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Pro Forma Financial Effects of the Specific Issues of Shares and Warrants
MANTENGU MINING LIMITED
Incorporated in the Republic of South Africa
(Registration number 1987/004821/06)
Share code: MTU ISIN: ZAE000320347
("Mantengu" or "the Company")
PRO FORMA FINANCIAL EFFECTS OF THE SPECIFIC ISSUES OF SHARES AND WARRANTS
1. INTRODUCTION
Shareholders are referred to the announcements released on SENS on 26 October 2023 and
21 December 2023, and to the Circular distributed to Shareholders on 21 December 2023 relating to the
Proposed Transaction encompassing the Specific Issues of Shares and Warrants by the Company
pursuant to the R500 million Facility to be made available to Mantengu by the Investor, GEM Global
Yield LLC SCS.
As set out in the Circular, Shareholders were advised that the pro forma financial effects of the Specific
Issues of Shares and Warrants, together with the independent reporting accountant's report thereon,
would be released on SENS once finalised.
Terms defined in the Circular shall, unless otherwise stated, bear the same meaning in this
announcement.
2. PRO FORMA FINANCIAL EFFECTS
The tables below set out the pro forma financial information of the Specific Issues of Shares and
Warrants on the reviewed condensed consolidated results of Mantengu for the six months ended
31 August 2023.
The pro forma financial information has been prepared to illustrate the impact of the Specific Issues of
Shares and Warrants on the reported financial information of Mantengu for the six months ended
31 August 2023, had the Specific Issues of Shares and Warrants occurred on 1 March 2023 for
purposes of the statement of comprehensive income and as at 31 August 2023 for purposes of the
statement of financial position.
The pro forma financial information has been prepared using accounting policies that comply with IFRS
and are consistent with those applied in the audited annual financial statements of Mantengu for the
financial year ended 28 February 2023. The pro forma financial information is presented in accordance
with the Listings Requirements and the Guide on Pro Forma Financial Information issued by the South
African Institute of Chartered Accountants.
The pro forma financial information is the responsibility of the Directors. Their responsibility includes
determining that the Mantengu pro forma financial information has been properly compiled on the basis
stated, which is consistent with the accounting policies of Mantengu and that the pro forma adjustments
are appropriate for purposes of the pro forma financial information disclosed pursuant to the Listings
Requirements. The pro forma financial information is provided for illustrative purposes only and, because
of its pro forma nature, may not fairly present Mantengu's actual financial position, changes in equity,
results of operations or cash flow.
The pro forma financial information should be read in conjunction with the Independent Reporting
Accountant's assurance report thereon, as set out at the end of this announcement.
Pro forma Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Consolidated
August 2023 Adjustment Adjustment after
Note 1 Note 2 Note 3 Adjustments
R'000 R'000 R'000 R'000
Revenue 13 087 13 087
Cost of sales (11 617) (11 617)
Gross Profit 1 470 1 470
Other Income 2 257 2 257
Depreciation (2 357) (2 357)
Director's
remuneration (2 774) (2 774)
Employee benefits (1 119) (1 119)
Administrative
expenses (6 781) (10 000) (1 526) (18 307)
Other expenses (6 096) (6 096)
Operating loss (15 400) (10 000) (1 526) (26 926)
Finance Costs (12 736) (12 736)
Loss before
taxation (28 136) (10 000) (1 526) (39 662)
Taxation @ 27% 12 103 12 103
Loss after taxation (16 033) (10 000) (1 526) (27 559)
LPS (cents) 10 12
Diluted LPS (cents) 10 12
HLPS (cents) 10 12
Diluted HLPS (cents) 10 12
Earnings per share (Number of shares reconciliation)
Weighted average number of shares in issue at 31 August 2023 153 487 944
Issue of 10 million shares to settle commitment fee 10 000 000
Drawdown of 50 889 192 shares 50 889 192
Exercising of 20 million Warrants 20 000 000
___________
Pro forma weighted average number of shares at 31 August 2023 234 377 136
There are no adjustments that arise out of the SAICA Headline Earnings Circular 1/2023.
