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Absolute Holdings Circular To Shareholders 17may2010
Absolute Holdings Circular To Shareholders 17may2010
Absolute Holdings Circular To Shareholders 17may2010
If you are in any doubt as to the action you should take, please consult your broker, Central Securities Depository Participant (CSDP),
banker, attorneys, accountant or other professional advisor immediately.
Action required
All shareholders
If you have disposed of all or any of your shares in Absolute Holdings Limited, this circular should be handed to the purchaser of such
shares or to the broker, CSDP, banker or agent through whom you disposed of such shares. Detailed action required by shareholders is
set out on page 12 of this circular.
CIRCULAR TO SHAREHOLDERS,
INCORPORATING REVISED LISTING PARTICULARS
regarding
the acquisition of:
an effective 60% interest in Bauba A Hlabirwa Mining Investments (Proprietary) Limited for a purchase
consideration of R340 623 000 to be settled through the issue of 68 124 600 new shares in Absolute at
an issue price of R5.00 per share; and
incorporating the potential further acquisition of an effective 60% interest in the Houtbosch prospecting
right subject to the notarial execution and registration of the already granted prospecting right, for an
additional consideration of R105 948 000, which will be settled though the issue of 21 189 600 new
shares in Absolute at an issue price of R5.00 per share; and
an increase in the Companys authorised share capital from 25 000 000 shares of R1.00 each to 200 000 000
shares of R1.00 each;
the specific issue of up to 30 000 000 shares for cash to non-related parties at a price to be determined;
the issue of approximately 1 875 598 shares to Qinisele Resources at a price to be determined;
a proposed waiver of a mandatory offer;
repositioning of the Company by:
the reconstitution of the board of directors;
a proposed name change of the Company to Bauba Platinum Limited;
the transfer of the Companys listing to the Main Board of the JSE Limited; and
amendment to the share incentive scheme;
and incorporating
a notice convening a general meeting of the Companys shareholders;
a form of proxy (for use by certificated shareholders and dematerialised shareholders with own name
registration only);
a form of surrender (for use by certificated shareholders in relation to the change of name of the Company);
and
Revised Listing Particulars.
CORPORATE INFORMATION
Directors
MK Diale* (Chairman)
AM Sher*# (Deputy Chairman)
MW Rosslee (Chief Executive Officer)
GP Sequeira (Financial Director)
JJ Serfontein*
*Non-executive
#Independent
Sponsor
Corporate Advisor
Competent Person
Transfer Secretaries
Auditors to Absolute
TAG Incorporated
(Practice number 961450)
Emwil House West, 15 Pony Street,
Tijgervallei Office Park, Silver Lakes, 0081
(Private Bag X35, Lynnwood Ridge, 0040)
Banker
Attorney
Nedbank Limited
(Registration number 1951/000009/06)
2nd Floor, Block F
Corporate Place
135 Rivonia Road
Sandown, 2196
(PO Box 1144, Johannesburg, 2000)
TABLE OF CONTENTS
Page
Corporate information
12
13
14
Circular to shareholders
1. Introduction
18
19
3. The acquisition
19
25
25
26
27
27
27
28
28
29
30
33
34
34
34
35
35
36
36
22. Consents
36
23. Costs
36
37
37
38
Page
Annexure 1
39
Annexure 2
Historical financial information of Bauba for the years ended 28 February 2009
and 28 February 2010
41
50
Pro forma financial effects of the transactions and pro forma income statement
and balance sheet
52
Annexure 5
57
Annexure 6
Historical financial information of NMR for the year ended 28 February 2010
59
Annexure 7
64
Annexure 8
66
Annexure 9
Location map
89
Annexure 10
90
Annexure 3
Annexure 4
96
Form of proxy (for use by certificated and own name dematerialised shareholders only)
Attached
Attached
105
In this circular, unless otherwise stated or the context so requires, the words in the first column have the
meanings stated opposite them in the second column, words in the singular shall include the plural and
vice versa, words denoting one gender include the other and expressions denoting natural persons include
juristic persons and associations of persons:
Absolute or the Company
Absolute Tiles
the acquisition or
the Bauba acquisition
the agreement between Absolute, Bauba, the Bauba sellers, NMR and
the NMR sellers dated 12 February 2010, in terms of which Absolute
will acquire:
an effective 60% direct and indirect interest in the share capital of
Bauba for a purchase consideration of R340 623 000 to be settled
through the issue of 68 124 600 new ordinary Absolute shares at
an issue price of R5.00 per Absolute share, in an asset for share
transaction in terms of section 42 of the Income Tax Act, following
which the Bauba sellers and NMR sellers will hold an effective 81%
direct interest in the share capital of Absolute prior to the minimum
capital raising; and
the Houtbosch prospecting right, subject to the grant and notarial
execution and registration of the Houtbosch prospecting right with
Bauba, for an additional consideration of R105 948 000 to be settled
through the issue of a further 21 189 600 new ordinary Absolute
shares at an issue price of R5.00 per Absolute share; and
in terms of which Absolute is required to secure a minimum capital
raising of R60 000 000;
the Act
Allied Quartzite
Bapedi Nation
Bauba
Bauba Platinum
Bauba Project
Bauba shares
the board
business day
Calulo Investments
Calulo Resources
Central Cluster
certificated shareholders
certificated shares
CIPRO
Closing Date
the Republic, the Kingdoms of Swaziland and Lesotho and the Republic
of Namibia;
Competition Authorities
controlling shareholder
CSDP
CV
curriculum vitae;
Danene Trust
dematerialised shareholders
dematerialised shares
those shares that have been incorporated into the Strate system and
which are held on the Companys sub-register in electronic form in
terms of the Custody and Administration of Securities Act of 1992;
Dikopane
DMR
effective date
the effective date of the acquisition of Bauba, being the day after the
Closing Date;
finalisation date
Highland
Hlabirwa
Houtbosch
Houtbosch acquisition
IFRS
Johnson Matthey
Kumane Trust
Thursday, 29 April 2010, being the last practicable date prior to the
finalisation of this circular;
Lenopodi
Listings Requirements
Lubtalk Investments
Main Board
Math-Pin Trust
Minerals Act
the Minerals Act, No. 50 of 1991, which has since been repealed and
replaced by the Mineral and Petroleum Resources Development Act,
No. 28 of 2002;
m oz
million ounces;
MPRDA
Mt
million tonnes;
name change
NMR
NMR sellers
NMR shares
Northern Cluster
the offer to odd lot shareholders to repurchase odd lot shares pursuant
to the share consolidation at a repurchase price of R4.00 per share as
approved by shareholders in general meeting and which shares have
been subsequently placed under the Companys general authority to
issue shares for cash in accordance with the Listings Requirements;
Orata Trust
parties
PGMs
Project Area
purchase consideration
the purchaser
Absolute;
Qinisele Resources
Rand or R
resolutions
Richtersveld Quartzite
SAMREC
SAMREC Code
the South African code for reporting of mineral resources and mineral
reserves, including the guidelines contained therein;
SENS
share consolidation
shareholders or
Absolute shareholders
10
Southern Cluster
SRP
SRP Code
Strate
targeted resource
transactions
transfer secretaries
the Tucker Boys Trust (Masters reference IT 7320/96), the family trust
of Eric Hugh Dennis Tucker (ID number 600509 5043 082);
VAT
VCM
11
All shareholders
If you have disposed of all your shares in Absolute, this circular should be handed to the purchaser of such
shares or to the broker, banker or agent through whom you disposed of such shares.
Certificated shareholders
If you are a certificated holder and you are unable to attend the general meeting of Absolute shareholders
to be held at 10h00 on Monday, 7 June 2010 at the registered office of the Company at Arcay House II,
Number 3 Anerley Road, Parktown, Johannesburg and wish to be represented thereat, you must complete
and return the attached form of proxy in accordance with the instructions contained therein and lodge it with,
or post it to, the transfer office, namely Computershare Investor Services (Proprietary) Limited, so as to be
received by them no later than 10h00 on Friday, 4 June 2010.
Dematerialised shareholders with own name registration
If you have dematerialised your shares with own name registration and you are unable to attend the general
meeting of Absolute shareholders to be held at 10h00 on Monday, 7 June 2010 at the registered office of the
Company at Arcay House II, Number 3 Anerley Road, Parktown, Johannesburg and wish to be represented
thereat, you must complete and return the attached form of proxy in accordance with the instructions
contained therein and lodge it with, or post it to, the transfer office, namely Computershare Investor Services
(Proprietary) Limited, so as to be received by them no later than 10h00 on Friday, 4 June 2010.
Dematerialised shareholders other than those with own name registration
If you hold dematerialised shares in Absolute through a CSDP or broker other than with an own name
registration, you must timeously advise your CSDP or broker of your intention to attend and vote at the
general meeting in order for your CSDP or broker to provide you with the necessary Letter of Representation
to do so, or should you not wish to attend the general meeting in person but wish to be represented thereat,
you must timeously provide your CSDP or broker with your voting instruction in order for the CSDP or broker
to vote in accordance with your instruction at the general meeting.
Copies of the circular, in English, can be obtained from the registered office of the Company.
12
2010
Circular and notice of general meeting to be posted to shareholders on
Monday, 17 May
Tuesday, 25 May
Thursday, 3 June
Monday, 7 June
Monday, 7 June
Tuesday, 8 June
Tuesday, 22 June
Friday, 25 June
Friday, 25 June
Monday, 28 June
Friday, 9 July
Monday, 12 July
Friday, 16 July
Date of issue of new replacement share certificates, provided that the old share
certificates have been lodged by 12h00 on the record date (share certificates
received after this time will be posted within five business days of receipt)
on or about
Monday, 19 July
Monday, 19 July
Notes:
1.
The abovementioned dates and times are South African dates and times and are subject to amendment. Any such amendment will
be announced on SENS and in the press.
2.
Should they wish to attend or vote at the above general meeting, dematerialised shareholders are required to advise their CSDP or
broker by the cut-off time stipulated above or in accordance with their agreements with their CSDP or broker.
3.
Share certificates in the name of Absolute will not be able to be dematerialised or rematerialised after Friday, 9 July 2010.
13
The board of directors released announcements dated 15 February 2010 and 17 May 2010, proposing the
acquisition of an effective 60% controlling interest in Bauba in terms of an agreement dated 12 February
2010 and addendum thereto dated 3 May 2010. The agreement contained a number of conditions precedent
which needed to be met prior to the issue of this circular. The acquisition will transform the Company into
a junior miner with its main focus being on platinum resources and will also result in a change in control
together with a restructure of the board of directors.
The proposed acquisition gives effect to Absolutes stated strategic intention of procuring mineral assets for
exploration and bringing such assets to production.
1. THE BAUBA PROJECT AND LOCATION
Bauba holds prospecting rights over eight farms (refer to location map below) which are prospective
for platinum mineralisation in the Eastern Bushveld Igneous Complex, encompassing an area
of approximately 50km in length and 6km in width (approximating 12 700 hectares) along the Leolo
mountain range in the Limpopo Province, collectively the Bauba Project. The farms cover the known
down-dip extent of several current development projects and operating mines on the Eastern limb of
the Bushveld Igneous Complex. The geological location is expected to reveal both Merensky Reef and
UG-2 Chromitite Layer occurrences as extensive exploration programmes have been conducted on the
properties neighbouring the Bauba Project.
The prospecting rights are geographically clustered as follows:
The Southern Cluster comprising the farms Genokakop 284 KT and Grootvygenboom 285 KT as well
as the Houtbosch prospecting right as described in paragraph 2 below;
The Central Cluster comprising the farms Magneetsvlakte 541 KS and Dingaanskop 543 KT; and
The Northern Cluster comprising the farms Fisant Laagte 506 KT, the remainder of Indi 474 KS,
Zwitzerland 473 KS and Schoonoord 462 KS.
A location map is set out below:
14
15
The Company also has access to the consultative expertise of Mr Dennis Tucker and geologist
Mr Stephen Gain.
The combined team has extensive PGM industry knowledge, corporate finance and deal-making
experience with access to a widespread network within the South African mining and corporate
environment.
Full details of the board restructure are contained in paragraph 9 of the circular.
7. BBBEE (BROAD-BASED BLACK ECONOMIC EMPOWERMENT)
The proposed transactions will ensure full compliance with the requirements and spirit of participation by
Historically Disadvantaged South Africans (HDSAs) in the mining industry as per the Mining Charter.
The Bapedi Nation holds 37.6% in Bauba, whilst Hlabirwa will retain its interest in the Bauba Project
through its direct retained shareholding in Bauba of 2.4% and its indirect shareholding of 3.6% through
its 6.1% shareholding in Absolute, thereby ensuring the continuous involvement of the surrounding
community. Whilst Absolute is aware that chieftainship of the Bapedi Nation remains unresolved, this
does not impact on the Bauba acquisition or the legal status of the mineral rights as the Bapedi Nation
is not a vendor. The Company has received legal opinion confirming this position.
The Math-Pin Trust (deemed to be BEE) and Calulo will hold an effective 6.5% and 3.6%, which equates
to a 3.9% and 2.2% interest in the Bauba Project, respectively. The effective cumulative interest by BEE
in the Bauba Project will therefore equate to 49.7%. The Company is committed to the development of
these properties to the benefit of the surface right owners through a detailed community development
plan in terms of which these prospecting rights were conferred.
