News releases

Admission to AIM

19 December 2006

Petmin, the Johannesburg-based JSE-listed (JSE:PET) (AIM: PTMN) mining company, today announces its proposed admission to London Stock Exchange plc`s Alternative Investment Market ("AIM") ("Admission") and a conditional placing (the "Placing") of 40,000,000 new ordinary shares of ZAR0.25 each in the Company ("Placing Shares") at 9p per share (approximately ZAR 1.26) ("Placing Price") to raise approximately GBP3.6m (approximately ZAR 50.4m) before expenses. The Placing represents approximately 9% of the Company`s current issued share capital.

The issue has been conducted under the Company`s general authority to issue up to 15% of its issued share capital of the Company for cash at a maximum discount of 10% to the weighted average traded price of the Company`s shares over the 30 days prior to the date on which the Placing Price was agreed.

Petmin is a multi-asset JSE-listed mining company, with profitable specialist coal and silica assets in South Africa and an experienced corporate and operational management team. Admission to AIM represents a further step by the company in its long-term strategy of becoming an international multi-commodity minerals business.

Placing Statistics
Placing Price	9p	R1.26
Number of Placing Shares	40,000,000
Total number of issued shares following Admission	479,890,000
Market capitalisation following Admission at the Placing Price	GBP43.2m	R604.7m
Estimated gross proceeds of the Placing	GBP3.6m	R50.4
Estimated net proceeds of the Placing	GBP2.7m	R37.4

The Placing Price of 9p (R1.26) is equivalent to a discount of 3.97% to the weighted average Petmin share price over the last 30 days prior to the date of finalisation of this announcement, being Thursday 13 December 2006, assuming an exchange rate of ZAR 14: GBP 1. Application has been made to London Stock Exchange plc for admission of the shares to trading on AIM, which is expected to occur on 20 December 2006. These shares will also be listed on the JSE Limited.

The proceeds of the Placing are intended to fund future growth, and more specifically:

a comprehensive drilling programme at Petmin`s Somkhele Anthracite Colliery near Richards Bay in KwaZulu-Natal Province, to move resources to proven reserves and extend the life of mine beyond 25 years;
the acquisition of additional Richards Bay Coal Terminal allocation to support planned growth in the company`s anthracite exports;
logistics and distribution channels for Somkhele and the Springlake Colliery near Dundee in KwaZulu-Natal Province;
a plant upgrade at the SamQuarz silica operation near Delmas in Mpumalanga Province; and
the financing of new projects and acquisitions and general working capital requirements.

Unaudited pro froma financail information

The unaudited pro forma consolidated income statement and balance sheet of Petmin, before and after the Placing are set out below. The unaudited pro forma earnings per share and net asset values per share have been presented for illustrative purposes only and because of their nature may not give a fair reflection of Petmin`s earnings and net asset values after the Placing. It has been assumed for purposes of the pro forma financial information that the Placing took place with effect from 30 June 2005 for income statement purposes and 30 June 2006 for balance sheet purposes. The directors of Petmin are responsible for the preparation of the unaudited pro forma earnings per share and net asset value per share calculations.

	Before	After	% Change
Basic earnings per ordinary share (cents)	16.38	11.86	-28%
Diluted earnings per ordinary share (cents)	14.85	10.81	-27%
Headline earnings per share (cents)	4.98	5.00	0%
Diluted headline earnings per share (cents)	4.52	4.58	1%
Net asset value per share (cents)	81.94	83.33	2%
Net tangible asset value (cents)	80.41	81.93	2%
Number of shares in issue	439,890,00	479,890,000	9%

Notes:

The "Before" financial information is based on Petmin`s audited income statement for the year ended 30 June 2006. The weighted average number of shares has been adjusted for the 40 million ordinary shares to be issued pursuant to the Placing. Interest benefit has been calculated in respect of the cash raised of ZAR 50.4 million, less total anticipated costs relating to Admission and the Placing of ZAR 13 million. Anticipated, one-off Admission expenses of ZAR 10.7 million have been added back for the headline earnings calculation.

The "Before" balance sheet is based on Petmin`s audited balance sheet as at 30 June 2006. The share capital and share premium have been adjusted to include the issue of 40 million ordinary shares at 9 pence per share (approximately ZAR 1.26 per share) and assumes an exchange rate of GBP 14: ZAR1. R2.3 million share issue expenses were written off against share premium.

Cash and cash equivalents has been adjusted to include the cash received as a result of the issue of 40 million ordinary shares at an average issue price of 9 pence per share less total anticipated Admission and Placing expenses of R13 million.

Key mining assets The Group`s principal mining assets comprise of:

SamQuarz, South Africa`s largest silica mine near Delmas in the Mpumalanga Province, approximately 85km east of Johannesburg. It has been in operation since 1955 and was acquired by Petmin in September 2004;
Springlake Colliery, South Africa`s largest producer of anthracite near Dundee in the KwaZulu-Natal Province, approximately 360km south-east of Johannesburg. It has been in operation since 1977 and was acquired by Petmin in December 2005; and
Somkhele, a high quality anthracite project approximately 85km north-east of Richards Bay in the KwaZulu-Natal Province. It is scheduled to commence production in January 2007, with sales expected to begin in the second quarter of 2007. The project was acquired by Petmin in December 2005 as part of its acquisition of Springlake Holdings.

A summary of Petmin`s key mining assets is outlined in the table below. The valuation referred to is sourced from Snowden Mining Industry Consultants Competent Person's Report ("CPR") on Petmin`s mining assets set out in Part IV of the AIM admission document published by the Company today ("Admission Document"). Further details of these assets are set out in the Admission Document (including the CPR set out therein), which is available on the Company's website at www.petmin.co.za.

