SNR subsidiary secures BEE partners
Thursday 20th December, 2007
Category :
Regulator News Service
Strategic Natural Resources PLC announces that its subsidiary, Acharnian Mining Company Limited (’AML’), has signed a sale and purchase agreement to sell 23 per cent. of its interest in Elitheni Coal (Pty.) Limited (’Elitheni Coal’), the holder of the coal prospecting rights over the Elitheni Area, to a broadly based black economic empowerment (’BEE’) group of investors. The consideration is approximately UK £4.4 million (ZAR 60.4 million at an agreed exchange rate of ZAR13.6854 : £1), payable in ZAR upon completion, on or before 28th February 2008.
SNR anticipates that it will recognise a profit on the sale of this share stake to the amount of approximately £3.8 million. The proceeds will be used to increase the level of drilling on the newly enlarged exploration area and to fund existing working capital requirements.
A further 3 per cent. of Elitheni Coal will be sold to a trust representing the local community. The Company is in the process of completing this transaction and further updates will be provided once it has been concluded.
The completion of the aforementioned transactions is expected to give Elitheni Coal a 26% BEE shareholder base, which is one of the final outstanding requirements for the granting of the mining licence by the South African Department of Minerals and Energy. Consequently the Board of SNR now anticipates that the Company will meet all of the tests required for Elitheni Coal to be granted a mining licence.
Accordingly this is a very significant milestone in the development of Elitheni Coal from being merely a prospective coal resource to becoming a coal-producing mining operation.
Elitheni Coal’s new BEE partners are African Pioneer Limited (’APL’) (21% shareholder) and Christopher Mazizandile Msutu (2% shareholder).
APL was formed in 1990 as a private investment company to take advantage of the major changes about to take place at that time in South Africa. At its early stages APL, through its wholly owned subsidiaries, engaged in a number of retail, distribution and logistics businesses in the black townships and coloured areas. Through a policy of pragmatic and progressive business management, the company has expanded substantially and now has a large shareholder base of almost 100 individuals who are predominantly from the black communities of the Eastern Cape.
Commenting on the importance of SNR’s BEE deal, Jeremy Metcalfe, SNR’s Chief Executive said, ‘African Pioneer Ltd is a terrific addition as our BEE partner. I am particularly pleased that Stephen Dondolo, the CEO of APL, will be joining the Elitheni Coal Board. Stephen has vast experience in initiating, developing and maintaining strong and profitable relationships with business partners and associates. Stephen was named South African Entrepreneur of the Year in 2002 and I am sure he will be a great and influential asset in helping us to develop our clean coal energy related enterprises in South Africa. ‘
For further information contact:
Jeremy P. Metcalfe
Chief Executive
Strategic Natural Resources PLC
Tel: +44(0)1303 874 798
Allan Piper
First City Financial Public Relations
Tel: +44 (0) 20 7242 2666
Rod Venables / Cecil Jordaan
HB Corporate
Tel: +44 (0) 20 7510 8600
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