8. SOUND PLATFORM TO CREATE VALUE
The board believes the proposed transaction provides the Company with:
a significant project that is strategically located down-dip from three existing producing platinum
mines and three development projects;
exposure to the platinum market which is poised for significant growth and investment over the next
five to ten years;
Johnson Matthey predicts that 2010 to 2015 will see major platinum supply deficits due to:
the increased auto catalyst demand from a growing Chinese economy;
a stagnation in platinum production globally due to cost pressures having eroded the profitability
of marginal, high cost operations;
new planned production having been delayed by the 2008/9 financial crisis; and
surging Exchange Traded Funds demand and limited new supply are believed to create a
positive and sustained platinum price response;
the technical and financial skills necessary to manage the Bauba Project from greenfield exploration
to a bankable feasibility study through to full development of the Bauba Project;
the potential to create a formidable and sustainable producer in the junior South African platinum
sector, and the opportunity to participate in further sector consolidation;
access to an experienced mining team with an extensive corporate finance and deal-making
background. The team also has access to a widespread network within the mining and corporate
environment; and
a value-adding relationship with the Bapedi Nation, which includes active participation and
representation in the Bauba Project.
The Companys strategic intention will be to develop a mine and thereby take advantage of an anticipated
future supply deficit in the global platinum arena arising from the stagnation in South African production
and the continual shift to extract from the deeper areas over the next 10 years.
Through this acquisition, the Company will continue to transform its primary business to that of an explorer
and developer of mineral assets, developing its considerable resources, with the intention of establishing
a mine producing an initial 350 000 ounces of PGMs per annum in the next 10 years, expanding
to 1 million ounces of PGMs per annum within 20 years.
16
17
CIRCULAR TO SHAREHOLDERS
1. INTRODUCTION
The board of directors released announcements on SENS and in the press dated 15 February 2010 and
17 May 2010 detailing, inter alia, the proposed acquisition of an effective 60% direct and indirect interest
in Bauba in terms of an acquisition agreement dated 12 February 2010. The purchase consideration
of R340 623 000 will be settled through the issue of 68 124 600 new ordinary shares in Absolute at an
issue price of R5.00 per share, which represented a premium of 66% to the market price at the time of
the announcement. In addition, the agreement provides for a minimum capital raising of R60 000 000
to be raised by Absolute to fund the initial work programme. In addition, Bauba has been granted
a prospecting right over Houtbosch, which grant is pending notarial execution and registration. Upon this
being achieved, in the name of Bauba, Absolute will issue an additional 21 189 600 shares in Absolute
to the vendors at an issue price of R5.00 per share and equating to a consideration of R105 948 000,
as Absolute will effectively hold a 60% interest in the Houtbosch prospecting right through its 60%
shareholding in Bauba. It is, however, intended that the Company will raise up to R150 000 000 (including
the minimum capital raising of R60 million detailed above) through a share issue for cash, which will
incorporate the minimum capital raising required in terms of the Bauba acquisition agreement.
The acquisition will result in a change in control of Absolute and, due to the issue of shares for the
transactions exceeding 100% of its current issued share capital, the acquisition will constitute a reverse
listing in accordance with the Listings Requirements. The Company will need to increase its authorised
share capital to facilitate the acquisition. Pursuant to the acquisition, it is proposed that the Company will
change its name to Bauba Platinum Limited.
In addition, the change in control of Absolute is an affected transaction as defined in the SRP Code and,
accordingly requires compliance with the SRP Code.
It is further intended that the Company issues shares to directors and Arcay Client Support in terms
of a specific issue of shares to related parties in order to settle existing obligations owed to these
related parties. This will not require shareholder approval in terms of paragraph 5.51(g) of the Listings
Requirements as the total number of shares issued will be less than 0.25% on a cumulative basis pursuant
to the transactions and will only be approved by directors pursuant to the transactions.
These transactions will require the approval of Absolute shareholders in general meeting in terms of the
Listings Requirements and the SRP Code.
18
2.2
Growth prospects
The primary business of the Company post implementation of the transactions will be:
the exploration and development of the Bauba Project with the intention of establishing a mine
producing an initial 350 000 ounces of PGMs per annum in the next 10 years, expanding
production to 1 million ounces per annum within 20 years from the overall resource base;
the pursuit of acquisitive opportunities in the PGM sector that will enhance shareholder value;
and
to consider projects with joint venture partners with technical deep level mining expertise and/or
funding.
2.3
3. THE ACQUISITION
3.1
19
The farms cover the known down-dip extent of several current development projects and operating
mines on the Eastern limb of the Bushveld Igneous Complex. The geological location is expected
to reveal both Merensky Reef and UG-2 Chromitite Layer occurrences as extensive exploration
programmes have been conducted on the properties neighbouring the Bauba Project.
The prospecting rights are geographically clustered as follows:
The Southern Cluster comprising the farms Genokakop 284 KT and Grootvygenboom 285 KT;
The Central Cluster comprising the farms Magneetsvlakte 541 KS and Dingaanskop 543 KT; and
The Northern Cluster comprising the farms Fisant Laagte 506 KT, the remainder of Indi 474 KS,
Zwitzerland 473 KS and Schoonoord 462 KS.
3.1.1
3.1.2
20
The vendors shall for a period of two years after 12 February 2010 not alienate, transfer,
cede, assign, pledge, encumber, furnish as collateral or by way of a guarantee, or in any
other manner or form deal with the claw back shares until the period of two years has
elapsed. If a court application citing Bauba and/or the Purchaser is brought for a remedy
which will result in revocation or cancellation of any Southern Rights within the two-year
period, then the restrictions above will continue to apply until the matter has been finally
resolved and the court applications finalised also with reference to the preceding sub
paragraphs. The CSDP account or such similar account to be held by the Sellers will be
endorsed with a note reflecting the provisions of this clause.
3.1.3
Other matters
No other book debts have been guaranteed. Normal warranties have been provided in
relation to an acquisition of this nature. As the Company will be acquiring shares in Bauba
and NMR, any liabilities for accrued taxation will be settled by Bauba and NMR, respectively.
3.2
21
A targeted resource has been estimated by geologist Mr Stephen Gain (Pr.SciNat Msc) using
average modifying factors from projects and mines on adjacent properties. An initial estimate of
the in situ resource tonnages on the farms is 700 Mt which could include in excess of 100 m oz
PGMs metal content. This in situ targeted resource estimation is considered conservative but is not
SAMREC Code compliant. This target resource has been independently verified by Venmyn and is
now estimated to be 138m oz PGMs, the details of which are included in Annexure 8 to this circular.
Bauba has designed a detailed investigative exploration programme that will be initiated by diamond
drilling, geological and geophysical mapping, and interpretation of the areas of interest. The drilling
sequence will commence on the Southern Cluster, followed by the Central and Northern Clusters
to determine the mineral resource base and the style of mineralisation. The drilling programme will
extend through to the base of the Bushveld Igneous Complex to establish the form and style of the
PGM mineralisation in the Middle and Lower groups of the Bushveld Igneous Complex, based on
public information from adjacent properties. The programme will focus on the known mineralisation
targets of the Merensky Reef and UG-2 Chromitite.
Results from the initial drilling, which commenced in April 2010, will form the basis of the balance
of the drilling programme on the Southern Cluster with the aim of establishing the extent of the
resource, which would be converted to a fully compliant reserve statement to form the basis of the
Bankable Feasibility Study.
3.3
Conditions precedent
The proposed Acquisition is still subject to the fulfilment of the following conditions precedent:
Absolute confirming in writing to the vendors and submitting written proof on or before the date
of the general meeting that it has secured irrevocable undertakings from potential investors for
the purposes of raising capital in the minimum amount of R60 000 000 (sixty million rand);
the shareholders of Absolute by 30 June 2010 pass in general meeting such resolutions as
may be necessary for the acquisition to proceed and that Absolute submits written proof to the
vendors thereof by 30 June 2010;
the board of Absolute obtaining the requisite shareholder resolution by 30 June 2010 providing
that, in the event of the claw back contemplated in terms of acquisition agreement applying,
such number of shares in Absolute, as more fully set out in paragraph 3.1 above, be returned
to Absolute and if a court does not sanction the cancellation thereof (upon an application being
made to a competent court for the cancellation of such number of the shares in the Absolute),
then in such event, Absolute buys back such number of shares in Absolute from the vendors at
a purchase price of R1.00 (one rand) (it being deemed by the Parties that such number of the
shares in the Absolute were issued and allotted for no consideration and shall be void ab initio);
Absolute obtaining its shareholders approval and waiver of the requirement for the Sellers to
make a mandatory offer to minorities in terms of the SRP Code in general meeting; and
the entering into of a formal loan agreement between Absolute and Calulo Investments.
As at the last practicable date, all the conditions precedent have been met with the exception of
the approval of the acquisition and associated transactions, namely the share issue for cash and
increase in authorised share capital, by Absolute shareholders in general meeting.
22
3.4
3.5
3.6
3.7
23
24
(19.09)
(19.09)
176.98
(12.66)
15 325
16 012
(0.19)
(0.19)
1.77
(0.13)
1 532 545
1 601 185
107 202
106 515
(0.27)
(17.77)
55.16
(9.57)
After
Bauba
acquisition3
119 202
118 515
48.28
(14.25)
98.13
(6.88)
After
specific
issue
(minimum)4
644.5%
673.3%
481.4%
25.4%
(44.6%)
64.0%
Change
(%)
137 202
136 515
105.18
(9.94)
148.49
(3.54)
After
specific
issue
(maximum)5
756.9%
790.8%
930.8%
47.9%
(16.1%)
81.5%
Change
(%)
82 168
81 482
70.04
(20.73)
134.97
(10.01)
After claw
back and
assuming
minimum
specific
issue6
(31.1%)
(31.2%)
(45.1%
(45.5%)
37.5%
(45.5%)
Change
(%)
100 168
99 482
144.07
(13.64)
197.33
(4.86)
After claw
back and
assuming
maximum
specific
issue7
(27.0%)
(27.1%)
(37.0%)
(37.2%)
32.9%
(37.3%)
Change
(%)
Notes:
1. The Before financial information is based on Absolutes published unaudited interim results for the six months ended 31 December 2009.
2. After the 1:100 share consolidation and odd lot offer as approved by shareholders in general meeting on 17 February 2010.
3. The After the Bauba acquisition column is based on the assumption that the issue of 68 124 600 new ordinary shares in respect of the Bauba acquisition (excluding Houtbosch) and 21 189 600
new ordinary shares in respect of the Houtbosch acquisition was effective from 1 July 2009 for basic (loss)/earnings per share and headline (loss)/earnings per share and 31 December 2009 for net
asset value and tangible net asset value purposes. The basic (loss)/earnings per share and headline (loss)/earnings per share include the results of Bauba for the year ended 28 February 2010,
extracted from the audited annual financial statements of Bauba for the year ended 28 February 2010. The results have been adjusted to reflect a six-month period only (with the exception of the
gain from sale of capital asset of R10 150 000, where the full amount is included).
The acquisition has been accounted for in terms of the revised IFRS 3: Business Combinations, as the expected effective date is after 1 July 2009, being the effective date of the revised
statement. As this is a reverse acquisition, the fair value of the consideration transferred has been determined with reference to the fair value of the consideration transferred (based on the value of
R573.23 million attributed to the Bauba Project) and in terms of IFRS 6: Exploration for and Evaluation of Mineral Resources, the cost associated with the acquisition of Absolutes mineral assets has
been capitalised to the cost of exploration and evaluation assets.
The After Bauba acquisition financial information includes transaction costs of R16.634 million and related tax effects as follows:
R10 218 690 payable to Qinisele Resources including the issue of 1 430 617 new shares to QR at an assumed price of R5.00 in respect of the Bauba acquisition (excluding Houtbosch);
R3 178 440 payable to Qinisele Resources including the issue of 444 981 new shares to QR at an assumed issue price of R5.00 in respect of the Houtbosch acquisition); and
Total other transaction costs of R3 237 000.
4. The After specific issue (minimum) financial information assumes:
Issue of 12 000 000 new ordinary shares at R5.00;
Capital raising fees of R3 million payable to Qinisele Resources that have been set-off against share premium;
The proceeds of R60 million from the specific issue;
Finance income at 6.7% earned on the proceeds of the specific issue (less transaction costs), being the prevailing money market rates on deposits of greater than R10 million for basic
loss/earnings per share and headline loss/earnings per share purposes only; and
The tax effects of the above.
5. The After specific issue (maximum) financial information assumes:
Issue of 30 000 000 new ordinary shares at R5.00;
Capital raising fees of R7.5 million payable to Qinisele Resources that have been set-off against share premium;
The proceeds of up to R150 million from the specific issue;
Finance income at 6.7% earned on the proceeds of the specific issue (less transaction costs), being the prevailing money market rates on deposits of greater than R10 million for basic
loss/earnings per share and headline loss/earnings per share purposes only; and
The tax effects of the above.
6. The After claw back and assuming minimum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and minimum specific issue and subsequent reduction of
the purchase consideration via the repurchase of 37 033 200 Absolute shares.
7. The After claw back and assuming maximum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and maximum specific issue and subsequent reduction
of the purchase consideration via the repurchase of 37 033 200 Absolute shares.
Before the
acquisition1
After
share
consolidation
and odd
lot offer2
Subject to the approval and implementation of the change of name, the attention
of shareholders is drawn to the following dates:
25
5.1.1.1 the results of the general meeting will be released on SENS Monday, 7 June 2010;
5.1.1.2 last date to trade in Absolute Holdings Limited shares in the JSE in order to be
recorded as a shareholder by the record date of the name change is Friday,
9 July 2010;
5.1.1.3 shares will commence trading under the new name on Monday, 12 July 2010; and
5.1.1.4 the record date for purposes of determining those shareholders whose shares will
be subject to the change of name is Friday, 16 July 2010.
5.2
5.2.2
Share certificates so received will be held by the transfer secretaries pending the change
of name being approved by shareholders at the general meeting. In the event that the
change of name is not approved, the transfer secretaries will, within five business days
thereafter, return the certificates to the certificated shareholders concerned, by registered
post, at the risk of such shareholders.
5.2.3
In the event that the change of name is approved, the transfer secretaries will, within five
business days thereafter, post the new share certificates to the certificated shareholders
concerned, by registered post, at the risk of such shareholders.
5.2.4
Dematerialised shareholders must not do anything as their accounts at their CSDP or broker
will be automatically updated.
