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Revised Related Party Acquisition of Langpan Mining Co, Rights Offer and Amendments to Memorandum of Incorporation
MANTENGU MINING LIMITED
(Formerly Mine Restoration Investments Limited)
Incorporated in the Republic of South Africa
(Registration number: 1987/004821/06)
Share code: MTU ISIN: ZAE000302360
("Mantengu" or “MTU” or “the Company”)
REVISED RELATED PARTY ACQUISITION OF LANGPAN MINING CO, RIGHTS OFFER AND
AMENDMENTS TO MEMORANDUM OF INCORPORATION
1. INTRODUCTION
On 20 August 2020 it was announced on SENS that the Company had entered into a share purchase
agreement (“Initial Share Purchase Agreement”) with the shareholders of Langpan Mining Co
Proprietary Limited (“Langpan”) (“Initial Vendors”) in terms of which the Initial Vendors would dispose
of their entire shareholding in Langpan for an aggregate purchase consideration of R550 million, to be
settled through the issue by the Company of 137 500 000 000 shares (“Consideration Shares”) to
the Initial Vendors (“Proposed Transaction”).
The Proposed Transaction, which constitutes a related party transaction and a reverse take-over for
the Company in terms of the Listings Requirements of the JSE Limited (“JSE”), requires a circular to
shareholders (“Circular”) containing, inter alia, revised listing particulars, a Competent Person’s
Report (“CPR”), a fairness opinion on the Proposed Transaction prepared by an independent expert
(“Independent Exert Report”) and a notice convening a general meeting of shareholders (“Notice”)
(“General Meeting”).
Shareholders are advised that as a result of certain delays, which included obtaining approval of the
CPR from the Readers Panel of the JSE, an updated Independent Expert Report based on the CPR
as approved by the Readers Panel in December 2021 and the audit of Langpan’s historical financial
information, which historical financial information is required to be included in the Circular, there has
been a change in certain of the Initial Vendors of Langpan.
Accordingly, on 21 April 2022, the Company entered into a new share purchase agreement with the
current shareholders of Langpan (“Vendors”) (“Share Purchase Agreement”) in respect of the
Proposed Transaction. The Share Purchase Agreement is based on the same terms and conditions
as the Initial Share Purchase Agreement entered into between Mantengu and the Initial Vendors on
19 August 2020 and replaces such agreement.
Subject to the successful implementation of the Proposed Transaction, the Company intends to
provide its existing shareholders the opportunity to lessen the dilutionary effect of the Proposed
Transaction and to raise additional capital by way of a partially underwritten rights offer (“Rights
Offer”), details of which are set out in paragraph 3 below.
After the implementation of the Proposed Transaction, the Company will hold 100% of the shares in
Langpan, making it a subsidiary of Mantengu. In accordance with paragraph 10.21 to Schedule 10 of
the JSE Listings Requirements, Mantengu will ensure that no provisions contained in the
memorandum of incorporation of Langpan will frustrate the Company in any way from compliance with
its obligations in terms of the JSE Listings Requirements, nor will it relieve the Company from
compliance with the JSE Listings Requirements.
2. THE PROPOSED TRANSACTION
2.1 Description of the business of Mantengu and Langpan
2.1.1 Mantengu
Mantengu has been listed on the Alternative Exchange (“AltX”) of the JSE since 2012
and currently exists as a cash shell. The Company previously held two major
investments, one in a coal fines processing and briquetting operation and the other in an
acid mine drainage technology. Both investments were discontinued and fully impaired
due to significant operational challenges.
2.1.2 Langpan
Langpan mines and processes chrome ore to produce chrome concentrate, with a high
concentration of Platinum Group Metals (“PGMs”) as a by-product. Langpan owns the
plant and infrastructure (“Plant”) and, indirectly through its wholly-owned subsidiary,
Memor Mining Proprietary Limited (“Memor Mining”), the mining right (“Mining Right”)
in relation to the chrome and PGM mining and associated beneficiation operations,
respectively, on the farm Langpan 371KQ (“Langpan Farm”). The Plant and Mining
Right are collectively referred to as the “Mining Assets”. In terms of a mining agreement
concluded between Langpan and Memor Mining in 2018 pursuant to which Langpan was
granted the exclusive right to mine ore on the Langpan Farm under the Mining Right,
Langpan has previously mined the high-grade chrome seams in order to sell high grade,
unprocessed chrome ore to the market.
