| Tue 19 Dec 2006, 9:00 | | Petmin Limited - Admission to AIM |
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PET
PET
Petmin Limited - Admission to AIM
Petmin Limited
Incorporated in the Republic of South Africa
Registration Number 1972/001062/06
Share Code: PET & ISIN: ZAE000076014
("Petmin", "the Company" or "the Group")
Admission to AIM
Petmin, the Johannesburg-based JSE-listed (JSE:PET) (AIM: PTMN) mining
company, today announces its proposed admission to London Stock Exchange
plc`s Alternative Investment Market ("AIM") ("Admission") and a conditional
placing (the "Placing") of 40,000,000 new ordinary shares of ZAR0.25 each
in the Company ("Placing Shares") at 9p per share (approximately ZAR 1.26)
("Placing Price") to raise approximately GBP3.6m (approximately ZAR 50.4m)
before expenses. The Placing represents approximately 9% of the Company`s
current issued share capital.
The issue has been conducted under the Company`s general authority to issue
up to 15% of its issued share capital of the Company for cash at a maximum
discount of 10% to the weighted average traded price of the Company`s
shares over the 30 days prior to the date on which the Placing Price was
agreed.
Petmin is a multi-asset JSE-listed mining company, with profitable
specialist coal and silica assets in South Africa and an experienced
corporate and operational management team. Admission to AIM represents a
further step by the company in its long-term
strategy of becoming an international multi-commodity minerals business.
Placing Statistics
Placing Price 9p R1.26
Number of Placing Shares 40,000,000
Total number of issued shares
following Admission 479,890,000
Market capitalisation following Admission at the
Placing Price GBP43.2m
R604.7m
Estimated gross proceeds of the Placing GBP3.6m
R50.4
Estimated net proceeds of the Placing GBP2.7m
R37.4
The Placing Price of 9p (R1.26) is equivalent to a discount of 3.97% to the
weighted average Petmin share price over the last 30 days prior to the date
of finalisation of this announcement, being Thursday 13 December 2006,
assuming an exchange rate of ZAR 14: GBP 1. Application has been made to
London Stock Exchange plc for admission of the shares to trading on AIM,
which is expected to occur on 20 December 2006. These shares will also be
listed on the JSE Limited
The proceeds of the Placing are intended to fund future growth, and more
specifically:
a comprehensive drilling programme at Petmin`s Somkhele Anthracite
Colliery
near Richards Bay in KwaZulu-Natal Province, to move resources to proven
reserves and extend the life of mine beyond 25 years;
the acquisition of additional Richards Bay Coal Terminal allocation to
support planned growth in the company`s anthracite exports;
logistics and distribution channels for Somkhele and the Springlake
Colliery near Dundee in KwaZulu-Natal Province;
a plant upgrade at the SamQuarz silica operation near Delmas in Mpumalanga
Province; and
the financing of new projects and acquisitions and general working capital
requirements.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma consolidated income statement and balance sheet of
Petmin, before and after the Placing are set out below. The unaudited pro
forma earnings per share and net asset values per share have been presented
for illustrative purposes only and because of their nature may not give a
fair reflection of Petmin`s earnings and net asset values after the
Placing. It has been assumed for purposes of the pro forma financial
information that the Placing took place with effect from 30 June 2005 for
income statement purposes and 30 June 2006 for balance sheet purposes. The
directors of Petmin are responsible for the preparation of the unaudited
pro forma earnings per share and net asset value per share calculations.
Before After % change
Basic earnings per ordinary share
(cents) 16.38 11.86 -28%
Diluted earnings per ordinary
share (cents) 14.85 10.87 -27%
Headline earnings per share (cents) 4.98 5.00 0%
Diluted headline earnings per
share (cents) 4.52 4.58 1%
Net asset value per share (cents) 81.94 83.33 2%
Net tangible asset value (cents) 80.41 81.93 2%
Number of shares in issue 439,890,000 479,890,000 9%
Notes:
The "Before" financial information is based on Petmin`s audited income
statement for the year ended 30 June 2006.
The weighted average number of shares has been adjusted for the 40 million
ordinary shares to be issued pursuant to the Placing.
