| Mon 5 Jun 2006, 11:16 | | Sallies - Revised Salient Details of the Proposed |
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SAL
SAL
Sallies - Revised Salient Details of the Proposed Acquisition
Sallies Limited
(Incorporated in the Republic of South Africa)
Registration number 1903/001879/06
JSE Share Code: SAL
ISIN: ZAE000022588
("Sallies" or "the Company")
REVISED SALIENT DETAILS OF THE PROPOSED ACQUISITION OF BUFFALO FLUORSPAR
1. Introduction
Further to the announcement dated 9 May 2006 shareholders are advised that
the Company on 5 June 2006 signed a revised agreement relating to the
acquisition of certain assets from Transvaal Mining and Finance Company
Limited ("TMFCL") (which trades as Buffalo Fluorspar) ("the agreement"),
salient details of which are contained in this announcement.
Buffalo Fluorspar is a fluorspar deposit located in the Limpopo Province
the salient underlying assets of which essentially comprise mineral rights
and a dormant fluorspar extraction plant.
2. Assets acquired
In terms of the agreement Sallies will acquire the following assets:
- the Fluorspar properties (as described in paragraph 3 below);
- all of the slimes and/or tailings on the Fluorspar properties; and
- all plant, equipment and other production facilities on the Fluorspar
properties associated with the recycling of the aforementioned slimes
and/or tailings.
3. Properties currently owned by TMFCL
The properties currently owned by TMFCL are:
- Portions 10 and 11 (both Portions of Portion 8), the remaining Portion
of Portion 8 (a Portion of Portion 3) as well as the remainder,
respectively of the Farm Buffelsfontein 347 KR District Potgietersrus,
being in aggregate an area of some 717,4728 hectares; and
- Portion 7 (a Portion of Portion 2) of the Farm Buffelsfontein 647 KR
District Potgietersrus, which is 1,7131 hectares in extent
(collectively defined as "the properties").
Sallies and TMFCL shall, as soon as reasonably possible, procure that the
properties owned by TMFCL shall be subdivided into two portions namely the
Fluorspar properties (which are to be purchased by Sallies) and the Stone
properties (which will remain the property of TMFCL). The parties shall
share the costs of such subdivision and registration in equal proportions.
4. Purchase price
The aggregate purchase price for the assets acquired is R65 million, which
amount is to be settled as follows:
- R62,5 million in cash; and
- by the allotment and issue, credited as fully paid, by Sallies to
TMFCL of such number of Sallies ordinary shares as shall be equal in
value to R2,5 million. The value of the Sallies ordinary shares shall
be deemed to be 90% of the 30 day weighted average traded price of
Sallies ordinary shares calculated up to the close of business on the
day immediately prior to the closing date. For purposes of clarity
the closing date is four business days after the fulfillment of the
last of the conditions precedent.
5. Conversion of mining rights
TMFCL will grant Sallies the entitlement to apply, in the name of TMFCL and
as the agent for and on behalf of TMFCL, for the conversion of the old
order rights held by TMFCL in connection with the properties into
respectively mining rights and/or prospecting rights in terms of the
Mineral and Petroleum Resources Development Act, 2002 (Act 28 of
2002)("MPRD Act") ("new order rights") as well as the transfer to Sallies
or its nominee of such new order rights in terms of Section II of the MPRD
Act.
6. Conditions precedent
The acquisition is subject to the fulfilment of the following conditions
precedent:
- By no later than Friday, 9 June 2006, or such later date as the
parties may agree to in writing, Sallies shall have completed the due
diligence of Buffalo Fluorspar and its underlying assets to its
satisfaction, and shall have delivered a written notice to TMFCL by no
later than Monday, 19 June 2006, advising TMFCL that it wishes to
proceed with the acquisition;
- the board of directors of Sallies shall have resolved, by no later
than 30 June 2006, that Sallies shall enter into the agreement; and
- the shareholders of Sallies in general meeting shall have resolved, by
no later than 27 July 2006, that Sallies shall enter into the
agreement.
7. Current status of the due diligence review
Sallies is currently completing its a due diligence review on Buffalo
Fluorspar in conjunction with the independent geological and techno-
economic consultants to Sallies, RSG Global (Pty) Ltd.
8. Financial effects
The operations of Buffalo Fluorspar have been dormant for approximately the
last 12 years and accordingly no trading results are available for that
period and it is therefore not possible or practicable to quantify any pro
forma financial effects at this time.
9. Further cautionary
Given that the agreement has not yet become unconditional, Sallies
shareholders are advised to exercise caution when dealing in the company"s
securities until they are in receipt of the relevant circular (giving
further details of the proposed acquisition) and/or the outstanding
conditions precedent have been fulfilled.
Johannesburg
5 June 2006
Sponsor
Ernst & Young Sponsors (Pty) Ltd
(Registration number 2000/031843/07)
Date: 05/06/2006 11:16:05 AM Produced by the JSE SENS Department