Notes to the pro forma consolidated statement of profit or loss and other comprehensive income
Note 1 – The Consolidated Statement of Profit or Loss and Other Comprehensive Income has been
extracted, without adjustment, from Mantengu's reviewed condensed consolidated results for the six
months ended 31 August 2023 published on SENS on 29 November 2023.
Note 2 - This is the commitment fee of R10 million, which is 2% of the R500 million Facility
("Commitment Fee"). Ten million Commitment Fee Shares were issued as settlement of the
Commitment Fee on 3 November 2023 at an issue price of R1.13 ("Issue Price"). The Issue Price
reflects a 10% discount to the 30-day volume weighted average price at close of business on the
Execution Date. The trading price on the day of issue was R1. The pro forma consolidated statement of
profit or loss and other comprehensive income reflects the expensing of the Commitment Fee of
R10 million.
Note 3 - This adjustment accounts for transaction costs, which are once off in nature, relating to the
entering into of the Share Subscription Facility Agreement. The total costs of R1 525 776 and the
relative breakdown is reflected in the Circular. The pro forma consolidated statement of profit or loss and
other comprehensive income reflects the expensing of these transaction costs.
Pro forma Consolidated Statement of Financial Position at 31 August 2023
Consolidated Consolidated
August 2023 Adjustment Adjustment Adjustment Adjustment after
Note 4 Note 5 Note 6 Note 7 Note 8 Adjustments
R'000 R'000 R'000 R'000 R'000 R'000
Assets
Non-current assets
Property, plant and
equipment 240 365 240 365
Right of use assets 7 672 7 672
Goodwill 39 195 39 195
287 232 287 232
Current Assets
Cash and cash
equivalents 85 50 622 80 000 (1 526) 129 181
Inventory 17 399 17 399
Prepayments 4 904 4 904
Trade and other
receivables 7 937 7 937
30 325 50 622 80 000 (1 526) 159 421
TOTAL ASSETS 317 557 50 622 80 000 (1 526) 446 653
EQUITY AND
LIABILITIES
Capital and
Reserves
Share Capital 99 970 10 000 50 622 80 000 240 592
Accumulated loss (36 506) (10 000) (1 526) (48 032)
63 464 - 50 622 80 000 (1 526) 192 560
Non-current
Liabilities
Other financial
liabilities 96 390 96 390
Lease liability 7 868 7 868
Deferred taxation 17 788 17 788
122 046 - 122 046
Current Liabilities
Other financial
liabilities 83 007 83 007
Lease liability 50 50
Trade and other
payables 48 217 48 217
Bank overdraft 148 148
Current taxation 625 625
132 047 132 047
TOTAL EQUITY
AND LIABILITIES 317 557 50 622 80 000 (1 526) 446 653
NAV (cents) 41
TNAV 176
Notes to the pro forma consolidated statement of financial position
Note 4 – The Consolidated Statement of Financial Position has been extracted, without adjustment, from
Mantengu's reviewed condensed consolidated results for the six months ended 31 August 2023
published on SENS on 29 November 2023.
Note 5 - This is the Commitment Fee of R10 million, which is 2% of the R500 million Facility. Ten million
Commitment Fee Shares were issued as settlement of the Commitment Fee on 3 November 2023 at an
Issue Price of R1.13. The Issue Price reflects a 10% discount to the 30-day volume weighted average
price at close of business on the Execution Date. The trading price on the day of issue was R1. We have
assumed that we will settle the entire Fee by issuing ordinary shares. The pro forma consolidated
statement of financial position reflects an increase in share capital of R10 million.
