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PAM - Palabora Mining Company Limited - Updated information regarding Palabora`s Broad Based Black Economic Empowerment Transaction PALABORA MINING COMPANY LIMITED (Incorporated in the Republic of South Africa) Registration number - 1956/002134/06 JSE Code: PAM ISIN: ZAE000005245 ("Palabora" or "the Company") UPDATED INFORMATION REGARDING PALABORA`S BROAD BASED BLACK ECONOMIC EMPOWERMENT TRANSACTION ("BBBEE Transaction") 1. Introduction Shareholders of Palabora ("Shareholders") are referred to the initial announcement of the BBBEE Transaction (the terms of which were approved by Shareholders in general meeting) published on the Securities Exchange News Service on 15 June 2010, the subsequent announcements dated 15 October 2010, 7 February 2011 and 20 June 2011 (which provided updates on the status of the BBBEE Transaction), and the announcement dated 19 December 2011 wherein Palabora announced the conversion, subject to certain administrative corrections, of seven of its eight existing old order mining rights into new order mining rights, a key step to enabling Palabora to move forward with the implementation of the BBBEE Transaction. The conversions of the remaining old order mining right remains subject to a third party dispute. Such dispute will, however, not prevent the implementation of the BBBEE Transaction insofar as the seven converted new order mining rights are concerned. Following extensive engagement with the Department of Mineral Resources ("DMR") and the trade unions representing the employees of Palabora, as well as other stakeholders, Palabora is pleased to announce that it has made significant progress with negotiating certain amendments to the BBBEE Transaction agreements ("BBBEE Transaction Agreements"), necessary for achieving the fulfilment of the outstanding suspensive conditions and the implementation of the BBBEE Transaction. 2. BBBEE Transaction amendments The engagement with stakeholders has resulted in the following amendments to the BBBEE Transaction Agreements being agreed upon between the parties: - the intellectual property relating to the mining methods of Palabora will be included in the sale of Palabora`s business to Palabora Copper Proprietary Limited ("Palabora Copper") (being the newly formed subsidiary of Palabora in which the BBBEE Partners will hold their interests in Palabora`s business); - the minimum dividend payable by Palabora Copper to its shareholders annually will be paid with effect from the implementation of the BBBEE Transaction and not only with effect from the end of the first year thereafter, effectively bringing the dividend payment regime forward by one year; and - in addition to providing a guarantee in respect of the minimum dividend payable to the Community Trust (which is presently provided for in the relevant transaction agreement), Palabora will further undertake to Palabora Copper to pay the minimum dividend payable to the Employee Trust in circumstances where Palabora Copper is itself unable to effect such payment (with Palabora having a right of recourse against Palabora Copper in respect of such payment). Palabora further wishes to advise Shareholders that a payment of R17 058.82 was made to each of its approximate 2 300 employees in December 2011, which payment was distributed equally to all permanent employees of Palabora and all permanent employees of the Palabora Foundation, excluding the Chief Executive Officer of Palabora and employees who are expatriates. 3. Suspensive conditions As some of the suspensive conditions to which the BBBEE Transaction is subject are still in the process of being fulfilled, Palabora and its BBBEE Partners have agreed to extend the longstop date for the fulfilment or waiver of the suspensive conditions from 30 March 2012 to 30 June 2012. The key suspensive conditions which remain to be fulfilled include: - the relevant administrative corrections being made by the DMR in respect of the seven old order mining rights referred to under paragraph 1 above, together with the receipt of written approval from the DMR for the cession of Palabora`s new order mining rights (save for the mining right forming the subject matter of the third party dispute) to Palabora Copper, and the registration of such new order mining rights in the name of Palabora Copper in the Mineral and Petroleum Titles Registration Office; - the adoption or amendment of the constitutional documents of the BBBEE Partners and Palabora Copper to the satisfaction of Palabora and the BBBEE Partners; - the receipt of consents from counterparties to certain key contracts as identified by Palabora for the transfer of such contracts to Palabora Copper; and - the obtaining of all consents and/or approvals as may be required under any Senior Finance Document to which Palabora is party for the implementation of the BBBEE Transaction. Palabora is working towards securing fulfilment of all of the remaining suspensive conditions as soon as is practicably possible. Shareholders will be kept apprised of developments in this regard. Phalaborwa 23 March 2012 Sponsor One Capital Joint corporate advisers NM Rothschild & Sons South Africa (Proprietary) Limited Legal adviser Webber Wentzel Date: 23/03/2012 16:00:01 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. 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