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Acquisition of Birca Copper and Metals Proprietary Limited
MANTENGU MINING LIMITED
Incorporated in the Republic of South Africa
(Registration number 1987/004821/06)
Share code: MTU ISIN: ZAE000320347
("Mantengu" or "the Company" or "the Group")
ACQUISITION OF BIRCA COPPER AND METALS PROPRIETARY LIMITED
1. Introduction
The board of directors of Mantengu is pleased to advise shareholders that the Company has entered into a
sale of shares agreement ("the Agreement") dated 10 May 2024 ("Signature Date") with Birca Investments
Proprietary Limited ("Birca Investments") and SA Metals and Fossils Proprietary Limited ("SA Metals and
Fossils") (collectively referred to as "the Sellers") for the acquisition of the entire issued share capital of
Birca Copper and Metals Proprietary Limited ("BCM") ("Sale Shares") for the consideration detailed in
paragraph 2.4 below, subject to the fulfilment of the Conditions set out in paragraph 2.3 below ("the
Acquisition"). The Sellers are not related parties to Mantengu.
Birca Investments is owned by Johann Jaen Brummer (20%), Carl Hoepner (20%) and Smit Family Trust
(60%). SA Metals and Fossils is owned by Marius Pienaar (100%).
2. The Acquisition
2.1 Nature of the business of BCM
BCM mines and processes high grade chrome ore ("Product") on the Farm Goudini 30, Registration
Division J.P., situated in the North West Province and measuring 2,109 hectares (""Wandre Familie
Trust Property" or "Mining Area"). The Mining Area is the subject of the mining right granted to
New Venture Mining Investment Holdings Proprietary Limited ("NVMHI") on or about 3 February
2012 and will continue to be of full force and effect for a period of 30 years ending on 5 November
2045 ("Mining Right").
2.2 Rationale
The Acquisition secures a strategic resource for the Group that complements Mantengu's existing
chrome ore mining and processing operation. The addition of this resource to the Group will
approximately double the Group's chrome ore supply, provide long term cost stability, and supply
chain resilience as well as unlock significant economic and technical synergies within the Group.
The addition of BCM to the Group's investment portfolio will enable the Group to operationally
streamline its mining operations, thereby increasing overall efficiency and profitability. The
management of BCM have significant skill and experience, and have proven to be dynamic in their
approach to mine optimisation, which is evident from the tremendous value they have unlocked in
BCM.
2.3 Conditions
2.3.1 Suspensive conditions
The Agreement (save for the Surviving Clauses as referred to therein, which shall be of
immediate force and effect), is subject to the fulfilment or waiver of certain suspensive
conditions on or before the Closing Date set out in paragraph 2.5 below:
2.3.1.1 the boards of directors of each of the Sellers resolving to authorise each of the
Sellers to enter into and implement the Agreement;
2.3.1.2 the Sellers procuring that the board of directors of BCM adopts the requisite
resolutions approving of the transfer of the Sale Shares from the Sellers to
Mantengu;
2.3.1.3 the board of directors of Mantengu adopting the requisite resolutions to, inter alia,
authorise the acquisition of the Sale Shares by Mantengu on the terms and
conditions set out in the Agreement and authorise the issue to the Sellers of the
Consideration Shares as contemplated in terms of paragraph 2.4 below;
2.3.1.4 BCM's shareholders passing a resolution electing, with effect from the Signature
Date, Michael Miller (Chief Executive Officer) and Magen Naidoo (Chief Financial
Officer (collectively the "Purchaser's Nominees") as directors of BCM;
2.3.1.5 BCM procuring the Purchaser's Nominees as signatories on its bank account; and
2.3.1.6 subject to the fulfilment of the aforementioned suspensive conditions, Mantengu
confirming to the Sellers that no material adverse change, as set out in the
Agreement, has occurred.
If any of the suspensive conditions are not fulfilled or waived, as the case may be, by the
Company for whose benefit the suspensive condition has been stipulated, on written notice
to the Sellers by the Closing Date, then the Agreement will never become effective, save for
the Surviving Clauses, all of which will continue to be of full force and effect.
