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Acquisition Cat 2
CHROMETCO LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/026265/06)
(JSE Code: CMO ISIN: ZAE000070249)
("Chrometco" or "the company")
- ACQUISITION OF GEOLOGICAL DRILL DATA, DRILL CORE AND
ABANDONMENT OF PROSPECTING RIGHT IN FAVOUR OF CHROMETCO
- RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are advised that Chrometco and certain of its
subsidiaries ("Chrometco Group") have entered into a Sale
Agreement (“the Agreement”) with NKWE Platinum (South
Africa) Proprietary Limited and one of its subsidiaries
(”NKWE”)and Realm Resources Limited (“REALM”). NKWE and
REALM (“the Sellers”) have agreed to cancel a current farm-
in agreement in favour of selling mineral rights as well as
historical drill core and geological data to Chrometco,
which, if implemented, will add significant value to the
Chrometco Group’s current rights to the Remaining Extent of
the Farm Rooderand 46 JQ property (“the Property”).
In terms of the Agreement, inter alia, NKWE is in the
process of renewing its new order prospecting right
(“Prospecting Right”), which entitles NKWE to prospect for
cobalt, copper and nickel as well as platinum group metals
and Gold ("Additional Minerals") on the Remaining Extent of
the Farm Rooderand 46 JQ ("Property"). NKWE has agreed to
dispose of its Geological Data and Drill Core to Chrometco
and to conditionally abandon its Prospecting Right subject
to the Minister of Mineral Resources ("Minister") granting
consent, in terms of section 102 of the Mineral and
Petroleum Resources Development Act, 2008 ("Section 102
Consent") to amend the mining right held by Chrometco over
the Property ("Chrometco Mining Right") to include the
Additional Minerals. Subject to the fulfillment of the
conditions precedent set out in section 4 below, Chrometco
will issue a maximum of 90 million ordinary Chrometco
shares (“the Consideration”)to the Sellers (“the
Transaction”).
2. Settlement of the Consideration
In accordance with the provisions of the Agreement the
Consideration will be settled as follows:
1.1. The issue by Chrometco of 20 million ordinary
Chrometco shares in equal allotments to the Sellers subject
to the fulfillment of the Part A Condition Precedent (the
“First Tranche Shares”);
1.2. The issue by Chrometco of 70 million ordinary
Chrometco shares in equal allotments to the Sellers subject
to the fulfillment of the Part B Conditions Precedent (the
“Second Tranche Shares”).
3. Rationale for the Transaction
In terms of the SENS announcement dated 22 December 2011,
shareholders were advised of the issue and approval of
Chrometco’s new order mining rights for chromite on the
Property as well as on portion 2 of Rooderand 46 JQ.
The benefits attributable to Chrometco in concluding the
Transaction will be:
- Increased geological definition, resource categorisation
and hence valuation of the chromite deposit on the
Property;
- Increase in resource statement by including the
Additional Mineral into the current Chromite resource; and
- Chrometco will be in a position to mine all the minerals
simultaneously, which will make mining more cost efficient.
4. Conditions precedent
The issue of the First Tranche Shares is subject to the
fulfillment of the condition precedent that Chrometco
shareholders approve the terms and conditions contained in
the Transaction, including the issue of the First Tranche
Shares and the Second Tranche Shares to the Sellers.
The issue of the Second Tranche Shares is subject to the
fulfillment of, inter alia, the following conditions
precedent:
- the unconditional renewal of the Prospecting Right by the
Minister or, if conditional, the renewal of the Prospecting
Right on terms and conditions acceptable to Chrometco and
the Sellers;
- the unconditional granting of the Section 102 Consent by
the Minister or, if conditional, the granting of the
Section 102 Consent on terms and conditions acceptable to
Chrometco and the Sellers;
- the execution by NKWE of a deed of abandonment in terms
of which NKWE abandons the Prospecting Right; and
- the execution of a deed of amendment in terms of which
the Additional Minerals are included in the Chrometco
Mining Right.
5. Categorisation of the Transaction
The Transaction is categorised as a Category II transaction
in terms of the JSE Limited (“the JSE”) Listings
Requirements. In terms of section 41 of the Companies Act,
No 71 of 2008, as amended, the shareholders are required to
approve the Transaction by special resolution, at a meeting
of the shareholders of Chrometco, to be convened.
A circular setting out the details of the Transaction for
this purpose will be posted to shareholders in due course.
6. Further Cautionary
Shareholders are advised that until the financial effects
of the Transaction are released, they should exercise
caution when dealing in their Chrometco securities on the
JSE.
13 August 2012
Corporate Advisor and Designated Advisor
Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 13/08/2012 08:49:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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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,
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