| Fri 8 Dec 2006, 7:00 | | Pamodzi Gold Limited - Abriged prospectus relating |
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JSE
PZG
Pamodzi Gold Limited - Abriged prospectus relating to the private placement
Of 8,210,000 ordinary shares and the listing of the
entire issued share capital of Pzgold on the Jse
Limited ("JSE")
Pamodzi Gold Limited)
(formerly Bema Gold SA (Proprietary) Limited)
(Incorporated in South Africa)
(Registration number 2002/013039/06)
Share code: PZG ISIN number: ZAE000088563
("PZGold" or "the Company")
Abriged prospectus relating to the private placement Of 8,210,000 ordinary
shares and the listing of the entire issued share capital of Pzgold on the
Jse Limited ("JSE")
This abridged prospectus is not an invitation to the general public to
subscribe for shares in PZGold. The private placing was only open to
invited institutional investors; clients of selected brokerages and invited
retail investors.
The purpose of this abridged prospectus is to provide parties participating
in the private placing and members of the investment community with
information relating to PZGold, its operations, its directors and
management and financial information.
1 Introduction
The JSE has approved the listing of the entire issued share capital of
PZGold, with effect from the commencement of business on 11 December
2006, in the Resources `Mining - Gold Mining" sector of the JSE under
the abbreviated name `PZGold.
Prior to the listing, R150 million has been raised by PZGold through a
private placing of Pamodzi Gold ordinary shares ("ordinary shares") to
invited institutional investors; clients of selected brokerages and
invited retail investors.
2 Rationale
The main purposes of the listing is to:
- raise capital for further mine development and for the acquisition
of a mill for the Middelvlei Mine;
- enhance investors" awareness of PZGold and provide them with a
market for trading PZGold shares; and
- facilitate direct investment in PZGold.
3 Overview of PZGold
Pamodzi Investment Holdings (Proprietary) Limited ("Pamodzi
Investments") is a Black Economic Empowerment investment house whose
founders and shareholders are renowned, predominantly black
businesspeople. Pamodzi Investments acquired an interest of 50.5% in
Pamodzi Resources (Proprietary) Limited ("Pamodzi Resources") in
December 2002. Pamodzi Resources owns 50.0% plus one share in
Middelvlei Gold Investments (Proprietary) Limited ("MGI"), a Joint
Venture with Superior Mining Corporation.
PZGold was created through merging the gold assets of MGI and Bema
Gold South Africa (Proprietary) Limited and as a result of this
merger, Pamodzi Resources together with MGI will hold 50.17% of the
issued share capital of PZGold. This effectively makes PZGold an
historically disadvantaged South African ("HDSA") owned and controlled
company.
PZGold has gold mining operations on the East and West Rand of the
Witwatersrand basin in Gauteng Province in South Africa.
The West Rand operations consist of the mining assets of the old
Impafa Resources (Proprietary) Limited ("Impafa Resources"), now
called MGI, used in or in relation to the project in respect of the
prospecting for and mining of gold on portions 16, RE 6, 3, 2 of the
Farm Middelvlei 255 IQ ("Middelvlei" or "Middlevlei Reef"), an
opencast mine situated 55km south-west of Johannesburg, currently
extracting the Black Reef ore body. The Middelvlei Reef and
Ventersdorp Contact Reef will be mined at a later stage. The operation
is expected to produce 26,000 oz per annum of gold from 3 open pits in
the first year (2006/2007) at cash costs of c$349/oz. Refined
production is expected to increase to 32,000 oz per annum by 2008. The
operation is expected to have an 8 year life of mine.
MGI applied for conversion of its old order mining rights as required
under the Mineral and Petroleum Resources Development Act (Act 28 of
2002), as amended, ("MPRDA") on 2 May 2005. MGI has been granted a new
order prospecting right for gold on approximately 633ha of the
Middelvlei farm. Currently MGI has agreements for toll milling with
either Goldfields Limited or Harmony Gold Mines Limited and is
currently treating ore through the Harmony Plant. However plans are
progressing to develop or acquire on-mine processing capacity.
