| Fri 23 Jun 2006, 12:07 | | Aflease Gold - Share Swap Transaction |
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AFO
AFO
Aflease Gold - Share Swap Transaction
AFLEASE GOLD LIMITED
(Formerly Sub Nigel Gold Mining Company Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1984/006179/06)
Share Code: AFO & ISIN Code: ZAE 000075867
("Aflease Gold" or "the Company")
SHARE SWAP TRANSACTION BETWEEN AFLEASE GOLD, TRINITY ASSET MANAGEMENT
(PROPRIETARY) LIMITED AND TRINITY HOLDINGS (PROPRIETARY) LIMITED
1. Introduction
Shareholders are referred to the cautionary announcement released on
SENS on 30 May 2006, and are advised that Aflease Gold has concluded a
share exchange agreement (the "Share Swap Agreement") with Trinity
Asset Management (Proprietary) Limited and Trinity Holdings
(Proprietary) Limited (collectively, "Trinity").
Under the Share Swap Agreement, subject to certain conditions, Aflease
Gold will acquire from Trinity not less than 7 500 000 and not more
than 13 000 000 ordinary shares of Randgold and Exploration Limited
("Randgold"), the exact number of such Randgold shares within such
range (the "Trinity Swap Shares") to be determined by Aflease Gold in
its discretion, in exchange for the issuance of a number of Aflease
Gold ordinary shares (the "Aflease Gold Swap Shares"), equal to not
less than 7 and not more than 10 times the number of Trinity Swap
Shares (the "Share Swap Transaction").
2. Terms of the Share Swap Transaction
Aflease Gold will acquire the Trinity Swap Shares against the
allotment and issue to Trinity of the Aflease Gold Swap Shares. The
Share Swap transaction will take place in two tranches, the details of
which are as follows:
2.1 First Tranche
Aflease Gold shall allot and issue to Trinity, which shall
subscribe for, the first tranche of the Aflease Gold Swap
Shares, being that number of Aflease Gold shares equal to 7
times the number of Trinity Swap Shares between 7 500 000 and 13
000 000 which Aflease Gold elects to acquire, against delivery
by Trinity to Aflease Gold of such Trinity Swap Shares.
Closing of the first tranche will take place on the fifth
business day after the fulfilment of the conditions precedent to
such closing specified in the Share Swap Agreement.
2.2 Second Tranche
Aflease Gold shall allot and issue to Trinity, which shall
subscribe for, the second tranche of the Aflease Gold Swap
Shares, being that number of Aflease Gold shares equal to a
multiple between zero and 3 of the Trinity Swap Shares acquired
on the closing of the first tranche based on Randgold"s net
asset value per share when the same is finally determined for
the purposes of the Share Swap Agreement. Under the Share Swap
Agreement, the number of Aflease Gold Swap Shares issued on the
closing of the second tranche will be between zero (if such net
asset value per share is less than R 14,70) and 3 times the
number of the Trinity Swap Shares acquired on the closing of the
first tranche (if such net asset value per share is more than R
21,00).
Closing of the second tranche will take place on the fifth
business day after the date on which Randgold"s net asset value
per share is finally determinable in accordance with the
provisions of the Share Swap Agreement.
2.3 The Share Swap Agreement also provides that Aflease Gold will
have the right, among other things, to cause the withdrawal of
legal proceedings instituted by Trinity for the liquidation of
Randgold and the JCI Limited Group ("JCI").
3. Rationale for the Transaction
If the Share Swap Transaction is completed, Aflease Gold will acquire
between 10% and 17,4% of the issued ordinary shares of Randgold. This
interest would complement the 12% interest in Randgold held by sxr
Uranium One Inc. ("Uranium One"), which holds approximately 79% of
Aflease Gold"s issued ordinary shares (cumulatively between
approximately 22% and 29,4% after giving effect to the Share Swap
Transaction).
The Share Swap Transaction will increase Aflease Gold"s asset base,
give the company additional financing flexibility to develop its
assets and enhance the liquidity of its ordinary shares. In addition,
the combined interest in Randgold of Aflease Gold and Uranium One is
expected to enable the two companies to play a significant role in
facilitating a resolution of the claims between Randgold and JCI in a
fair and equitable manner.
Aflease Gold intends to hold its Randgold shares for investment
purposes pending satisfactory resolution of the claims by and against
Randgold. In that regard, Aflease Gold intends to be supportive of
all steps directed at securing full value for Randgold"s shareholders,
whether through the sale or liquidation of its investments, including
its shares in Western Areas, or otherwise.
Randgold"s JSE Limited ("JSE") and NASDAQ listings were suspended in
2005 and a forensic investigation into its affairs is still ongoing.
Randgold continues to hold an attractive portfolio of mineral rights
and investments in mining and mineral exploration companies, including
a 3,5% equity interest in Western Areas Ltd. Western Areas holds a
50% joint venture interest in the South Deep gold mine. Western Area"s
attributable share in the defined mineral resources of South Deep,
consists of a measured resource of 3,96 million ounces and an
indicated resource of 29,58 million ounces. JCI holds a 24,9% equity
interest in Western Areas.
4. Conditions Precedent
The Share Swap Transaction is subject to the fulfilment of, inter
alia, the following conditions precedent:
* Aflease Gold shareholders approving an increase in the authorised
share capital of the Company from 475 000 000 to not less than 1 225
000 000 Aflease Gold shares through the creation of not less than
750 000 000 new Aflease Gold shares;
* The JSE granting all the necessary approvals for and/or in
connection with the implementation of the Share Swap and the listing
on the JSE of the Aflease Gold Swap Shares;
* The board of directors of JCI confirming, to the satisfaction of
the Aflease Gold board of directors, that the unconditionally
recoverable net indebtedness of JCI and/or the JCI subsidiaries to
Randgold and/or its subsidiaries in respect of the claims of Randgold
which are subject to a mediation agreement between Randgold and JCI is
not less than R1 100 000 000 in the aggregate; and
* Aflease Gold receiving an irrevocable written commitment to vote
all of the Aflease Gold shares held by Uranium One in favour of the
increase in the authorised share capital.
5. Warranties
Certain warranties which are normal in a transaction of this nature
have been provided by the parties.
6. Financial Effects
The unaudited financial effects of the Share Swap are in the process
of being finalised and will be published in due course
7. Categorisation
In terms of section 9.5 of the Listings Requirements of the JSE, the
Share Swap Transaction is regarded as a category 2 transaction.
8. Circular to Aflease Gold Shareholders
Subject to the approval by the JSE, a circular containing full details
of the Share Swap will be posted to Aflease shareholders within 28
days of this announcement.
A circular containing full details of the increase in authorised share
capital together with the notice convening the required general
meeting of Aflease Gold shareholders to approve the same will posted
separately in due course.
9. Cautionary Announcement
Shareholders are reminded to continue to exercise caution when dealing
in Aflease Gold"s shares, until the financial effects have been
announced.
Johannesburg
23 June 2006
Investment Bank and Attorneys Reporting accountants
Sponsor
Nedbank Capital Deneys Reitz Ernst & Young
Date: 23/06/2006 12:07:22 PM Produced by the JSE SENS Department