Note 6 – This adjustment reflects the maximum drawdown on the Facility in respect of the number of
ordinary shares that can be issued to the Investor. Considering that GYBL's current shareholding is
6.1%, after the issue of 10 million Commitment Fees Shares as settlement of the Commitment Fee and,
in accordance with the provisions with the Share Subscription Facility Agreement cannot exceed
29.99%, the maximum headroom for further issuances is 23.89% and amounts to 50 889 192 ordinary
shares. We have assumed an issue price of R1 per share which is the 10% discount to the 15-day
volume weighted average price at the time of issuance. The pro forma consolidated statement of
financial position reflects an increase of both cash and share capital of R50 889 192.
An additional adjustment reflects the expensing of the total Share Provider Fee of R266 645 and is
based on an interest rate of 0,0349% per day and on the issue of 50 889 192 ordinary shares required
for an amount of 15 days. The pro forma consolidated statement of financial position reflects a decrease
in share capital after accounting for the Share Provider Fee and a corresponding decrease in cash.
Note 7 - This adjustment accounts for 20 million Warrants issued at a strike price of R4 per Warrant. We
have assumed that these Warrants will be "in the money" and hence the pro forma consolidated
statement of financial position reflects an increase of both cash and share capital of R80 million. There is
no fee relative to the issue of the Warrants to the Investor. Mantengu will however, be liable for damages
to the Investor should these Warrants not be issued within 90 days of having entered into the Share
Subscription Facility Agreement, the last date for such issue being 23 January 2024. This detail is
included in the Circular.
As mentioned above, we have assumed that these Warrants will be "in the money" and hence the
adjustments depicted. The Warrants are currently deep "out of the money" and hence have no value
from an accounting perspective. Under this scenario, there would be no impact on both the pro forma
consolidated statement of profit or loss and other comprehensive income and the pro forma consolidated
statement of financial position.
Note 8 - This adjustment accounts for transaction costs, which are once off in nature, relating to the
entering into of the Share Subscription Facility Agreement. The total costs of R1 525 776 and the relative
breakdown is reflected in the Circular. The pro forma consolidated statement of financial position reflects
a decrease in cash on settlement of these costs.
Johannesburg
15 January 2024
Designated Adviser
Merchantec Capital
Legal Adviser to Mantengu
Baker McKenzie Inc.
Independent Reporting Accountant
HLB CMA South Africa Inc.
Head Office:
CMA Office & Conference Park
No.1 2nd Road
Halfway House Estate
Midrand, 1685
Tel International: +27 11 315 0215
Tel Local: 010 786 0153
E-Mail: info@hlbcma.co.za
www.hlbisouthafrica.co.za
Formed in 1969, HLB International services clients through its member firms in 156
countries, their 40,831 staff including partners in 1,128 offices worldwide
HLB CMA South Africa Inc., Reg. 1997/013001/21, is a member of HLB International, the global advisory, auditing and accounting network
INDEPENDENT REPORTING ACCOUNTANT'S ASSURANCE REPORT ON THE PRO FORMA
FINANCIAL INFORMATION OF MANTENGU
"The Board of Directors
Mantengu Mining Limited
5 St Michaels Lane
Bryanston
Sandton, 2021
15 January 2024
Dear Sirs
INDEPENDENT REPORTING ACCOUNTANT'S REPORT ON THE COMPILATION OF THE PRO
FORMA FINANCIAL INFORMATION INCLUDED IN THE ANNOUNCEMENT IN RELATION TO THE
CIRCULAR
The definitions commencing on page 9 of the Circular to which this letter relates apply mutatis mutandis to
this report (unless specifically defined where used or the context indicates a contrary intention).
Introduction
We have completed our assurance engagement to report on the compilation of pro forma financial
information of Mantengu Mining Limited ("Mantengu") by the directors. The pro forma financial information
consists of the pro forma Statement of Financial Position at 31 August 2023, the pro forma statement of
comprehensive income for the period ended 31 August 2023 and related notes. The applicable criteria on
the basis of which the directors have compiled the pro forma financial information are specified in the
Listings Requirements of the JSE Limited ("JSE") and described in the basis of preparation paragraph.
