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Western Areas Limited - Proposed rights offer of ordinary shares WESTERN AREAS LIMITED (Incorporated in the Republic of South Africa) (Registration Number 1959/003209/06) Share code: WAR ISIN: ZAE000016549 ADR Ticker symbol: WAR CUSIP No: 957654304 (`Western Areas` or `the Company`) Proposed rights offer of ordinary shares Shareholders are advised that the directors of Western Areas have resolved to proceed with a renounceable rights offer of approximately 35.5 million ordinary shares (`rights offer shares`) in the ratio of approximately 30 rights offer shares for every 100 existing ordinary shares (`the rights offer`). The rights offer share subscription price will be determined and announced prior to the registration of the rights offer circular by the Registrar of Companies. Based on the closing market price of 2 300 cents per Western Areas share on the last practicable trading date before finalisation of this announcement, approximately R816 million will be raised by the rights offer. All rights offer shares not taken up by shareholders and/or their renounces will be available for allocation to shareholders who may apply for additional rights offer shares. The rights offer will not be underwritten. The proceeds of the rights offer will be used by Western Areas to fund its share of the balance of capital expenditure at the South Deep Twin Shaft Complex (`South Deep`) to develop 100, 105 and 110 Levels. Following the completion of foregoing development, South Deep is anticipated to operate at a throughput of 320 000 tonnes of reef milled per month and cash costs of R57 000/kg, doubling production to approximately 800 000 ounces of gold per annum. The capital expenditure net of revenue attributable to Western Areas over the next three years is R500 million. Details of the planned utilisation of the funds raised from the rights offer, together with a 25-year attributable South Deep mine plan with forecast production, operating costs and capital expenditure will be provided in the rights offer circular. Negotiations are progressing with the hedge banks to restructure the derivatives structure to more appropriately reflect the forecast South Deep production profile. The refinancing of the Option Premium Payable and the possible conversion of this obligation into a Rand denominated obligation will be addressed as soon as practically possible, taking due consideration that the full life of mine plan for South Deep is scheduled to be completed by the end of 2005, resulting in the definition of a SAMREC compliant Mineral Resource and Mineral Reserve statement. The rights offer is subject to, inter alia: - the JSE Securities Exchange South Africa (`the JSE`) granting listings for the rights offer shares and letters of allocation to be issued in terms of the rights offer; - the Registrar of Companies registering the rights offer circular and the letters of allocation in terms of the section 146A of the Companies Act, 1973 (Act 61 of 1973) as amended; and - Western Areas shareholders at the annual general meeting to be held on or about 29 June 2005 (`the AGM`) passing the resolutions to increase Western Areas` authorised share capital for purposes of the rights offer and to place the unissued shares under the control of the directors for the purposes thereof; and - All other regulatory approvals and exemptions as may be required. Western Areas has borrowed R174 million from JCI Limited (`JCI`) as at 31 March 2005 under the terms of the R200 million stand-by facility arranged in 2004 as part of the future funding requirements of the Company. The JCI stand-by facility is unsecured, carries interest at prime plus 1.5% and is to be repaid out of the funds raised from the rights offer. JCI will follow its rights in the rights offer on the same terms and conditions as all other Western Areas shareholders. Western Areas shareholders providing irrevocable undertakings to follow their rights post announcement of the subscription price will be entitled to a 0.5% commitment fee of the subscription price payable to Western Areas. The rights offer subscription price and salient dates of the rights offer will be announced in due course. Following the AGM and subject to approval by the JSE, the rights offer circular will be posted to shareholders. Johannesburg 12 May 2005 Corporate adviser NewFound Sponsor Sasfin Corporate Finance A division of Sasfin Bank Limited Corporate law adviser Tabacks Date: 12/05/2005 05:01:28 PM Produced by the JSE SENS Department
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