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MML - Metmar Limited - Further announcement regarding the acquisition by Metmar METMAR LIMITED Incorporated in the Republic of South Africa (Registration number 1998/007269/06) Share code: MML ISIN code: ZAE000078747 ("Metmar" or "the Company") FURTHER ANNOUNCEMENT REGARDING THE ACQUISITION BY METMAR OF A FURTHER 60 PERCENT INTEREST IN EASTERN BELT CHROME MINES (PROPRIETARY) LIMITED ("EASTERN BELT CHROME") AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT Metmar shareholders ("Shareholders") are referred to the announcement published by the Company on 24 June 2011 and 27 June 2011 on SENS and in the press, respectively, ("the Announcement") which sets out details of the proposed acquisition of a further 60 percent interest in Eastern Belt Chrome ("the Transaction") and are advised that the unaudited pro forma financial effects of the Transaction ("Financial Effects") on Metmar`s basic earnings per share ("EPS"), headline earnings per share ("HEPS"), net asset value per share ("NAVPS") and net tangible asset value per share ("NTAVPS") are set out below. FINANCIAL EFFECTS The Financial Effects as set out below have been prepared for illustrative purposes only, to assist Shareholders in assessing the impact of the Transaction on Metmar`s EPS, HEPS, NAVPS and NTAVPS. These Financial Effects have been disclosed in terms of the JSE Limited Listings Requirements and, because of their nature, do not necessarily fairly present Metmar`s financial position, changes in equity, results of operations or cash flows after the Transaction. The Financial Effects are the responsibility of the directors of Metmar. Before the After the Change
Transaction Transaction (%) (1) (2) EPS (cents) 22.2 25.6 (4) 15.3 HEPS (cents) 23.1 26.0 (4) 12.5 NAVPS (cents) 261.8 275.4 (5) 5.2 NTAVPS (cents) 235.2 248.8 (5) 5.8 Weighted average number of shares 210 511 611 210 511 611 - in issue during the Period Shares in issue at 28 February 232 440 480 232 440 480 - 2011 Notes: 1 Based on Metmar`s audited results for the year ended 28 February 2011 ("the Period"). 2 Based on the assumption that the Transaction took place on 1 March 2010 for statement of comprehensive income purposes and 28 February 2011 for statement of financial position purposes. 3 The financial information relating to Eastern Belt Chrome in calculating the Financial Effects was extracted from Eastern Belt Chrome`s management accounts for the year ended 28 February 2011 ("the Management Accounts"). Management of the Company is satisfied with the accuracy of the Management Accounts. 4 EPS and HEPS have been adjusted to include the following: a) transaction costs of R265 000, with no taxation adjustment; b) the fair value adjustment of the initial 20% of Eastern Belt Chrome purchased by Metmar for R7.2 million, being R12.8 million and deferred capital gains taxation thereon at 14%, amounting to R1.8 million. This accounting treatment of the fair value adjustment is required in terms of IFRS 9 Financial Instruments, which specifies how an entity should classify and measure financial assets; c) the interest cost on the purchase consideration of R61.4 million ("the Consideration") from 1 March 2010 at 9% p.a. together with the taxation effect thereon at 28%; d) the pro forma consolidated income of Eastern Belt Chrome for the year ended 28 February 2011 amounting to R20 928, which takes into account expenditure of a non-recurring nature and trading income for the last quarter of the financial year only; and e) no adjustment has been made for the annuity marketing income that would have been derived from the offtake of chrome ore from Sefateng Chrome (Proprietary) Limited for the mining operations at Swartkoppies mine for the balance of the year. 5. The NAVPS and NTAVPS have been adjusted to include the following: a) the increase in financial liabilities by the Consideration discounted at 9% p.a. being R60.0 million; and b) in terms of IFRS (3) Business Combinations, each identifiable asset acquired and liability assumed of Eastern Belt Chrome has been measured at its acquisition date at fair value, resulting in an increase in the net asset value of Eastern Belt Chrome by R31.6 million. During the period that the Company considered whether to effect the Transaction, a third party had offered an amount similar to the Consideration paid by Metmar. 6 A detailed purchase price allocation ("PPA") required in terms of IFRS (3) Business Combinations is an estimate arrived at by management of the Company for purposes of the Financial Effects and has not yet been reviewed by the Company`s auditors. All factors will be considered during the period after the acquisition date to determine whether information obtained after that date results in an adjustment to this estimate. CONDITIONS PRECEDENT The Transaction is still subject to the fulfillment of the conditions precedent referred to in the Announcement. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT Further to the publication of the Financial Effects, the cautionary statement as set out in the Announcement is hereby withdrawn. Johannesburg 18 July 2011 Sponsor One Capital Attorneys to Metmar Tabacks Corporate Law Advisors Date: 18/07/2011 08:00:08 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.