In the event that certificated shareholders do not complete the attached form of surrender and who
later wish to obtain a share certificate in the new name of the Company, such shareholders will be
required to return their share certificates to the transfer secretaries together with certified copies of
identity documents, if in own name, or if otherwise, certified copies of company/trust documents.
6. SHARE ISSUE FOR CASH
6.1
As part of the conditions precedent in terms of the acquisition agreement, the Company is required
to raise a minimum amount of R60 million for additional capital to be applied towards a working
programme in respect of the Bauba Projects and for working capital. This amount may be changed,
if amended in writing between the parties. Absolute is seeking shareholder approval to raise up
to R150 million through the issue of up to 30 000 000 additional new Absolute shares, in one or
more tranches, at a price to be determined through a road show, to interested off-shore and local
investors, institutions, certain existing shareholders and the local market, all of whom are to be
identified during the road show prior to the general meeting on 7 June 2010. The discount at which
the share issue for cash will take place is not known at the last practicable date and will be based
on market conditions prevailing at the time of the capital raising.
These shares will not be issued to related parties as defined in the Listings Requirements and will
result in a maximum dilution of 15.8% assuming the issue of the Houtbosch payment shares. The
shares will be of a class already in issue and will rank pari passu with the existing shares in issue.
Qinisele Resources will seek indications of interest from private and institutional investors to acquire
shares in Absolute. The results of the share placement will be announced on SENS and in the press.
In the event of an over subscription for the share issue for cash, the directors will allocate the shares
on an equitable basis in accordance with the Listings Requirements. There is no intention to extend
a preference to any particular individual, company or group.
26
6.2
The resolution authorising the share issue requires a 75% majority of the votes cast in favour of the
resolution, excluding any parties and their associates, participating in the specific issue of shares
for cash.
7.2
27
Subject to the approval of shareholders at the general meeting on Monday, 31 May 2010, the board will
be reconstituted as follows:
CEO: Mr Pine Pienaar;
Financial Director: Mr Mark Rosslee;
Chairman: Mr Jonathan Gourlay Best;
Independent Non-executive directors: Messrs Kenneth Dicks and Sholto Dolamo; and
Non-executive director: Dr Mathews Phosa.
The names, ages, qualifications, nationality, business address and function as well as a brief curriculum
vitae of each of the above directors of the Company are set out in paragraph 3.1 and Appendix 6 to the
Revised Listing Particulars.
10. HISTORICAL FINANCIAL INFORMATION
10.1 Extracts of historical financial information
Extracts of the historical financial information of Bauba for its first two years of operation for the
periods ended 28 February 2009 and 28 February 2010 are set out in Annexure 2 to this circular.
Extracts of the historical financial information of NMR for its first year of operation for the period
ended 28 February 2010 are set out in Annexure 6 to this circular.
10.2 Reporting accountants report
The reporting accountants reports on the historical information of Bauba and NMR, as set out in
Annexure 2 and Annexure 6 to this circular, are included in Annexure 1 and Annexure 5 to this
circular, respectively.
11. MAJOR SHAREHOLDERS
11.1 Shareholders, other than directors, directly and indirectly beneficially interested in 5% or more in the
ordinary share capital of the Company at the last practicable date were as follows:
Shareholder
Number
of shares
Percentage
holding
Calulo Resources
Tucker Boys Trust
Discount Toy Cash and Carry CC
RAB Investment Trust
4 922 811
1 865 149
1 005 500
944 798
30.74%
11.65%
6.28%
5.90%
Total
8 738 258
54.57%
No shareholders are indirectly beneficially interested in 5% or more in the ordinary share capital of
the Company at the last practicable date.
Shareholder, other than directors, directly and indirectly beneficially interested in 5% or more in the
ordinary share capital of the Company following the implementation of the transactions is as follows:
Number
of shares
Percentage
holding
Highlands
61 085 027
44.5%
Total
61 085 027
44.5%
Shareholder
28
R000
Authorised
25 000 000 shares of R1.00 each
25 000
Issued
16 011 848 shares of R1.00 each
Share premium
16 012
112 412
After the acquisition settled through the issue of 68 124 600 new shares and
increase in authorised share capital
Authorised
200 000 000 shares of R1.00 each
200 000
Issued
84 136 448 shares of R1.00 each
Share premium
84 136
384 910
After the share issue for cash (assumed at 30 000 000 shares at an assumed
issue price of R5.00 per share)
Issued
114 136 448 shares of R1.00 each
Share premium
114 136
504 910
135 326
589 669
137 202
597 171
29
12.2.3 At the General Meeting held on 17 February 2010, shareholders approved the consolidation
of the authorised share capital of the Company from R25 000 000 divided into 2 500 000 000
ordinary shares with a par value of R0.01 per share to R25 000 000 divided into 25 000 000
ordinary shares with a par value of R1.00 per share and the consolidation of the issued
share capital of the Company from R16 011 848 divided into 1 601 184 758 ordinary shares
with a par value of R0.01 per share to R16 011 848 divided into 16 011 848 ordinary shares
with a par value of R1.00 per share.
12.2.4 At the General Meeting held on 17 February 2010, shareholders approved the repurchase
of up to 21 414 odd lot offer shares at R4.00 per share, subject to the approval of the
consolidation of the share capital of the Company as detailed in paragraph 12.2.3 above.
The odd lot offer closed on 1 April 2010 and the Company repurchased 17 996 odd lot
offer shares, which have been immediately issued under the Companys general authority
to issue shares for cash. The Company does not hold any treasury shares at the last
practicable date.
12.2.5 Details of shares issued during the preceding three years are set out in paragraph 4.2 of
the Revised Listing Particulars.
12.2.6 The ordinary shares are listed on the JSE. All the authorised and issued ordinary shares
are of the same class and rank pari passu in all respects. In terms of a resolution passed
at the Annual General Meeting held on 27 January 2010, the unissued ordinary shares are
under the control of the directors of Absolute until the next annual general meeting of the
Company, subject to the provisions of section 221 of the Act and the Listings Requirements.
12.2.7 No commission or consideration has been paid by the Company during the two years
preceding the date of this circular, nor is it intended to pay a commission or a consideration
to any person subscribing for or agreeing to subscribe for any of the Companys securities.
12.2.8 Other than the repurchase of shares in terms of the recent odd lot offer, which shares have
since been reissued as detailed in paragraph 12.2.4 above, there has been no repurchase
of shares up until the last practicable date.
12.3 Other information
12.3.1 Inter-company transactions and balances
Details of inter-company transactions and balances are contained in note 10 and 23 of the
annual financial statements of Absolute in Appendix 1 to the Revised Listing Particular,
which is attached to this circular. In addition, inter-company loans and receivables pursuant
to the acquisition are set out in Appendix 5 to the Revised Listing Particulars.
12.3.2 Share trading history
The share trading history of Absolute is set out in Annexure 7 to this circular. The JSE is the
only stock exchange on which Absolute securities are listed.
13. DIRECTORS AND KEY MANAGEMENT
13.1 Directors information
30
Age
Business address
Occupation
40
Platinum Place
Turnberry Office Park
48 Grosvenor Road, Bryanston
Businessman
72
20 Platinum Road
Bedfordview
48
Chartered
Accountant
Age
Business address
Occupation
37
Platinum Place
Turnberry Office Park
48 Grosvenor Road, Bryanston
Financial Director
47
Geologist
* Non-executive
# Independent
Also directors of subsidiaries of the Company
All of the above directors are South African. A complete list of other directorships for the directors is
disclosed in Appendix 3 to the Revised Listing Particulars, which is attached to this circular.
None of the directors have been convicted of an offence involving dishonesty, declared bankrupt,
insolvent or entered into voluntary compromise arrangements, nor have they been publicly criticised
by any statutory or regulatory authorities or disqualified by a court from acting as a director, manager
or conducting the affairs of a company.
There were no receiverships, compulsory liquidations, creditors voluntary liquidations,
administrations, company voluntary arrangements or any compromise with creditors generally or
any class of creditors, where any director is or was a director with an executive function of such
company at the time of, or within 12 months preceding such events. All of the above directors have
completed directors declarations in terms of Schedule 21 of the Listings Requirements relating to
the appointment of new directors. Copies of the declarations are available for inspection.
Brief profiles on each of the directors are included in Appendix 6 to the Revised Listing Particulars,
details of which are attached to this circular.
13.2 Directors interests in securities
13.2.1 The current directors interests in the ordinary share capital of the Company as at the last
practicable date were as follows:
2009
Beneficially held
Direct
Indirect
Total shares
held
Total
MK Diale*
MW Rosslee
GP Sequeira
AM Sher*
JJ Serfontein*#
16 667
200 000
930 584
232 646
244 891
930 584
232 646
16 667
444 891
5.81%
0.00%
1.45%
0.10%
2.78%
Total
216 667
1 408 121
1 624 788
10.15%
*Non-executive
#Independent
31
MW Rosslee^
GP Sequeira
MK Diale*
AM Sher*#
JJ Serfontein*#
Salaries
R
Bonuses
R
Fees
R
Expenses
R
Share
options
R
Share
benefits
R
2 000 000
24 000
40 000
40 000
104 000
Total
^ Appointed 1 September 2008
* Non-executive
# Independent
32
GP Sequeira
Salaries
R
Bonuses
R
Fees
R
Expenses
R
Share
options
R
Share
benefits
R
1 200 000
500 000
13.4.4
M Diale, JJ Serfontein and AM Sher are remunerated by Absolute per board or committee
meeting attendance, which remuneration was approved at the Annual General Meeting as
R24 000 per meeting for a chairman and R16 000 for other members.
13.4.5
Other than as disclosed above in paragraph 13.4.1 above, no material benefits were
received by the directors.
13.4.6
13.4.7
The group does not have a pension or provident plan. The shareholders have approved
a share incentive scheme at a general meeting held on 31 March 2009. The scheme is
pending registration with the Master of the High Court as the prior attorney firm did not
lodge the share incentive scheme. The Companys new attorneys, Eversheds, have since
lodged the share incentive scheme for registration. Salient features of the share incentive
scheme are set out in Appendix 9 to the Revised Listing Particulars.
13.4.8
There have been no commission, gain or profit sharing arrangements entered into
with the directors other than the interest in the underwriting agreement as detailed in
paragraph 13.3 above.
13.4.9
Arcay Client Support acts as company secretary to Absolute at a fee of R8 000 per month.
13.4.10 No fees have been paid, or are payable, to third parties in lieu of directors fees for any of
the directors.
13.4.11 No other technical, consulting or other fees are payable, directly or indirectly, a part of
which is then paid to a director of the Company.
13.4.12 No amounts are payable to the directors of Absolute in respect of emoluments, fees, share
options, technical, consulting or other fees.
13.4.13 Qinisele Resources is paid a monthly retainer of R75 000 and, in terms of its mandate,
can earn a success fee of 5% on introduction of a transaction with a deal value of up to
R100 million and 3% on transactions above R100 million. In addition, a capital raising fee
of 5% will be payable in the event that Qinisele Resources is mandated to raise capital for
any transaction. Absolute holds 25.1% in Qinisele Resources, and thus the Company and
its directors have an indirect benefit from Qinisele Resources. However, the directors of
Absolute do not have any direct interest in this fee as at the last practicable date.
Details of directors remuneration pursuant to the acquisition are detailed in paragraph 3.4 in the
Revised Listing Particulars, which is attached to this circular.
13.5 Appointment, retirement, qualification, remuneration and voting powers
Appendix 2 to the Revised Listing Particulars, which is attached to this circular, contains provisions
extracted from the articles of association of the Company regarding the qualification, appointment,
retirement and terms of office of directors (Article 94), the remuneration of directors and voting
powers and voting in relation to interests of the directors.
13.6 Key management
Profiles of key management are set out in Appendix 6 to the Revised Listing Particulars.
14. MATERIAL BORROWINGS, COMMITMENTS AND CONTINGENT LIABILITIES
Appendix 5 to the Revised Listing Particulars, which is attached to this circular, sets out the details of
the borrowing powers of the Company exercisable by the directors and the manner in which borrowing
powers may be varied. No instances have occurred during the past three years where the borrowing
powers of the Company have been exceeded.
33
Details of the Companys and its subsidiaries current material commitments, lease payments and
contingent liabilities are set out in paragraph 11.4 of the Revised Listing Particulars which is attached to
this circular.
In addition to the debts repayable as detailed in Appendix 5 to the Revised Listing Particulars, which is
attached to this circular, the Company has normal trade creditors amounting to approximately R3.7 million
at the last practicable date.
Bauba and NMR had no material borrowings at the last practicable date.
15. MATERIAL CONTRACTS
15.1 The following agreements of Absolute are regarded as being material in relation to this circular and
the Company:
15.1.1 The acquisition agreement dated 12 February 2010 relating to the acquisition of Bauba and
related transactions detailing, inter alia, the Bauba acquisition for a purchase consideration
of R340 623 000, the potential acquisition of the Houtbosch prospecting right and the
minimum capital raising requirement of R60 million.
15.2 The following agreements of Absolute were entered into within the two years prior to the date of this
circular:
15.2.1 the mandate agreement between Absolute and Qinisele Resources dated 17 March 2008
relating to corporate advisory services provided to Absolute by Qinisele Resources;
15.2.2 the acquisition agreement with Allied Quartzite and Richtersveld Quartzite Company dated
27 June 2008 to acquire businesses at a cost of R1.8 million to be settled through the
issue of 45 000 000 shares at 4 cents per share (equating to 450 000 shares at R4.00 post
consolidation);
15.2.3 the agreement with the Qinisele Resources shareholders dated 5 August 2008 relating
to the acquisition of Qinisele Resources for a consideration of R20 000 000.04 settled
through the issue of 333 333 334 shares at 6 cents per share (equating to 3 333 333 shares
at R6.00 post consolidation); and
15.2.4 the agreement with the Dikopane Shareholders dated 29 July 2009 relating to the acquisition
of 49% of Dikopane for a consideration of R1 million, settled in equal portions of cash
of R500 000 and the issue of 8 333 333 shares at 6 cents (equating to 83 333 shares
at R6.00 post consolidation).
