s head office in Rosebank, Johannesburg, has been closed down and this
function has been relocated at the Witkop operation. The estimated saving will
be in excess of R4 million per year.
4. Appointment of managing director, Witkop
To strengthen the group"s management, Izak Marais has been recruited from Gold
Fields where he was manager, mining, of the Kloof division. He has been
appointed to the new position of managing director of the Witkop operation and
has also joined the Sallies board.
5. Results for the year
The group"s results for the year to 30 June 2003 will be published on or about
22 September 2003. Some 90% of the group"s production is sold on the export
market at US dollar-denominated prices, and the strengthening of the rand
against the dollar has therefore had a significant impact on its revenue during
the latter half of the financial year. In addition, the once-off restructuring
costs associated with the performance improvement plan will be fully accounted
for in this period. It is consequently likely that the loss reported at the
interim stage will have increased in the second half of the year.
By order of the board
Pretoria
3 July 2003
Sponsor
Ernst & Young Sponsors (Pty) Ltd
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