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Scl - Sacoil - Proposed Unbundling Of Shares In Pioneer Coal Limited (pioneer

Release Date: 15/12/2008 17:20:21      Code(s): SCL
SCL - SACOIL - Proposed unbundling of shares in Pioneer Coal Limited ("PIONEER  
COAL") conditional acquisition of Coal Exploration Assets by Pioneer Coal       
withdrawal of cautionary announcement                                           
SACOIL HOLDINGS LIMITED                                                         
(Formerly SA Mineral Resources Corporation Limited)                             
(Incorporated in the Republic of South Africa)                                  
(Registration number 1993/000460/06)                                            
Share code: SCL     ISIN: ZAE000127460                                          
("SACOIL" or "the company")                                                     
PROPOSED UNBUNDLING OF SHARES IN PIONEER COAL LIMITED ("PIONEER COAL")          
CONDITIONAL ACQUISITION OF COAL EXPLORATION ASSETS BY PIONEER COAL              
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT                                           
Introduction                                                                    
Further to the announcement dated 2 September 2008 which advised that the       
directors of SacOil were, inter alia, considering proposals for the acquisition 
and unbundling to SacOil shareholders of coal exploration assets, the directors 
now advise that they have finalised proposals in terms of which:                
- Pioneer Coal, a newly formed company, will issue 313 291 612 ordinary shares  
 to SacOil at a price of R0.001 per share;                                      
- All the shares in Pioneer Coal held by SacOil will then be distributed to     
 SacOil shareholders by way of an unbundling in terms of section 46 of the      
 Income Tax Act, 1962 (Act 58 of 1962, as amended), on the basis of one Pioneer 
 Coal share for each SacOil share held ("the unbundling");                      
- Pioneer Coal will, immediately after the unbundling, acquire three mineral    
 exploration companies which hold a number of mineral exploration rights on     
 farms situated in Limpopo and Mpumalanga ("the coal exploration companies");   
 and                                                                            
- An application will be made for the listing of Pioneer Coal in the "Mining-   
 Coal" sector of the JSE Limited ("the JSE")                                    
(Collectively, "the transactions").                                             
Reasons for the transactions                                                    
On 26 March 2008 SacOil announced that it had reached agreement to invest in    
certain oil exploration rights in the Democratic Republic of the Congo          
("the Oil Concessions"). Following this transaction ("the SacOil transaction"), 
the directors of SacOil have decided to focus the business of SacOil on that    
of the exploration and development of oil and gas resources. The directors of   
SacOil decided that the coal exploration companies held strong potential for    
the shareholders of SacOil and accordingly decided to acquire the coal          
exploration companies for the benefit of SacOil shareholders via Pioneer        
Coal.                                                                           
The unbundling will allow investors to attribute appropriate separate ratings   
to their holdings in SacOil and Pioneer Coal. It is expected that this will     
unlock any potential discount that may eventuate by retaining both companies    
under a single share structure. It will also enable the companies to develop    
separate management and funding structures that will be appropriate for the     
businesses they operate.                                                        
The unbundling                                                                  
The unbundling will, subject to fulfilment of the suspensive conditions set out 
below, be effected in terms of section 46 of the Income Tax Act and section 90  
of the Companies Act, by way of a reduction in SacOil`s share premium account.  
313 291 612 Pioneer Coal shares will be issued to SacOil shareholders prior to  
implementation of the SacOil transaction on the basis of one Pioneer Coal share 
for each SacOil share held.                                                     
Acquisition of the coal exploration companies                                   
Pioneer Coal has, in terms of agreements signed on Friday, 12 December 2008,    
agreed to acquire all the shares and loan accounts in Mudengu Resources         
Holdings (Proprietary) Limited, Bono Lithihi Investments Group (Proprietary)    
Limited and Solar Spectrum Trading 365 (Proprietary) Limited ("Solar")("the     
acquisition"). The coal exploration companies have access to valid New Order    
Prospecting Rights ("new order rights") over, inter alia, some 35 farms         
totaling 48 160 hectares in the recognised Limpopo and Soutpansberg             
coalfields. In addition, Pioneer Coal, through Solar, has applied for           
Prospecting Rights over 4 contiguous farms totaling 11 101 hectares in the      
Mpumalanga Coalfield. Pioneer Coal has mandated Venmyn Rand (Proprietary)       
Limited to complete a Competent Person`s report in terms of SAMREC              
requirements.                                                                   
The consideration for the acquisition is R102 780 309, to be settled by         
the issue to the vendors of 275,934,364 shares in Pioneer Coal at a price       
of 30 cents per share, a cash payment of R2 000 000 to be paid on fulfillment   
of the suspensive conditions referred to below; and a deferred cash payment     
of R18 000 000, which cash payment will only be payable upon the proving by     
Pioneer Coal of reserves held by the coal exploration companies of not less     
than 67 million tonnes of proved coal reserves and 133 million tonnes of        
probable coal reserves.                                                         
The acquisition is subject to warranties normal for a transaction of this       
nature, including that the coal exploration companies have or alternatively     
will have valid title to the new order rights prior to the implementation of    
the acquisition.                                                                
The vendors of the coal exploration companies are, in the main, black persons   
including broadly based black organisations, led by Messrs Thaba Mufamadi and   
Ofhani Phaswana. Mr. Mufamadi has been appointed Chairman of Pioneer Coal.      
