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PETRA MINING LIMITED - CHANGE OF CONTROL OF PETRA MINING LIMITED AND FURTHER CAUTIONARY PETRA MINING LIMITED (Incorporated in the Republic of South Africa) (Registration number 1972/001062/06) Share Code: PET ISIN: ZAE 000010237 ("Petmin" or "the company") CHANGE OF CONTROL OF PETRA MINING LIMITED AND FURTHER CAUTIONARY 1. CHANGE OF CONTROL AND MANDATORY OFFER Following the cautionary announcements dated 15th and 25th September 2003, shareholders of Petra Mining Limited ("Petmin") are advised that Midnight Storm Investments 34 (Pty) Ltd ("Storm") has acquired 33,351,361 Petmin shares from Pretklerk Beleggings (Pty) Ltd and Fourie Du Preez Beleggings (Pty) Ltd at a price of 30 cents per share. The acquired shares represent 41,69% of the issued share capital of Petmin. As a result of the transaction, Storm is obliged to make a mandatory offer to Petmin shareholders in respect of all Petmin shares not currently owned by it, at a price of 30 cents per share in terms of the rules of the Securities Regulation Panel ("SRP"). Storm, inter alia, through its underwriter PSG Capital Limited, has made a submission to the SRP regarding the funding of the mandatory offer to minorities and is awaiting approval. Storm is controlled by the previous controlling shareholder of Petmin, except for Mr Fourie du Preez. 2. REFOCUSING OF PETMIN"S BUSINESS Petmin is currently a cash company listed on the JSE Securities Exchange, South Africa ("JSE"). Historically, Petmin was a gold mining company with subsidiaries operating on the East Rand. The company disposed of its assets to a Canadian mining group for an amount of R667,320,000 in cash during 2002, and distributed most of the cash to its shareholders through dividends and a reduction in its share premium, retaining a cash balance net of tax provisions in the amount of approximately R25,4 million. The company believes that the new order established by the Minerals and Petroleum Resources Development Act, 2002 and the Mining Charter creates, for the first time, an environment conducive to the development of an independent junior mining sector in South Africa. Historically, the exploration and development of South Africa"s mineral resources was essentially the exclusive domain of major mining finance houses. Previously disadvantaged entrepreneurs had no means to participate in a meaningful way in the growth of the South African mining sector, and unlike their counterparts in countries like Canada and Australia, independent South African junior mining companies did not have the benefit of access to a well developed public capital market to finance exploration and development stage projects. The abovementioned disposal represented the first direct foreign investment in the South African mining sector following the announcement of the Mining Charter. Over the past year, the company has had discussions with emerging South African companies lead by previously disadvantaged entrepreneurs, and with international companies who have demonstrated a keen understanding of the imperatives underpinning the Mining Charter and significant interest in participating in African exploration and development projects in the Platinum, Gold, Diamond, and Chrome sectors. The company intends to refocus its business and to create shareholder value by pursuing such exploration and development projects in which: * emerging previously disadvantaged entrepreneurs, including women, participate in a substantial and meaningful way; and * the full set of criteria contained in the Mining Charter Scorecard are pursued progressively; and * access to international equity capital is optimally leveraged to enhance project economics. The company is currently reviewing certain specific projects that might meet these criteria, and appropriate announcements will be made in this regard in due course. 3. RESIGNATION OF THE CHIEF EXECUTIVE OFFICER AND RECONSTITUTION OF THE BOARD The company thanks Mr. Fourie Du Preez, who is retiring from the board, for his valuable contribution to the unlocking of value for Petmin shareholders during his tenure as chief executive officer. The company is delighted that he has agreed to act as a consultant to the company for the next twelve months and he will receive an arms length consulting fee details of which will be included in the circular to shareholders. The net effect of the transactions referred to in paragraph 1 above is that Mr. Du Preez will have divested his entire shareholder"s interest in the company except for 3 333 333 shares which he indirectly retains as an investment in the company. Storm intends to reconstitute the board of directors of Petmin after the offer to minorities closes. Full details of the new board, as well as the appointment of a new Chief Executive Officer will be disclosed in the circular to shareholders. 4. FURTHER CAUTIONARY Petmin currently remains a cash company in terms of the Listings Requirements of the JSE. The company will deal with potential projects and transactions purely on merit regardless of the time constraints imposed on it by the JSE Listings Requirements to do a transaction to retain its listing, and it is therefore possible that the company may not enter into a transaction within the required time period to retain its listing. Should the listing be suspended or terminated, the company will reapply for the listing of its securities on the JSE once an appropriate transaction is entered into. Shareholders are therefore advised to exercise caution in dealing in their securities until a further announcement is made. 5. CIRCULAR TO SHAREHOLDERS A circular to shareholders containing full details of the mandatory offer will be posted within 28 days of this announcement, subject to the approval of the SRP and the JSE. Pretoria 18 November 2003 Corporate Adviser: River Group Underwriter: PSG Capital Sponsor: River Group Date: 20/11/2003 08:00:04 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
