Completes Acq of 25% Interest in Veremo
May 23 2008 - 7:16AM
UK Regulatory
RNS Number : 1787V
Petmin Limited
23 May 2008
23rd May 2008
JSE:PET / AIM:PTMN
Petmin Limited
("Petmin" or "the Company" or "the Group")
CONCLUSION OF THE ACQUISITION OF A 25% INTEREST IN
VEREMO HOLDINGS LIMITED ("VEREMO")
RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. CONCLUSION OF THE ACQUISITION OF A 25% INTEREST IN VEREMO) ("Transaction")
Further to the press announcement of 6 November 2007, Petmin is pleased to announce that, following the fulfillment of the conditions
precedent to the Transaction Petmin now holds a 25% interest in Veremo Holdings Limited.
The balance (75%) of the equity in Veremo is held by Framework Investments Limited ("Framework"), a wholly owned subsidiary of Kermas
Limited (jointly "the Kermas Group"), a substantial indirect shareholder in Samancor Chrome Limited, South Africa's second largest producer
of ferrochrome.
Petmin has settled the balance of its obligations in terms of the Transaction, through the payment of R4,275,000.00 in cash and the
issue of the 7,077,586 new Petmin ordinary shares of ZAR 0.25, at an average issue price of ZAR 4.50 per share ("the shares"), representing
a premium of 25% to the volume weighted average share price on 31 October 2007 being the date upon which the Transaction was concluded.
The Company has applied for the shares to be admitted to trading on the JSE and AIM, which is expected to occur on Friday, 30 May 2008.
The issue of the shares represents an increase of 1.34% in the issued share capital of Petmin and after the issue, Petmin will have
535,541,188 shares in issue.
2. DESCRIPTION OF THE VEREMO IRON PROJECT
Veremo holds the prospecting rights to a substantial polymetallic Mineral Resource with an estimated 60.42% FE²O³ (wt%) and 14.22%
TiO² (wt%), located on the Eastern Limb of the Bushveld Complex in South Africa's Mpumalanga Province, near Stoffberg. Test work has shown
the resource to be suitable for the production of high quality pig-iron.
The resource forms part of the Magnetite Layer 21 of the Upper Zone of the Bushveld Complex, and is particularly well-developed in the
area, outcropping on surface, and with thickness of up to 60 metres having been encountered in a comprehensive drilling programme.
To date, 90 holes have been drilled, equating to some 6 000 metres. The average depth per drill hole over all the holes drilled is 32
metres. In addition, 306 trenches and 15 deep pits have been excavated to expose the weathered portion of the resource and determine outcrop
positions.
The updated 2008 Mineral Resource for the Project, as endorsed by Snowden Mining Industry Consultants, and published during February
2008 is as follows:
Classification Weathering Tons (Mt) Fe (%) SiO2 (%) TiO2(%) V2O5 (%) SG
Indicated Resource Fresh 797.5 42.05 15.13 14.09 0.015 4.22
Weathered 123.8 43.00 13.67 14.64 0.016 4.16
Measured Resource Weathered 11.6 48.98 5.03 18.38 0.23 3.85
Total Resource 933.0 42.26 14.22 14.22 0.15 4.21
The Mineral Resource has been reported in accordance with guidelines of the South African Code for the Reporting of Mineral Resources
and Mineral Reserves (the SAMREC Code, 2007) and can be viewed at the offices, or downloaded at www.petmin.co.za
This announcement has been approved by Mr George Gilchrist BSc (Hons) Geology, Pr Nat, MGSSA of Snowden Mining Industry Consultants.
The thickness of the deposit from south to north is, on average, 44.39 metres. Mining consultants are currently developing an initial
25-year mine plan (to support the production of 700 000 tonnes of pig iron and titanium bearing slag of approximately 300,000 tonnes).
Extensive test work has been undertaken to determine the optimum metallurgical process for the production of pig iron from the resource.
3. DEVELOPMENT OF THE VEREMO IRON PROJECT
The essential terms and conditions of the agreement between Petmin and the Kermas Group are as follows:
1. Finalise a strategic plan to maximise the long term value of the Project. This may result in a separate listing of Veremo.
2. Framework to fund (or procure funding for) and develop the Project on normal commercial terms.
3. Framework will provide (or procure the provision of) all the funding required (development and working capital) to produce at
least 700,000 tonnes of pig iron per annum within 48 months from 30 April 2008 (commencement date). Petmin has no obligation to fund the
development of the Project up to this level of production and will suffer no dilution of its shareholding in Veremo as a consequence of the
funding provided (or procured) by Framework.
4. Framework has warranted that Veremo will for the first three years from the commencement date, distribute a dividend of at least
R65,000,000 (sixty-five million rands) per year in cash to Petmin.. The Kermas Group will pay to Petmin any shortfall between actual
distributions made by Veremo and the amount of R65,000,000 (sixty-five million rands) per year for three years.
5. In the event that production is increased above 700,000 tonnes of pig iron per annum and should funding be required from Veremo
shareholders, then Petmin will be obliged to fund its pro rata share of the additional capital requirements; and
6. Petmin, currently the largest producer of anthracite and silica in South Africa, will be granted an irrevocable first right of
refusal to supply, from its production facilities, all anthracite and all silica that may be required by the Veremo Project for a period of
five years from first production on terms at least as favorable as those which Veremo is able to obtain from other suppliers.
4. RATIONALE AND CONCLUSION
The Transaction represents a further step in the development of Petmin into a multi-commodity minerals business with a particular
emphasis on industrial minerals, bulk commodities and base metals that are either cash-producing and/or near-cash producing. The Kermas
Group is a substantial international partner with a proven ability to manage large projects and Petmin is particularly pleased to partner
the Kermas Group in developing an important South African asset with significant guaranteed returns to Petmin's shareholders.
5. TABLE OUTLINING THE FINAL STRUCTURE
For a table outlining the final structure of the Company following this transaction, please visit the Company's website,
www.petmin.co.za
6. RENEWAL OF CAUTIONARY
Further to the cautionary announcement dated 23 April 2008, shareholders are advised that negotiations are still in progress which, if
successfully concluded, may have a material effect on the price of Petmin's securities.
Accordingly, shareholders are advised to continue exercising caution when dealing in the Company's securities until a full announcement
is made.
Johannesburg
23 May 2008
Secretary and Sponsor - JSE
River Sponsors (Pty) Limited
Consultants
Snowden Mining Industry Consultants
Attorneys
Cliffe Dekker Inc.
Enquiries:
Petmin
Bradley Doig (COO) +27 824 597 818
Russell & Associates
Shelagh Blackman or Charmane Russell
+27 11 880 3924
Numis Securities Limited
John Harrison +44 207 260 1000
Nick Stamp +44 207 260 1000
Parkgreen Communications
Justine Howarth +44 207 851 7480
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQSESFFDSASEFI
Petmin (LSE:PTMN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Petmin (LSE:PTMN)
Historical Stock Chart
From Jul 2023 to Jul 2024