The East Rand operations consist of three underground operations
namely: The Grootvlei Proprietary Mines Limited ("Grootvlei") (which
includes a processing plant), Consolidated Modderfontein Mines 1979
Limited ("Cons Modder") and Nigel Gold Mining Company (Proprietary)
Limited ("Nigel") situated on the East Rand, some 40km east of
Johannesburg. All three operations hold old order mining rights under
the MPRDA and conversion to new order rights is subject to compliance
with regulatory issues. The merger and the subsequent HDSA status of
PZGold will address the compliance with these regulatory issues.
These operations have a significant amount of unredeemed capital
expenditure and assessed losses and are not expected to pay any tax in
the immediate future.
These operations are expected to produce c160,000 oz per annum over
the next 3 years, at an average cash cost of c.$422/oz. These
operations are expected to have a 9 year life of mine.
4 Prospects of the Company
On the listing date, PZGold will be the only HDSA owned and controlled
gold company listed on the JSE. PZGold"s portfolio comprises
production ounces, near production ounces and blue sky potential
contiguous to its existing operations.
PZGold intends to become at least a 400 000 oz per annum gold producer
in the near future. This will be achieved through a dual strategy of
organic growth and acquisitions or joint ventures. The Company has
identified attractive acquisition targets and intends to pursue a
number of transactions in the short to medium term.
PZGold intends to leverage off its HDSA status, technical skills,
access to capital and strategic location to:
- consolidate the junior gold mining operations in South Africa
through becoming the empowerment partner to mining companies needing
to comply with the Mining Charter before the 1 May 2009 deadline; and
- become a preferred bidder for various non-core assets of the larger
mining groups looking to gain additional Mining Charter points through
disposing of assets to HDSA owned and controlled mining companies.
A R75 million capital injection from Pamodzi Resources, pursuant to
the merger, will enable the Company to enhance its capital expansion
plans and pursue some of these opportunities. The Company expects to
return to the capital markets to raise funds to enable it to conclude
some of the acquisitions as a result of its HDSA status. The issue of
scrip is expected to dilute the HDSA shareholding and in order to
counter this, Pamodzi Resources has an option to acquire additional
PZGold shares in order to maintain the Company"s HDSA shareholding
above 50%. These shares will be acquired at a discount of 15% to the
30 day trade weighted average of PZGold shares traded on the JSE.
This option is valid until 1 May 2009, when the conversion of old
order mining rights to new order rights must be complete.
The Directors believe that with PZGold"s HDSA status, new management
team and access to capital, PZGold will become a significant gold
mining company, where future cash flows from operations will finance
future capital expansion and exploration of its asset base thereby
ensuring capital growth for its shareholders.
5 Group structure
The Group structure can be found in the published announcement
contained in the Business Day and Beeld.
6 Directors
The names, ages, business addresses, qualifications, occupations,
nationalities and brief CV"s of the Directors and senior management
are set out below:
6.1 Non-executive Directors
Director Business Abbreviated curriculum vitae
address
Ndaba Allan Pamodzi House Ndaba Ntsele is the co-founder
Ntsele (54) 3rd Floor and CEO of Pamodzi Investments
South 5 Willowbrook and co-founder of Pamodzi
African Close Property Developers. Prior to
(Non- Melrose North the end of apartheid in 1993,
Executive Atholl Mr. Ntsele was awarded the
Chairman) South Africa Nike Sub-Saharan Africa
license to trade in all Nike
sporting merchandise. Mr.
Ntsele has also been involved
in several government
initiatives including chairing
the conference on Micro
Economic Strategy of the Sub-
Saharan region and serving as
deputy chairman of Education
Africa. He has a diploma in
Business Management.
Johannes Pamodzi House Kobus du Plooy is an executive
Jacobus du 3rd Floor director of Pamodzi
Plooy 5 Willowbrook Investments and has been
(39) Close involved in all aspects of
South Melrose North Pamodzi"s equity investment
African Atholl activities since 1997. Before
South Africa joining Pamodzi, Kobus spent
(Non- more than three years as a
Executive manager in the financial
Director) department of the Industrial
Development Corporation and
also served as a manager in
structured finance at First
National Bank"s Corporate and
Investment Banking Division.
