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Acquisition of Chrome Assets and Renewal of Cautionary
BAUBA PLATINUM LIMITED
Incorporated in the Republic of South Africa
(Registration number 1986/004649/06)
Share code: BAU ISIN: ZAE000145686
(“Bauba” or “the Company”)
ACQUISITION OF CHROME ASSETS AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcement dated 25 September 2013, and the subsequent renewal of
cautionary announcements, the last of which was dated 4 February 2014, the board of directors of
Bauba (“the Board”) is pleased to advise shareholders that Bauba has entered into an Assets for Shares
Agreement (“Agreement”) with Highland Trading Investments Limited, the Danene Trust, the Kumane
Trust, the Math-Pin Trust, the Pimlico Investment Trust and Hlabirwa Mining Investments Proprietary
Limited (“the Vendors”) for the acquisition of a 60% interest in the prospecting rights over the farms
Moeijelik 412 KS and Waterkop 113 KT (“Previously Excluded Farms”) for a purchase consideration of
R150 million (“the Acquisition”).
2. THE ACQUISITION
2.1 History and nature of the Acquisition
On 12 February 2010, Bauba entered into an agreement with the Vendors (“2010 Agreement”) to
acquire certain prospecting assets. The 2010 Agreement allowed for the exclusion of the
prospecting rights in relation to the Previously Excluded Farms. In terms of the Acquisition, the
prospecting rights held over the Previously Excluded Farms will allow for the prospecting of
unspecified minerals with the emphasis on platinum group metals (“PGMs”), vanadium ore,
titanium ore, iron ore and associated minerals. Furthermore, the prospecting rights held over farm
Moeijelik 412 KS also allow for the prospecting of the mineral chrome, which is specifically
excluded from the prospecting rights held over farm Waterkop 113 KT.
2.2 The rationale for the Acquisition
The chrome minerals located on the farm Moeijelik 412 KS have been assessed and determined to
be economically viable by the Board and Venmyn Deloitte, an independent competent person.
Based on the outcome of the valuations, partial funding of the future PGM exploration activities as
well as a distribution of part of the generated cash as dividends will be possible.
In the current economic climate, obtaining any substantial funding for exploration activities in the
junior mining environment has proven difficult. The Acquisition will satisfy some of the short-to-
medium term requirements to pursue the required exploration activities to support a mining license
application to be lodged with the Department of Mineral Resources.
2.3 Purchase consideration
2.3.1 Share Consideration
The purchase consideration of R150 million is to be settled through the issue and allotment
to the respective Vendors of 230 769 231 Bauba ordinary shares at an issue price of
65 cents per share (“Share Consideration”).
2.3.2 Claw Back
The Share Consideration above is subject to the grant of a mining permit over the farm
Moeijelik 412 KS within one year of signature of the Agreement, or such later date as the
parties may in writing agree (“Mining Permit”). Should the Mining Permit not be granted
within the requisite time period, Bauba will be entitled to the unconditional return of the Share
Consideration for no consideration and the Vendors shall be obliged to co-operate fully to
ensure such shares are vested in Bauba absolutely. Bauba A Hlabirwa Mining Investments
Proprietary Limited (“Bauba A Hlabirwa”) has lodged the application for the Mining Permit,
which application has been accepted by the Department of Mineral Resources.
2.4 Cancellation of the 2010 Claw Back
The 2010 Agreement required that the 37 033 200 Bauba ordinary shares issued in relation to the
Southern Cluster were subject to a conditional return to Bauba. Given that the Department of
Mineral Resources initially granted the prospecting right to Bauba A Hlabirwa and subsequently
renewed this prospecting right, the Acquisition provides for the cancellation of this condition and
that the shares vest in the Vendors absolutely, subject to shareholder approval at the general
meeting.
2.5 Issue of Houtbosch Shares
The 2010 Agreement provided for the issue of 21 189 600 Bauba ordinary shares to the Vendors
for the prospecting right on the Farm Houtbosch 323KT, which was granted to the prospect holder
but not notarially executed. The Acquisition provides that these ordinary shares be issued subject
to shareholder approval at the general meeting. This prospecting right is in the process of being
notarially executed
2.6 Conditions Precedent and effective date
The Acquisition is subject to the fulfilment or waiver, as the case may be, of inter alia the following
conditions precedent:
2.6.1 Bauba’s Chief Executive Officer confirming in writing, within 60 days of the signature of the
Agreement that Bauba has obtained all such regulatory approvals as are necessary for the
Agreement to proceed;
2.6.2 the shareholders of Bauba pass in general meeting such resolutions as may be necessary
for the Acquisition to proceed and that Bauba submit written proof to the Vendors thereof
within 60 days of the date of signature of the Agreement;
2.6.3 the board of directors and/or the trustees, as the case may be, of each of the Vendors pass
such resolutions as may be necessary for the Acquisition to proceed and that the Vendors
submit written proof to Bauba within 60 days of the date of signature of the Agreement; and
2.6.4 the Board pass such resolutions as may be necessary for the Acquisition to proceed and
that Bauba submits written proof thereof to the Vendors within 60 days of the date of
signature of the Agreement.
The effective date of the Acquisition shall be the fifth business day after all of the Conditions
Precedent have been fulfilled.
3 PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects of the Acquisition on the reported financial information of Bauba are in the
process of being finalised and will be announced to shareholders in due course.
4 AMENDMENTS TO THE MEMORANDUM OF INCORPORATION
In order to be able to issue the Share Consideration to the Vendors in terms of the Agreement, Bauba
will be required to amend its Memorandum of Incorporation (“MOI”) in order to convert its par value
shares to no par value shares and increase the authorised share capital of the Company.
Accordingly, Bauba will be proposing the relevant amendments to the MOI, which in terms of paragraph
5.92(A) and Schedule 10.5(d) of the JSE Listings Requirements (“Listings Requirements”) and section
16(1)(c) of the Companies Act, 2008 (71 of 2008), as amended, requires the approval by way of a
special resolution (requiring at least a 75% majority of the votes cast in favour of such resolution) of all
shareholders present or represented by proxy at the general meeting.
5 RELATED PARTY
The Vendors are material shareholders of the Company and are therefore considered to be related
parties. Accordingly in terms of paragraph 10.4(f)(ii) of the JSE Listings Requirements, as the Acquisition
is from a related party, the Company is required to obtain a fairness opinion on the Acquisition from an
independent expert (“Fairness Opinion”) and the board of directors of the Company are required to
include a statement in the circular to be issued to shareholders confirming whether the issue is fair to
shareholders.
6 CLASSIFICATION OF THE ACQUISITION AND CIRCULAR TO SHAREHOLDERS
The Acquisition, which is classified as a Category 1 transaction in terms of the JSE Listings
Requirements, requires shareholder approval. Accordingly, a circular containing full details of the
proposed Acquisition, the amendments to the MOI, the Fairness Opinion, Revised Listing Particulars of
Bauba and, a notice to convene a general meeting of Bauba shareholders in order to consider and if
deemed fit, to pass with or without modification, the resolutions necessary to approve and implement the
Acquistion, will be sent to Bauba shareholders in due course.
7 RENEWAL OF CAUTIONARY ANNOUNCEMENT
Further to paragraph 3 above, shareholders are advised to continue exercising caution when dealing in
Bauba securities until a further announcement, incorporating the pro forma financial effects of the
Acquisition, is made.
Johannesburg
19 March 2014
Sponsor
Merchantec Capital
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