Johannesburg, South Africa. 1 December, 2005. Petra Mining Limited (JSE: PET; Petmin) has secured shareholder approval for the company's acquisition of Springlake Holdings (Pty) Limited (Springlake) for R108 million, and has announced the go-ahead for the development of a new R114 million, 950 000 run-of-mine tonnes per year (ROM tpa) high-quality anthracite mine, Somkhele, near Mtubatuba and Richards Bay in KwaZulu-Natal (KZN).
The company also disclosed today that it has consolidated its Black Economic Empowerment (BEE) shareholding into an anchor BEE consortium comprising Dark Capital Investments (Proprietary) Limited (Dark), Lebone Resources (Proprietary) Limited (Lebone), Popcru Investments (Proprietary) Limited, Umsobomvu Coal (Proprietary) Limited and others. The anchor consortium's holding is in excess of 40% and, with those of other BEE shareholders, gives Petmin a total BEE shareholding in excess of 52%.
Lebo Mogotsi (34), a director of Lebone and previously a non-executive director of Petmin, has been appointed as an executive director and Deputy Chairperson of Petmin. Bradley Doig (41), a director of Decorum Capital Partners and fund manager of the New Africa Mining Fund (NAMF), and Alwyn Martin (67), representing Dark, have been appointed non-executive directors.
The company has also appointed an executive team comprising Lebo Mogotsi, Chief Executive Officer Dawie Warmenhoven, Jan du Preez, Bradley Doig and Bruce Tanner.
Warmenhoven said that today's announcements marked "substantial" progress by the company in respect of key cornerstones of its strategy:
Capital for the acquisition of Springlake from the New Africa Mining Fund (NAMF) and minorities, which was agreed upon in April 2005, was raised mainly through the issue of 175 810 000 shares at 60 cents per share.
Springlake comprises:
Springlake Colliery, in operation for 29 years, has a life of mine of more than 12 years according to a recent Competent Person's Report. Various off-take agreements are in place and the vendors have warranted an after-tax profit of some R45 million for the next 28 months.
The new Somkhele operation will include a washing and processing plant with a capacity of 120 000 ROM tonnes per month (tpm). Scheduled to be in production (initially at a rate of 40 000 ROM tpm during the second quarter of 2007, ramping up to full production in 2010, it is expected to be one of the lowest cost producers of quality anthracite in South Africa, and to bring much-needed development to the economically depressed area around Mtubatuba.
"Somkhele will add significant value to the Petmin Group due the high quality of the resource and the demand for high quality reductants in the smelting sector; also, it will augment Springlake's production through unique product blending opportunities," Warmenhoven said.
Petmin's current allocation for the Richards Bay Coal Terminal is 200 000 tonnes a year over the next three years but this is re-assessed according to usage every 12 months.
"We are confident that, as a result both of Springlake's ability to increase its export tonnages and of Petmin's improved BEE status, we can achieve an allocation increase," Warmenhoven said.
Petmin, active in the South African mining sector until 2002, converted from a cash shell to an operating mining company some 18 months ago when it acquired Mpumalanga-based SamQuarz, South Africa's largest producer of high-quality silica sand. In its first set of results since converting, the company announced a profit after tax of R28.3 million (including fair value adjustments of some R22.8 million) for the year ended 30 June 2005.
Note to editors: A document containing short profiles on the new appointees to Petmin's Board of Directors and Executive Committee accompanies this media release.
Petmin profiles
Dawid H Warmenhoven (Dawie) – Bjuris, LLB
Chief Executive Officer, Petmin, Member of Executive Committee)
Warmenhoven was appointed Chief Executive Officer of Petmin in February 2004 Prior to that he was an executive director of mining contracting company, JIC Mining Services (Pty) Ltd and has some 12 years’ experience in the management of operational mining assets. An admitted attorney and currently on the roll of non-practising attorneys, he joined Petmin in 1995.
Lebogang A K Mogotsi (Lebo) – BCom
Executive Director, Deputy Chairperson, Petmin (appointed 30 November 2005), Member of Executive Committee
Ms Mogotsi is a director of Lebone Resources (Pty) Ltd, a women’s empowerment mining company that focuses on mining, beneficiation and consulting and is currently working with Virtual Metals Research and Consulting Limited on a gold beneficiation research project in South Africa. She is also an independent non-executive director of Merafe Resources Ltd (formerly SA Chrome Ltd), a mining company listed on the JSE Ltd. Ms Mogotsi gained experience in gold beneficiation at AngloGold Ashanti Limited, where she held two portfolios: Marketing Manager: Beneficiation and Executive Assistant to the Executive Director: Marketing.
Alwyn Martin – BCom, CA (SA)
Non-executive Director, Petmin (appointed 30 November 2005)
Martin is the former chairman of Vodacom Group (Pty) Ltd and a former Chief Executive of Siemens Telecommunications in South Africa. He currently holds a number of directorships in the telecommunications and insurance industries and is also an independent non-executive director of Trans Hex Group Limited.
Bradley Doig – BA, HDip in Company Law
Non-executive Director, Petmin, Member of Executive Committee (appointed 30 November 2005)
Doig is currently a director of Decorum Capital, the Fund Manager for the New Africa Mining Fund (NAMF). He has 10 years’ experience with BHP Billiton in various parts of the world. He also spent time at Dresdner Kleinwort Benson in the UK.
Jan Du Preez – MCom (Mergers & Acquisitions), CA (SA)
(Chairman of the Executive Committee)
Du Preez qualified as a chartered accountant with Deloitte in 1990 and since then has been involved as an entrepreneur in various aspects of the mining industry. He was a shareholder of JIC Mining Services (Pty) Ltd and Pretklerk (Pty) Ltd. He has been part of the Petmin management team since 1990.
Bruce Philip Tanner BCom (UCT), BCompt (Hons) (CTA) (Unisa), CA (SA).
(Member of the Executive Committee)
Tanner is a qualified chartered accountant with nine years’ mining finance and administration experience, five of which included involvement in the marketing of coal and copper. From June 2002 to November 2004, he was Chief Operating Officer of AfriOre Ltd’s coal operations and Chief Financial Officer of AfriOre, a Toronto Stock Exchange-listed company with exploration and mining projects in Africa. AfriOre was the previous owner of Springlake Holdings (Pty) Ltd.
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