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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 Supplied by www.sharenet.co.za Produced by the JSE SENS Department.