There is no outstanding obligation or settlement that is material to the Company or its subsidiaries
as at the last practicable date.
15.3 The above contracts will be available for inspection at the registered office of the Company
as detailed in paragraph 26 below.
16. ADEQUACY OF CAPITAL
After considering the effect of the transactions, the directors of Absolute are of the opinion that the working
capital available to the Company and its subsidiaries, and pursuant to the transactions, is sufficient for
the groups present requirements for a period of 12 months as at the date of this circular.
17. MATERIAL CHANGES
Other than the acquisition disclosed in paragraph 3 above, there have been no material changes in the
financial or trading position of the Company or its subsidiaries since the publication of the unaudited
results of Absolute for the six months ended 31 December 2009.
34
35
19.2 Non-residents who are emigrants from the common monetary area
Share certificates reflecting the change of name will be restrictively endorsed non-resident in
terms of the Exchange Control Regulations and will be sent to the shareholders authorised dealer
in foreign exchange in South Africa controlling their blocked assets.
19.3 All other non-residents
Share certificates reflecting the change of name will be restrictively endorsed non-resident in
terms of the Exchange Control Regulations.
With regard to dematerialised shareholders whose registered addresses are outside the common
monetary area, their shares will be annotated in the Companys relevant sub-register as non-resident
and statements will be restrictively endorsed in terms of those regulations.
20. OPINIONS AND RECOMMENDATIONS
20.1 The board of directors have considered the terms and conditions of the transactions and are of the
opinion that such terms and conditions are fair and reasonable and that the implementation of the
transactions will be to the long-term benefit of the shareholders.
The directors are of the opinion that the future prospects of the group are sound and refer
shareholders to paragraph 2.2 of the Revised Listing Particulars, which is attached to this circular.
20.2 Accordingly, the board of directors recommends that shareholders vote in favour of the special and
ordinary resolutions relating to the transactions at the general meeting of shareholders.
20.3 The directors of Absolute who have direct and indirect interests in the issued share capital of the
Company support the transactions and intend, to vote in favour of the transactions in respect of all
their shares.
20.4 Shareholders are referred to the independent expert opinion in relation to the waiver of the offer to
minority shareholders, which is contained in Annexure 10 to this circular.
20.5 Shareholders are recommended to consult their professional advisors regarding the action to be
taken in relation to the transactions.
21. DIRECTORS RESPONSIBILITY STATEMENT
The directors of Absolute, whose names are given in paragraph 13.1 above, collectively and individually,
accept full responsibility for the accuracy of the information given and certify that to the best of their
knowledge and belief there are no facts that have been omitted which would make any statement false
or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this
circular contains all information required by law and the Listings Requirements and the SRP Code.
22. CONSENTS
The reporting accountants, corporate advisors, competent person, auditors, transfer secretaries and
sponsor have all consented, in writing, to their reports being included in the circular and Revised Listing
Particulars, where applicable, and to act in the capacities stated and to their names being used in this
circular and have not withdrawn their consents prior to the finalisation of this circular.
23. COSTS
The estimated costs, excluding VAT, relating to the circular based on a capital raising of a minimum of
R60 million and maximum of R150 million, are set out below:
36
Assuming capital
raising of a minimum
of R60 million
R000
Assuming capital
raising of a maximum
of R150 million
R000
135
16 397
500
625
550
100
53
875
94
25
280
135
20 897
500
625
550
100
53
875
94
25
280
Total
19 634
24 134
The JSEs fees for the inspection of the Competent Persons Report will be charged at an hourly rate. This
fee is, therefore, still outstanding at the last practicable date.
As at the last practicable date, suppliers for printing, publication and distribution had not been finalised.
These costs are estimated at R280 000 and relate to the printing and distribution of the circular and
publishing of related announcements. The total costs relating to the circular are accordingly estimated
at R19.634 million and R24.134 million, assuming a capital raising of a minimum of R60 million and
maximum of R150 million, respectively (excluding VAT). The above fees include R3.178 million payable
only on successful implementation of the Houtbosch acquisition. All the abovementioned costs will be
borne by Absolute.
Of the fees payable to Qinisele Resources for corporate advisory and capital raising, the fees payable
in respect of capital raising are payable in cash, whereas the fees payable in respect of corporate
advisory services are payable approximately 30% in cash and 70% via the issue of shares in Absolute.
Accordingly, Qinisele Resources has agreed to accept 1 875 598 shares in settlement of a portion of
its fees, assuming an issue price at a 10% discount of the 30 day Volume Weighted Average Price
determined at the date, that the issue is agreed in writing beween the Company and Qinisele Resources,
as detailed in paragraph 7.1 above, subject to approval thereof by shareholders in general meeting.
The issue price has been assumed at R5.00 for the purpose of this circular and any remainder of the total
fee payable to Qinisele Resources will be settled in cash.
There were no preliminary expenses incurred by the Company within the three years preceding the date
of this circular.
24. CODE OF CORPORATE PRACTICE AND CONDUCT
The board of directors is committed to the principles of openness, integrity and accountability and the
provision of timeous, meaningful reporting to stakeholders. A corporate governance report addressing
the guiding principles as set out in the Code of Corporate Practice and Conduct as contained in the
King II and King III Reports on Corporate Governance (the King Report), together with details of Absolutes
compliance with the various aspects of the King Report as required by the Listings Requirements, is set
out in Appendix 4 attached to and forming part of the Revised Listing Particulars.
25. GENERAL MEETING OF SHAREHOLDERS
The general meeting of Absolute shareholders will be held at Arcay House II, Number 3 Anerley Road,
Parktown, Johannesburg at 10h00 on Monday, 7 June 2010 in order to consider and, if deemed fit,
to pass with or without modification, the special and ordinary resolutions necessary to implement the
transactions set out in this circular. A notice convening such general meeting is attached to, and forms
part of, this circular.
37
A form of proxy, for use by those certificated shareholders and own name registered dematerialised
shareholders who are unable to attend the general meeting but wish to be represented thereat, is
attached to, and forms part of this circular. A duly completed form of proxy must be received by the
transfer secretaries by not later than 10h00 on Thursday, 3 June 2010.
Dematerialised shareholders who hold dematerialised shares in Absolute through a CSDP or broker and
do not have an own name registration, must timeously advise their CSDP or broker of their intention to
attend and vote at the general meeting or be represented by proxy thereat in order for the CSDP or broker
to provide the necessary Letter of Representation to do so, or should shareholders not wish to attend the
general meeting in person, must timeously provide their CSDP or broker with the voting instructions in
order for the CSDP or broker to vote in accordance with their instructions at the general meeting.
In terms of the Listings Requirements, any unlisted shares or shares held through a share incentive
scheme or treasury shares will be precluded from voting at the general meeting.
26. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection at the registered office of Absolute at
Arcay House II, Number 3 Anerley Road, Parktown, Johannesburg, during normal business hours from
Monday, 17 May 2010 up to and including Monday, 7 June 2010:
26.1
26.2
the reporting accountants reports on the historical financial information on Bauba and NMR
as well as the pro forma financial effects of the transactions on the balance sheet and income
statement;
26.3
26.4
26.5
the interim results for the six months ended 31 December 2009 and the audited financial
statements of Absolute for the years ended 30 June 2009, 30 June 2008 and 30 June 2007;
26.6
the audited financial statements of Bauba and NMR for the years ended 28 February 2010 and
28 February 2009;
26.7
the letters of consent received from the independent expert and independent reporting
accountants, competent person, corporate advisors, auditors, sponsor, lawyers and transfer
secretaries;
26.8
26.9
the latest Competent Persons Report on Lekkersing Diamond Quartzite Natural Stone and other
Absolute Mineral Assets, dated 25 March 2010;
26.10 copies of existing and new directors declarations in terms of Schedule 21 of the Listings
Requirements;
26.11 power of attorneys signed by each director;
26.12 copies of existing and new service agreements with MW Rosslee and PC Pienaar, respectively;
26.13 the independent advice letter from Moore Stephens relating to the waiver of the mandatory offer;
and
26.14 a signed copy of this circular and Revised Listing Particulars.
MW Rosslee
ABSOLUTE HOLDINGS LIMITED
Johannesburg
17 May 2010
FOR AND ON BEHALF OF ALL THE OTHER DIRECTORS OF ABSOLUTE HOLDINGS LIMITED, IN
TERMS OF POWERS OF ATTORNEY GRANTED TO HIM BY SUCH DIRECTORS.
38
ANNEXURE 1
REPORTING ACCOUNTANTS
INFORMATION OF BAUBA
REPORT
ON
THE
HISTORICAL
FINANCIAL
39
6. SCOPE OF REVIEW
We conducted our review in accordance with the International Standard on Review Engagements 2400.
This standard requires that we plan and perform the review to obtain moderate assurance as to whether
the financial information for the year ended 28 February 2009 is free of material misstatement. A review is
limited primarily to enquiries of company personnel and analytical procedures applied to financial data
and thus provide less assurance than an audit. We have not performed an audit of the abovementioned
financial information and, accordingly, we do not express an audit opinion thereon.
7. OPINIONS
In our opinion, the historical financial information of Bauba for the year ended 28 February 2010 as
reported in Annexure 2 fairly presents, in all material respects, the financial position as of that date, in
accordance with International Financial Reporting Standards, the Companies Act in South Africa and the
JSE Listings Requirements.
Based on our review, nothing has come to our attention that causes us to believe that the historical
financial information of Bauba for the year ended 28 February 2009 as reported in Annexure 2 is not fairly
presented, in all material respects, in accordance with International Financial Reporting Standards, the
Companies Act in South Africa and the JSE Listings Requirements.
8. CONSENT
We consent to the inclusion of this report, which will form part of the circular to the shareholders
of Absolute.
Yours faithfully
MOORE STEPHENS CORPORATE FINANCE (PROPRIETARY LIMITED
Registered Auditors
Chartered Accountants SA
Per: Nick Lazanakis
7 West Street
Houghton, 2198
30 April 2010
40
ANNEXURE 2
This annexure contains a report on the historical financial information of Bauba. The information is taken
from Baubas audited financial statements for the years ended 28 February 2009 and 28 February 2010.
The accounting policies adopted for purposes of this report comply, and have been consistently applied
in all material respects, with International Financial Reporting Standards and have been reported on by
Moore Stephens (Jhb) Corporate Finance (Proprietary) Limited as detailed in Annexure 1 to this circular.
The same accounting policies and methods of computation have been followed as compared to the prior
year. The financial statements have been audited by Bruk Munkes & Co. and they were reported on without
qualification.
GENERAL INFORMATION
Main business and operations
Incorporation
The company was incorporated on 19 December 2006 and obtained its certificate to commence business on
the same day. Bauba was dormant until its first year of operation being for the year ended 28 February 2009.
Review of activities
Main business and operations
The company is engaged in the exploration and mining of mineral resources and operated principally in
South Africa.
Authorised and issued share capital
25 ordinary shares were issued during the year under review.
Dividends
The dividends already declared and paid to shareholders during the year are as reflected in the attached
statement of changes in equity.
Directors
The directors of the company during the year and to the date of this report are as follows:
Name
Motubatse Ben Bokgobelo
Moruthane Ben Sekhukhune
Victor Thulare
Nicolaas Phillipus Jacobus van der Hoven
Jurie Hendrik Wessels
Changes
(Deceased 12 June 2009)
Secretary
The secretary of the company is Elizabeth Stephanie Moult of:
Postal address:
2 Chaplin Close
Kirstenhof
7806
41
1. BASIS OF PREPARATION
The consolidated income statements, balance sheets, statements of changes in equity, cash flow
statements and the related notes for the years ended 28 February 2010 and 28 February 2009 (Historical
Financial Information), have been extracted, without adjustment from the audited statutory financial
statements of Bauba A Hlabirwa Mining Investment (Pty) limited (Bauba or the Company). The audited
statutory financial statements of the Company for the years ended 28 February 2010 and 28 February
2009 have been prepared in accordance with International Financial Reporting Standards (IFRS) and
have been reported on without qualification by Bruk Munkes & Co. The results have been reported on by
Moore Stephens (Jhb) Corporate Finance (Proprietary) Limited as detailed in Annexure 1 to this circular.
The Historical Financial Information is the responsibility of the directors of Absolute.
2. CONSOLIDATED INCOME STATEMENTS
The consolidated income statements of Bauba for the years ended 28 February 2010 and 2009 are set
out below:
Audited
Year ended
28 Feb 2010
R
Audited
Year ended
28 Feb 2009
R
Revenue
Operating expenses
(2 236 428)
(6 350)
Operating profit
Investment revenue
Other Income
Finance costs
(2 236 428)
866 153
10 150 000
(823)
(6 350)
608 277
3 563 776
(2 463)
8 778 902
(1 660 856)
4 163 240
(666 779)
7 118 046
3 496 461
7 118 046
3 496 461
(8 729 000)
(4 300 000)
Headline profit/(loss)
(1 610 954)
(803 539)
5 981 551
(1 353 743)
4 921 000
119
3 496 461
(803 539)
100
42
Audited
Year ended
28 Feb 2009
R
1 077 169
2 600
28 126
100
1 079 769
28 226
6 170
6 923 149
19 219
13 615 895
6 929 319
13 635 114
8 009 088
13 663 340
2 500 100
4 463 257
100
3 496 461
6 963 357
3 496 561
1 045 731
666 779
9 500 000
1 045 731
10 166 779
8 009 088
13 663 340
125
5 570 686
5 570 686
100
3 496 561
3 496 461
Note(s)
ASSETS
Non-current assets
Property, plant and equipment
Loans to shareholders
7
8
Current assets
Trade and other receivables
Cash and cash equivalents
9
10
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Retained income
11
Liabilities
Current liabilities
Current tax payable
Trade and other payables
12
Share
premium
R
Total share
capital
R
Retained
income
R
Total
equity
R
100
100
3 496 461
3 496 561
100
100
3 496 461
3 496 561
25
25
2 499 975
2 499 975
25
2 499 975
2 500 000
7 188 046
(6 151 250)
966 796
7 188 046
25
2 499 975
(6 151 250)
3 466 796
125
2 499 975
2 500 100
4 463 257
6 963 357
11
11
11
Changes in equity:
Profit for the year
Issue of shares
Share premium on issued shares
Dividends
Total changes
Balance at 28 February 2010
Note
43
Note(s)
Audited
Year ended
28 Feb 2010
R
Audited
Year ended
28 Feb 2009
R
15
9 476 699
608 277
(2 463)
10 082 513
(1 193 257)
10 150 000
(30 394)
3 563 776
8 956 743
3 533 382
12
2 500 000
(2 500)
(6 151 250)
100
(100)
(3 653 750)
(6 692 746)
13 615 895
6 923 149
13 615 895
11
6. ACCOUNTING POLICIES
6.1
Nature of operations
Bauba carries on the business of exploration and mining of mineral resources. The company was
registered in 2006 but only commenced operation in the 2009 financial year.
