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Disposal of Benicon Mining Proprietary Limited and further 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 BENICON MINING PROPRIETARY LIMITED AND FURTHER CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the ‘Further Cautionary Announcement’ dated 29 January 2014 regarding,
inter alia, the proposed disposal by Sentula of the Bankfontein mining right, which is held by its 74%-
owned subsidiary, Benicon Mining Proprietary Limited (“Benicon Mining”). The board of directors of
Sentula (“the Board”) is pleased to inform shareholders that Sentula and Roan Coal Proprietary Limited
(“the Purchaser”) have entered into a Sale of Shares and Claims Agreement (“Benicon Mining Sale
Agreement”) on 28 February 2014 (“Signature Date”). In terms of the Benicon Mining Sale Agreement,
Sentula will sell to the Purchaser, which will purchase, the “Sale Equity”, as detailed hereafter, as one
indivisible transaction (“the Benicon Mining Disposal”).
The "Sale Equity" comprises the Sale Shares and the Sale Claims, provided that if there are no Sale
Claims then any reference to "Sale Equity" shall be construed as a reference to the Sale Shares.
The "Sale Shares" comprise 740 ordinary shares in the issued ordinary share capital of Benicon Mining
having a par value of R1.00 each, constituting 100% of the entire issued share capital of Benicon Mining
as at the “Closing Date”, being the third business day after the day on which the last outstanding
“Conditions Precedent”, as set out in paragraph 2.4 below, is fulfilled or waived, as the case may be.
The "Sale Claims" comprise all amounts of any nature whatsoever owing by Benicon Mining to Sentula
on the Closing Date from any cause whatsoever, including by way of loan account or otherwise, in
contract or in delict, actual or contingent, and includes any interest accrued thereon.
2. THE BENICON MINING DISPOSAL
2.1 Nature of Benicon Mining
During 2009, the Sentula Group acquired the entire issued share capital of Benicon Mining, which
holds the prospecting right on the immovable property as detailed in paragraph 2.4.1 below. On
2 April 2013, a new order mining right was approved by the Department of Mineral Resources
(“DMR”) (“Bankfontein Mining Right”).
2.2 Rationale for the Benicon Mining Disposal
As set out in the Audited Summary Consolidated Financial Results for the Year Ended
31 March 2013, it has been the intention of the Board to monetise the asset, through the disposal of
Sentula’s interest in the Bankfontein Mining Right.
2.3 Purchase Consideration and Payment
As set out in the Benicon Mining Sale Agreement:
2.3.1 The Purchase Consideration, being an amount equal to R36 804 300, will be paid in cash by
the Purchaser to Sentula before the Closing Date by way of:
- the Purchaser paying a “Deposit” in the amount of R3 680 430 by electronic transfer of
immediately available and freely transferable funds into Sentula’s attorneys’ trust
account by no later than 23:59 on the Signature Date; and
- the Purchaser making a payment of the Purchase Consideration, less the Deposit, to
Sentula on the Closing Date.
2.3.2 If the:
2.3.2.1 Conditions Precedent, or any of them, are not fulfilled as a result of any deliberate
act or omission of the Purchaser intended by the Purchaser to frustrate and/or
prevent such fulfilment; or
2.3.2.2 Sentula cancels the Benicon Mining Sale Agreement as a result of a breach of the
provisions of the Benicon Mining Sale Agreement by the Purchaser,
the Purchaser shall forfeit the Deposit and all interest accrued thereon, which shall
be paid by Sentula's attorneys, on receipt of written instruction from Sentula, to
Sentula, without prejudice to Sentula's rights in law, by way of pre-estimated
liquidated damages.
Sentula has provided warranties which are normal in a transaction of this nature.
2.4 Effective date and conditions precedent
All risk in and all benefit attaching to the Sale Equity will, against payment of the Purchase
Consideration as set out in paragraph 2.3 above, pass to the Purchaser on the Closing Date.
Possession and effective control of the Sale Equity will be given to the Purchaser on the Closing
Date. Sentula will accordingly retain the right to exercise all voting rights attaching to the Sale
Shares until the Closing.
The Benicon Mining Disposal remains subject to the fulfilment of the following Conditions Precedent:
2.4.1 by not later than 23:59 on the 30th day after the Signature Date, the “Sale of Property
Agreement” - being the agreement to be entered into between Benicon Coal Proprietary
Limited (“Benicon Coal”) and Benicon Mining in terms of which Benicon Coal sells the
immovable property (being the Remaining Extent of Portion 7 of the Farm Bankfontein 215,
registration division IS, Mpumalanga, measuring 513.9192 hectares in extent) over which
the Bankfontein Mining Right is held to Benicon Mining, has become unconditional in
accordance with its terms, save for any condition requiring that the Benicon Mining Sale
Agreement becomes unconditional;
2.4.2 by not later than 23:59 on the 240th day after the Signature Date:
- to the extent necessary, the shareholders of Sentula have passed all such resolutions
as may be required to approve and implement the Benicon Mining Disposal and Sentula
has obtained all such approvals as may be required by the JSE Limited (“JSE”);
- Sentula or the Purchaser has received confirmation that the approval for the transfer of
the Sale Shares from Sentula to the Purchaser (“Share Sale Consent”) has been
granted by the Minister of the DMR; and
2.4.3 by not later than 23:59 on the 20th business day after the fulfilment of the Condition
Precedent contained in paragraph 2.4.2 above, the “Repurchase Shares”, being 260
ordinary shares in the issued ordinary share capital of Benicon Mining constituting 26% of
the entire issued share capital of Benicon Mining as at the Signature Date, have been
repurchased by Benicon Mining.
3. REHABILITATION GUARANTEE
3.1 The Purchaser acknowledges that there are existing guarantees issued by Sentula in favour of the
DMR in respect of the rehabilitation of the “Mining Area” (the area over which the Bankfontein
Mining Right has been granted) and certain of the areas over which the prospecting rights are held
for an amount equal to R3 195 700 as at the Signature Date ("Rehabilitation Guarantee").
3.2 The Purchaser shall procure the release of Sentula from the Rehabilitation Guarantee as soon as
possible after the Closing Date, and in any event by no later than 20 days thereafter by paying an
amount equal to R3 195 700 to the DMR.
4. CATEGORISATION OF THE BENICON MINING DISPOSAL
The Benicon Mining Disposal, which is classified as a Category 1 transaction in terms of the JSE
Listings Requirements, requires shareholder approval. Accordingly, a circular containing full details of
the proposed Benicon Mining Disposal and, a notice to convene a general meeting of Sentula
shareholders in order to consider and if deemed fit, to pass with or without modification, the resolutions
necessary to approve and implement the Benicon Mining Disposal, will be sent to Sentula shareholders
in due course.
5. PRO FORMA FINANCIAL EFFECTS OF THE BENICON MINING DISPOSAL AND FURTHER
CAUTIONARY ANNOUNCEMENT
Further to the cautionary announcement released on SENS on 28 February 2013, and as the pro forma
financial effects of the Benicon Mining Disposal on the reported financial information of Sentula are still
to be finalised, shareholders are advised to continue exercising caution when dealing in Sentula’s
securities until a further announcement incorporating the pro forma financial effects of the Benicon
Mining Disposal, is made.
Johannesburg
28 February 2014
Sponsor
Merchantec Capital
Legal advisors
Edward Nathan Sonnenbergs Incorporated
Date: 28/02/2014 04:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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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