| Fri 12 Aug 2005, 8:25 | | Chrometco Limited - Abridged Pre-Listing Statement |
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Chrometco Limited - Abridged Pre-Listing Statement
Chrometco Limited
(formerly `Sweet Equity Investments (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2002/026265/06)
JSE code: CMO ISIN: ZAE000070249
(`Chrometco` or `the company`)
Warning: The listing of the ordinary shares in the company is on the ALTX.
Shareholders are advised of the risks of investing in a company listed on the
ALTX. Shareholders are advised that the JSE does not guarantee the viability or
the success of a company listed on the ALTX. In terms of the JSE Listings
Requirements a designated advisor has to be retained by the company. The
designated advisor is required to, inter alia, attend all board meetings held
by the company to ensure that all JSE Listings Requirements and applicable
regulations are complied with, approve the financial director of the company
and guide the company in a competent, professional and impartial manner. If the
company fails to retain a designated advisor it must make arrangements to
appoint a new designated advisor within 10 business days, failing which the
company faces suspension of trading of its securities. If a designated advisor
is not appointed within 30 days of its suspension the company faces the
termination of its listing without an offer to minority shareholders.
ABRIDGED PRE-LISTING STATEMENT
This abridged pre-listing statement is not an invitation to the public to
subscribe for shares in Chrometco, but is issued in compliance with the
Listings Requirements of JSE Limited (`the JSE`) (`Listings Requirements`).
This abridged pre-listing statement is issued to provide shareholders and
investors with additional information on Chrometco.
1. INTRODUCTION
The JSE has formally approved the listing of Chrometco on the AltX from the
commencement of trade on Friday, 12 August 2005. The shares will trade under
the abbreviated name `Chrometco`, with share code `CMO` and ISIN ZAE0000702049.
In order to raise share capital ?to enable the company to fund strategic
initiatives and working capitalU, Chrometco has, prior to the issue of this
pre-listing statement, placed 4 041 800 ordinary shares in Chrometco with a par
value of R0,001 each at a subscription price of R1,25 (`private placement`)
thereby raising R5 052 250.
2. INCORPORATION AND HISTORY OF CHROMETCO
Chrometco was incorporated on 23 October 2002 as Sweet Equity Investments
(Proprietary) Limited with an authorised share capital of 1 000 shares of R1,00
each and an issued share capital of 100 shares of R1,00 each by the founding
members Mr. E. Bramley and Mr. S. Simons. On 8 October 2003 the name of the
company was changed to Chrometco (Proprietary) Limited and on 17 February 2004
the company was converted to a public company. The name was changed to
Chrometco Limited. The authorised share capital was increased to R2 000 in the
form of 200 000 000 ordinary shares of 0,001 cents each. On 14 April 2005 the
authorised share capital was increased to R5 000 in the form of 500 000 000
ordinary shares of 0,001 cents each. Post 28 February 2005, an additional 6 880
000 ordinary shares were issued to 12 shareholders at an average issue price of
R1,25 per share (`post balance sheet issue`). The proceeds were used to settle
certain creditors and contractual liabilities.
Chrometco was formed with the initial objective of researching and
investigating business development opportunities in the field of mining,
concentrating and beneficiating ferrous metals and their ores, in particular,
chrome and manganese.
3. NATURE OF BUSINESS AND PROSPECTS
Chrometco holds title to the chrome rights to Portion 2 of the farm Rooderand
46 JQ, located on the north- west flank of the Pilanesberg intrusion. Korpo
Trust (Proprietary) Limited (`Korpo`) is the registered owner of the chrome
mineral rights on Portion 2 of Rooderand. Chrometco has purchased the company
Korpo in terms of an acquisition agreement and is now the sole shareholder
thereof. It was confirmed by the DME`s office that Chrometco holds a `used old
order right`.
Chrometco has had to enter into a joint venture agreement with the company
Pilanesberg Mining Co (Proprietary) Limited as this was the only way to legally
and exclusively gain access to the current valid `old order` mining license on
Portion 2 of Rooderand 47 JQ. Pilanesberg Mining Co (Proprietary) Limited holds
a valid current mining license to mine the minerals held by Chrometco`s
subsidiary Korpo, being the Korpo mineral rights on Portion 2 of Rooderand 47
JQ. The substance of the joint venture agreement is that Chrometco controls
100% of the mining license for its exclusive use until the licence is renewed,
at which time it will be renewed into the relevant Chrometco subsidiary.
The company expects the bankable feasibility study with regard to the LG6 seam
to be completed within 8 months from listing.
4. PROSPECTS
Copper, cobalt, nickel and manganese
The board is currently reviewing several projects and opportunities in the
above metals which appear to have a very good potential of being brought to
account in due course. These opportunities and/or projects are mostly
beneficiation projects and are currently in a very early stage of
investigations and are secondary to the main business of the company, being as
described above, that of Chrome exploration and possible future mine
development.
