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Revised Related Party Acquisition, Rights Offer and Amendment of Memorandum of Incorporation
MINE RESTORATION INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
(Registration No. 1987/004821/06)
Share code: MRI
ISIN: ZAE000164562
(“MRI” or “the Company”)
REVISED RELATED PARTY ACQUISITION, RIGHTS OFFER AND AMENDMENT OF MEMORANDUM
OF INCORPORATION
1. Introduction
On 10 October 2019, it was announced by MRI on the Securities Exchange News Service that it had
entered into a share purchase agreement with the shareholders of Langpan Mining Co Proprietary
Limited (“Langpan”) (“the Vendors”) in terms of which the Vendors will dispose of their entire
shareholding (100%) in Langpan for an aggregate purchase consideration of R550 000 000, to be
settled through the issue by MRI of 137 500 000 000 shares (“the Consideration Shares”) (“the
Proposed Transaction”) to the Vendors. On 13 July 2020, it was announced that this share purchase
agreement had lapsed but that the Company remains in discussions with the Vendors regarding the
Proposed Transaction. The board of directors of MRI (”the Board”) is pleased to announce that a new
share purchase agreement has been entered into with the Vendors (a list of which is contained in
paragraph 2.3 below) on 13 August 2020 (“the Share Purchase Agreement”).
The Company also intends to raise additional capital in order to repay existing debt through the
proceeds of a partially underwritten rights offer, details of which are set out in paragraph 3 below.
After the implementation of the Proposed Transaction, MRI will hold 100% of the shares in Langpan,
making it a subsidiary of MRI. In accordance with paragraph 10.1 of the Listings Requirements of the
JSE Limited (“JSE”) (“Listings Requirements”), MRI will ensure that no provisions contained in the
Memorandum of Incorporation (“MOI”) of Langpan will frustrate the Company in any way from
compliance with its obligations in terms of the Listings Requirements, nor will it relieve the Company
from compliance with the Listings Requirements.
2. The Proposed Transaction
2.1. Description of the businesses of MRI and Langpan
MRI has been listed on the Alternative Exchange of the JSE since June 2012 and exists as a cash shell.
The Company previously held two major investments in coal fines processing and briquetting, as well
as acid mine drainage technology. Both investments were discontinued and fully impaired due to
significant operational challenges.
Langpan mines and processes chrome ore to form chrome concentrate, with a by-product having a
high concentration of Platinum Group Metals (“PGM”). Langpan owns the plant and machinery and
the mining rights, respectively, in relation to the chrome and PGM mining and associated beneficiation
operations on the farm Langpan 371KQ (collectively, “the Mining Assets”). Langpan is currently mining
the high grade chrome seams in order to sell high grade, unprocessed chrome ore to the market.
Langpan concluded supply agreements on 8 October 2019 with Scutella Ventures Limited in relation
to the sale of chrome concentrate for a five-year period, including a forward sale of chrome
concentrate for a two-year period (“the Forward Sale”), on commercial terms. Langpan has further
entered into a series of inter-related financing agreements the effect of which is to immediately
monetise the Forward Sale and a portion of these proceeds will be used to settle the purchase
consideration in relation to the acquisition by Langpan of the Mining Assets.
2.2. Rationale for the Proposed Transaction
The Proposed Transaction is a first step towards MRI’s transformation into a mining house that
promotes rural investment into sustainable mining projects on an inclusive and equitable basis. The
Proposed Transaction will enable MRI to transform from a cash shell and position itself to achieve its
rural investment mandate.
2.3. Details of the Vendors and related parties
The Vendors comprise the parties named in the table below.
Name of Vendor % Shareholding Related Nature of Relationship
in Langpan Ltd Party
Disruption Capital 29.6% Yes MRI Directors Mike Miller and
(“DCL”) Alistair Collins own 100% of DCL.
Furiscape (Pty) Ltd 18.8% No
Dalenn Holdings Ltd 13.7% No
Kianalily (Pty) Ltd 8.5% Yes MRI Financial Director Ulrich
Bester and his associate own
100% of Kianalily.