6.2
44
6 years
5 years
The remaining useful lives, residual values and depreciation method are reviewed and adjusted,
if appropriate, at financial year-end to ensure that such periods and method of depreciation are
consistent with the expected pattern of economic benefits from the items of property, plant and
equipment.
The carrying values of property, plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying value may not be recoverable.
An item of property, plant and equipment is derecognised when either it has been disposed or
when it is permanently withdrawn from use and no future economic benefits are expected from its
use or disposal. Any gains or losses arising on the retirement and disposal of an item of property,
plant and equipment are included in the consolidated income statement in the period of retirement
or disposal.
Intangible assets exploration and evaluation assets
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as
exploration and evaluation assets on an area of interest basis. Costs incurred before the Company
has obtained the legal rights to explore an area are recognised in the income statement.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current
and either:
the expenditures are expected to be recouped through successful development and exploitation
of the area of interest; or
activities in the area of interest have not at the reporting date, reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves and
active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if: (i) sufficient data exists to
determine technical feasibility and commercial viability and (ii) facts and circumstances suggest
that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing,
exploration and evaluation assets are allocated to cash-generating units to which the exploration
activity related. The cash generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in
an area of interest are demonstrable, exploration and evaluation assets attributable to that area
of interest are first tested for impairment and then reclassified from intangible assets to mining
property and development assets within property, plant and development.
Intangible assets development costs
Development costs relating to major development programmes are capitalised. Development
costs consist primarily of expenditure to develop the technology to commercialisation. Day-today development costs to maintain production are expensed as incurred. Initial development
and preproduction costs relating to a new technology, including amortisation and depreciation to
develop the technology, are capitalised until commissioning of production facilities.
The Company reviews the carrying amount of development assets and development costs when
circumstances suggest the carrying amount may not be recoverable. Recoverability is assessed
using estimates of future cash flows on a discounted basis, including revenues, operating costs
and future capital expenditures. Where necessary a reduction in carrying amount is recorded.
Financial assets
The Company classifies its financial assets in the following categories: at fair value through profit or
loss, loans and receivables, and available for sale. The classification depends on the purpose for
which the financial assets were acquired. Management determines the classification of its financial
assets at initial recognition.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading.
A financial asset is classified in this category if acquired principally for the purpose of selling in
the short-term. Derivatives are also categorised as held for trading unless they are designated
as hedges. Assets in this category are classified as current assets.
45
46
Accumulated
depreciation
2009
R
Carrying
value
Cost
valuation
(7 335)
23 059
(119 326) 1 073 931
30 394
(2 268)
28 126
Total
30 394
(2 268)
28 126
1 223 651
Accumulated
depreciation
Carrying
value
FARM
NAME
Limpopo
Schoonoord
Northern Cluster
FARM
NUMBER
462KS
SIZE
(ha)
2,212
Remainder of Indi
474KS
1,516
Zwitzerland
473KS
1,952
Fisant Laagte
506KS
2,013
Magneetsvlaakte
541KS
1,129
APPLICATION
NAME
PROSPECTING
RIGHT
No.
Bauba A Hlabirwa
Mining Investments
(Pty) Limited
DATE
ISSUED
EXPIRY
DATE
7 June
2006
6 July
2011
256/2006PR
Central
Cluster
Dingaanskop
543KS
1,036
Grootvygenboom
284KT
1,610
Genokakop
285KT
1,304
248/2006PR
256/2006PR
Southern
Cluster
8. LOANS TO SHAREHOLDERS
2010
R
2009
R
43
2 510
47
43
10
47
2 600
100
2010
R
2009
R
6 171
19 219
2010
R
2009
R
19 185
6 903 964
1 826
13 614 069
6 923 149
13 615 895
The above loans bear no interest and there are no fixed terms of repayment.
9. TRADE AND OTHER RECEIVABLES
Value-added tax
10. CASH AND CASH EQUIVALENTS
Cheque account
Call account
47
2009
R
1 000
1 000
125
2 499 975
100
2 500 100
100
2010
R
2009
R
9 500 000
2010
R
2009
R
Authorised
1000 ordinary shares of R1.00 each
875 unissued ordinary shares are under the control of the directors
in terms of a resolution of members passed at the last general meeting.
This authority remains in force until the next annual general meeting.
Issued
125 ordinary shares of R1.00 each
Share premium
Operating profit for the year is stated after accounting for the following:
Operating lease charges premises
Proceeds on sale of capital asset
Depreciation on property, plant and equipment
Employee costs
60 000
(10 150 000)
144 214
1 555 973
(3 563 776)
2010
R
2009
R
8 778 902
4 163 240
144 241
(10 150 000)
(866 153)
823
(3 563 776)
(608 277)
2 463
2 268
13 049
(9 500 000)
19 219
9 500 000
9 476 699
Adjustments for:
Depreciation and amortisation
Proceeds from sale of capital asset
Interest received
Finance costs
Depreciation
Changes in working capital
Trade and other receivables
Trade and other payables
48
R 90 000
R 90 000
R 60 000
R275 000
R275 000
Total directors emoluments for the year ended 28 February 2010 amounted to R1 313 308.76, comprising
a basic salary, as follows:
Basic salary
Motubatse Ben Bokgobelo (deceased 12 June 2009)
Moruthane Ben Sekhukhune
Victor Thulare
Nicolaas Phillipus J van der Hoven
Jurie Hendrik Wessels
Ntoampe Isaac Mampuru (appointed director February 2009)
R 40 429.60
R121 288.80
R136 491.84
R502 495.56
R502 495.56
R 10 107.40
FARM
NAME
Limpopo
Houtbosch
Southern
Cluster
FARM
NUMBER
323KT
SIZE
(ha)
1,712
APPLICATION
NAME
Bauba A Hlabirwa
Mining Investments
(Pty) Limited
PROSPECTING
RIGHT
No.
Pending
DATE
ISSUED
EXPIRY
DATE
Pending Pending
49
ANNEXURE 3
50
This standard requires us to comply with ethical requirements and to plan and perform the assurance
engagement to obtain sufficient appropriate evidence on which to base our conclusion.
We do not accept any responsibility for any reports previously given by us on any financial information used
in the compilation of the pro forma financial information, beyond that owed to those to whom those reports
were addressed by us at the dates of their issue.
Sources of information and work performed
Our procedures consisted primarily of comparing the unadjusted financial information with the source
documents, considering the pro forma adjustments in light of the accounting policies of Absolute, considering
the evidence supporting the pro forma adjustments and discussing the adjusted pro forma financial
information with the directors of Absolute in respect of the transactions.
In arriving at our conclusion, we have relied upon financial information prepared by the directors of Absolute
and other information from various public, financial and industry sources.
While our work performed has involved an analysis of the historical published audited financial information
and other information provided to us, our assurance engagement does not constitute an audit or review of
any of the underlying financial information conducted in accordance with International Standards on Auditing
or International Standards on Review Engagements and, accordingly, we do not express an audit or review
opinion.
In a limited assurance engagement, the evidence-gathering procedures are more limited than for a
reasonable assurance engagement and therefore less assurance is obtained than in a reasonable assurance
engagement. We believe our evidence obtained is sufficient and appropriate to provide a basis for our
conclusion.
Conclusion
Based on our examination of the evidence obtained, nothing has come to our attention, which causes us to
believe that:
the pro forma financial information has not been properly compiled on the basis stated;
such basis is inconsistent with the accounting policies Absolute; and
the adjustments are not appropriate for the purposes of the pro forma financial information as disclosed in
terms of paragraphs 8.17 and 8.30 of the Listings Requirements.
We consent to the inclusion of this letter and the reference to our opinion in this circular in the form and
context in which it appears.
Yours faithfully
MOORE STEPHENS (JHB) CORPORATE FINANCE (PROPRIETARY) LIMITED
Chartered Accountants SA
Per: Nick Lazanakis
Johannesburg
7 West Street
Houghton, 2198
30 April 2010
51
ANNEXURE 4
This unaudited pro forma financial information has been prepared for illustrative purposes only and because
of its nature may not fairly present Absolutes financial position and results of operations nor the effect and
impact of the acquisition going forward.
The tables below illustrate the pro forma balance sheet and income statement of Absolute after the
acquisition, related minimum capital raising of R60 million and related transactions, which has been assumed
at 12 000 000 shares at R5.00. In addition, the pro forma financial information is reflected as though the full
R150 000 000 is raised through the placement of a maximum of 30 000 000 new shares at R5.00 per share,
although the final placement pricing is still to be determined through a road show to investors. The recent
repurchase of shares in terms of the odd lot offer has not been taken into account in the pro forma effects as
the shares were immediately placed under the Companys general authority to issue shares for cash.
It has been assumed that the transactions were effective at 1 July 2009, being the beginning of Absolutes
financial period for the purposes of the pro forma income statement and on 31 December 2009 for the
purposes of the pro forma balance sheet. The unaudited pro forma income statement and balance sheet
have been prepared using accounting policies that comply with International Financial Reporting Standards
and that are consistent with those applied in the published unaudited interim results of Absolute for the six
months ended 31 December 2009.
The directors of Absolute are responsible for the compilation, contents and preparation of the unaudited
pro forma financial information contained in this document and for the financial information from which it has
been prepared. Their responsibility includes determining that: the unaudited pro forma financial information
has been properly compiled on the basis stated; the basis is consistent with the accounting policies of
Absolute; and the pro forma adjustments are appropriate for the purposes of the unaudited pro forma financial
information disclosed in terms of the JSE Listings Requirements.
The independent reporting accountants report on the pro forma financial information is set out in Annexure 3.
52
53
106 515
(19.09)
(19.09)
15 325
(2 925)
(2 925)
Headline earnings
81 482
99 482
(4.86)
(13.64)
(13 565)
(4 836)
(8 729)
(4 836)
c.
b. R3 178 440 payable to Qinisele Resources including the issue of 444 981 new shares to QR at an assumed issue price of R5.00 in respect of the Houtbosch acquisition); and
R10 218 690 payable to Qinisele Resources including the issue of 1 430 617 new shares to QR at an assumed price of R5.00 in respect of the Bauba acquisition (excluding Houtbosch);
a.
The issue of 68 124 600 new ordinary shares in respect of the Bauba acquisition (excluding Houtbosch) and the issue of 21 189 600 new ordinary shares in respect of the Houtbosch acquisition;
(37 033)
(10.01)
(20.73)
(16 887)
(8 158)
(8 729)
(8 158)
(5 564)
728
4.
136 515
(8 428)
270
Extracted from the audited annual financial statements of Bauba for the year ended 28 February 2010. The Bauba results have been adjusted to reflect a six-month period only. All numbers have
been adjusted to reflect a six-month period with the exception of the gain from sale of capital asset of R10 150 000, where the full amount is included.
118 515
(3.54)
(9.94)
(13 565)
(16 887)
(6.88)
(14.25)
(4 836)
(8 729)
(4 836)
(8 158)
(8 729)
(8 158)
(20 152)
10 150
(538)
4 977
602
(20 754)
(18 927)
(10 198)
(8 729)
(10 198)
(5 564)
728
(20 152)
10 150
(538)
2 112
602
(20 754)
3.
(1 400)
7 329
(8 729)
7 329
(8 428)
270
Claw
back
R000
Extracted from the published unaudited interim financial results of Absolute for the six months ended 31 December 2009.
(1 611)
7 118
(8 729)
7 118
(10 095)
(104)
(20 152)
10 150
(538)
4 977
602
(20 754)
After
specific
issue
(maximum)6
R000
After
claw back
and
assuming
maximum
specific
issue8
R000
2.
(2 925)
(2 925)
9 464
(2 135)
(20 152)
10 150
(538)
2 112
602
(20 754)
After
specific
issue
(minimum)5
R000
After
claw back
and
assuming
minimum
specific
issue7
R000
1.
Notes:
(9.57)
(17.77)
(2 925)
(2 925)
8 779
(1 661)
(20 152)
10 150
(538)
446
(2 925)
(1 118)
10 150
433
(2 925)
(2 236)
10 150
(1)
866
602
(20 754)
(2 400)
(538)
13
(1 118)
(2 400)
(538)
13
(2 236)
Operating loss
Other income
Finance charges
Interest income
602
(3 002)
After
Bauba
acquisition4
R000
602
(3 002)
Bauba
Adjusted
for six
months3
R000
Revenue
Profit on sale of subsidiary
General administrative expenses
After share
Consolidation
and odd
Before1
lot offer2
R000
R000
Bauba
actual
for the
year
ended
31 December
20093
R000
The unaudited pro forma income statement set out below presents the effects of the acquisition on the results of Absolute for the six months ended
31 December 2009 based on the assumption that the acquisition was effective 1 July 2009.
54
Capital raising fees of R3 million payable to Qinisele Resources that has been set-off against share premium;
Finance income at 6.7% earned on the proceeds of the specific issue (less transaction costs), being the prevailing money market rates on deposits of greater than R10 million; and
The acquisition has been accounted for in terms of the revised IFRS 3: Business Combinations, as the expected effective date is after 1 July 2009, being the
effective date of the revised statement. Due to the exploration nature of Absolute and the once-off costs associated with a transaction of this nature, these
pro forma effects are not expected to be of a continuing nature.
