| Mon 5 Mar 2007, 12:16 | | TSX - Trans Hex/ RVI- Disposal by the Trans Hex Gr |
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TSX
TSX
TSX - Trans Hex/ RVI- Disposal by the Trans Hex Group of its Middle Orange
Operations
Trans Hex Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1963/007579/06)
Share codes JSE: TSX and NSX: THX
ISIN: ZAE000018552
("Trans Hex" or "the company")
Rockwell Ventures Incorporated
(Incorporated in Canada)
(Registration Number BC 0354545)
Share code TSXV: RVI
("RVI")
DISPOSAL BY THE TRANS HEX GROUP OF ITS MIDDLE ORANGE OPERATIONS
TO ROCKWELL RESOURCES RSA (PROPRIETARY) LIMITED ("ROCKWELL")
1. Introduction
Trans Hex is pleased to announce the conclusion of a conditional agreement
("Sale Agreement") on 3 March 2007 with Rockwell, in terms of which the
whole of the diamond-related prospecting, exploration, mining, recovery and
treatment operations conducted by the Trans Hex Group together with Mvela
Exploration (which is jointly held by Mvelaphanda Resources Limited and
Trans Hex) in respect of the Saxendrift and Niewejaarskraal Mines, as well
as certain associated prospecting projects located between Douglas and
Prieska in the Middle Orange River region of the Northern Cape Province
(collectively, "the Middle Orange Operations"), will be acquired by
Rockwell ("the transaction"). The Middle Orange Operations will first be
acquired, on a going concern basis, by Saxendrift Mine (Pty) Limited
("Saxendrift SPV"), a wholly-owned subsidiary of Trans Hex Diamante Limited
("Diamante"), followed by the acquisition by Rockwell from Diamante of the
shares in and shareholder claims against Saxendrift SPV.
The transaction constitutes a category 3 transaction in terms of the JSE
Limited Listings Requirements. This announcement is therefore for
information purposes only and no action is required by Trans Hex
shareholders.
2. Details and terms of the transaction
2.1 The purchaser
Rockwell is a wholly-owned subsidiary of RVI, a public company
incorporated under the company laws of Canada and listed on the TSX
Venture Exchange. Rockwell holds 51% of H C van Wyk Diamonds
(Proprietary) Limited ("H C van Wyk") and Klipdam Diamond Mining
Limited. H C van Wyk is a well-established Northern Cape-based
alluvial diamond miner operating at Holpan-Klipdam north of Kimberley,
and at Wouterspan which is situated across the Orange River from the
Saxendrift Mine. Rockwell is currently in the process of increasing
its interest in HC Van Wyk by a further 23%, with the balance of the
equity being held by a black economic empowerment partner, African
Vanguard Resources (Proprietary) Limited. Rockwell`s other producing
and exploration alluvial diamond properties in southern and central
Africa include the Galputs Project in Namaqualand in South Africa and
the Kwango River Project in the Democratic Republic of Congo.
2.2 The purchase consideration
The purchase consideration payable for the Middle Orange Operations is
R100 410 000.00 (inclusive of zero rated value-added tax), and is
payable in cash.
2.3 The effective date and warranties
Subject to the Sale Agreement becoming unconditional and being
implemented, ownership of, and the risk in and benefit from the Middle
Orange Operations will be deemed to have transferred to Rockwell with
effect from 1 April 2007 ("the effective date"). The transaction is
subject to warranties that are normal for a transaction of this
nature.
3. Rationale for the transaction
In its Interim Financial Statements published in November 2005, Trans Hex
announced that it had taken a strategic decision to disinvest from the
Middle Orange Operations and to focus on other areas of operation. Trans
Hex is of the view that the Middle Orange Operations can still be mined
profitably by a lower-cost producer.
4. Conditions precedent to the transaction
The implementation of the Sale Agreement is subject to the fulfillment of
certain conditions precedent including, amongst others:
- the unconditional approval of the Competition Commission (or, if such
approval is subject to conditions, such conditions being acceptable to
Trans Hex and Rockwell);
- all requisite consents by the Minister of Minerals and Energy to the
cession and transfer of the underlying mining and prospecting rights
pertaining to the Middle Orange Operations to Saxendrift SPV and the
acquisition by Rockwell of the shares in and shareholders claims
against Saxendrift SPV;
- satisfactory provision by Rockwell of certain financial undertakings;
- to the extent required, the approval of the TSX Venture Exchange;
- completion by Rockwell, to its satisfaction, of a mineral tenements`
due diligence investigation; and
- the audited balance sheet of Saxendrift SPV as at the effective date
meeting specified criteria.
Fulfillment of some of the conditions precedent may be waived or the date
specified for their fulfillment extended in certain limited circumstances.
5. Pro forma financial effects
The pro forma financial effects presented below are the responsibility of
the board of Trans Hex and are presented for illustrative purposes only to
provide information on how the transaction might have impacted on the
reported financial information of the company if it had been implemented in
the six months ended 30 September 2006. Because of their nature, the pro
forma financial effects may not fairly present the company`s financial
position, changes in equity and results of operations or cash flows.
Before the After the % change
Transaction Transaction
(1) (2)
Basic earnings per share for
the six months ended 30
September 2006 (cents) 2.6 24.63 836
Diluted earnings per share
for the six months ended 30
September 2006 (cents) 2.6 24.53 836
Headline earnings per share
for the six months ended 30
September 2006 (cents) 7.5 10.8 45
Net asset value ("NAV") per
share at 30 September 2006
(cents) 1,070 1,095 2.36
Net tangible asset value
("NTAV") per share at 30
September 2006 (cents) 1,070 1,095 2.36
Weighted average shares in
issue for the period (`000) 105 872 105 872 0
Shares in issue at the end of
the period (`000) 89 872 89 872 0
Notes:
1. The figures in this column are extracted from the reviewed results of
the company for the six months ended 30 September 2006 as released on
SENS on 14 November 2006.
2. The figures in this column are based on the figures set out in the
previous column after the implementation of the transaction. For
purposes of the earnings and headline earnings per share, it was
assumed that the transaction had been in effect for the six months
ended 30 September 2006 and that the purchase consideration was
invested at an after-tax effective interest rate of 5%. For purposes
of NAV and NTAV per share, it was assumed that the transaction had
been implemented on 30 September 2006.
3. Basic earnings per share and diluted earnings per share are enhanced
largely due to the reversal of an impairment of R19.7million relating
to the Middle Orange Operations which was raised in the September 2005
Interim Financial Statements.
6. Application of the sale proceeds
As announced by Trans Hex in its Interim Financial Statements released on SENS
on 14 November 2006, the group has embarked on a R200 million earth moving
equipment replacement program at its flagship Lower Orange river operations.
This replacement programme is aimed at improving the operational effectiveness
at these operations. The proceeds from this sale will be used to partly finance
this replacement programme. Trans Hex is continually evaluating potential
diamond resource acquisitions and the proceeds may be partially utilised to
acquire diamond resources.
Cape Town
5 March 2007
Corporate and Transactional Advisor to Trans Hex
QuestCo (Pty) Limited
Legal Adviser to Trans Hex
Mervyn Taback Inc
Legal Advisor to RVI
Falcon Inc Attorneys
Sponsor to Trans Hex
Rand Merchant Bank (A division of FirstRand Bank Limited)
Namibian Sponsor
IJG Corporate Finance (Pty) Limited
Date: 05/03/2007 12:16:49 Produced by the JSE SENS Department.