2.3.2 Conditions subsequent
The Agreement is subject to the following conditions subsequent which, if not fulfilled by the
date falling 18 months after the Signature Date, the parties to the Agreement ("Parties") will
be restored as near as possible to the status quo ante, and no Party shall have any claim
against Mantengu solely as a result of the cancellation of the Agreement:
2.3.2.1 the transfer of the Mining Right pursuant to an agreement concluded between
NVMIH and BCM, in terms of which NVMIH sells the Mining Right to BCM on the
terms and conditions contemplated therein, becomes unconditional;
2.3.2.2 the Deeds of Sale, comprising the deed of sale entered into between BCM and
the trustees for the time being and from time to time of:
2.3.2.2.1 the A du Preez (Jnr) Familie Trust (Masters reference number:
IT11298/1997), in terms of which such trust sells portion 4 of the Farm
Roode Kopjes 32, Registration Division J.P., situated in the North
West province, measuring 770.7539 hectares, to BCM, on the terms
and conditions contemplated therein; and
2.3.2.2.2 the Wandre Familie Trust (Masters reference number: IT6527/1997),
in terms of which such trust sells the Wandre Familie Trust Property
to BCM, on the terms and conditions contemplated therein,
becoming unconditional in accordance with their terms.
Until such time as the Mining Right has transferred to BCM as referred to in paragraph
2.3.2.1 above, BCM is entitled to mine and process Product in terms of a contractorship
agreement entered into between it and NVMIH.
2.4 Consideration
2.4.1 As consideration for the Sale Shares, on the Closing Date the Company will issue to the
Sellers such number of ordinary shares in Mantengu ("Shares") which, at the Closing Date,
will have a market value equivalent to an aggregate of R29,887,000 ("Consideration
Shares").
2.4.2 The Consideration Shares will be issued to the Sellers in the ratio 80% to Birca Investments
and 20% to SA Metals and Fossils.
2.4.3 The number of Consideration Shares to be issued to the Sellers will be calculated by
reference to the 15-day volume weighted average price of the Shares trade on the JSE
Limited ("JSE") ("VWAP") as will be determined on the "GEM Pricing Period Expiry Date",
being the date on which the 15-day VWAP period expires in accordance with the terms of
Mantengu's initial draw down under the R500 million share subscription facility made
available to Mantengu by GEM Global Yield LLC SCS ("VWAP Price"), using the formula:
R29,887,000 ÷ VWAP Price = Consideration Shares,
provided that, for purposes of calculating the number of Consideration Shares, the VWAP
Price will be subject to a minimum value of R0.60.
2.5 Effective Date
The Effective Date of the Acquisition is the Closing Date, being the business day on which the last
of the suspensive conditions is fulfilled or waived, as the case may be, provided that if the Closing
Date occurs before the GEM Pricing Period Expiry Date, the Closing Date will be deemed to have
occurred on the GEM Pricing Period Expiry Date.
2.6 Financial information
The unaudited net asset value of BCM for the year ended 29 February 2024 was R102 million. The
unaudited profit attributable to BCM for the year ended 29 February 2024 was R2 million.
The financial statements have been prepared in accordance with International Financial Reporting
Standards for Small and Medium-Sized Entities.
2.7 Warranties
The Agreement contains warranties that are customary for a transaction of this nature.
2.8 Memorandum of incorporation of BCM
In compliance with paragraph 10.21 of Schedule 10 of the JSE Listings Requirements, Mantengu
will ensure that the provisions of the memorandum of incorporation of BCM do not frustrate or relieve
the Company in any way from compliance with its obligations in terms of the JSE Listings
Requirements.
3. Categorisation of the Acquisition
The Acquisition is classified as a Category 2 transaction in terms of the JSE Listings Requirements.
Johannesburg
13 May 2024
Designated Adviser
Merchantec Capital
Date: 13-05-2024 03:55:00
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