The After claw back and assuming maximum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and maximum specific issue and subsequent reduction
of the purchase consideration via the repurchase of 37 033 200 Absolute shares.
Finance income at 6.7% earned on the proceeds of the specific issue (less transaction costs), being the prevailing money market rates on deposits of greater than R10 million; and
8.
Capital raising fees of R7.5 million payable to Qinisele Resources that has been set-off against share premium;
The After claw back and assuming minimum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and minimum specific issue and subsequent reduction
of the purchase consideration via the repurchase of 37 033 200 Absolute shares.
Issue of 30 000 000 new ordinary shares at an assumed issue price of R5.00;
Issue of 12 000 000 new ordinary shares at an assumed issue price of R5.00;
7.
6.
5.
55
54 985
176.98
(12.66)
16 012
54 985
26 647
2 996
7 221
2 996
7 221
26 647
4 225
4 225
19 426
19 426
Total liabilities
Current liabilities
Trade and other payables
Other financial liabilities
Current tax payable
Bank overdraft
18 904
522
18 904
522
28 338
28 338
Liabilities
Non-current liabilities
Long-term liabilities
Rehabilitation liability
16 012
12 326
16 012
12 326
3 110
54 985
3 110
54 985
1 553
942
330
285
51 875
51 875
1 553
942
330
285
30 365
1 510
20 000
30 365
1 510
20 000
Total assets
Current assets
Inventories
Trade and other receivables
Short-term receivables
Cash and cash equivalents
ASSETS
Non-current assets
Property, plant and equipment
Investment in associates
Investments in financial assets
Deferred tax
Loans to shareholders
Before1
R000
8 009
1 046
1 046
1 046
6 963
2 500
4 463
8 009
6 929
6 923
1 080
1 077
55.16
(0.27)
107 202
86 820
27 693
8 267
4 225
1 046
2 996
19 426
18 904
522
59 128
69 267
(10 139)
86 820
2 783
1 553
948
330
(48)
84 037
60 493
1 510
20 000
2 032
3
After Bauba
acquisition4
R000
98.13
48.28
119 202
144 660
27 693
8 267
4 225
1 046
2 996
19 426
18 904
522
116 968
126 267
(9 299)
144 660
59 783
1 553
948
330
56 952
84 877
60 493
1 510
20 000
2 872
3
After
specific issue
(minimum)5
R000
148.49
105.18
137 202
231 420
27 693
8 267
4 225
1 046
2 996
19 426
18 904
522
203 728
211 767
(8 039)
231 420
145 283
1 553
948
330
142 452
86 137
60 493
1 510
20 000
4 132
3
After
specific issue
(maximum)6
R000
(37 033)
(6 066)
(6 066)
(6 066)
(6 066)
(6 066)
(6 066)
Claw
back
R000
134.97
70.04
82 168
138 594
27 693
8 267
4 225
1 046
2 996
19 426
18 904
522
110 902
120 201
(9 299)
138 594
59 783
1 553
948
330
56 952
78 811
54 427
1 510
20 000
2 872
3
197.33
144.07
100 168
225 354
27 693
8 267
4 225
1 046
2 996
19 426
18 904
522
197 662
205 701
(8 039)
225 354
145 283
1 553
948
330
142 452
80 071
54 427
1 510
20 000
4 132
3
The unaudited pro forma balance sheet set out below presents the effects of the acquisition on the financial position of Absolute as at 31 December 2009 based
on the assumption that the acquisition was effective 31 December 2009.
56
In terms of IFRS 6: Exploration for and Evaluation of Mineral Resources, the cost associated with the acquisition of Absolutes mineral assets has been capitalised to the cost of exploration and
evaluation assets.
f.
Capital raising fees of R3 million payable to Qinisele Resources that has been set-off against share premium;
Due to the exploration nature of Absolute and the once-off costs of this transaction, these pro forma effects are not expected to be of a continuing nature.
The After claw back and assuming maximum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and maximum specific issue and subsequent reduction
of the purchase consideration via the repurchase of 37 033 200 Absolute shares.
8.
Capital raising fees of R7.5 million payable to Qinisele Resources that has been set-off against share premium;
The After claw back and assuming minimum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and minimum specific issue and subsequent reduction
of the purchase consideration via the repurchase of 37 033 200 Absolute shares.
Issue of 30 000 000 new ordinary shares at an assumed issue price of R5.00;
Issue of 12 000 000 new ordinary shares at an assumed issue price of R5.00;
R3 178 440 payable to Qinisele Resources including the issue of 444 981 new shares to QR at an assumed issue price of R5.00 in respect of the Houtbosch acquisition); and
e.
d. R10 218 690 payable to Qinisele Resources including the issue of 1 430 617 new shares to QR at an assumed price of R5.00 in respect of the Bauba acquisition (excluding Houtbosch);
7.
6.
5.
Following the acquisition, the former Bauba shareholders will hold more than 80% of the combined entity. The guidance to IFRS 3 regarding fair value of the consideration transferred in respect
of a reverse acquisition scenario specifies that this value should relate to the fair value of the accounting acquirer rather than the accounting acquiree. IFRS 3 requires that the most reliable
basis of measuring the fair value of the accounting acquirer be used. Bauba is an unlisted entity. The fair value for 100% of Bauba equates to R573.23 million. For IFRS purposes, Absolute
shareholders acquired an effective interest of 10.1% of Bauba (16.8% of 60% of Bauba) for an effective purchase consideration of R57.9 million.
The After Bauba acquisition includes transaction costs of R16.634 million and related tax effects as follows:
The fair value of the number of equity interests calculated in that way can be used as the fair value of consideration transferred in exchange for the acquire. In other words, the purchase
consideration in a reverse acquisition is the consideration effectively transferred by the accounting acquirer to the shareholders of the accounting acquiree.
The acquisition has been accounted for in terms of the revised IFRS 3: Business Combinations, as the expected effective date is after 1 July 2009, being the effective date of the revised statement.
Adjustments relate to the issue of 68 124 600 new ordinary shares in respect of the Bauba acquisition and 21 189 600 new ordinary shares in respect of the Houtbosch acquisition. The acquisition
has been performed based on the guidance per IFRS 3:
4.
Extracted from the audited annual financial statements of Bauba for the year ended 28 February 2010.
3.
In a reverse acquisition, the accounting acquirer usually issues no consideration for the acquiree. Instead, the accounting acquiree usually issues its equity shares to the owners of the
accounting acquirer. Accordingly, the acquisition-date fair value of the consideration transferred by the accounting acquirer for its interest in the accounting acquiree is based on the number
of equity interests the legal subsidiary would have had to issue to give the owners of the legal parent the same percentage equity interest in the combined entity that results from the reverse
acquisition.
2.
Extracted from the published unaudited interim financial results of Absolute for the six months ended 31 December 2009.
1.
Notes:
ANNEXURE 5
REPORTING ACCOUNTANTS
INFORMATION OF NMR
REPORT
ON
THE
HISTORICAL
FINANCIAL
57
6. OPINIONS
In our opinion, the historical financial information of NMR for the year ended 28 February 2010 as reported
in Annexure 2 fairly presents, in all material respects, the financial position as of that date, in accordance
with International Financial Reporting Standards, the Companies Act in South Africa and the JSE Listings
Requirements.
7. CONSENT
We consent to the inclusion of this report, which will form part of the circular to the shareholders of
Absolute.
Yours faithfully
MOORE STEPHENS (JHB) CORPORATE FINANCE (PROPRIETARY LIMITED
Registered Auditors
Chartered Accountants SA
Per: Nick Lazanakis
7 West Street
Houghton, 2198
30 April 2010
58
ANNEXURE 6
The historical information on NMR has been extracted from the audited financial statements for the year
ended 28 February 2010. NMR is audited by Bruk Munkes & Co and the results were reported on without
qualification. The results were prepared in accordance with International Financial Reporting Standards and
have been reported on by Moore Stephens (Jhb) Corporate Finance (Proprietary) Limited as detailed in
Annexure 5 to this circular. The preparation and presentation of the historical financial information is the
responsibility of the directors of the Company and has been prepared in accordance with the accounting
policies of the Company.
Main business and operations
The company was incorporated on 9 November 2006 and obtained its certificate to commence business on
the same day. NMR was dormant until its first year of operation, being for the year ended 28 February 2010.
Review of activities
Main business and operations
The company is engaged in mining activities and operates principally in South Africa.
The operating results and state of affairs of the company are fully set out in the attached annual financial
statements and do not in our opinion require any further comment.
Net profit of the company was R2 112 506 (2009: profit R nil).
Dividends
The dividends already declared and paid to shareholders during the year are as reflected in the attached
statement of changes of equity.
Authorised and issued during the year under review.
11 509 ordinary shares were issued during the year under review.
Directors
The directors of the company during the year and to the date of this report are as follows:
Name
Nationality
South African
South African
South African
Secretary
The secretary of the company is Elizabeth Stephanie Moult of:
Postal address
2 Chaplin Close
Kirstenhof
7806
59
(3 523)
Operating loss
Investment revenue
(3 523)
2 116 030
2 112 507
Taxation
2 112 507
9 150
9 150
9 165
23 087
2
3
2010
R
43
157 800
157 843
Current assets
Cash and cash equivalents
20 800
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Retained income
178 643
179 309
(3 523)
175 786
Liabilities
Non-current liabilities
Loans from directors
43
Current liabilities
Trade and other payables
2 814
Total liabilities
2 857
60
178 643
23 087
761.41
761.41
Share
premium
R
Total share
capital
R
23 087
23 087
156 222
156 222
179 309
179 309
2 112 507
(2 116 030)
(3 523)
23 087
156 222
179 309
(3 523)
175 786
Note(s)
2010
R
Note
Retained
income
R
Total
equity
R
2 112 507
179 309
(2 116 030)
175 786
2 115 321
43
(43)
(709)
2 116 030
179 309
(157 800)
(2 116 030)
(2 094 521)
20 800
20 800
61
ACCOUNTING POLICIES
Nature of operations
NMR carries on the business of exploration and mining of mineral resources. The Company was registered
in 2006 but only commenced operation in the 2010 financial year.
1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS
The annual financial statements have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice and the Companies Act of South Africa, 1973. The annual
financial statements have been prepared on the historical cost basis, and incorporate the principal
accounting policies set out below.
These accounting policies are consistent with the previous year.
1.1
Investments in associates
An investment in an associate is carried at cost less any accumulated impairment.
1.2
Financial Instruments
Initial recognition and measurement
Financial instruments are recognised initially when the company becomes a party to the contractual
provisions of the instruments.
The company classifies financial instruments, or their component parts, on initial recognition as a
financial asset, a financial liability or an equity instrument in accordance with the substance of the
contractual arrangement.
Financial instruments are measured initially at fair value, except for equity investments for which a
fair value is not determinable, which are measured at cost and are classified as available for sale
financial assets.
For financial instruments which are not at fair value through profit or loss, transaction costs are
included in the initial measurement of the instrument.
1.3
Tax
Current tax assets and liabilities
Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the
amount already paid in respect of current and prior periods exceeds the amount due for those
periods, the excess is recognised as an asset.
Current tax liabilities/(assets) for the current and prior periods are measured at the amount expected
to be paid to/(recovered from) the tax authorities, using the tax rates (and tax laws) that have been
enacted or substantially enacted by the balance sheet date.
Tax expenses
Current and deferred taxes are recognised as income or an expense and included in profit or loss
for the period, except to the extent that the tax arises from:
a transaction or event which is recognised, in the same or a different period, directly in equity; or
a business combination.
Current tax and deferred taxes are charges or credited directly to equity if the tax relates to items
that are credited or charges, in the same or a different period, directly equity.
1.4
Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents
the amounts receivable for goods and services provided in the normal course of business, net of
trade discounts and volume rebates, and value-added tax.
62
2. INVESTMENTS IN ASSOCIATES
Name of company
Listed/
Unlisted
Holding
2010
%
Cost
2010
R
Unlisted
34.40
43
The carrying amounts of associates are shown at cost net of impairment losses
3. LOANS TO SHAREHOLDERS
The Orata Trust
157 800
The above loan bears interest at prime, levied from 1 March 2010 and there are
no fixed terms of repayment.
4. SHARE CAPITAL
Authorised
100 000 ordinary shares of R1.00 each
100 000
76 913 unissued ordinary shares are under the control of the directors in terms
of a resolution of members passed at the last annual general meeting. This
authority remains in force until the next annual general meeting.
Issued
23 087 ordinary shares of R1.00 each
Share premium
23 087
156 222
179 309
15
14
14
43
The above loans bear no interest and there are no fixed terms of repayments.
