News, the hard way!From Metorex web page and further to their cautionary statement that I posted the other day.
"Press Release : 17 February 2003
METOREX LIMITED
Incorporated in the Republic of South Africa)
(Registration number 1934/005478/06)
Share code: MTX
ISIN code: ZAE000022745
(“Metorex”)
The acquisition of an effective 54 per cent interest in the assets and liabilities of the ETC division of Avgold Limited and further cautionary announcement
1. INTRODUCTION
Further to the cautionary announcements published in the press on 3 December 2002 and 10 January 2003 (“the cautionary announcements”),
Investec Bank Limited is authorised to announce that Metorex, Millenium Consolidated Investments Limited (“MCI”) and Crew Development Corporation Inc. (“Crew”) (“the Consortium”) have concluded an agreement with Avgold Limited (“Avgold”) (“the acquisition agreement”), in terms of which the Consortium has, subject to certain conditions precedent, effectively acquired the assets and liabilities, excluding any gold hedge agreements, of the ETC division (“ETC”) of Avgold with effect from the date on which the last condition precedent is fulfilled (“the ETC acquisition”).
2. THE ETC ACQUISITION
2.1 Metorex has, as a member of the Consortium, participated in the ETC acquisition, in accordance with its stated strategic objective of seeking to acquire new, longer-life projects to supplement its existing mining portfolio.
2.2 In terms of the acquisition agreement, the Consortium has, through Barberton Mines Limited (“Newco”), subject to the fulfillment of the
conditions precedent referred to in paragraph 6 below, acquired ETC for a cash consideration of R300 million (“the ETC purchase consideration”).
2.3 The ETC purchase consideration will be funded by Newco as follows:
- R150 million in interest bearing debt;
- R120 million funded by Metorex; and
- R30 million funded by Crew.
The R120m funded by Metorex and the R30 million funded by Crew will be in the form of shareholders' loans. Prior to any shareholders' distributions to the Consortium members by Newco, both the interest bearing debt and shareholders' loans will be repaid.
2.4 Metorex’s shareholders loan to Newco will comprise R30 million from internal cash resources and R90 million to be raised by the placing of new Metorex shares with institutional investors (“the Metorex placing shares”)
2.5 The shareholdings of the Consortium members in Newco will be as follows:
- Metorex 54%
- Crew 20% and
- MCI 26%
3. RATIONALE FOR THE ETC ACQUISITION
3.1 The ETC acquisition is expected to be both value and earnings enhancing for Metorex over the medium to long term.
3.2 The ETC acquisition will enhance the diversification and growth of Metorex’s current mining portfolio whilst simultaneously bolstering Metorex’s exposure to gold revenues.
3.3 The ETC acquisition will create a mining vehicle with significant Black Economic Empowerment (“BEE”) credentials through the shareholding of MCI. Metorex is committed to making significant progress in fulfilling the empowerment requirements outlined in the recently published mining charter and the Minerals and Petroleum Resources Development Act, Act 28 of 2002.
3.4 The Metorex share placing is expected to result in increased liquidity in Metorex shares.
4. SALIENT INFORMATION ON ETC
4.1 Background information
ETC is a South African-based Greenstone gold mining operation, situated in the Magisterial District of Barberton, in the Mpumalanga Province, some 370 kilometres east of Johannesburg.
ETC operations currently comprise three operating mines, namely Sheba Mine, New Consort Mine and Fairview Mine, currently producing approximately 100 000 ounces of gold per annum.
4.2 Salient features
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The table below summarises the salient features of ETC:
6 months
31 December
Sorry about that, but the web page is screwed up there and won't copy and paste the NR.
********************************************************************
As at 30 June 2002 the reported gold reserves of ETC amounted to 8 950 kilograms (proved) and 9 394 kilograms (probable). Measured, indicated and inferred gold resources (exclusive of gold reserves) totalled 27 355 kilograms.
5. CONDITIONS PRECEDENT
The ETC acquisition is subject to the fulfillment of the following conditions precedent, the:
5.1 granting of the requisite regulatory approvals, including inter-alia the Competition Commission;
5.2 assignment of the Biox License agreement between Avgold and Biomin Technologies SA to Newco;
5.3 approval of the ETC acquisition by a simple majority of Metorex’s shareholders in general meeting; and
5.4 JSE Securities Exchange SA (“JSE”) and the London Stock Exchange (“LSE”) approving the documentation to be sent to Metorex shareholders and approving the listing of the Metorex placing shares on the JSE and the LSE.
6. CIRCULAR TO METOREX SHAREHOLDERS
A circular to Metorex shareholders containing the details of the ETC acquisition and notice of general meeting will be posted to Metorex shareholders in due course.
7. PRO-FORMA FINANCIAL EFFECTS
In lieu of the fact that Metorex is expected to release its interim financial results for the six-month period ended 31 December 2002 on or about Thursday, 20 February 2003 (“interim results”) the pro-forma financial effects of the ETC acquisition on Metorex (“pro-forma financial effects”) will be published simultaneously with the interim results.
8. FURTHER CAUTIONARY ANNOUNCEMENT
Metorex shareholders are referred to the cautionary announcements and are hereby advised to continue to exercise caution until such time as the pro-forma financial effects have been published.
Johannesburg
17 February 2003"
Comments on this from anyone? I haven't emailed Crew yet to see how this is beneficial, and why they decided not to let us know about it (Man, they are tight-lipped). The annual production is similar to what is expected from Nalunaq, except we have to share it. Also, I think the 30 million Rand is about $5.5 million canadian for 20% interest. Let's see, 20% interest of of 54% of 100000 oz is 10800 oz at $350 minus expenses, let's use $165 cost which then is about 2 million USD. That shouldn't hurt the bottom line too much, should it?
By the way, what does this statement mean exactly:
"The R120m funded by Metorex and the R30 million funded by Crew will be in the form of shareholders' loans. Prior to any shareholders' distributions to the Consortium members by Newco, both the interest bearing debt and shareholders' loans will be repaid."
Joergen, did you and your insiders hear any rumors about this purchase?
Cheers,
Oxyurid