Langpan concluded exclusive offtake agreements with Scutella Ventures Limited
(“Scutella”) in 2018 in relation to the sale of chrome concentrate for a five-year period
(with first delivery due to take place in September 2022), including a forward sale of
chrome concentrate for a two-year period (“the Forward Sale”). Langpan has further
entered into a series of inter-related financing agreements the effect of which is to
immediately monetise the Forward Sale.
Throughout 2020 and 2021, the COVID-19 pandemic created significant uncertainty in
both the commodity and capital markets which, as a result, cast concern around the
Forward Sale. Although the Scutella long stop dates pertaining to the offtake
agreements have been extended to 31 December 2022, the board of directors of both
Mantengu and Langpan have pursued alternative funding options to underpin the
Proposed Transaction and to minimise any further global or local issues caused by the
pandemic. To this effect, the following has been achieved:
Langpan signed a term sheet on 24 December 2021 with:
- an independent off-taker for a prepayment facility of $3.5 million for the delivery of
240,000MT of chrome concentrate over a period of 24 months. Langpan signed
the conditional agreements on 14 April 2022; and
- an institutional funder for a debt facility of R55 million.
The funding agreements will be utilised to support the capital expansion program and
working capital requirements of the mining operation should the Scutella contracts not
reach financial close.
2.2 Rationale for the Proposed Transaction
Mantengu’s vision is to transform into a next generation mining, mining services and energy
conglomerate that intends on disrupting the mining sector by:
2.2.1 Investing in people by promoting a radical transformation mandate specifically designed
to tackle broad-based wealth creation, job creation, skills transfer, rural infrastructure
and biodiversity integrity whilst achieving optimal returns, on a quantitative and
qualitative basis, for all stakeholders;
2.2.2 Deploying a world first funding model that will unlock capital, commodity and energy
markets to smaller black-owned mining, mining services and energy companies;
2.2.3 Providing an aggregation platform underpinning broad based empowered access to the
capital markets;
2.2.4 Investing in a portfolio of rare and strategic minerals;
2.2.5 Investing in mining related services aimed at supporting the mining portfolio; and
2.2.6 Ensuring investments are geared towards clean energy and sustainable mining
practices.
Mantengu’s acquisition of Langpan is its first step towards its transformation into a company
that promotes rural investment into sustainable mining projects on an inclusive and equitable
basis. The Proposed Transaction will enable Mantengu 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 set out in the table below:
%
Shareholding Related
Name of Vendor in Langpan Party Nature of Relationship
Gamsy Family Trust 18.7% No
Disruption Capital Proprietary 16.1% Yes MTU Chairman, Mike Miller,
Limited (“DCL”) owns 100% of DCL.
Alistair Collins Family Trust 12.3% Yes MTU former Director Alistair
Collins is a Trustee and
Beneficiary of the Trust.
Kianalily Proprietary Limited 9.2% No
Its Really Me Proprietary Limited 7.9% No
Susan Lynne Tarr 5.3% No
Pinotage Trustees Sarl 5.3% No
Dev Maharaj Family Trust 5.0% No
Roux Mining and Civils Proprietary 2.7% No
Limited (in liquidation)
Andru Proprietary Limited 2.4% No
BLM Global Partners RSA 1.9% No
Proprietary Limited
Simeka Capital Holdings Proprietary 1.8% No
Limited
Keith Lee Shew 1.7% No
CCAAC Investments Proprietary 1.3% No
Limited
Parkview Trust 0.9% No
Jennifer Suzanne Geyer 0.9% No
Gravy Holdings Proprietary Limited 0.8% No
LWS Family Office Proprietary 0.8% No
Limited
Putisolve Proprietary Limited 0.7% No
Amolo Holdings Proprietary Limited 0.7% No
Summa Investments Proprietary 0.6% No
Limited
Sitona Materials Handling and 0.5% No
Logistics Proprietary Limited
Sendizza Minerals Proprietary 0.4% No
Limited
Katherine Louise Miller 0.3% No
Catherine Berlein 0.2% No
Inpro Limited 0.2% No
Ginger Cat Holdings Proprietary 0.2% No
Limited
Petrus Johannes Human 0.1% No
Siyembili Consulting and Business 0.1% No
Services Proprietary Limited
Gavin Mason 0.1% No
Jenny Mason 0.1% No
Lynne Miller 0.1% No
Ian Miller 0.1% No
Ashley Gerald Wilson 0.1% No
Nndanganeni Musekene 0.1% No
