| Mon 29 Mar 2004, 8:38 | | PETRA MINING LIMITED - PRESS RELEASE |
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PETRA MINING LIMITED - PRESS RELEASE
Press release
PETRA MINING LIMITED
(Incorporated in the Republic of South Africa, Registration number
1972/001062/06)
Share Code PET; ISIN ZAE 000010237
("Petmin" or "the company")
PETMIN ACQUIRES SOUTH AFRICA"S LARGEST HIGH QUALITY SILICA MINE AND ANNOUNCES
STRATEGIC PARTNERSHIP WITH THE NEW AFRICA MINING FUND TO ESTABLISH PETMIN AS AN
HDSA CONTROLLED MINING AND EXPLORATION COMPANY
PRESS RELEASE
Embargo: 29 March 2004
Pretoria
Petmin, in a joint statement with the New Africa Mining Fund ("NAMF"),
announced today that it had acquired SamQuarz (Pty) Ltd ("SamQuarz"), a
private company that owns the largest producing high quality silica mine in
South Africa, in a R 65 million transaction that simultaneously establishes
Petmin as a prominent broad based public JSE listed black empowerment
company in the South African mining industry.
NAMF is facilitating the participation of three independent and unrelated
broadly representative BEE companies in the transaction, which includes
Matlapeng Resources ("Pty") Ltd ("Matlapeng"), a mining investment company (with
a beneficial shareholder base in excess of 1.5 million previously disadvantaged
South Africans) in which Black Management Forum Investments (Pty) Ltd ("BMFI")
and Kopano Ke Matla Investments (Pty) Ltd ("Kopano") hold a controlling stake,
Zondwa
Resources (Pty) Ltd ("Zondwa") and Little Swift Investments (Pty) Ltd "(Swift").
NAMF is a R560 million private equity fund that was set up and subscribed to
by the following companies:
* ABSA Corporate and Merchant Bank
* BHP Billiton Plc
* Development Bank of South Africa Ltd
* Gold Fields Limited
* Harmony Gold Mine Ltd
* The Industrial Development Corporation of SA
* The International Finance Corporation (a Division of the World Bank)
* Kumba Resources Ltd
* Sanlam Limited
NAMF is endorsed by the South African Government and supported by the South
African mining industry, and was set up inter alia to invest in the development
of the junior mining sector in South Africa and Africa and to facilitate and
fund black economic empowerment in the mining industry.
SamQuarz owns the largest high quality silica mine in South Africa .It commenced
operations in 1956 and has a life of mine of 67 years. SamQuarz produces
approximately 1 million tons of high grade Silica Sand products at a state of
the art German designed and constructed processing plant, commissioned in 2001
at a total cost of approximately R 105 million.
Petmin, together with NAMF and its BEE partners have taken the decision to
acquire SamQuarz based on SamQuarz"s long term viability and stable annual free
after tax cash flows (approximately R 11 million for the year ended 31 December
2003). These cash flows will provide Petmin with a source of financial leverage,
enhancing Petmin"s ability to pursue its core strategy of developing and
turning exploration and mining activities to account.
The transaction will be funded with a mix of equity and senior debt. R25 million
of equity will be committed; comprising R13 million of new equity capital
provided by the BEE consortium as facilitated by NAMF and the balance drawn
from Petmin"s current cash reserves. Petmin also acquired the Quarzwerke GmbH
loan account in SamQuarz and will utilise SamQuarz"s balance sheet to secure R40
million of senior debt.
A further R5 million of additional capital raised from the BEE consortium will
be allocated to evaluating and implementing expansion opportunities at SamQuarz.
The BEE consortium will subscribe for 40 million new Petmin shares at a price of
45 cents per share, and will have an option to subscribe for a further 40
million shares during the next 12 months.
Quarzwerke GmbH, the German parent company of SamQuarz, has also agreed to
enter into a consulting and skills transfer agreement with Petmin to ensure
a seamless transformation period.
It is anticipated that the transaction will result in an initial aggregate BEE
interest of approximately 33% in Petmin. Upon exercise of the BEE options,
Petmin will be an HDSA controlled company in terms of the Mining Charter.
The transaction is subject to a due diligence investigation, financing and
the normal regulatory approvals.
"The new relationship between Petmin and NAMF is a significant development for
black economic empowerment in the South African mining industry", said Mr.
Arthur Matshiashidi, CEO of Decorum Capital Partners, who manages the New Africa
Mining Fund. "It provides a mechanism of access for emerging BEE groups to a
stable public listed vehicle which not only ensures continuity and a measure of
liquidity, but also presents a significant opportunity for the growth of Petmin
itself as a leading black empowerment force in the region".
Colin Matjila, CEO of Kopano and Campbell Bomella, CEO of BMF, said: "This
transaction constitutes an important milestone for Matlapeng.It is our first
investment in a JSE listed mining company, and provides an ideal platform from
which we intend to increase our shareholding in Petmin as we continue to
increase our investments in the South African mining industry .Matlapeng
believes in real empowerment in its widest and most representative sense - a
conviction shared by our new partners Petmin and NAMF. We look forward to
playing an important role in the growth of the company and the unlocking of
value for all its shareholders".
Dawid Warmenhoven, CEO of Petmin said: "We are delighted to have NAMF,
Matlapeng, Zondwa and Swift as our new strategic partners. Both Petmin"s
controlling shareholders as well as non-executive directors Jabu Mabena and Lebo
Mogotsi have existing relationships with our new partners , and their
introduction as significant shareholders of Petmin adds significant value both
to our growth objectives as a developing junior mining company, as well as to
the pursuit of one of our stated objectives to become a BEE partner of choice to
larger mining companies who share our commitment to the unlocking of Southern
Africa"s mineral wealth for all its people."
Pretoria
27 March 2004
For further information contact:
New Africa Mining Fund
Bradley Doig: Tel - 082 459-7818
Petra Mining Limited
Jan du Preez: Tel - 082 557-1979
River Group
James Hinton: Tel - 082 557-2512
Date: 29/03/2004 07:21:49 AM Produced by the JSE SENS Department