Interest benefit has been calculated in respect of the cash raised of
ZAR 50.4 million, less total anticipated costs relating to Admission and
the
Placing of ZAR 13 million.
Anticipated, one-off Admission expenses of ZAR 10.7 million have been
added
back for the headline earnings calculation.
The "Before" balance sheet is based on Petmin`s audited balance sheet as
at
30 June 2006.
The share capital and share premium have been adjusted to include the
issue
of 40 million ordinary shares at 9 pence per share (approximately ZAR
1.26
per share) and assumes an exchange rate of GBP 14: ZAR1. R2.3 million
share
issue expenses were written off against share premium.
Cash and cash equivalents has been adjusted to include the cash received
as
a result of the issue of 40 million ordinary shares at an average issue
price
of 9 pence per share less total anticipated Admission and Placing
expenses of
R13 million.
Key mining assets
The Group`s principal mining assets comprise of:
SamQuarz, South Africa`s largest silica mine near Delmas in the Mpumalanga
Province, approximately 85km east of Johannesburg. It has been in
operation
since 1955 and was acquired by Petmin in September 2004;
Springlake Colliery, South Africa`s largest producer of anthracite near
Dundee in the KwaZulu-Natal Province, approximately 360km south-east of
Johannesburg. It has been in operation since 1977 and was acquired by
Petmin
in December 2005; and
Somkhele, a high quality anthracite project approximately 85km north-east
of
Richards Bay in the KwaZulu-Natal Province. It is scheduled to commence
production in January 2007, with sales expected to begin in the second
quarter of 2007. The project was acquired by Petmin in December 2005 as
part
of its acquisition of Springlake Holdings.
A summary of Petmin`s key mining assets is outlined in the table below. The
valuation referred to is sourced from Snowden Mining Industry Consultants`
Competent Person`s Report ("CPR") on Petmin`s mining assets set out in Part
IV
of the AIM admission document published by the Company today ("Admission
Document"). Further details of these assets are set out in the Admission
Document (including the CPR set out therein), which is available on the
Company`s website at www.petmin.co.za.
Mining Location Status ROM
Asset Production
SamQuarz Delmas, Operating 1.6mtpa
Mpumalanga mine
Springlake3 Dundee, Operating 1.3mtpa
Colliery KwaZulu- mine
Natal
Somkhele Mtubatuba, Near 0.95 mtpa5
KwaZulu- production4
Natal
Mining Product Life of CPR
Asset Mine Valuation1
SamQuarz Silica >10 R205m
years2
Springlake3 Anthracite >12 R211m
Colliery years
Somkhele Anthracite 11 R453m
years6
Total R869m
1 NAV (mining assets only) real (non-inflated) discount rate of 10 per
cent.
used for valuation purposes
2 Based on the CPR, the directors estimate that there are a further 30
years of mineable reserves at SamQuarz at an average ROM production level
of 1.6 mtpa (1.3 mtpa saleable product).
3 Note that the LOM for the current opencast mining operations (which
contribute 0.5 mtpa out of the total ROM production level of 1.3 mtpa)
is eight years. Based on the CPR, the Directors believe that Springlake has
a further five years of mineable underground reserves (as well as 8m
mineable
in situ tonnes of underground bituminous resource). Also note that
neither
the summary table above nor the CPR attribute any value to the
additional
mining rights at Besterdale farm adjacent to Springlake
4 Production is currently scheduled to commence in Area 2 in January 2007
and in Area 1 in 2009.
5 Note that, under the LOM plan, estimated ROM production for first full
year of production at Somkhele is 0.5 mtpa, rising to 0.95 mtpa by 2010.
No value
has been attributed to Areas 4 and 5 in the CPR.
6 The current LOM plan of 11 years is based on operations at Somkhele
Areas
1 and 2. Based on the CPR, the Directors believe that there are a
further 16
years of mineable resources in Area 1 (as well as an inferred resource
of
21.4m mineable in situ tonnes in Area 3).