He holds a B.Com (Hons), CA
(SA).
John Graham Superior John Proust has advised public
Proust (47) Mining and private companies with
Canadian Corporation respect to debt and equity
HSBC Building financing, mergers and
(Non- Suite 1500 acquisitions and corporate
Executive 885 West restructuring since 1986. Mr.
Director) Georgia Proust has served on numerous
Street Boards and in several senior
Vancouver BC operating positions for
Canada private companies and TSX
Venture Exchange listed
companies, including as
current President, CEO and a
Director of Southern Arc
Minerals Inc. and Superior
Mining International
Corporation and as a Director
of Canada Energy Partners
Inc., Western Uranium
Corporation and KPS Ventures
Ltd. He is a graduate of the
Directors college, Micheal G.
G De Groote School of
Business, McMaster University
in Canada and holds the
designation of Chartered
Director (C.Dir). He is also a
graduate of the Canadian
Securities Course.
Dennis Bema Gold Dennis Stansbury has over 30
Robert Corporation years of varied surface and
Stansbury Suite 3100 underground engineering,
(54) Three Bentall production and management
US Centre experience. He currently holds
595 Burrard the position of Vice President
(Non- Street of Production and Development
Executive Vancouver BC for the Bema Gold Corporation,
Director) Canada a position he has held since
1994.
Sibongile Pamodzi House Sibongile Radebe is currently
Patricia 3rd Floor the head of Group
Radebe (46) 5 Willowbrook Communications for Nedbank
South Close Limited. She is also a
African Melrose North director of Freefall
Atholl (Proprietary) Limited and
(Independent South Africa Jacaranda Radio.
Non-
Executive
Director)
Dr. Mfezo Pamodzi House Dr Mokgata graduated with a
Blossom 3rd Floor B.Sc (Genetics and Bio Chem)
Mokgata (47) 5 Willowbrook in 1988 and an MBChB in 1994.
South Close She also holds a post graduate
African Melrose North diploma in occupational
Atholl medicine and is a member of
(Independent South Africa the certification committee at
Non- the Medical Bureau of
Executive Occupational Disease. She is
Director) currently the Occupational
Medical Practitioner and
Employee Wellness Practitioner
for City Power and Carnival
City.
Roger Thomas Bema Gold Roger Richer is currently the
Richer (52) Corporation General Counsel, Secretary and
Canadian Suite 3100 Vice President of
Three Bentall Administration of Bema Gold
(Non- Centre Corporation. He is currently
Executive 595 Burrard the President and Director of
Director) Street affiliated companies of Bema
Vancouver BC Gold: Consolidated Puma
Canada Minerals, Victoria Resource
Corp and Consolidated Westview
Resources Inc.
He has extensive experience in
all aspects of mining law
including coordinating and
managing outside teams of
lawyers engaged in a specific
project.
He has extensive experience
having overseen the risk
management (insurance) program
for Bema and its various
operations. He has a Degree
Bachelor of Law from the
University of Victoria,
British Columbia, Canada and
he is an admitted member to
the Bar of British Columbia.
Mzila Isaac Pamodzi House Mzila Mthenjane graduated at
Mthenjane 3rd Floor Wits in 1992 with a BSc (Min)
(36) 5 Willowbrook Eng. degree and joined
South Close Anglogold where he worked for
African Melrose North 5 years up to the level of
Atholl Technical Assistant, after
(Independent South Africa which he joined RMB and worked
Non- on various mining and
Executive infrastructure related
Director projects in the Corporate and
Project Finance divisions. In
July 2002 he joined Gold
Fields Mining Services
(Corporate Office) as a Senior
Manager in the Corporate
Development unit with
responsibility for Corporate
Finance, M&A and Corporate
Strategy until June 2004 when
he joined Deutsche Securities
as Vice President - Global
Banking, Corporate Finance. He
is currently with Royal
Bafokeng Holdings as an
Investment Manager responsible
for the 50% investment in
Bafokeng Rasimone Platinum
Mine.
