Wrap Text
Successful consolidation of Pallinghurst’s PGM assets, establishment of Sedibelo Platinum Mines & IDC investment
PALLINGHURST RESOURCES LIMITED
(Incorporated in Guernsey)
(Guernsey registration Number: 47656)
(South African external company registration number 2009/012636/10)
Share code on the BSX: PALLRES ISIN: GG00B27Y8Z93
Share code on the JSE: PGL
("Pallinghurst" or the "Company")
Successful consolidation of Pallinghurst’s PGM assets, establishment of Sedibelo Platinum Mines and ZAR3.24bn
investment by the IDC
1. Introduction
Pallinghurst is pleased to confirm the successful consolidation of the Platinum Group Metals (“PGM”) interests
held by the Company, along with the Pallinghurst Co-Investors Limited and the Bakgatla Ba Kgafela Tribe (the
“Bakgatla”) to create a new entity intended to be called Sedibelo Platinum Mines Limited (“Sedibelo Platinum
Mines”). The completion of the consolidation enabled the Industrial Development Corporation (“IDC”) to
complete its investment of ZAR3.24 billion for a 16.2% interest in Sedibelo Platinum Mines on 3 December
2012.
Brian Gilbertson, Pallinghurst Chairman, commented:
“Sedibelo Platinum Mines holds a unique position amongst PGM producers with significant shallow resources,
allowing safe open-cast and shallow underground mining for decades to come, and one of the industry’s
strongest balance sheets. The long-term commitment of three sovereign investors on the shareholder register
will support the unlocking of the full potential of the company with associated job creation and community
benefits”.
2. Key features of the Consolidation and the IDC Investment
The consolidation of the three contiguous properties of Pilanesberg Platinum Mines (“PPM”), Sedibelo and
Magazynskraal, in the North West Province of South Africa (the “Consolidation”) was identified at the outset of
Pallinghurst’s investment into PGMs as the key to unlocking significant value by creating a safe, low cost and
long life PGM producer of industry significance.
With the consolidation completed, the final condition precedent for the previously announced investment by
the IDC has been satisfied and the IDC has injected ZAR3.24 billion (US$420 million) into Sedibelo Platinum
Mines.
The benefits to Sedibelo Platinum Mines from the completion of the Consolidation and the IDC Investment
include:
- The creation of a large and contiguous ore-body which will allow for the development of a safe and
shallow mining complex, with a long life;
- Creates an unhedged and debt-free producer, with a strong balance sheet;
- Unlocking synergies and benefitting from anticipated rapid organic growth with associated job
creation;
- Reinforces the strong partnership with the Bakgatla community which is also the Sedibelo Platinum
Mines BEE partner; and
- Opportunity to partner with the IDC to form a joint venture to explore and develop opportunities for
energy efficient PGM beneficiation.
Pallinghurst, as a shareholder in Sedibelo Platinum Mines, will share in these benefits.
3. Pro forma financial effects of the Consolidation and the IDC Investment on the Company
The impact of the completion of the Consolidation and the IDC Investment on certain key elements of
Pallinghurst’s financial information is illustrated below.
Loss per share for
period ending 30 Earnings per
June 2012 including Impact of share including
impact of Consolidation impact of
Gemfields/Fabergé and IDC Consolidation and % change in
transaction(1) Investment(2) IDC Investment EPS(3,4)
(Loss)/profit and headline (loss)/profit- US$ (55,020,555) 62,542,448 7,521,893
Weighted average number of shares for loss per share 498,611,862 498,611,862 Not
Loss and headline loss per share- US$ (0.11) 0.13 0.02 applicable(3)
% increase in
NAV per
NAV per share at 30 NAV per share share vs pro
June 2012, Impact of including impact forma 30
including impact of Consolidation of Consolidation June 2012
Gemfields/Fabergé and IDC and IDC NAV per
transaction(1,5) Investment(2) Investment share(4)
NAV and Tangible NAV – US$ 384,536,338 62,542,448 447,078,786
Number of shares in issue for NAV and Tangible NAV per
share 760,452,631 760,452,631
NAV and Tangible NAV per share in US$ 0.51 0.08 0.59 16%
(1)Loss per share and NAV per share include the impact of the merger of Gemfields and Fabergé as described in the Company’s SENS
announcement dated 21 November 2012 (available on www.pallinghurst.com). For simplicity, the numbers including this impact have not
been adjusted between 21 November 2012 and the date of this announcement, although certain variables have changed in the intervening
period (particularly the listed price of Gemfields shares and foreign exchange rates). If the anticipated impact of the completion of the
Gemfields Fabergé transaction materially changes, the Directors would release revised information.
(2)The Company’s attributable interest in Sedibelo Platinum Mines is approximately 200 million shares, or 7% of the three billion shares in
issue, with an implied value of US$186 million. The completion of the Consolidation and the IDC Investment result in a valuation increase
across the Company’s PGM investments for accounting purposes of approximately US$63 million.
(3)The Company’s Interim Report for the period to 30 June 2012 (the “Interim Report”) included a loss of (US$0.03) per share. Including the
impact of the Gemfields/Fabergé transaction the Loss was (US$0.11) per share. The impact of the Consolidation and IDC investment is to
reverse this loss, resulting in positive earnings per share of US$0.02. Therefore the percentage decrease in loss per share as a result has not
been presented.
(4)This information, which has not been audited, is the responsibility of Pallinghurst’s Directors.
(5)NAV per share assumes completion of the Company's Rights Offer at 30 June 2012. See Interim Report for explanation.
Arne H. Frandsen, Pallinghurst Chief Executive, commented:
“Today’s announcement is the culmination of six years of focused work; the creation of Sedibelo Platinum
Mines is a first step in unlocking significant value for Pallinghurst shareholders. Within the past month, the
Pallinghurst management team has announced the first delivery of manganese ore from the Tshipi mine, the
proposed merger of Gemfields and Fabergé and now today the emergence of “Sedibelo Platinum Mines”. As I
predicted in my Chief Executive’s Statement in the most recent annual report, 2012 has been a year of
transformation and Pallinghurst is very well-positioned for sustainable value creation”.
Guernsey
4 December 2012
Investment Bank and Sponsor
Investec Bank Limited
Date: 04/12/2012 05:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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