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LAB - Labat Africa Limited - Pro Forma financial effects of the acquisition of Primrose Gold Metallurgical operation and ERPM Gold Metallurgical operation and withdrawal of cautionary LABAT AFRICA LIMITED Incorporated in the Republic of South Africa) (Registration number: 1986/001616/06) Share Code: LAB ISIN: ZAE000018354 ("Labat" or "the company") PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION OF PRIMROSE GOLD METALLURGICAL OPERATION AND ERPM GOLD METALLURGICAL OPERATION AND WITHDRAWAL OF CAUTIONARY Further to the announcements dated 20 July 2010, 23 July 2010 and 16 August 2010, all relating to an agreement to acquire the gold processing and smelting operations known as Primrose Gold Metallurgical as well as ERPM Gold Metallurgical from Primrose Gold Mines (Pty) Limited, a wholly owned subsidiary of Aurora Empowerment Systems (Pty) Limited, for a purchase consideration of R38 000 000 through the issue of 38 000 000 Labat ordinary shares at R1.00 per share, the pro forma effects have been based on the reviewed condensed consolidated results of Labat for the year ended 28 February 2010 and are set out in the table below. The financial effects are presented for illustrative purposes only and because of their nature may not give a fair reflection of the Company`s results, financial position, cash flows and changes in equity after the transaction. It has been assumed that for the purposes of the pro forma financial effects, the transaction took place as at 28 February 2010 for the statement of financial position, and for the period 1 March 2009 to 28 February 2010, for the statement of comprehensive income. The directors of Labat are solely responsible for the preparation of the financial effects. Before After %
Change Net asset value per share (cents) (NAV) (25.6) (5.3) 79.32% Net tangible asset value per share (25.6) (5.3) 79.32% (cents) (NTAV) Loss per share (cents) (16.9) (8.4) 50.14% Headline loss per share (cents) (8.2) (1.2) 85.80% Number of shares in issue 197 235 19.27% 155 155
Weighted number of shares in issue 197 235 19.27% 155 155 Assumptions: 1 The "Before" column information has been extracted, without adjustment from Labat`s published reviewed condensed consolidated financial results for the year ended 28 February 2010; 2 The figures above represent the pro forma financial effects of the transaction, which has been accounted for in terms of IFRS 3 (revised): Business Combinations; 3 Earnings per share and Headline earnings per share effects are based on the following principal assumptions: (i) the transaction was effective on 01 March 2009; (ii) Primrose results have been based on the most recent management financial information for the period from 01 February 2010 to 31 July 2010. These results have been inspected by Labat`s auditors, Ngubane Zeelie Inc and are in the process of being reviewed; (iii) as the management financial information represent a six month period and the transaction is reported for a twelve month period, the reviewed management financial information has been annualised, to represent a twelve month period; (iv) management regards the fair value of the plant acquired to be no less than the purchase price, and no recognition of intangible assets apply; and (v) a notional provision has been made for income tax at 28% on profit from the new business. 4 NAV and NTAV per share effects are based on the following principal assumptions: (i) the proposed transaction took effect on 28 February 2010; (ii) the recognition of the tangible and identifiable intangible assets is based on a provisional basis, with the allocation of the purchase price to the assets acquired, on a fair value basis, for IFRS 3 (revised) accounting purposes. In terms of IFRS 3(revised):Business Combinations, the fair value exercise will be finalised within twelve months of the effective date of the transaction and any appropriate adjustments, if required, will be made. CONDITIONS PRECEDENT At the date of this announcement, this transaction was still subject to the approval of shareholders in general meeting. WARRANTIES The agreements concluded for the transaction contain general warranties and undertakings inherent in and usual to transactions of such nature. No warranties or undertakings are provided which are unusual or are of an onerous nature. DOCUMENTATION Shareholders are advised that a circular to shareholders is in the process of being prepared and will be forwarded to shareholders in due course. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT Shareholders are referred to the previous cautionary announcement published on SENS on 15 July 2010, and are advised that the cautionary announcement is now withdrawn. Johannesburg 31 August 2010 Transaction Advisor Arcay Moela Sponsors (Proprietary) Limited Date: 31/08/2010 10:15:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