5. DIRECTORS
The full names, ages occupations and business addresses of the directors of
Chrometco are outlined below:
Director Age Occupation Business address
Edward
Bramley 36 Managing Director Office 8
Morgenster Building
3 Main Road, Irene
Mike
Godfrey Saner 60 Chairperson and Geologist 105 Sixth Street,
Linden Johannesburg
Josef Adam
Johannes
De Beer 35 Financial Director Woodhill Park Centre,
St Bernard Street,
Pretoria
Bruce
Alexander
Williamson 52 Businessman 19 Stirling Road,
Hurlingham
Johannesburg
All directors are South African citizens
Directors` responsibility statement
The directors of Chrometco:
# have considered all statements of fact and opinion in the pre-listing
statement;
# accept, collectively and individually, full responsibility for
the accuracy of such statements; and
# certify that, to the best of their knowledge and belief, there are no
omissions of material facts or
considerations which would render any statements of fact or opinion contained
in the pre-listing statement false or misleading, and that all reasonable
enquiries to ascertain such facts have been made and that the pre-listing
statement contains all information required by law, the Companies Act, 1973
(Act 61 of 1973), as amended and the Listings Requirements.
6. SHARE CAPITAL
The authorised and issued share capital of Chrometco, after the transaction,
is set out below:
Shares R
Authorised
Ordinary shares of 0,0001 cent each 500 000 000 5 000
Issued
Ordinary shares of 0,0001 cent each 144 441 800 1 445
Share premium 15 570 601
Less: share issue expenses (1 500 000)
14 072 046
7. CONTROLLING SHAREHOLDERS
The major shareholders of Chrometco are:
Woad Minerals (Pty) Ltd - Mr. S. Simons - 44 998 400 ordinary shares (28,48%);
and Audax Resources (Pty) Ltd - Mr. E. Bramley - 40 005 600 ordinary shares
(25,32%).
8. SUMMARY OF HISTORICAL FINANCIAL INFORMATION
Historical financial information
for the years ended 28 February
Audited Reviewed
2005 2004
R R
Turnover 172 316 -
Operating loss (843 720) (124 236)
Attributable loss (857 558) (124 236)
Headline loss per share (cents) (1,08) (0,14)
Loss per share (cents) (0,89) (0,14)
Price: Earnings ratio on subscription
price of 125 cents (times) N/A N/A
Earnings yield on subscription price (%) N/A N/A
Net asset value per share (cents) 0,77 0,51
Net tangible asset value per share (cents) (1,17) 0,51
Number of shares in issue 133 520 000 91 300 000
Weighted average number of shares in issue 96 493 601 90 108 767
9. UNAUDITED PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma consolidated income statement and balance sheet of
Chrometco before and after the post balance sheet issue and the private placing
are set out below. The unaudited pro forma income statement and balance sheet
have been presented for illustrative purposes only and because of their nature
may not give a fair reflection of Chrometco`s results, financial position and
changes in equity after the post balance sheet and the private placing. It has
been assumed for purposes of the pro forma financial information that the post
balance sheet issue of and the private placing took place with effect from 1
March 2004 for income statement purposes and 28 February 2005 for balance sheet
purposes. The directors of Chrometco are responsible for the preparation of the
unaudited pro forma income statement and balance sheet.
Unaudited pro forma income statement
Adjustments - After the
post balance post balance
sheet issue sheet issue
Before1 of shares of shares
Audited Pro forma
R R R
Revenue 172 316 - 172 316
Cost of sales (125 263) - (125 263)
Gross profit 47 053 - 47 053
Other income 2 000 - 2 000
Operating expenses (1 074 592) - (1 074 592)
Fair value adjustment
for non derivative
financial liabilities 181 819 - 181 819
Operating loss (843 720) - (843 720)
Investment income 5 243 - 5 243
Finance costs (19 081) - (19 081)
Net loss before
and after taxation (857 558) - (857 558)
Minority interest
in losses 500 - 500
Net loss for
the year (857 058) - (857 058)
Basic loss per share
(cents) (0,89) (0,83)
Headline loss
per share
(cents) (1,08) (1,00)
Weighted average
number of shares 96 493 601 6 880 0002 103 373 601
After the
post balance
sheet issue
Adjustments - After the of shares and
private private the private
placement placement placement
Pro forma Pro forma
R R R
Revenue - 172 316 172 316
Cost of sales - (125 263) (125 263)
Gross profit - 47 053 47 053
Other income - 2 000 2 000
Operating expenses - (1 074 592) (1 074 592)
Fair value adjustment
for non derivative
financial liabilities - 181 819 181 819
Operating loss - (843 720) (843 720)
Investment income - 5 243 5 243
Finance costs - (19 081) (19 081)
Net loss before
and after taxation - (857 558) (857 558)
Minority interest
in losses - 500 500
Net loss for
the year - (857 058) (857 058)
Basic loss per share
(cents) (0,85) (0,80)
Headline loss
per share
(cents) (1,03) (0,97)
Weighted average
number of shares 4 041 8003 100 535 401 107 415 401
Notes:
1. The `Before` financial information is based on Chrometco`s, audited income
statement for the year ended 28 February 2005.