The pro forma financial information was compiled by the directors to illustrate the impact of the Specific
Issues of Shares and Warrants, described in the Circular to Mantengu Shareholders dated 21 December
2023, on the Company's financial position as at 31 August 2023, and the Company's financial performance
for the period then ended, as if the corporate action or event had taken place at 1 March 2023 and for the
period then ended. As part of this process, information about the Company's financial position and financial
performance has been extracted by the directors from the Company's interim financial statements for the
period ended 31 August 2023, on which a Reviewer's report was issued on 29 November 2023.
Directors' Responsibility for the Pro Forma Financial Information
The directors are responsible for compiling the pro forma financial information on the basis of the applicable
criteria specified in the JSE Listings Requirements and described in the pro forma financial information.
CorporateINTL Audit & Assurance Services Firm of the Year 2019 and 2023
IRBA Practice no.: 912476
SAICA Practice no.:30701993
Offices in: Midrand (HQ), Vaal Triangle, West Rand, East Rand, Tshwane, Cape Town
Directors: Our list of directors is available on request from
mbasecretarial@mbainc.co.za
Our Independence and Quality Control
We have complied with the independence and other ethical requirements of the Code of Professional
Conduct for Registered Auditors issued by the Independent Regulatory Board for Auditors (IRBA Code),
which is founded on fundamental principles of integrity, objectivity, professional competence and due care,
confidentiality and professional behaviour. The IRBA Code is consistent with the International Ethics
Standards Board for Accountants' International Code of Ethics for Professional Accountants (including
International Independence Standards).
HLB CMA South Africa Incorporated applies the International Standard on Quality Management 1, Quality
Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or
Related Services Engagements and accordingly maintains a comprehensive system of quality control
including documented policies and procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory requirements.
Reporting Accountant's Responsibility
Our responsibility is to express an opinion about whether the pro forma financial information has been
compiled, in all material respects, by the directors on the basis specified in the JSE Listings Requirements
based on our procedures performed.
We conducted our engagement in accordance with the International Standard on Assurance Engagements
(ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information
Included in a Prospectus which is applicable to an engagement of this nature (Circular) issued by the
International Auditing and Assurance Standards Board. This standard requires that we plan and perform
procedures to obtain reasonable assurance about whether the pro forma financial information has been
compiled, in all material respects, on the basis specified in the JSE Listings Requirements.
For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions
on any historical financial information used in compiling the pro forma financial information, nor have we, in
the course of this engagement, performed an audit or review of the financial information used in compiling
the pro forma financial information.
The purpose of pro forma financial information included in a prospectus or Circular of this nature is solely
to illustrate the impact of a significant corporate action or event on unadjusted financial information of the
entity as if the corporate action or event had occurred or had been undertaken at an earlier date selected
for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of
the corporate action or event at 31 August 2023 would have been as presented.
A reasonable assurance engagement to report on whether the pro forma financial information has been
compiled, in all material respects, on the basis of the applicable criteria involves performing procedures to
assess whether the applicable criteria used by the directors in the compilation of the pro forma financial
information provide a reasonable basis for presenting the significant effects directly attributable to the
corporate action or event, and to obtain sufficient appropriate evidence about whether:
• The related pro forma adjustments give appropriate effect to those criteria; and
• The pro forma financial information reflects the proper application of those adjustments to the unadjusted
financial information.
Our procedures selected depend on our judgement, having regard to our understanding of the nature of
the company, the corporate action or event in respect of which the pro forma financial information has been
compiled, and other relevant engagement circumstances.
Our engagement also involves evaluating the overall presentation of the pro forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Opinion
In our opinion, the pro forma financial information has been compiled, in all material respects, on the basis
of the applicable criteria specified in the JSE Listings Requirements and described in the pro forma financial
information.
Jean-Andre du Toit CA(SA)
Director
Registered Auditor
Reporting Accountant Specialist (JSE)
On Behalf of HLB CMA South Africa Incorporated
(JSE accredited Reporting Accountant)
CMA Office and Conference Park
No. 2 Second Road
Halfway House, 1985"
Date: 15-01-2024 04:50:00
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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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