Disposals Of Benicon Coal Proprietary Limited And Benicon Mining Proprietary Limited And Further Cautionary Announce SENTULA MINING LIMITED Incorporated in the Republic of South Africa (Registration number: 1992/001973/06) Share code: SNU ISIN: ZAE000107223 (“Sentula” or “the Company”) DISPOSALS OF BENICON COAL PROPRIETARY LIMITED AND BENICON MINING PROPRIETARY LIMITED AND FURTHER CAUTIONARY ANNOUNCEMENT Shareholders are referred to the announcements released on SENS on 28 February 2014 and 14 April 2014 regarding the Disposals and using the terms defined therein unless otherwise stated are hereby provided with an update thereto. 1. PRO FORMA FINANCIAL EFFECTS The table below sets out the pro forma financial effects of the Disposals on Sentula’s basic earnings per share, headline earnings per share, net asset value per share and tangible net asset value per share. The pro forma financial effects have been prepared to illustrate the impact of the Disposals, on an individual basis and on an aggregated basis, on the reviewed condensed consolidated interim results of Sentula for the six months ended 30 September 2013, had the Disposals occurred on 1 April 2013 for purposes of the statement of comprehensive income and on 30 September 2013 for purposes of the statement of financial position. The pro forma financial effects have been prepared using accounting policies that comply with IFRS and that are consistent with those applied in the audited results of Sentula for the twelve months ended 31 March 2013 as well as the reviewed condensed consolidated interim results for the six months ended 30 September 2013. The pro forma financial effects which are the responsibility of the directors of the Company are provided for illustrative purposes only and, because of their pro forma nature may not fairly present Sentula’s financial position, changes in equity, results of operations or cash flow nor the effect and impact of the Disposals going forward. The full financial effects will be included in the circular to Sentula shareholders (“circular”) which circular is currently being finalised and is expected to be distributed before the end of May 2014. Pro Pro forma forma After After Before Benicon Benicon Aggreg- the Coal % Mining % Pro forma ated Disposals Disposal Change Disposal Change After the % 1 2 from 1 to 2 3 from 1 to 3 Disposals Change Basic (loss)/earnings per share (cents) (42.8) (14.4) 66.4 (42.2) 1.4 (13.8) 67.8 Headline (loss)/earnings per share (cents) (6.8) (5.8) 14.7 (6.6) 2.9 (5.6) 17.6 Net asset value per share (cents) 226.5 212.3 (6.3) 225.5 (0.4) 211.3 (6.7) Tangible net asset value per share (cents) 219.6 205.4 (6.5) 218.6 (0.5) 204.4 (6.9) Weighted average number of shares in issue (000’s) 581 005 581 005 - 581 005 - 581 005 - Total number of shares in issue (net of treasury shares) (000’s) 581 005 581 005 - 581 005 - 581 005 - Notes: 1. Extracted from the reviewed condensed consolidated interim results of Sentula for the six months ended 30 September 2013. Benicon Coal Disposal 2. The “Pro forma After Benicon Coal Disposal” column reflects the pro forma financial effects of the Benicon Coal Disposal on earnings, headline earnings, net asset value and net tangible asset value per share based on the following assumptions: - The Benicon Coal Disposal is effective 1 April 2013 for purposes of the pro forma financial effects on earnings, and headline earnings per share and 30 September 2013 for purposes of the pro forma financial effects on net asset value and net tangible asset per share. - Once-off transaction costs of R2.2 million have been allocated to profit and loss and are once off in nature. - In terms of Sentula's senior debt facility under the debt agreement which records the terms of Sentula’s senior debt facilities in the amount not exceeding R700 million (“Debt Agreement”) (in terms of which Sentula may not apply for any additional financing without the prior approval of the SBSA Consortium, being the providers of Sentula’s senior debt facility) and given that the coal assets are held as security by the SBSA Consortium, 100% of the net cash proceeds of R97.8 million (net of deferred purchase consideration of R50 million and after transaction costs of R2.2 million) arising from the disposals of coal assets must be applied to decrease the indebtedness to the SBSA Consortium under the Debt Agreement. Consequently, an interest saving of R4.8 million has been assumed based on a rate of 9.3875%, being the average rate on the senior debt facility provided by the SBSA Consortium for the six month period. - R50 million of the total proceeds of R150 million is deferred for a period of 18 months and will carry interest at a rate of Prime +1%, resulting in interest income recognised of R2.4 million. - No adjustment for South African taxation has been made for purposes of the pro forma financial effects as the Company has sufficient assessable losses (for which no deferred tax asset has been raised) to off-set the interest effects. Benicon Mining Disposal 3. The “Benicon Mining Disposal” column reflects the pro forma financial effects of the Benicon Mining Disposal on earnings, headline earnings, net asset value and net tangible asset value per share based on the following assumptions: - The Benicon Mining Disposal is effective 1 April 2013 for purposes of the pro forma financial effects on earnings, and headline earnings per share and 30 September 2013 for purposes of the pro forma financial effects on net asset value and net tangible asset per share. - Once-off transaction costs of R0.9 million have been allocated to profit and loss and are once off in nature. - In terms of Sentula's senior debt facility under the Debt Agreement (in terms of which Sentula may not apply for any additional financing without the prior approval of the SBSA Consortium) and given that the coal assets are held as security by the SBSA Consortium, 100% of the net cash proceeds of R35.9 million (after transaction costs of R0.9 million is deducted from the gross proceeds of R36.8 million) arising from the disposals of coal assets must be applied to decrease the indebtedness to the SBSA Consortium under the Debt Agreement. Consequently, an interest saving of R1.7 million has been assumed based on a rate of 9.3875%, being the average rate on the senior debt facility provided by the SBSA Consortium for the six month period. - No adjustment for South African taxation has been made for purposes of the pro forma financial effects as the Company has sufficient assessable losses (for which no deferred tax asset has been raised) to off-set the interest effects. 2. FURTHER CAUTIONARY ANNOUNCEMENT Shareholders are referred to the further cautionary announcements dated 29 January 2014 and 14 April 2014 regarding the approach by parties interested in certain other businesses within the Sentula portfolio. As the board of directors of Sentula is still engaged in the strategic evaluation of alternative options to further unlock shareholder value and commensurately reduce the Group’s senior debt, which may result in actions that could have a material effect on the price of Sentula’s securities, shareholders are advised to continue exercising caution when dealing in Sentula’s securities until further announcements are made. Johannesburg 16 May 2014 Sponsor Merchantec Capital Auditors and reporting accountants PricewaterhouseCoopers Inc. Legal advisors Cliffe Dekker Hofmeyr Competent Person and Competent Valuator Venmyn Deloitte Date: 16/05/2014 02:02:00 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. 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