Mining Asset	Location	Status	ROM Production
SamQuarz	Delmas, Mpumalanga	Operating mine	-1.6mtpa
Springlake3 Colliery	Dundee, KwaZulu-Natal	Operating mine	-1.3mtpa
Somkhele	Mtubatuba, KwaZulu-Natal	production4	0.95 mtpa5
Mining Asset	Product	Life of mine	CPR Valuation1
SamQuarz	Silica	>10 years2	R205m
Springlake3 Colliery	Anthracite	>12 years	R211m
Somkhele	Anthracite	11 years6	R453m
			Total R869m

NAV (mining assets only) real (non-inflated) discount rate of 10 percent used for valuation purposes
Based on the CPR, the directors estimate that there are a further 30 years of mineable reserves at SamQuarz at an average ROM production level of 1.6 mtpa (1.3 mtpa saleable product).
Note that the LOM for the current opencast mining operations (which contribute 0.5 mtpa out of the total ROM production level of 1.3 mtpa) is eight years. Based on the CPR, the Directors believe that Springlake has a further five years of mineable underground reserves (as well as 8m mineable in situ tonnes of underground bituminous resource). Also note that neither the summary table above nor the CPR attribute any value to the additional mining rights at Besterdale farm adjacent to Springlake
Production is currently scheduled to commence in Area 2 in January 2007 and in Area 1 in 2009.
Note that, under the LOM plan, estimated ROM production for first full year of production at Somkhele is 0.5 mtpa, rising to 0.95 mtpa by 2010. No value has been attributed to Areas 4 and 5 in the CPR.
The current LOM plan of 11 years is based on operations at Somkhele Areas

1 and 2. Based on the CPR, the Directors believe that there are a further 16 years of mineable resources in Area 1 (as well as an inferred resource of 21.4m mineable in situ tonnes in Area 3).Key strengths:

The directors believe that Petmin`s key strengths are as follows:

well-established, profitable mining assets in SamQuarz and Springlake, which have made the Group the largest producer of silica and anthracite in South Africa;
in Somkhele, a high-quality anthracite asset scheduled for near-term production with the potential to provide greater access to the South African metallurgical markets of ferrochrome and titanium production and to complement Springlake`s existing product offering and market position through blending opportunities;
proximity to and relationships with South Africa`s leading plate and clear glass manufacturers and certain leading world-wide producers of ferroalloys;

a highly experienced board of directors and operational management team with:

a track record of making value-enhancing acquisitions;
the proven ability to drive organic growth by implementing performance improvements in assets acquired (that is, SamQuarz and Springlake) and to manage the development of new assets (that is, Somkhele);
significant equity interests in the Company with a view to ensuring appropriate incentivisation;
the Company`s BEE shareholding of 39.95 per cent. (prior to the Placing) and its relationship with the New Africa Mining Fund;
a strong balance sheet with relatively low gearing; and
the potential for significant growth both domestically and internationally by acquisitions.

Key customers The Group supplies anthracite and silica to blue-chip customers in the metallurgical and industrial sectors in South Africa, including Xstrata South Africa (Pty) Limited, Samancor Limited, Assmang Limited, Glass South Africa (Pty) Limited and Consol Limited. In addition, the Group supplies coal from Springlake to customers in other countries including Brazil, Spain, India, Turkey, Ireland and Belgium. Springlake currently has an export allocation of 235,000 tonnes per year from the Richards Bay Coal Terminal. The Directors are evaluating the possibility of expanding this allocation and/or other export channels in order to support planned growth in the Group`s exports.

Placing details

The Placing has been undertaken by Numis Securities Limited ("Numis") on behalf of the Company. Numis, which is acting as Nominated Adviser and Broker to the Company, has underwritten the Placing and has agreed to subscribe for 30,000,000 ordinary shares at the Placing Price. Pursuant to an agreement with FirstRand (Ireland) plc ("FirstRand"), following Admission these shares will be transferred to FirstRand.

The Placing is subject to the placing agreement among inter alios the Company and Numis becoming unconditional and not being terminated prior to 20 December 2006 or such later date (being not later than 29 December 2006) as the Company and Numis may agree. The Placing Shares will on Admission rank pari passu in all respects with the existing ordinary shares in issue.The AIM admission document will be distributed to all shareholders within the next 30 days.

The contents of this announcement, which have been prepared by and are the sole responsibility of the Company, have been approved by Numis Securities Limited of Cheapside House, 138 Cheapside London EC2V 6LH, solely for the purposes of section 21 (2)(b) of the Financial Services and Markets Act 2000. Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is advising the Company and no one else in relation to the Placing and Admission and will not regard any other person as its client in relation to the Placing and Admission and will not be responsible to any person other than the Company for providing the protections afforded to its clients or for advising any other person in relation to the Placing or Admission or any transaction or arrangement referred to or information contained in this announcement. This announcement does not constitute, or form part of, an offer or invitation to sell or issue, or any solicitation of an offer to purchase or subscribe for securities and any subscription for or purchase of, or application for, shares in the Company to be issued or sold in connection with the Placing should only be made on the basis of information contained in the admission document to be issued in due course in connection with the Placing and Admission and any supplements thereto. The admission document will contain certain detailed information about the Company and its management, as well as financial statements and other financial data. This announcement does not contain or constitute an offer of securities for sale in the United States. The securities referred to herein have not been and will not be registered with the US Securities Act of 1933, as amended, and may not be offered or sold in the United States absent of registration under that Act or an available exemption from it. This announcement and the information contained herein are not for publication, distribution or release in, or into, the United States, Canada, Australia, Japan or the Republic of Ireland.

Sponsor and Corporate Advisor
River Group

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