| Wed 17 Aug 2005, 9:19 | | Petra Mining Limited - Further Announcement |
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Petra Mining Limited - Further Announcement
PETRA MINING LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1972/001062/06)
Share code: PET ISIN: ZAE000010237
(`Petmin` or `the Company`)
FURTHER ANNOUNCEMENT REGARDING THE ACQUISITION OF SPRINGLAKE HOLDINGS
(PROPRIETARY) LIMITED, BEE STATUS UPDATE AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. Introduction
Shareholders are referred to the acquisition announcement published on SENS and
in the press dated 25 May 2005 (`the announcement`), whereby Petmin announced
the acquisition of the entire issued share capital and claims on loan account
in Springlake Holdings (Proprietary) Limited (`Springlake`) for R108 236 000 to
be settled by the issue of 175 810 000 Petmin shares at 60 cents per share and
R2 750 000 payable in cash.
2. Conclusion of the due diligence review and the Competent Person`s Report
Referring to paragraph 4 of the announcement, the due diligence review and
Competent Person`s Report have now been completed. The fair value of the
Springlake mining assets has been confirmed by KPMG Inc. and Snowden Mining
Industry Consultants (Proprietary) Limited (`Snowden`) at R150,6 million, and
the cost of the Springlake acquisition, including estimated transaction costs,
is R113,2 million. Included in the acquisition cost is a contingent payment of
R26,5 million payable if the profit warranty of R53,6 million for the 28 months
from 1 March 2005 to 30 June 2007 is met. The fair value of the Springlake
mining assets has been taken into account to determine the net tangible asset
value per share and the net asset value per share, however, the profit warranty
has not been taken into account in calculating the pro forma financial effects
on the earnings per share and headline earnings per share, which have been
calculated in paragraph 3 below.
3. Pro forma financial effects of the Springlake acquisition on Petmin
After the
Springlake
Before (1) acquisition (2) %
Published Pro forma Change
Earnings per share (cents) 1.12 1.842 64
Headline earnings per share
(cents) 1.12 1.842 64
Diluted earnings per share (cents) 0.92 2.743 197
Diluted headline earnings
per share (cents) 0.92 2.743 197
Net asset value per share (cents) 52.55 66.384 26
Net tangible asset value
per share (cents) 52.55 64.144 22
Number of shares in issue (`000) 186 0004 321 7234 73
Weighted average number
of shares in issue (`000) 165 0003 300 7233 82
1. The `Before` financial information has been extracted, without adjustment
from the published, reviewed interim results of Petmin for the six months
ended 31 December 2004.
2. Earnings and headline earnings per share have been adjusted to include the
audited income and expenditure relating to Springlake, pro rated for a six
month period and additional depreciation relating to plant and mining equipment
and amortisation of mineral rights for a six month period arising due to the
allocation of the purchase price in terms of IFRS 3 (AC140):
(Business Combinations) and the excess of the purchase consideration over the
net asset value of Springlake at fair value. Headline earnings per share has
not been adjusted for the excess of the net asset value of the Springlake
acquisition over the purchase consideration.
3. Diluted earnings and headline earnings per share have been calculated by
including the dilutionary effect of the 31 million options at an estimated
strike price of 49 cents per option (calculated using the weighted average
traded price of Petmin`s shares on the JSE for the 30 days prior to 31 December
2004 less a 10% discount). These options were in issue at 31 December 2004, but
have subsequently lapsed.
4. Net asset and net tangible asset value per share have been adjusted to
include the assets and liabilities of Springlake, at fair value, and the
capitalisation of the estimated transaction costs of R5 million, the issue of
the initial consideration shares at the issue price, the raising of the
contingent consideration arising as a result of the business combination, the
settlement of the cash portion of the purchase price and the transaction costs,
the excess of the net asset value of the Springlake acquisition over the
purchase consideration ,raising of deferred taxation in respect of plant and
mining equipment and mineral rights at 29% arising due to the allocation of the
purchase price in terms of IFRS 3 (AC140) : (Business Combinations) and the
settlement of that portion of the transaction costs to be settled through the
issue of shares at the issue price. The effect of the issue of the additional
44 253 334 ordinary shares following the fulfilment of Springlake`s profit
warranty is to reduce the net asset value and net tangible asset value per
share by 6 cents per share.
4. Resources statement
Snowden have concluded on the reserves and resources of Springlake as follows:
Springlake Colliery (`the colliery`)
`The colliery has mined anthracite for 29 years and Snowden believes that the
colliery has a suitable underground infrastructure to continue mining
operations and potentially expand production within the limitations of the
current infrastructure. Sufficient capital expenditure has been identified to
sustain future production. Snowden further believes that the colliery will
continue to produce at around 600 kt per annum from the underground operations
for at least another 10 years. In addition, contractor operations in the
Lentedal open pit, situated in close proximity of the wash plant, will
guarantee sustainable production at around 500 kt per annum for another eight
years.`
Somkhele Anthracite Project (`Somkhele`)
`Snowden believes that Somkhele will be able to produce anthracite at the
planned production rate of 500kt per annum. The combined life of mine for Areas
1 and 2 at this production rate is at least 10 years. Operating costs and
capital expenditure were determined by Springlake in sufficient detail to
achieve the planned production.`
(Source: Snowdens: Competent persons report on the South African mineral assets
of Springlake Holdings (Proprietary) Limited, 29 May 2005)
5. Black Economic Empowerment
In the announcement details were given regarding the establishment of an anchor
Black Economic Empowerment (`BEE`) consortium.
The board is pleased to announce that Popcru Mining Investment (Proprietary)
Limited (`POPCRU`) has acquired 8 333 333 shares in Petmin. POPCRU has in
excess of 80 000 Historically Disadvantaged South African members and Petmin
welcomes POPCRU as a significant broad based empowerment shareholder.
6. Circular to shareholders
A circular to shareholders containing details of the Springlake acquisition is
currently being prepared and will be circulated to shareholders within 21 days
of this announcement.
7. Withdrawal of cautionary announcement
With the publication of this pro forma financial information, shareholders
need no longer exercise caution when dealing in the company`s securities.
PRETORIA
16 August 2005
Corporate Advisor and Sponsor
RIVER GROUP
Reporting Accountants
KPMG
BEE Facilitator
New Africa Mining Fund
Managed by Decorum Capital Partners (Pty) Ltd
Independent Professional Expert to Petmin shareholders
KPMG
Transaction Attorneys
CLIFFE DEKKER
Competent Person to Springlake
SNOWDEN
Date: 17/08/2005 08:30:15 AM
Produced by the JSE SENS Department