Theresa Walstra 0.1% No
Breamline Proprietary Limited 0.1% No
Sean Frankim 0.03% No
Total 100%
2.4 Conditions precedent and effective date
The Proposed Transaction is subject to the fulfilment or waiver, as the case may be, of the
following conditions on or before the Effective Date, being the date that is nine months from the
date of signature of the Share Purchase Agreement (“Effective Date”), or such other date as
the parties thereto may agree upon in writing:
2.4.1 written confirmation from the JSE that the suspension of the listing of Mantengu shares
(“Shares”) on the AltX will be lifted upon implementation of the Proposed Transaction;
2.4.2 the approval of the Proposed Transaction by the requisite majority of independent
Mantengu shareholders by way of an ordinary resolution;
2.4.3 Mantengu having obtained the necessary shareholder approval required in terms of
section 41(1) and 41(3) of the Companies Act, 2008 (Act 71 of 2008), as amended
(“Companies Act”) authorising the issue of the Consideration Shares and Rights Offer
Shares as referred to in paragraph 3 below, by way of special resolution at the General
Meeting;
2.4.4 Mantengu having obtained the necessary shareholder approval required in terms of
section 16 of the Companies Act, to amend Mantengu’s memorandum of incorporation
(“MOI”) pursuant to an increase in authorised share capital and a consolidation of
Shares, by way of special resolution at the General Meeting, and the filing of the
amended MOI with the Companies and Intellectual Property Commission (“CIPC);
2.4.5 to the extent applicable, the shareholders of certain Vendors having approved entry
into and implementation of the transactions contemplated under the Sale Purchase
Agreement in accordance with sections 112 and 115 of the Companies Act, and each
Vendor having waived the application to the Proposed Transaction of Parts B and C of
Chapter 5 of the Companies Act and the Takeover Regulations; and
2.4.6 Mantengu obtaining the requisite regulatory approvals required to conclude the
transactions provided for in the Share Purchase Agreement, namely JSE, Takeover
Regulation Panel and Exchange Control Regulations approval.
If the conditions precedent are not fulfilled or waived, as the case may be, prior to the Effective
Date, or such later date as the parties to the Share Purchase Agreement may agree upon in
writing, the Share Purchase Agreement shall terminate and the parties shall be restored as
closely as possible to the positions in which they would have been had such agreement not
have been entered into.
2.5 Financial information
The audited net asset value of Langpan for the year ended 28 February 2021 was R37.4 million.
The audited loss after tax attributable to the net assets for the year ended 28 February 2021 was
R4.4 million.
The reviewed net asset value of Langpan for the six months ended 31 August 2021 was
R35.8 million.
The reviewed loss after tax attributable to the net assets for the six months ended 31 August
2021 was R6 million.
The financial statements were prepared in accordance with International Financial Reporting
Standards and the Companies Act.
Langpan was incorporated on 20 September 2017 for the purposes of acquiring the Mining
Assets and commenced operations on or about 15 June 2020.
2.6 Warranties
The Share Purchase Agreement contains warranties that are customary for a transaction of this
nature.
2.7 Other significant details
The Share Purchase Agreement contains non-compete and non-solicitation clauses in terms
of which the Vendors and any of their affiliates, as the case may be, have undertaken that for
a period of five years from the third business day following the Effective Date (“Closing Date”),
they will not:
- undertake or be involved in any business or form part of a business in South Africa in
competition with Langpan Mining Co’s business;
- do or say anything which is harmful to the reptation of Langpan Mining Co which leads a
person to cease to deal with Langpan Mining Co;
- offer to or employ, solicit or seek to entice away from Langpan Mining Co any person who
was employed with Langpan Mining Co in a skilled or managerial position; and/or
- solicit, or otherwise engage, the custom of any person who is or was a client or was
negotiating to become a client of Langpan Mining Co at any time during the period of
12 months ending on the Closing Date.