6. CASH USED IN OPERATIONS
Profit before taxation
Adjustments for:
Dividends received
2 112 507
(2 116 030)
2 814
(709)
63
ANNEXURE 7
The share price history of the Companys ordinary shares traded on the JSE for the past three years up until
the last practicable date are given below:
Statistic date
High
(cents)
Low
(cents)
Close
(cents)
Volume traded
Value traded
Quarterly
30 March 2007
29 June 2007
28 September 2007
31 December 2007
4
4
3
3
3
2
4
4
3
1 138 200
115 800
540 000
39 146
4 575
12 800
31 March 2008
30 June 2008
30 September 2008
31 December 2008
3
6
5
5
3
6
4
3
3
6
5
4
15 000
250 000
646 250
23 388 689
450
15 000
25 912
914 974
31 March 2009
30 June 2009
30 September 2009
31 December 2009
5
3
5
5
2
2
2
3
2
3
5
3
11 870 788
8 202 056
30 368 000
23 284 517
338 442
199 647
1 284 499
827 981
30 January 2009
27 February 2009
31 March 2009
30 April 2009
29 May 2009
30 June 2009
31 July 2009
31 August 2009
30 September 2009
30 October 2009
30 November 2009
31 December 2009
2
3
5
5
4
2
2
4
3
3
2
2
2
2
3
5
5
5
5
4
3
75 000
95 000
39 025
140 000
9 901 280
7 772 337
1 500
1 900
1 080
5 800
363 284
237 965
31 January 2010
28 February 2010
78 133 993
4 262 774
7
6
6
6
6
6
6
6
6
6
6
6
5
6
6
5
5
6
6
6
6
6
6
6
6
6
6
745 600
1 650 558
2 103 858
2 050 038
4 612 996
1 023 780
3 847 418
475 800
2 454 760
45 176
99 033
126 231
122 130
276 780
61 427
230 125
27 290
147 286
Month ended
Daily
1 March 2010
2 March 2010
3 March 2010
4 March 2010
5 March 2010
8 March 2010
9 March 2010
10 March 2010
11 March 2010
64
Statistic date
High
(cents)
Low
(cents)
Close
(cents)
Volume traded
Value traded
Daily (continued)
12 March 2010
15 March 2010
16 March 2010
17 March 2010
18 March 2010
19 March 2010
6
6
6
6
6
545
5
6
6
5
5
260
6
6
6
5
6
500
3 399 802
302 000
334 000
4 231 324
432 119
599 555
203 166
18 120
20 040
252 859
24 135
2 585 009
600
520
520
500
480
452
440
444
499
498
545
545
545
500
462
467
465
480
475
445
440
439
450
530
511
500
450
452
420
425
430
444
480
498
545
498
460
460
465
460
430
430
430
415
439
439
530
520
510
500
452
425
430
444
499
498
545
545
498
460
462
465
460
430
430
430
440
439
439
60 000
5 000
10 588
44 450
3 859
70 968
13 340
1 671
8 572
29 346
6 203
25 628
23 404
1 532
720
5 730
5 730
12 105
2 730
66 497
4 323
5 000
10 157
329 365
25 576
53 061
217 647
17 511
309 967
57 344
7 233
39 033
144 682
30 996
139 673
117 809
7 143
3 317
26 649
26 393
54 069
12 684
286 125
18 649
21 950
44 699
65
ANNEXURE 8
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
! Regional Geology
! Local Geology
Statement
These documents comply with the Executive Summary requirements of Section 12.9 (h)
KEY FEATURES
Mr. Andy Clay, M.Sc. (Geol), M.Sc. (Min. Eng.), Dip.Bus.M. Pr.Sci.Nat., MSAIMM, FAusIMM, FGSSA, IOD,
AAPG, CIMMP.
Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA.
Compiled by:
Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA.
Effective Date :
Prepared For :
Purpose:
This is an Independent assessment and verification of Bauba's PGE prospective properties on behalf of
Absolute Holdings. Absolute's strategic objective is to initially build a 0.35Moz p.a. PGE mine within the next
10 years and ramp it up to 1Moz p.a. within 20 years. The Company has entered into a binding agreement
with Bauba A Hlabirwa Mining Investments (Pty) Limited (Bauba) whereby Absolute will acquire a 60%
share in the PGE explorer.
th
Sources of Information :
Technical Reports as supplied by Qinisele Resources including Press releases of 16 February 2010 and a
Business Day article, Absolute takes 60% stake in the PGE explorer Bauba, as well as reports from the
public domain of adjacent mineral properties. Property areas were obtained from Win Deed, a Deeds and
Office Enquiry website.
th
Personal Inspection :
A site inspection was carried out on 25 February by Venmyn, Gain Consulting cc and Qinisele Resources
personnel. The Southern and Central Clusters were visited at the time.
Bauba holds prospecting rights, in the North Eastern Bushveld Igneous Complex (BIC), over nine farms
extending over an area of approximately 56km in length and 6km in width (approximating 14,480ha). The
farms have been grouped into three areas namely the Northern, Central and Southern Clusters. The
PROJECT
AREA
Johannesburg
Durban
Northern Cluster is being dealt with in this report. It consists of Schoonoord 462KS, Indie 474KS, Zwitzerland
473KS and Fisant Laagte 506KS. The total area is about 7,700ha. All the Bauba farms lie along the Leolo
mountain range in the Limpopo Province approximately 40km northwest of the Limpopo Province town of
Steelpoort and 245km northeast of Johannesburg. To the east and up-dip, the Bauba mineral assets are
surrounded by several current operating mines and development projects.
Cape Town
th
License Status:
Ownership Details:
Bauba owns the prospecting rights. These were ceded to Bauba, on 9 April 2007, by King Moruthane Ben
th
Sekhukhune and Motubatse Ben Bokgobela representing Sekhukhune Rhyne Thulare for and on behalf of
the Bapedi Nation. Absolute Holdings is in the process of acquiring 60% of the PGE explorer, Bauba.
Topography and Climate:
The Northern Cluster lies in a mountainous area with elevations lying between 800m and 1,270m. The
elevation difference between the peaks and the flat valleys is about 470m. The climate of the area is typical of
sub-tropical Highveld with warm moist summers and cool dry winters. The rainfall on the escarpments is
higher at 700mm compared to about 500mm in the valleys. Temperatures recorded at Steelpoort vary
0
between 30 C and 17.6 C in January and 21.6 C to 3.8 C in July. Extremes of 40 C and -2.3 C have also
been recorded.
Infrastructure and Accessibility:
The farms are relatively easy to access but field camps will have to be constructed. Access roads will be cut
The Bauba prospects are located on the North Eastern Limb of the BIC, which lies on the eastern portion of
with the aid of bulldozers and water for drilling will have to be taken to site using bowsers.
the world's largest layered igneous intrusion and known to host more that 80% of the world's PGE's and
associated base and precious metal deposits. The farms lie down dip of existing mines and exploration
projects. Reconnaissance mapping carried out to-date shows that the farms lie in the Main and Upper Zones
Northern Limb
Eastern Limb
Mokopane
Steelpoort
PROJECT
AREA
Rustenburg
SCALE:
66
surface and 390m apart, with dips ranging between 18o W in the South East and 300 SW in the North West.
However, in the Northern to Central Cluster, two diapiric structures, the Paradys and the Phoshiri domes are
Middelburg
Pretoria
InterAction
of the BIC. The Critical Zone which is known to host both PGE targets, the Merensky Reef and the UG-2
Chromitite, lies directly below the Main Zone. These two layers are expected to be at least a 1,600m below
Western Limb
100km
thought to have deformed the Critical Zone rocks close to their outer edges, hence possibly uplifting the ore
hosting rocks closer to surface.
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 1
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
FIGURE 1: LOCATION MAP SHOWING THE BAUBA NORTHERN CLUSTER ON THE EASTERN BIC
Anglo Platinum Operating Mine
Anglo Platinum Prospecting Right/Option
Anooraq/Anglo Platinum Operating Mine
Bauba Project Areas(Absolute Holdings Ltd)
Implats/Misc Operating Mine
African Rainbow/Anglo Platinum
Operating Mine
Jubilee
Lesego
Nkwe Platinum
Anooraq
Chrome Mines
Smelters
Anooraq
(Bokoni)
Lesego
Platinum
(Phosiri)
disp
port uted
ion
Northern Cluster
Project Area
SCHOONOORD
462 KS
AngloPlat/Anooraq
(Ga Phasha)
INDIE 474 KS
ZWITZERLAND 473 KS
AngloPlat
(Twickenham)
FISANT LAAGTE 506 KS
MAGNEETSVLAAKTE 541 KS
Jubilee
Platinum
Central Cluster
Project Area
Implats
(Marula)
DINGAANSKOP 435 KS
MOOIHOEK
DILOKONG
GROOTVYGENBOOM
204 KT
MR
CR
UG2 Reef
Merensky Reef
Chromite Reef
Fault
Road
Railway
River
Limit
Town
Cross Section Lines
African Rainbow/
Angloplat
(Modikwa)
Southern Cluster
Project Area
Mooihoek
Bothashoek
EASTERN
CHROME MINES
(Montrose)
GENOKAKOP
285 KT
HOUTBOSCH
323 KT
Nkwe
Platinum
Steelpoort
Scale:
7.5km
FARM
FARM
NAME
No.
2.
Limpopo
Northern
(ha)
NAME
RIGHT
2,013
Bauba A
Hlabirwa
Mining
Investments
(Pty) Limited
256/2006PR
Zwitzerland
473KS
1,952
Indie
474KS
1,516
Schoonoord
462KS
2,212
InterAction
3.
ISSUED
EXPIRY
DATE
7-Jun-06 6-Jul-11
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 2
67
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
Anooraq
(Bokoni)
VMR
disp
port uted
ion
A
CR
Chromite Reef
Vandiferous Reef
Fault
Road
Railway
River
Limit
Town
Chrome Mines
Smelters
SCHOONOORD
462 KS
Lesego
Platinum
(Phosiri)
ZWITZERLAND
473 KS
AngloPlat/Anooraq
(Ga Phasha)
INDIE 474 KS
Northern Cluster
Project Area
FISANT
LAAGTE
506 KS
AngloPlat
(Twickenham)
MR
MAGNEETSVLAAKTE
541 KS
Central Cluster
Project Area
D
DINGAANSKOP
543 KS
Jubilee
Platinum
Implats
(Marula)
MOOIHOEK
MERENSKY REEF
Upper
Group
UG2
UG1
Southern Cluster
Project Area
UPPER ZONE
MG4
PYROXENITE MARKER
Middle
Group
MAIN ZONE
MG3
MG2
MG1
LEGEND:
68
Steelpoort
LG5
Bothashoek
EASTERN
CHROME MINES
(Montrose)
Nkwe
Platinum
MARGINAL ZONE
InterAction
African Rainbow/
Angloplat
(Modikwa)
Mooihoek
HOUTBOSCH
323 KT
LG7
Lower
Group
F
GENOKAKOP
285 KT
Chromitite
Anorthosite
F
Norite
Pyroxenite
DILOKONG
7.5km
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 3
Scale:
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
!
THICKNESS
Upper Zone
Varies
Main Zone
3,900m
Upper Critical
Zone
DOMINANT LITHOGLOGY
DESCRIPTION
1,400m
Pyroxenite inter-layered with
hartzburgite and chromitite.
Critical Zone
Lower Zone
Varies ,
reaches a
maximum of
1,700m
Marginal Zone
Several
metres to
hundreds of
metres
InterAction
Corporate Reporting & Identity Specialists,
Annual Reports, Graphics
5.
LOCAL GEOLOGY
Reconnaissance mapping carried out has revealed that the farms lie in
the Main and Upper Zones of the BIC. The Critical Zone which is known
to host both PGE targets, the Merensky Reef and the UG2, lies directly
below the Main Zone.
Throughout the BIC the PGE and other mineral layers are tabular
bodies extending laterally over hundreds of square kilometres, resulting
in extensive mineral resources whose continuity has been established
over years of exploration and mining. Using exploration information
from public domain of companies surrounding the Northern Cluster, a
series of reef contours was constructed by S. Gain and used to predict
the behaviour of the mineralisation on the farms.
The two PGE layers are expected to have dips ranging between 180
west in the south-east and 300 South-Eest in the North-West under the
Northern Cluster farms.
Two diapiric structures, the Paradys and the Phoshiri domes are
thought to have deformed the Critical Zone rocks close to the outer
edges of the Northern and Central clusters, providing an uplift of the ore
host rocks closer to surface than the norm for the area. This is shown in
Figure 3 . The precise extent of the structural complexity of the area will
be a focus of the technical assessment of the area by Absolute.
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 4
69
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
FIGURE 3:SCHEMATIC E-W CROSS SECTION ILLUSTRATING THE EFFECT OF THE PHOSHIRI DOME ON THE STRATIGRAPHY
Government
Ground
Koppieskraal
E
Spelonk
2000m
LEGEND:
Upper Zone
Indie
474 Ks
Zwitzerland
473 Ks
Main Zone
Merensky Reef
UG2 Reef
Chromitite Layer
0m
Upper/Lower
Critical Zone
-2000m
Lower Zone
Marginal Zone
39km
1:100 000
FIGURE 4:SCHEMATIC E-W CROSS SECTION VIEW OF THE EASTERN BIC INCLUDING NORTHERN CLUSTER
2000m
Angloplat/anooraq
(Ga Phasha)
Zwitzerland
473 Ks
Indie
474 Ks
Waterkop
LEGEND:
Chromex
(Mecklenburg)
Upper Zone
Main Zone
mamsl
-2000m
0m
Merensky Reef
UG2 Reef
Chromitite Layer
Upper/Lower
Critical Zone
Lower Zone
Scale:
5km
Marginal Zone
TABLE 3: EXPLORATION TARGETS FOR THE NORTHERN CLUSTER AS DEDUCED FROM THE EASTERN NEIGHBOURS
PROPERTY
Bokoni Mine
Ga-Pasha PGM Project
Northern Cluster
InterAction
Corporate Reporting & Identity Specialists,
Annual Reports, Graphics
70
EXPECTED
DIPS
REEF
MR
UG2
MR 140 to 180W
UG2
MR 300SW to 180W
UG2
MR-UG2
WIDTH
GEO
GRADE
PARTING (m) (m)
RD LOSS (%) 4E (g/t)
0.80 3.44
15
4.22
0.90 4.00
20
5.23
1.17 3.44
22
4.49
390
0.74 4.00
27
6.50
>2,500
0.99 3.44
19
4.29
0.82 4.00
23
5.55
1,600
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 5
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
TABLE 4 : EXPLORATION TARGET ESTIMATE FOR THE NORTHERN CLUSTER
4.00
4.00
4.00
4.00
4.00
0.82
0.82
0.82
0.82
72.6
49.7
64.0
66.0
252.3
S - 002 S - 001
SCHOONOORD
462 KS
S - 004
ZWITZERLAND
473 KS
INDIE
474 KS
FISANT LAAGTE
506 KS
Farm Boundary
Boreholes
Scale:
3km
The total depth per hole is predicted to be in the region of about 2,000m.
