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Update on acquisitions/major projects
AFRIMAT LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2006/022534/06)
Share code: AFT
ISIN: ZAE000086302
(“Afrimat” or “the Company” or “the Group”)
UPDATE ON ACQUISITIONS/MAJOR PROJECTS
Glenover Phosphate Proprietary Limited (“Glenover”)
Shareholders are referred to the announcement released on the Stock Exchange News
Service ("SENS") on 9 December 2021, in terms of which Afrimat announced that it had
purchased certain assets and rights to mine select deposits at the Glenover mine ("Glenover
Mine"), as well as the option to acquire 100% of the shares in Glenover Phosphate Proprietary
Limited (“Glenover”) from the current shareholders (“Glenover Shares”), for a total purchase
consideration of R550 million (“Glenover Acquisition”).
The Glenover Acquisition includes phosphate stockpiles ("Inventory Deposits”), rare earth
elements and a vermiculite mining Right ("Glenover Mining Right”), which positions Afrimat
to enter new commodities aligned with global trends relating to food security and advanced
technology, for example electric vehicles. The implementation of the initial phases of this
acquisition have progressed well with Afrimat selling high-grade phosphate. The feasibility
studies of the follow-up phases of the project have yielded pleasing results thus far.
There are no outstanding conditions precedent in respect of the Inventory Deposits and
Vermiculite Mining Right, and payments of R215 million and R35 million for the Inventory
Deposits and the Vermiculite Mining Right respectively were paid in cash to the sellers.
Furthermore, the option to acquire the Glenover Shares is subject to the fulfilment of the
following outstanding conditions precedent, namely: i) Afrimat’s Board approval and ii)
Afrimat’s sole discretion to exercise the option to purchase Glenover Shares from the Glenover
shareholders together with all claims that the shareholders may have against Glenover, by 10
November 2022.
Gravenhage Mining Right and Associated Assets
Shareholders are referred to the announcement released on the SENS on 21 May 2021
regarding an agreement (“Agreement”) concluded between Afrimat, Aquila Steel (S Africa)
Proprietary Limited and Rakana Consolidated Mines Proprietary Limited (“the Sellers”), in
terms of which the Company agreed to purchase the Gravenhage manganese mining right
and associated assets (“Assets”) from the Sellers (“Gravenhage Acquisition”).
Shareholders are hereby notified that, according to the Company, all conditions precedent to
the Transaction as set out in the Agreement were not fulfilled by the conditions precedent
fulfilment date, being 20 August 2022 ("End Date”).
In particular, the condition precedent requiring the grant of the Water Use License Application
as defined in the Agreement has not been fulfilled, in that the water use licence which was
issued by the Department of Water and Sanitation (“Department”) deviates materially from
the Water Use Licence Application which was submitted by the Sellers to the Department and
as such does not constitute the grant of the Water Use Licence Application as contemplated
in the Agreement. Accordingly, due to the non-fulfilment of all the conditions precedent by the
End Date and in terms of the provisions of the Agreement, the Agreement lapsed on 20 August
2022 and shall not be of any force or effect.
Shareholders are also advised that a formal dispute has been declared between the Company
and the Sellers in terms of the Agreement, inter alia regarding whether the condition precedent
relating to the Water Use Licence has been fulfilled, which the parties have to date been
unable to resolve through negotiation ("Dispute”). If the Dispute remains unresolved, it may
be referred to arbitration for determination.
A further announcement will be released on SENS providing shareholders with an update
regarding the Dispute in due course.
Cape Town
22 August 2022
Sponsor
PSG Capital
Date: 22-08-2022 08:50:00
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