6.2 Executive Directors
The executive directors have the responsibility for the day-to-day
running of the business and the execution of PZGold"s strategy. There
is a clear division of responsibilities between the executive
committee and the Board.
Director Business address Abbreviated curriculum vitae
Kenneth Pamodzi Gold Ken Steenkamp has had 20
Michael Limited years experience in senior
Steenkamp AMR Office Park positions with Gold Fields
(49) Building 3 in coal, base metals and
South Concorde Road gold. His last position was
African East general manager of Kloof
Bedfordview Gold Mining Company Limited.
(Chief South Africa He has both entrepreneurial
Executive and technical skills having
Officer) successfully owned and
controlled several
companies. He has a BSc
Mining Eng. and a MSc
Engineering degree from
Wits.
Antony Pamodzi Gold Tony Murdoch Eaton has a BSc
James Limited Mining Engineering. Tony has
Murdoch AMR Office Park extensive experience in
Eaton (49) Building 3 gold, platinum and coal
Zimbabwean Concorde Road including the appointment as
East General Manager of Wankie
(Chief Bedfordview Colliery - the largest
Operating South Africa Zimbabwean mining company.
Officer) He has a BSc Mining Eng.
Degree from Wits.
Martin Jaap Pamodzi Gold Martin Schermers has 10
Schermers Limited years of experience in the
(43) AMR Office Park mining industry and has been
South Building 3 involved with Petrex
African Concorde Road (previously Petra Mining)
East since 1996. Martin was
(Chief Bedfordview Financial Director at JIC
Financial South Africa Mining Services
Officer) (Proprietary) Limited from
1996 until 2002, Financial
Director at Petrex until
April 2004 and was the
Managing Director of Bema
Gold SA prior to the merger.
He has a BCompt degree.
7 Share Capital
The authorised and issued share capital of PZGold, before and after
the private placing, is set out below:
R
Authorised share capital of PZGold before the
private placement
1,000,000,000 ordinary shares of R0.001 1,000,000
(0.1cent) each
Issued share capital of PZGold before the 41,020.00
private placement
41,020,000 ordinary shares of R0.001 (0.1cent)
each
Share Premium 529,799,000
Issued share capital of PZGold after the private
placement
41,020,000 ordinary shares of R0.001 (0.1cent) 41,020.00
each
Share premium 744,473,000
Total 744,473,000
All the issued shares of PZGold are of one class, namely ordinary
shares with a nominal value of R0.001 (0.1 cent) each, ranking pari
passu in all respects..
8 Further documentation
Copies of the following documents will be available for inspection
during normal business hours at the registered office of PZGold from
27 November 2006 until 11 December 2006:
- a signed copy of this prospectus (available in English only);
- the Memorandum and Articles of Association of PZGold and its
subsidiaries;
- the PZGold share incentive scheme;
- the written consents of the merchant bank,financial advisor and
sponsor, reporting accountants and auditors, attorneys and competent
person to PZGold for the publication of their name and reports in this
prospectus in the form and context in which they appear;
- the audited annual financial statements of PZGold for years ended 31
December 2003, 31 December 2004 and 31 December 2005 and the audited
financial statements for the seven month period ending 31 July 2006;
- the signed independent reporting accountants" reports;
service agreements with Directors, managers, vendors and promoters
entered into since the date of incorporation;
- material contracts;
- the option agreement; and
- the Competent Person"s Report.
The registered office of PZGold:
AMR Office Park
Building 3
Concord Road East
Bedfordview
2007
(P O Box 670, Bedfordview, 2008)
Sandton
8 December 2006
Merchant bank, financial advisor and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Competent Person
Minxcon (Proprietary) Limited
Reporting accountants and auditors
PricewaterhouseCoopers Inc
Attorneys
Cliffe Dekker Inc
Date: 08/12/2006 07:00:12 AM Produced by the JSE SENS Department
