Sallies Limited - Sallies sees light at end of tun
SAL
SAL
Sallies Limited - Sallies sees light at end of tunnel
SALLIES LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1903/001879/06
JSE Share Code: SAL
ISIN: ZAE000022588
SALLIES SEES LIGHT AT END OF TUNNEL
Johannesburg, 20 September 2006 - Fluorspar producer Sallies said today the
major advances of recent months - including a capital injection of R110
million, the acquisition of Buffalo Fluorspar, the virtual completion of a BEE
partnership and the cancellation of the onerous Honeywell contract - had
significantly improved its recovery prospects.
The long-embattled company suffered a further setback in the year to June, with
the delayed granting of mining rights for its Buffelshoek deposit substantially
reducing feed grades and hence production. In addition, it had to supply
Honeywell at sub-market prices for the first half of the year, for which
Honeywell is still withholding part of the payment. Revenue from mining
consequently declined to R86.9 million (2005: R101.2 million) and the company
posted an attributable loss of R39 million (2005: R31.8 million).
Chief executive Izak Marais said, however, that the company"s prospects had
brightened considerably over the past three months and the major transactions
completed or currently being finalised would not only stabilise the business but
provide a solid platform for future growth. Management is now focusing on the
achievement of budgeted production and grade targets.
Marais noted that cash generated by a rights offer, the exercise of options by
FRM Strategies and private share placement had eased the extreme financial
pressure under which the company had operated in recent years. The newly
acquired Buffalo has thus far performed ahead of expectations and it was
expected that the BEE transaction, in terms of which African Renaissance
Investments will acquire a 30% stake in the company, would generate further
growth opportunities.
Marais said the international market for fluorspar remained buoyant with price
levels improving further. Sallies will benefit fully from these favourable
conditions once it has fulfilled all its old contractual obligations by the end
of 2006.
"We"ve started the new financial year in a much-improved position and, in the
light of the tangible reversal in our fortunes, our focus is shifting from
survival to growth," he said.
For further information call Izak Marais on 083 298 2000
Issued by du Plessis Associates on behalf of Sallies Limited.
dPA contact Helen McKane on Tel : +27 11 728 4701,Fax: +27 11 728 2547 or e-
mail: sallies@dpapr.com
Date: 20/09/2006 12:17:03 PM Produced by the JSE SENS Department
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