PALABORA MINING COMPANY LIMITED - Notice Under Section 45 Of The Companies Act 2008

Release Date: 03/12/2013 14:45
Code(s): PAM
 
Wrap Text
Notice Under Section 45 Of The Companies Act 2008

PALABORA MINING COMPANY LIMITED
(Incorporated in the Republic of South Africa)
Registration number – 1956/002134/06
JSE Code: PAM ISIN: ZAE000005245
("Palabora" or "the Company")

NOTICE UNDER SECTION 45 OF THE COMPANIES ACT 2008

Palabora shareholders (“Shareholders”) are advised that on Thursday, 28 November 2013 the board of
directors of Palabora (“Board”) and Palabora Copper (Pty) Ltd (Palabora Copper) approved to progress
the Lift II project from prefeasibility to feasibility study. The feasibility will be conducted from 1 January
2014 to May 2014.


Palabora Copper has been producing copper in South Africa for over half a century, initially as a large
open cast operation and thereafter successfully transitioned to an underground block cave operation in
2002. This proved to be a good investment both technically and financially, over the course of the Lift I
Life of Mine. The current underground block cave operation was developed with a plan to deplete the Lift I
reserve by 2020. The closure of Lift I has been brought forward by five years to December 2015 as a
direct result of the dilution from the North wall failure. Comprehensive geological, mine and financial study
has demonstrated that Copper production at Palabora Copper can be extended on an economically
rational basis beyond this date with the construction of a second lift underground block cave operation.


The Board is comfortable that the high standard of engineering during the prefeasibility study fulfils the
required benchmark standards for large mining projects.


The feasibility work needs to meet Engineering, Construction, Bank Lender profitability and Funding
Option standards otherwise referred to as a “Bankable Feasibility.” An investment of R55 million will be
made available for the feasibility study. During this project stage, Palabora Copper will expend an
additional R652 million on early works infrastructure and the on-going development of the twin decline
ramps. The on-going development of the declines and dependent infrastructure is an essential activity to
maintain Lift II as an on-going option. The total investment during the feasibility stage will be R707 million.


Pursuant to the feasibility study, the Company was requested to provide financial assistance to Palabora
Copper to the value of R350 million in connection with the shareholders agreement between Palabora
and Palabora Copper.

Accordingly, shareholders are hereby advised in accordance with section 45(5) of the Companies Act,
that a resolution of the board in terms of sections 45(2) and 45(3) of the Companies Act, was adopted on
28 November 2013, whereby the Company is authorised to provide the financial assistance contemplated
above.




Phalaborwa
3 December 2013

Sponsor
One Capital

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