It is intended that in conjunction with the unbundling and acquisition,         
Pioneer Coal will raise an appropriate amount of cash ("the capital raising").  
Following the capital raising, it is expected that Pioneer Coal will continue   
to be majority black owned.                                                     
Suspensive conditions                                                           
The transactions are subject to the fulfilment of the following principal       
suspensive conditions:                                                          
- SacOil shareholder approval;                                                  
- Regulatory approvals, including those of the JSE and Exchange Control         
 authorities;                                                                   
- The grant of a listing of Pioneer Coal by the JSE;                            
- Consent by the Minister in terms of Section 11 of the Mineral and Petroleum   
 Resources Development Act, 2002, to the extent required;                       
- Completion of a Competent Person`s report on the coal exploration assets;     
- Completion by Pioneer Coal of a due diligence investigation into the coal     
 exploration companies; and                                                     
- Completion of the capital raising.                                            
Financial effects of the transactions                                           
The table below sets out the unaudited pro forma financial effects of the       
transactions on a SacOil shareholder. The unaudited pro forma financial         
effects are presented for illustrative purposes only and because of their       
nature may not give a fair reflection of a SacOil shareholder`s financial       
position after the transactions. The directors of SacOil are responsible for    
the preparation of the unaudited pro forma financial effects.                   
                                                                                
                                                                                
The unaudited pro forma financial effects are based on the following            
assumptions:                                                                    
1.   the coal exploration companies have been acquired by Pioneer Coal;         
2.   the mineral rights being acquired by Pioneer Coal through the              
acquisition of the coal exploration companies have a value of R35.745       
    million as per the draft Competent Person`s Report prepared by Venmyn Rand  
    (Pty) Ltd;                                                                  
3.   the total number of shares that will be issued by Pioneer Coal in respect  
of the transactions will be 589 225 976, being 313 291 612 shares in respect   
 of the unbundling and 275,934,364 shares in respect of the acquisition;        
4.   the costs in relation to the transactions are estimated at R3 850 000; and 
5.   The financial effects of the SacOil transaction have not been included in  
these financial effects because the unbundling will take place prior to the 
    issue of shares under the SacOil transaction.                               
                              Before 1 After the            % change            
                                       transactions2                            
Loss per SacOil                                                                 
share(cents)        (5.68)              (5.68)               0.0                
Headline loss per                                                               
SacOil              (2.90)              (2.90)               0.0                
share(cents)                                                                    
Net asset value                                                                 
per SacOil          14.18               18.78                32.4               
share(cents)                                                                    
Tangible net asset                                                              
value per SacOil    14.18               14.18                0.0                
share (cents)                                                                   
Weighted average                                                                
number of shares    167 592 528         167 592 528                             
in issue                                                                        
Number of shares                                                                
in issue            313 291 612         313 291 612                             
Notes:                                                                          
1.   The  "Before" financial information is based on SacOil`s published  audited
    results for the twelve months ended 30 June 2008.                           
2.    The  "After the transactions" net asset value and net tangible asset value
per  SacOil  share are based on 1 Pioneer Coal share with a net asset  value 
   of  4.60  cents  per Pioneer Coal share, which each SacOil shareholder  will 
   receive  for  every  1  SacOil share held and the net asset  value  and  net 
   tangible asset      value per share of SacOil.                               
Withdrawal of cautionary announcement                                           
In  the light of the above and further to the cautionary announcements, the last
of  which  was dated 4 December 2008, SacOil shareholders are advised  that  the
cautionary announcement is withdrawn.                                           
Midrand                                                                         
15 December 2008                                                                
Sponsor                                                                         
Sasfin Capital                                                                  
A division of Sasfin Bank Limited                                               
Date: 15/12/2008 17:20:20 Supplied by www.sharenet.co.za                     
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