Its Only Me (Pty) Ltd 7.9% No
Ngama Ltd 5.3% No
Mvikeli Trust 5.3% No
Roux Engineering (Pty) Ltd 2.7% No
Batcor Plant Hire (Pty) Ltd 2.0% No
BLM Global Partners RSA 2.0% No
(Pty) Ltd
Simeka Capital Holdings 1.8% No
(Pty) Ltd
Andru (Pty) Ltd 0.9% No
Putisolve (Pty) Ltd 0.7% No
Dev Maharaj Family Trust 0.2% No
Inpro Limited 0.2% No
Ashley Wilson 0.1% No
Nndangi Musekene 0.1% No
Piet Human 0.1% No
Breamline (Pty) Ltd 0.1% No
Sean Frankim 0.03% No
Total 100%
There are no related party relationships other than those noted above. The Vendors will enter into a
lock-up agreement in relation to their holdings of Consideration Shares such that they will not dispose
thereof until such time as Langpan’s obligations in terms of the Forward Sale have been fully
discharged.
2.4. Effective date
The Proposed Transaction will become effective on the “Effective Date” (as defined in the Share
Purchase Agreement) which is the date falling no later than nine months after the date of signature
of the Share Purchase Agreement or such earlier date as the parties thereto may agree, provided that,
by no later than the Effective Date, the conditions precedent set out in paragraph 2.5 below have been
fulfilled.
2.5. Conditions precedent
The Proposed Transaction is conditional upon, inter alia:
• written confirmation from the JSE that the suspension of the listing of MRI shares on the
Alternative Exchange of the JSE has been lifted;
• the approval of the requisite majority of MRI shareholders of the Proposed Transaction;
• the approval by MRI shareholders of a special resolution in respect of the proposed amendments
to the Company’s MOI described in paragraph 4 below and the filing of the amended MOI with
the Companies and Intellectual Properties Commission; and
• the approval by MRI shareholders of a special resolution authorising the issue of the
Consideration Shares and the Rights Offer shares, as set out in paragraph 3, below, in terms of
sections 41(1) and 41(3) of the Companies Act, 71 of 2008, as amended.
2.6. Financial information relating to Langpan
The unaudited net asset value of Langpan for the year ended 29 February 2020 was R2 847 278 in
terms of the International Financial Reporting Standards. Langpan was incorporated on 20 September
2017 for the purposes of acquiring the Mining Assets and commenced mining operations on or about
15 June 2020.
2.7. Warranties
The Share Purchase Agreement contains warranties that are normal for a transaction of this nature.
2.8. Classification of the Proposed Transaction
In terms of the Listings Requirements, the Proposed Transaction is classified as both a related party
transaction, as certain of the Vendors are directors of the Company or associates thereof, and a
reverse take-over.
Shareholders should note that the JSE will only permit MRI to retain its listing following the reverse
take-over if the JSE is satisfied that MRI still qualifies for a listing.
3. The Rights Offer
MRI will seek to raise approximately R15 000 000 through a partially underwritten renounceable rights
offer (“the Rights Offer”) at a subscription price of 0.1 cent per Rights Offer share, whereby Rights
Offer shares will be issued simultaneously with the Consideration Shares.
The proceeds from the Rights Offer will be applied as follows:
• to fund transaction costs in relation to the Rights Offer and the Proposed Transaction; and
• to extinguish certain of MRI’s liabilities.
The launch of the Rights Offer is conditional upon the conditions precedent set out in paragraph 2.5
above.
4. Amendments to the MOI
In order to facilitate the Proposed Transaction and the Rights Offer, it will be necessary to increase
the authorised share capital of the Company. In addition, in order to reduce the number of shares in
issue, the Company will seek the approval of its shareholders to consolidate its shares in a ratio of 1
consolidated MRI share for every 1 000 MRI shares currently in issue.
5. Independent Expert Opinion
In accordance with both the Listings Requirements and Regulation 86(7) of the Companies
Regulations, an independent expert will be appointed to provide a fair and reasonable opinion in
relation to the terms of the Proposed Transaction.
6. Circular and notice of general meeting
A circular and Revised Listings Particulars, prepared in terms of the Listings Requirements and
containing, inter alia, details of the Proposed Transaction, the Rights Offer and the amendments to
the MOI, together with the report of the independent expert, a competent persons report and a notice
of general meeting of MRI shareholders will be dispatched in due course.
Johannesburg
20 August 2020
Designated Advisor
Questco Proprietary Limited
Date: 20-08-2020 08:00:00
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