2. The weighted average number of shares in issue has been adjusted for the
post balance sheet issue of 6,88 million ordinary shares.
3. The weighted average number of shares in issue has been adjusted for the
4,04 million ordinary shares issued in terms of the private placing.
4. No interest benefit has been calculated in respect of the cash raised as it
will be used to fund the proposed exploration programme and Chrometco`s
working capital requirements.
Unaudited pro forma balance sheet
Adjustments - After the
post balance post balance
sheet issue sheet issue
Before1 of shares of shares
Audited Pro forma
R R R
ASSETS
Non-current assets 2 960 975 - 2 960 975
Motor vehicles
and equipment 234 541 - 234 541
Intangible assets 2 599 898 - 2 599 898
Other long-term assets 126 536 - 126 536
Current assets 256 652 8 505 001 8 761 653
Inventories 53 180 - 53 180
Trade and other
receivables 5 217 - 5 217
Cash and cash
equivalents 198 255 8 505 0013 8 703 256
Total assets 3 127 627 8 505 001 11 722 628
EQUITY AND
LIABILITIES
Capital reserves 1 033 501 8 505 001 9 538 502
Share capital 1 335 702 1 405
Share premium 2 013 460 8 504 9312 10 518 391
Accumulated loss (981 294) - (981 294)
Non-current
liabilities 1 953 550 - 1 953 550
Long term liabilities 1 818 981 - 1 818 981
Long term finance
leases 134 569 - 134 569
Current liabilities 230 576 - 230 576
Provisions 3 181 - 3 181
Trade and other
payables 167 284 - 167 284
Current portion
of borrowings 33 678 - 33 678
Taxation payable 26 433 - 26 433
Total liabilities
and equity 3 127 627 8 505 001 11 722 628
Net asset value
per share (cents) 0,77 6,79
Net tangible asset
value per
share (cents) (1,17) 4,94
Number of shares
in issue 133 520 000 6 880 000 140 400 000
After the
post balance
sheet issue
Adjustments - After the of shares and
private private the private
placement placement placement
Pro forma Pro forma
R R R
ASSETS
Non-current assets - 2 960 975 2 960 975
Motor vehicles
and equipment - 234 541 234 541
Intangible assets - 2 599 898 2 599 898
Other long-term assets - 126 536 126 536
Current assets 3 552 250 3 808 902 12 313 903
Inventories - 53 180 53 180
Trade and other
receivables - 5 217 5 217
Cash and cash
equivalents 3 552 2505 3 750 505 12 255 506
Total assets 3 552 250 6 769 877 15 274 878
EQUITY AND
LIABILITIES
Capital reserves 3 552 250 4 585 751 13 090 752
Share capital 404 1 375 1 445
Share premium 3 552 2104 5 565 670 14 070 601
Accumulated loss - (981 294) (981 294)
Non-current
liabilities - 1 953 550 1 953 550
Long term liabilities - 1 818 981 1 818 981
Long term finance
leases - 134 569 134 569
Current liabilities - 230 576 230 576
Provisions - 3 181 3 181
Trade and other
payables - 167 284 167 284
Current portion
of borrowings - 33 678 33 678
Taxation payable - 26 433 26 433
Total liabilities
and equity 3 552 250 6 769 877 15 274 878
Net asset value
per share (cents) 3,33 9,06
Net tangible asset
value per
share (cents) 1,44 7,26
Number of shares
in issue 4 041 800 137 561 800 144 441 800
Notes:
1. The `Before` balance sheet is based on Chrometco`s, audited balance
sheet as at 28 February 2005.
2. Share capital and share premium have been adjusted to include the post
balance sheet issue of 688 million ordinary shares at R1,25 per share.
3. Cash and cash equivalents has been adjusted to include the cash received
as a result of the post balance sheet issue of 6,88 million ordinary shares
at an average issue price of 1,25 per share.
4. Share capital and share premium have been adjusted to include the issue
of the 4,04 million ordinary shares in terms of the private placing offer at
R1,25 per share less payment of the estimated transaction costs amounting to
R1,5 million which have been written off against share premium.
5. Cash and cash equivalents has been adjusted to include the cash received
as a result of the private placing and to reflect the payment of the
estimated transaction costs amounting to R1,5 million.
10. COPIES OF THE PRE-LISTING STATEMENT
Copies of the prospectus and pre-listing statement may be obtained any time
during normal business hours, from the registered office of Chrometco, River
Sponsors, and the transfer secretaries, details of which are set out below:
# The registered office of the company - Office 8 Morgenster Building,
3 Main Road, Irene, 0062;
# The office of River Sponsors - Parc Nouveau Building, 225 Veale Street,
Brooklyn, Pretoria, 0181
# The office of Computershare Investor Services 2004 (Pty) Ltd -
Ground Floor, 70 Marshall Street,
Johannesburg, 2001
Pretoria
10 August 2005
Corporate Adviser
RIVER GROUP
Designated Adviser
RIVER GROUP
Competent Person
Michael G Saner
Reporting Accountants
KPMG
Date: 12/08/2005 07:27:48 AM
Produced by the JSE SENS Department
