SENTULA MINING LIMITED - Disposal Of Megacube Assets And Cautionary Announcement

Disposal Of Megacube Assets And Cautionary Announcement

SENTULA MINING LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1992/001973/06)
Share code: SNU ISIN: ZAE000107223
(“Sentula” or “the Company”)


DISPOSAL OF MEGACUBE ASSETS AND CAUTIONARY ANNOUNCEMENT


1. INTRODUCTION AND RATIONALE

  The board of directors of Sentula is pleased to inform shareholders that Sentula and Megacube Mining
  Proprietary Limited (“Megacube”), a wholly-owned subsidiary of the Company, have entered into a
  contract to auction, dated 30 November 2012, (“the Agreement”) with Ritchie Bros. Auctioneers (ME)
  Limited (“the Auctioneer”), regarding the proposed sale by unreserved public auction (“Auction”) of the
  remaining moveable equipment of Megacube with an estimated book value of approximately R300
  million (“Equipment”), which final list of equipment is still to be agreed between the parties (“Disposal”).
  The Auctioneer is a member of Vancouver listed Richie Bros Auctioneers Incorporated, which is one of
  the world’s largest industrial auctioneers of heavy equipment and trucks.

  As set out in the Company’s reviewed condensed consolidated interim results for the six months ended
  30 September 2012 published on 14 November 2012, shareholders were advised that Megacube had,
  as a business, ceased operations during the period under review and intended to monetise its remaining
  plant and equipment through outright disposals, trade-ins and redeployments within the Sentula group.

  The estimated book value of the Equipment to be sold at the Auction represents 19% of the Company’s
  property, plant and equipment and 12% of its total non-current assets, as disclosed in the Company’s
  statement of financial position, dated 30 September 2012.

2. COMMISSION AND MARKETING

  In exchange for the services rendered by the Auctioneer in relation to the Auction, Megacube shall pay
  the Auctioneer a market related commission based on the Gross Proceeds - being the actual sale price
  (excluding VAT) achieved at the Auction - in respect of each item of Equipment (or part thereof).
  In addition, the Auctioneer will conduct a global marketing campaign in respect of the Auction for which
  Megacube undertakes to refund the costs in respect thereof, up to a maximum amount of
  USD1.5 million.

3. REFURBISHMENT OF EQUIPMENT

  The Auctioneer will appoint, and supervise the activities of, one or more third party contractors to repair
  and refurbish the Equipment in accordance with an appraisal recommendation document (“Refurb
  Schedule”) to be agreed between the parties. Megacube undertakes to pay for any repair and
  refurbishment activities included in the Refurb Schedule up to a maximum amount of USD3.5 million.

4. SALE DATE

  The Auctioneer shall, as agent of Megacube, offer the Equipment for sale at an unreserved public
  auction which will commence on 20 March 2013 at Remaining Extent of portion 12 (a portion of portion
  2) of the farm Wolverkrans 17, also known as “Riverside”, in the Republic of South Africa.

5. REPRESENTATIONS AND WARRANTIES

  The parties acknowledge, inter alia, that as at the signature date of the Agreement, the Equipment is
  subject to a special notarial bond in favour of SB-SML Security SPV Proprietary Limited (“SBSA
  Consortium”), and that the parties will be required to comply with the instructions of SBSA Consortium
  relevant to the release of the security which SBSA Consortium holds over the Equipment and any
  instructions relevant to the payment of the Gross Proceeds.
   Megacube represents and warrants that, inter alia, it has procured the release of the Equipment prior to
   the commencement date of the Auction.

6. CATEGORISATION OF THE DISPOSAL

   While the Auctioneer cannot guarantee the quantum of the Gross Proceeds that will be realised from the
   Auction, the Equipment will be sold to the highest bidder on the date of the Auction, and as such, the
   categorisation of the Disposal will be discussed with the JSE Limited pursuant to the JSE Listings
   Requirements and shareholders will be advised accordingly.

7. PRO FORMA FINANCIAL EFFECTS OF THE DISPOSAL AND CAUTIONARY ANNOUNCEMENT

   As the pro forma financial effects of the Disposal on the reported financial information of Sentula cannot
   be determined prior to completion of the Auction, shareholders are advised to exercise caution when
   dealing in Sentula’s securities until a further announcement, incorporating the pro forma financial effects
   of the Disposal, is made.


Johannesburg
8 January 2013


Sponsor
Merchantec Capital

Legal advisors
Cliffe Dekker Hofmeyr

IR Advisors
College Hill

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