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Acquisition Of Mineral Rights And Withdrawal Of Cautionary Announcement
Sub Nigel Gold Mining Company Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1984/006179/06)
Share code: SBN ISIN: ZAE 000006391
("Sub Nigel" or "the company")
ACQUISITION OF MINERAL RIGHTS AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Sasfin Corporate Finance is authorised to announce that Sub Nigel has entered
into an agreement ("the agreement") with GFL Mining Services Limited ("GFL"), a
wholly owned subsidiary of Gold Fields Limited, for the acquisition ("the
acquisition") of the mineral rights to 32 farms or portions of farms ("the
mineral rights") in the Ventersburg District ("the Ventersburg Project") in the
Free State Province. The mineral rights extend over an area of 9760.404
hectares.
The acquisition comprises a Category 3 transaction as defined in the JSE
Securities Exchange South Africa Listings Requirements.
2. Rationale for the acquisition
An evaluation of previous exploration results, conducted by independent
consultants appointed by Sub Nigel, indicated that the Ventersburg Project has
economic potential. The indicated potential gold resource within a specific area
of interest in the northern area of the Ventersburg Project is in excess of 7
million ounces lying between 250 and 1 000 metres below the surface.
The acquisition of the mineral rights, in an area where favourable
infrastructure conditions exist for further exploration and mining activities,
will enable Sub Nigel to conduct further exploration and evaluate the
feasibility of establishing a mine.
3. Purchase consideration and settlement
In terms of the agreement, the purchase consideration for the mineral rights is
R 2 625 000 to be settled by the issue to GFL of 7 500 000 (seven million five
hundred thousand) new ordinary shares of no par value in Sub Nigel at an issue
price of 35 cents per share.
Settlement will be effected on the later of:
* the business day following the date of registration of the cession of
the mineral rights to Sub Nigel, or the date on which transfer and delivery
thereof is deemed to have occurred in terms of the agreement if the Mineral and
Petroleum Resources Development Act, No 28 of 2002 becomes effective prior to
such registration, or
* 1 October 2003.
4. Exploration, feasibility study, and option granted to GFL
In terms of the agreement, Sub Nigel has:
* undertaken to conduct, at its own cost, an exploration program, and,
if justified, to conduct a study to investigate the feasibility of establishing
a gold mine on the acquired mineral right properties; and
* granted to GFL or its nominee a sole and exclusive right to acquire,
at its sole discretion, up to a 51% beneficial interest in the mine should the
board of directors of Sub Nigel decide to proceed with the establishment
thereof. Should the option be exercised, GFL will reimburse 75% of the
exploration and feasibility study costs incurred by Sub Nigel, and the parties
will contribute to the mine establishment costs pro rata to their beneficial
interests in the joint venture.
5. Pro Forma Financial Effects
The table below sets out the pro forma financial effects of the acquisition,
based on the published interim financial statements of Sub Nigel for the six
months ended 31 December 2002. This information is provided for illustrative
purposes only and because of its historical nature, may not be a true reflection
into the future.
Before After % change
Loss and headline loss per share 0.63 0.48 (23.8)
(cents)
Tangible net asset value per 56.2 48.9 (13.0)
share (cents)
Weighted average number of 44 798 52 298 16.7
shares in issue (`000)
Number of shares in issue (`000) 50 631 58 131 14.8
Notes:
1. For purposes of calculating the loss and headline loss per share it
was assumed that the acquisition was effected on 1 July 2002.
2. For purposes of calculating the net asset value per share it was
assumed that the acquisition was effected on 31 December 2002.
6. Withdrawal of Cautionary Announcement
Shareholders are referred to the cautionary announcement published on 8 August
2003, and are advised that as a result of the conclusion of the agreement and
the publication of this announcement, caution is no longer required when dealing
in their shares in the company.
Cape Town
19 August 2003
Corporate Advisor and Sponsor:
Sasfin Corporate Finance, a division of Sasfin Bank Limited
Date: 19/08/2003 04:32:57 PM Produced by the JSE SENS Department
