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MML - Metmar - Announcement regarding a General Issue Of Shares For Cash, A
Specific Issue of Shares for Cash, The Acquistion of an Interest in the Fuleni
Anthracite Project and Cautionary Announcement
METMAR LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/007269/06)
Share code: MML
ISIN code: ZAE000078747
("Metmar" or "the Company")
ANNOUNCEMENT REGARDING A GENERAL ISSUE OF SHARES FOR CASH, A SPECIFIC ISSUE OF
SHARES FOR CASH, THE ACQUISTION OF AN INTEREST IN THE FULENI ANTHRACITE PROJECT
AND CAUTIONARY ANNOUNCEMENT
1. Introduction
Metmar shareholders ("Shareholders") are advised that Metmar, Metmar
Investments and Resources (Proprietary) Limited ("MIR"), a wholly-owned
subsidiary of Metmar, a consortium comprising of Peter Gain ("Gain"),
Thomas Borman ("Borman") and Marc Ooms ("Ooms") ("the Consortium") and
Beacon Rock Corporate Services (Proprietary) Limited ("Beacon Rock"), which
is owned by Gain, Borman and Rupert Smith, (collectively, "the Parties")
have entered into a heads of agreement ("Heads of Agreement") on 6 June
2012.
Borman is a 46 year old B. Com Honours graduate from the University of
Pretoria with over 15 years experience in mining business development and
strategy gained in senior managerial positions at BHP Billiton Limited. He
was a founding member of the team which established and consolidated the
portfolio of assets now constituting the Optimum group of companies which
was recently acquired by Glencore for a purchase consideration of some R8.5
billion.
Gain is an entrepreneur with almost 15 years experience in the mining
sector, building mining and exploration investments (including Optimum
alongside inter alia Borman, Ooms and Rupert Smith). Gain has held senior
positions in both mining and boutique corporate and commodity advisory
groups, and holds a B. Bus Sc degree from the University of Cape Town.
Ooms is a seasoned investor, having had a 35 year career at the forefront
of private and investment banking. He is the former General Partner of the
Petercam Group, a Benelux Investment Bank with over Euro 15 billion in
funds under management, and is currently a director of various European
companies.
Rupert Smith is an experienced commercial attorney with 28 years
involvement in mergers and international commerce. He holds a B.A. LLB
degree from the University of the Witwatersrand.
In terms of the Heads of Agreement, the Parties wish to implement a
transaction in two phases ("the Transaction"), further details of which are
provided below.
2. The Transaction
Phase 1 of the Transaction ("Phase 1")
In terms of Phase 1, Metmar will issue 34 866 072 ordinary shares ("Cash
Issue Shares") (being 15% of Metmar`s ordinary shares in issue) to the
Consortium at a price of R2.85 per ordinary share ("Issue Price") in terms
of the general authority to issue shares for cash which was granted to
Metmar by Shareholders at the Company`s annual general meeting held on 3
August 2011. This will generate cash proceeds of approximately R99.4
million which will be used by Metmar to further capitalise MIR for the
purpose of reducing debt and funding certain of its core metals and
minerals projects. The Issue Price represents an 8% premium to Metmar`s 30-
day volume weighted average price up until and including 5 June 2012, being
R2.64 ("the VWAP"). The dividend of 16.5 cents which was declared by the
Company on 30 March 2012 and which is payable on 25 June 2012 will not
accrue to the Cash Issue Shares, and accordingly the effective premium to
the VWAP is approximately 14%. It is intended that the Cash Issue Shares be
issued on or around 25 June 2012. Phase 1 is a general issue for cash in
terms of the JSE Limited Listings Requirements ("Listings Requirements").
Phase 2 of the Transaction ("Phase 2")
The Consortium shall subscribe for a further 43 478 261 Metmar ordinary
shares at a price of R3.45 per ordinary share ("Specific Issue Price"),
providing further cash proceeds of R150 million ("the Specific Issue") of
which at least R100.6 million will be used by Metmar to further capitalise
MIR, again for the purpose of funding certain of its core metals and
minerals projects. The Specific Issue Price represents a 31% premium to the
VWAP.
In addition, the Consortium shall sell its entire 55% interest in the
Fuleni anthracite project ("Fuleni") to MIR, in exchange for an interest of
approximately 25% ("Consideration Shares") in the issued ordinary share
capital and shareholder loans of MIR. ("the Fuleni Acquisition"). The
quantum of the Consideration Shares is based on the value of MIR following
the implementation of Phase 2, with the Fuleni interest valued at R225
million, MIR`s portfolio of metals and mineral projects valued at R430
million, and on the basis that MIR has been capitalised by R245 million.
Fuleni is located in northern KwaZulu-Natal some 45 kilometres north-west
of Richards Bay. The project area measures 14615 hectares in extent and is
estimated to contain a SAMREC compliant gross in situ anthracite resource
of 318.6 million tonnes (57.1 million tonnes Measured Category, 99.1
million tonnes Indicated Category and 162.4 million tonnes Inferred
Category) as reported by competent person Mr CD van Niekerk (M.Sc, MDP,
Pr.Nat.Sci, FGSSA) of Gemecs (Proprietary) Limited ("the Competent
Person"). The Competent Person has approved the disclosure of this
information in this announcement.
Directors and shareholders of Metmar holding approximately 40% of Metmar`s
issued share capital have provided irrevocable undertakings to vote all of
their shares in favour of Phase 2 of the Transaction.
3. Rationale for the Transaction
The Transaction provides for the introduction of funding and expertise in
the management and optimisation of metals and minerals projects. It is
intended that, upon completion of an agreed transitional period, Beacon
Rock will manage the day-to-day activities of MIR and shall be responsible
for the commercialisation, development and optimisation of the Parties`
respective metals and minerals projects.
4. Conditions precedent to the Transaction
Phase 2 is subject to the following suspensive conditions:
* the implementation of Phase 1;
* the execution of the renewal of the Fuleni prospecting right;
* the execution of a sale and purchase agreement between MIR and Ooms in
respect of the sale by Ooms of his entire interest in Fuleni;
* the execution of a sale and purchase agreement between MIR on the one
hand and Gain and Borman on the other hand in respect of the sale by
Gain and Borman of their entire interest in Fuleni;
* the Fuleni transactions referred to above will have obtained the
necessary approval from the Competition Authorities and the consent of
the Minister of Mineral Resources;
* the execution of a MIR services agreement between MIR and Beacon Rock;
* the execution of a MIR shareholders agreement between Metmar, MIR and
the Consortium; and
* the approval of Shareholders.
Phase 2 will become effective upon the fulfilment of the suspensive
conditions.
5. Pro forma financial effects of the Transaction and cautionary announcement
Shareholders are advised to exercise caution when dealing in the Company`s
securities until such time as a further announcement containing the pro
forma financial effects of the Transaction is published.
6. Circular and Shareholder approval
In terms of the Listings Requirements, the Specific Issue is a specific
issue for cash and the Fuleni Acquisition is a category 1 acquisition.
Shareholder approval is, therefore required for Phase 2. Consequently, a
circular containing full details of the Specific Issue and the Fuleni
Acquisition and incorporating a notice to convene a general meeting of
Shareholders will be posted to Shareholders in due course.
Johannesburg
7 June 2012
JSE Sponsor and Transaction Sponsor
One Capital
Date: 07/06/2012 11:09:00 Supplied by www.sharenet.co.za
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