Key strengths:
The directors believe that Petmin`s key strengths are as follows:
well-established, profitable mining assets in SamQuarz and Springlake,
which
have made the Group the largest producer of silica and anthracite in
South
Africa;
in Somkhele, a high-quality anthracite asset scheduled for near-term
production with the potential to provide greater access to the South
African
metallurgical markets of ferrochrome and titanium production and to
complement Springlake`s existing product offering and market position
through blending opportunities;
proximity to and relationships with South Africa`s leading plate and clear
glass manufacturers and certain leading world-wide producers of
ferroalloys;
a highly experienced board of directors and operational management team
with:
- a track record of making value-enhancing acquisitions;
- the proven ability to drive organic growth by implementing performance
improvements in assets acquired (that is, SamQuarz and Springlake) and to
manage the development of new assets (that is, Somkhele);
- significant equity interests in the Company with a view to ensuring
appropriate incentivisation;
the Company`s BEE shareholding of 39.95 per cent. (prior to the Placing)
and
its relationship with the New Africa Mining Fund;
a strong balance sheet with relatively low gearing; and
the potential for significant growth both domestically and internationally
by acquisitions.
Key customers
The Group supplies anthracite and silica to blue-chip customers in the
metallurgical and industrial sectors in South Africa, including Xstrata
South Africa (Pty) Limited, Samancor Limited, Assmang Limited, Glass South
Africa (Pty) Limited and Consol Limited. In addition, the Group supplies
coal from Springlake to customers in other countries including Brazil,
Spain, India, Turkey, Ireland and Belgium. Springlake currently has an
export allocation of 235,000 tonnes per year from the Richards Bay Coal
Terminal. The Directors are evaluating the possibility of expanding this
allocation and/or other export channels in order to support planned growth
in the Group`s exports.
Placing details
The Placing has been undertaken by Numis Securities Limited ("Numis") on
behalf of the Company. Numis, which is acting as Nominated Adviser and
Broker to the Company, has underwritten the Placing and has agreed to
subscribe for 30,000,000 ordinary shares at the Placing Price. Pursuant to
an agreement with FirstRand (Ireland) plc ("FirstRand"), following
Admission these shares will be transferred to FirstRand.
The Placing is subject to the placing agreement among inter alios the
Company and Numis becoming unconditional and not being terminated prior to
20 December 2006 or such later date (being not later than 29 December 2006)
as the Company and Numis may agree. The Placing Shares will on Admission
rank pari passu in all respects with the existing ordinary shares in issue.
The AIM admission document will be distributed to all shareholders within
the next 30 days.
Enquiries:
Petmin
Jan Du Preez (CEO) +27 825 571 979
Bradley Doig (COO) +27 824 597 818
www.petmin.co.za
Numis Securities Limited +44 207 776 1500
John Harrison
Nick Stamp
Parkgreen Communications +44 207 493 3713
Justine Howarth
Victoria Thomas
Russell & Associates
James Duncan +27 11 880 3924
+27 82 892 8052
The contents of this announcement, which have been prepared by and are the
sole
responsibility of the Company, have been approved by Numis Securities
Limited of Cheapside House, 138 Cheapside London EC2V 6LH, solely for the
purposes of section 21 (2)(b) of the Financial Services and Markets Act
2000. Numis Securities Limited, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is advising the Company
and no one else in relation to the Placing and Admission and will not
regard any other person as its client in relation to the Placing and
Admission and will not be responsible to any person other than the Company
for providing the protections afforded to its clients or for advising any
other person in relation to the Placing or Admission or any transaction or
arrangement referred to or information contained in this announcement.
This announcement does not constitute, or form part of, an offer or
invitation to sell or issue, or any solicitation of an offer to purchase or
subscribe for securities and any subscription for or purchase of, or
application for, shares in the Company to be issued or sold in connection
with the Placing should only be made on the basis of information contained
in the admission document to be issued in due course in connection with the
Placing and Admission and any supplements thereto. The admission document
will contain certain detailed information about the Company and its
management, as well as financial statements and other financial data.
This announcement does not contain or constitute an offer of securities for
sale in the United States. The securities referred to herein have not been
and will not be registered with the US Securities Act of 1933, as amended,
and may not be offered or sold in the United States absent of registration
under that Act or an available exemption from it. This announcement and the
information contained herein are not for publication, distribution or
release in, or into, the United States, Canada, Australia, Japan or the
Republic of Ireland.
Sponsor
River Group
Date: 19/12/2006 09:00:02 Produced by the JSE SENS Department.
