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R45 million investment to develop the Monastery Kimberlite Project, cautionary and update on listing on JSE
THABEX LIMITED
Registration Number 1988/000763/06
(Incorporated in the Republic of South Africa)
Share code: TBX ISIN: ZAE000013686
(“Thabex” or “the Company”)
Young Lions Exploring Africa
INVESTMENT OF UP TO R45 MILLION TO DEVELOP THE MONASTERY KIMBERLITE
PROJECT, CAUTIONARY ANNOUNCEMENT AND UPDATE ON THABEX’S LISTING ON
THE JSE
1. INTRODUCTION
Thabex, through its 91% owned subsidiary Tradepost 121 Proprietary Limited
(“Tradepost”), has entered into an option and share purchase agreement with
investment fund Taurus Captiva plc (“Taurus”), a company incorporated in Malta,
(“the Agreement”) in terms of which Taurus has been granted the option to invest up
to US$5 million, equating to approximately R45 million, in Tradepost against the
issue of up to 40% of the current issued share capital of Tradepost (“Investment
Shares”) to Taurus (“the Investment”).
2. BUSINESS OF TRADEPOST
Tradepost is a 91% held subsidiary of Thabex and it holds 94.56% in Monastery Mine
Proprietary Limited (“Monastery Mine”) which has submitted a Mining Right (“MR”)
application for the mining of diamonds, ilmenite and semi-precious stones. Tradepost
also holds 97% in Monastery Holdings Proprietary Limited (“Monastery Holdings”),
which holds all the plant and equipment on the Monastery Mine area, in the district
of Marquard in the Free State Province. Monastery Mine plans to refurbish the
Monastery Holdings plant to facilitate the production of a minimum of 50 000 tons
per month (“tpm”) open cast mining operation over the Monastery kimberlite pipe.
3. RATIONALE FOR THE INVESTMENT
The rationale for the investment by Taurus is to enable Tradepost to fund the
development of an open cast mining operation by refurbishing and modifying
Monastery Holding’s plant to process a minimum of 50 000 tpm for a period of five
years, prior to a decision being made to commence with underground mining of the
Monastery Kimberlite pipe.
4. TERMS OF THE OPTION
4.1 In terms of the Agreement, Thabex grants Taurus the sole right to purchase a 40%
interest in Tradepost (being 383 ordinary shares) (“the option”).
4.2 The option period commenced on the earlier of the payment of the option purchase
price or 1 April 2013, for a period of four months.
4.3 Taurus will be issued shares in Tradepost on a pro rata basis to the amount invested
in relation to the total investment amount of US$5 million during a 12 month period
commencing on the third business day after which the option is exercised, provided
that the first investment amount of US$500 000 will result in Taurus being issued
10% of the ordinary shares in Tradepost (being 56 ordinary shares in Tradepost).
4.4 As a result about the uncertainty about when the South African Department of
Mineral Resources (“DMR”) will grant the MR of Monastery Mine, Taurus has not
exercised its first two option purchases on 1 April 2013 and 1 May 2013 and
therefore has a purchase option to acquire only a further 5% in Tradepost prior to
the effective date, being 1 August 2013, to acquire a further 30% in Tradepost.
5. TERMS OF THE INVESTMENT
5.1 The subject of the investment is 35% of the issued share capital of Tradepost.
5.2 The investor is Taurus.
5.3 The effective date of the investment is 1 August 2013.
5.4 The investment consideration is the amount of US$5 million which shall be settled in
cash, through an option of US$500 000 (“option amount”) payable over a period of
four months commencing on 1 April 2013 until 1 July 2013 in four monthly
installments of US$125 000 per month. The option amount will be paid towards 10%
of the issued capital of Tradepost. The option amount is deductible from the total
investment amount of US$5 million on exercise of the option. The balance of the
investment of US$4.5 million will result in an investment of an additional 30% in the
issued share capital of Tradepost.
5.5 With reference to paragraph 6. below the MR has to date not been granted and
shareholders will be informed as soon as it has been granted. Thabex is proposing an
amendment to the agreement with Taurus before 31 July 2013 in order to ensure all
conditions precedent are full filled timeously.
6. CONDITIONS PRECEDENT
The Option and the Investment is subject to:
- Monastery Mine being granted a MR in terms of its accepted MR application;
- the obtaining of all necessary regulatory approvals, including, inter alia, approval
by the JSE by no later than 31 July 2013 (or within such extended period as the
parties may agree to in writing); and
- approval by shareholders of Thabex in general meeting.
7. PRO FORMA FINANCIAL EFFECTS OF THE INVESTMENT
The pro forma financial effects of the Investment on the reported financial
information of Thabex are in the process of being finalised and will be announced to
shareholders in due course, after the reviewed/audited financial results of Thabex for
the year ended 28 February 2012, the interim period ended 31 August 2012 and 28
February 2013 are published on SENS.
8. CATEGORISATION OF THE INVESTMENT AND FURTHER DOCUMENTATION
The Option and the Investment constitutes a Category 1 transaction in terms of
paragraph 9.5(b) of the JSE Listings Requirements. Accordingly, a circular containing
full details of the Option and the Investment (“Circular”), including, inter alia, a
notice to convene a general meeting of shareholders of Thabex in order to consider
and, if deemed fit to pass, with or without modification, the resolutions necessary to
approve and implement the Option and the Investment, will be distributed to
shareholders of Thabex as soon as practically possible after it has been informed by
the DMR that the MR has been granted.
9. UPDATE ON THABEX’S LISTING ON THE JSE
On 6 May 2013 the JSE informed Thabex that it is considering terminating the
Company’s listing for the following reasons:
9.1. Thabex has not published its financial statements and interim statements
timeously.
9.2. That the previously published financial and interim statements contained a
disclaimer of opinion by the auditors.
9.3 That the Company does not comply with the minimum capital requirements in
terms of Section 4.28(a) of the JSE Listings Requirements.
The Company has been given up to 24 May 2013 to motivate to the JSE why its
listing should not be terminated.
The Company, in view of the development at Monastery Mine shall respond to the
JSE on or before the above-mentioned date. Shareholders will be kept informed on
the progress of this matter.
10. CAUTIONARY ANNOUNCEMENT
Further to paragraph 7 above, shareholders are advised to exercise caution when
dealing in Thabex securities until a further announcement, incorporating the pro
forma financial effects of the Investment, is made.
Johannesburg
23 May 2013
Merchantec Capital
Sponsor
Date: 23/05/2013 04:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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