2.8 Classification of the Proposed Transaction
As set out in paragraph 1 above, in terms of the JSE Listings Requirements, the Proposed
Transaction constitutes both a related party transaction, as certain of the Vendors are current
and former directors of Mantengu, and a reverse take-over for the Company.
Accordingly, the Proposed Transaction is subject to approval by shareholders present or
represented in General Meeting and voting (excluding the related party/ies and their associates).
Shareholders should note that the JSE will only permit Mantengu to retain its listing following the
reverse take-over if the JSE is satisfied that Mantengu still qualifies for a listing.
3. THE RIGHTS OFFER
Mantengu will seek to raise approximately R15 million through a partially underwritten renounceable
rights offer in terms of which shareholders will be entitled to subscribe for new Shares (“Rights Offer
Shares”) at a subscription price of 0.1 cent per Rights Offer Shares, whereby Rights Offer Shares
will be issued post the issue of the Consideration Shares. The Vendors have agreed not to take up
or renounce any rights relating to the Consideration Shares.
The proceeds from the Rights Offer will be applied:
- to fund transaction costs in relation to the Rights Offer and the Proposed Transaction; and
- to extinguish certain of Mantengu’s liabilities.
As the Rights Offer is subject to the successful implementation of the Proposed Transaction, full
details of the Rights Offer will be communicated to shareholders in due course.
4. AMENDMENTS TO THE MOI
In order to facilitate the issue of the Consideration Shares 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 pursuant to the increase in authorised share capital, the Company will seek the
approval of its shareholders to consolidate its ordinary share capital on the basis of 1 consolidated
Share for every 1 000 Shares currently in issue post the conclusion of the Rights Offer and to amend
the Company’s MOI accordingly.
5. CPR
Bara Consulting Proprietary Limited (“Bara Consulting”) was appointed by the Company to compile
a CPR and mineral asset valuation for Langpan. The report was commissioned in order to comply
with the JSE Listings Requirements. The CPR and mineral asset valuation have been compiled in
accordance with:
- The South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral
Reserves (SAMREC Code) 2016 Edition;
- The South African Code for the Reporting of Mineral Asset Valuation (SAMVAL Code) 2016
Edition; and
- Section 12 of the JSE Listings Requirements.
The CPR, which was approved by the Readers Panel of the JSE on 20 December 2021, confirmed
Langpan’s:
- Mineral Reserve of 2.17 million tonnes of chrome, including PGMs; and
- Valuation of R851 million.
The executive summary of the CPR will be included in the Circular.
Bara Consulting has approved in writing the relevant information set out in this announcement.
6. INDEPENDENT EXPERT REPORT
In accordance with paragraph 10.4(f) of the JSE Listings Requirements, Letsema Corporate Finance
Proprietary Limited was appointed by the Company as the independent expert to provide the fairness
opinion on the Proposed Transaction, which Independent Expert Report will be included in the
Circular.
7. CIRCULAR AND NOTICE
The Circular which will contain, inter alia, full details of the Proposed Transaction, revised listing
particulars, the executive summary of the CPR, the Independent Expert Report and the proposed
amendments to the MOI, together with the Notice of General Meeting in order to consider and, if
deemed fit to pass, with or without modification, the resolutions necessary to approve and implement,
inter alia, the Proposed Transaction and the amendments to the MOI, will be issued in due course.
8. CONCLUSION
The board of directors of Mantengu (“Board”) is extremely excited about the prospects of the
Proposed Transaction, which underpins the Company’s endeavours to procure upliftment of the
suspension of the listing of the Company’s Shares on the AltX and resultant reinstatement to trading.
Whilst the Board works on the JSE reinstatement processes, as referred to in paragraph 2.2 above,
the board of directors of Langpan has secured two complementary debt facilities, totalling
approximately R100 million, to underpin the refurbishment of its chrome and PGM beneficiation plant
and the start-up of operations.
The Board is fully committed to protecting stakeholders’ value and has thus remained steadfast in its
reinstatement commitment. In light of the macro-economic and South African political challenges
coupled with the continuing challenges of the global pandemic, the Board is pleased with the
progress that has been made thus far.
Johannesburg
22 April 2022
Designated Adviser
Merchantec Capital
Competent Person
Bara Consulting Proprietary Limited
Independent Expert
Letsema Corporate Finance Proprietary Limited
Date: 22-04-2022 04:45:00
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