All the reef drilling, sampling, core storage and logging will be carried
out in accordance with the accepted industrial QA/QC normal practices
as defined in Table 1 of the SAMREC Code.
11.
InterAction
Corporate Reporting & Identity Specialists,
Annual Reports, Graphics
500
DEPTH (m)
1000
1500
2000
SHAFT DEPTH
0
2500
Nkwe
(Inferred)
Jubilee
(Feasibility)
Project Area
Chromitite Reef
UG2 Reef
Merensky Reef
23.1
15.8
20.4
21.0
80.4
S - 003
Northern Cluster
Project Area
12.9
8.8
11.3
11.7
44.7
disp
u
port ted
ion
23
23
23
23
Steve Gain obtained geological information from Bokoni Mine for the
area. The geologic losses at Bokoni are estimated to be 20% for the
Merensky Reef and 15% for the UG-2 chromitite layer. The losses are
attributable to potholes (UG2-9% and Merensky-16%), pegmatites,
which replace the reef (<3% for both reefs), dykes (4% in both reefs),
structural and alteration features such as faults, shears, joints, veins
and alteration zones, which cause minor complications in mining.
Lesego
Platinum
(Phosiri)
5.55
5.55
5.55
5.55
Marikana
10.3
7.0
9.1
9.3
35.7
19
19
19
19
Union Richard
4.29
4.29
4.29
4.29
Amandebult #3
75.0
51.4
66.2
68.2
260.7
Northam #1
0.99
0.99
0.99
0.99
3.44
3.44
3.44
3.44
UG2
WIDTH
GRADE GEO
UG2 TOTAL
RD (m)
(Mt) 4E (g/t) LOSS (%) (Moz) (Moz)
Impala #17
RD
GEO
MR
LOSS (%) (Moz)
Amandebult
2,212
1,516
1,952
2,013
7,693
MERENSKY
GRADE
(Mt)
4E (g/t)
WIDTH
(m)
Northam #2
FARM NAME
Northern Cluster*
Schoonoord
Indie
Zwitzerland
Fisant Laagte
TOTAL
AREA
(ha)
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 6
71
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
TABLE 6: MINERAL RESERVE BY MINE/PROJECT AS AT 31ST December 2009
MINE/PROJECT
OWNERSHIP
CATEGORY
Proved
49% Anglo Platinum, 51% Anooraq Probable
Total
MERENSKY
Mt
4E PGE g/t 4E MOZ
19.0
4.53
2.9
5.1
4.14
0.6
24.1
4.44
3.5
UG2
Mt
4E PGE g/t 4E MOZ
33.1
5.47
5.7
8.6
5.31
1.4
41.6
5.44
7.1
MERENSKY
CATEGORY (Mt) 4E PGE (g/t) 4E (Moz)
Measured
24.7
5.92
4.7
Indicated
29.0
5.73
5.3
49% Anglo Platinum, 51% Anooraq
Inferred
92.0
5.55
16.3
TOTAL 145.7
5.65
26.3
OWNERSHIP
UG2
(Mt)
4E PGE (g/t) 4E (Moz)
108.8
6.75
23.7
73.9
6.82
16.1
131.2
6.78
28.6
313.9
6.78
68.4
MERENSKY
CATEGORY (Mt) 4E PGE (g/t) 4E (Moz)
Measured
8.4
4.32
1.2
Indicated
48.2
4.65
7.1
49% Anglo Platinum, 51% Anooraq
Inferred
180.0
4.45
25.7
TOTAL 236.6
4.49
34.2
OWNERSHIP
UG2
(Mt)
4E PGE (g/t) 4E (Moz)
24.9
6.50
5.1
57.3
6.56
12.0
186.7
6.48
39.0
268.9
6.50
56.1
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Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 7
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
TABLE OF CONTENTS
! Locality, Property Description And
Neighbouring Properties
! Physiography Climate And Access
! Legal Tenure And Agreements
! Regional Geology
! Local Geology
Statement
These documents comply with the Executive Summary requirements of Section 12.9 (h)
KEY FEATURES
Mr. Andy Clay, M.Sc. (Geol), M.Sc. (Min. Eng.), Dip.Bus.M. Pr.Sci.Nat., MSAIMM, FAusIMM,
FGSSA, IOD, AAPG, CIMMP.
Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA.
Compiled by:
Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA.
Effective Date :
Prepared For :
Purpose:
Sources of Information :
Business Day article, Absolute takes 60% stake in the PGE explorer Bauba, as well as reports
from the public domain of adjacent mineral properties. Property areas were obtained from Win
Deed, a Deeds and Office Enquiry website.
A site inspection was carried out on 25th February by Venmyn, S. Gain from S.Gain Consulting cc and
Personal Inspection :
Qinisele Resources personnel. The Southern and Central Clusters were visited at the time.
Reliance on Other Experts:
Bauba holds prospecting rights, in the North Eastern Bushveld Igneous Complex (BIC), over nine
farms extending over an area of approximately 56km in length and 6km in width (approximating
14,480ha). The farms have been grouped into three areas namely the Northern, Central and
PROJECT
AREA
Johannesburg
Southern Clusters. The Central Cluster is being dealt with in this report. It consists of the
Magneetsvlaakte 541KS and Dingaanskop 543KS. The combined area of the two farms covers just
Durban over 2,100ha. All the Bauba farms lie along the Leolo mountain range in the Limpopo Province
approximately 40km northwest of the Limpopo Province town of Steelpoort and 245km northeast of
Johannesburg. To the east and up-dip, the Bauba mineral assets are surrounded by several current
operating mines and development projects.
Cape Town
License Status:
Prospecting Right No. 248/2006PR and Prospecting Right No. 256/2006PR both due to expire on
the 6th July 2011.
Bauba owns the prospecting rights. These were ceded to Bauba, on 9th April 2007, by King
Ownership Details:
Moruthane Ben Sekhukhune and Motubatse Ben Bokgobela representing Sekhukhune Rhyne
Thulare for and on behalf of the Bapedi Nation. Absolute Holdings is in the process of acquiring 60%
of the PGE explorer, Bauba.
Topography and Climate:
The Central Cluster lies in rugged terrain with elevations lying between 980m and 1200m. The
elevation difference between the two farms forming the Central Cluster is about 220m. The climate
of the area is typical of sub-tropical Highveld with warm moist summers and cool dry winters. The
rainfall on the escarpments is higher at 700mm compared to about 500mm in the valleys.
Temperatures recorded at Steelpoort vary between 300C and 17.6 0C in January and 21.60C to 3.8 0C
in July. Extremes of 40 0C and -2.3 0C have also been recorded.
The farms are relatively easy to access but field camps will have to be constructed. Access roads will
The Bauba prospects are located on the North Eastern Limb of the BIC, which lies on the eastern
be cut with the aid of bulldozers and water for drilling will have to be taken to site using bowsers.
portion of the world's largest layered igneous intrusion and known to host more that 80% of the
world's PGE's and associated base and precious metal deposits. The farms lie down dip of existing
mines and exploration projects. Reconnaissance mapping carried out to-date shows that the farms
Northern Limb
Eastern Limb
Mokopane
targets, the Merensky Reef and the UG-2 Chromitite, lies directly below the Main Zone. These two
Western Limb
Steelpoort
PROJECT
AREA
Rustenburg
SCALE:
layers are expected to be at least 1,400m below surface and 400m apart, with dips ranging between
110 W and 120 W in the Central Cluster. However, in the Northern to Central Cluster, two diapiric
Middelburg
Pretoria
InterAction
lie in the Main and Upper Zones of the BIC. The Critical Zone which is known to host both PGE
100km
structures, the Paradys and the Phoshiri domes are thought to have deformed the Critical Zone rocks
close to their outer edges, hence uplifting the ore hosting rocks closer to surface.
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 8
73
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
2.
FIGURE 1: LOCATION MAP SHOWING THE BAUBA CENTRAL CLUSTER ON THE EASTERN BIC
FIGURE 2 : PICTURE ILLUSTRATING THE
ACCESSIBILITY OF THE CENTRAL CLUSTER
Anooraq
(Bokoni)
Northern Cluster
Project Area
SCHOONOORD
462 KS
Lesego
Platinum
(Phosiri)
disp
port uted
ion
INDIE
474 KS
ZWITZERLAND 473 KS
AngloPlat/Anooraq
(Ga Phasha)
AngloPlat
(Twickenham)
FISANT LAAGTE 506 KS
MAGNEETSVLAAKTE 541 KS
Jubilee
Platinum
Central Cluster
Project Area
Implats
(Marula)
DINGAANSKOP 435 KS
MOOIHOEK
GROOTVYGENBOOM
Anglo Platinum Operating Mine
204 KT
Anglo Platinum Prospecting
E
Right/Option
Anooraq/Anglo Platinum
Southern Cluster
Project Area
Operating Mine
GENOKAKOP
Bauba Project Areas
285 KT
(Absolute Holdings Ltd)
Implats/Misc Operating Mine
HOUTBOSCH
African Rainbow/Anglo Platinum
323 KT
Operating Mine
Jubilee
Lesego
Nkwe Platinum
TABLE 1: LEGAL TENURE
Anooraq
FARM
Chrome Mines
COUNTRY PROVINCE CLUSTER
NAME
Smelters
South
Africa
Limpopo
DILOKONG
F
African Rainbow/
Angloplat
(Modikwa)
74
Bothashoek
EASTERN
CHROME MINES
(Montrose)
Nkwe
Platinum
FARM
No.
Scale:
CR
7.5km
AREA
(ha)
Magneetsvlaakte 541KS
1,129
Dingaanskop
1,036
543KS
APPLICATION PROSPECTING
NAME
RIGHT No.
Bauba A
248/2006PR
Hlabirwa
Mining
Investments 256/2006PR
(Pty) Limited
UG2 Reef
Merensky Reef
Chromite Reef
Fault
Road
Railway
River
Limit
Town
Cross Section Lines
DATE
ISSUED
EXPIRY
DATE
7-Jun-06
6-Jul-11
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 9
MR
Steelpoort
Central
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Mooihoek
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
Both Rights are due to expire on the 6th of July 2011. Absolute has now
entered into a binding agreement with Bauba where Absolute will hold a
60% direct and indirect share in Bauba (Table 1).
Anooraq
(Bokoni)
Lesego
Platinum
(Phosiri)
A
A
CR
VMR
Chromite Reef
Vandiferous Reef
Fault
Road
Railway
River
Limit
Town
Chrome Mines
Smelters
SCHOONOORD
462 KS
INDIE
474 KS
ZWITZERLAND
473 KS
Northern Cluster
Project Area
AngloPlat/Anooraq
(Ga Phasha)
FISANT
LAAGTE
506 KS
AngloPlat
(Twickenham)
MR
MAGNEETSVLAAKTE
541 KS
Central Cluster
Project Area
D
DINGAANSKOP
543 KS
Jubilee
Platinum
Implats
(Marula)
MOOIHOEK
MERENSKY REEF
Upper
Group
UG2
UG1
Southern Cluster
Project Area
UPPER ZONE
MG4
PYROXENITE MARKER
Middle
Group
MAIN ZONE
MG3
MG2
MG1
LEGEND:
Steelpoort
LG5
REGIONAL GEOLOGY
The Bauba prospects are located on the eastern limb of the BIC as
shown Figure 3. The limb forms part of three layered mafic-ultramafic
bodies, defined as the northern, western and eastern limbs. These form
an ellipse in plan, some 200km by 370km in extent with granites and
felsic volcanic in the central and southern regions. The Bushveld
Complex exhibits remarkably consistent layering that can be correlated
extensively throughout the geologic expression of the whole complex.
Figure 3 portrays the plan view as well as the vertical representation of
the stratigraphy of the Bauba Project area in relation to the geology of
the Eastern BIC. The units in Table 2 are the units as they have been
described by S. Gain.
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Bothashoek
EASTERN
CHROME MINES
(Montrose)
Nkwe
Platinum
MARGINAL ZONE
4.
African Rainbow/
Angloplat
(Modikwa)
Mooihoek
HOUTBOSCH
323 KT
LG7
Lower
Group
F
GENOKAKOP
285 KT
Chromitite
Anorthosite
F
Norite
Pyroxenite
DILOKONG
Scale:
7.5km
In places the rocks are pegmatoidal and can form pipes and
segregations. Later dolerite dykes intruded into faults. The Critical Zone
contains the main economic targets namely the Merensky Reef and the
UG2 chromitite layer.
The Merensky Cyclic Unit and Merensky Reef
The Merensky Cyclic Unit occurs close to the top of the Critical Zone. At
Winnaarshoek this unit consists of a 2-5 meter thick feldspathic
orthopyroxenite that is overlain by norite-leuconorite, spotted
anorthosite and then mottled anorthosite. A similar stratigraphic
sequence is described on Nkwe's Garatau and Maandagshoek. The
Merensky pyroxenite is typically medium-grained, brownish-gray, and
can be described as feldspathic orthopyroxenite.
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 10
75
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
THICKNESS
Upper Zone
Varies
Main Zone
3,900m
Upper Critical
Zone
DOMINANT LITHOGLOGY
DESCRIPTION
1,400m
Critical Zone
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LOCAL GEOLOGY
Reconnaissance mapping carried out has revealed that the farms lie in
the Main and Upper Zones of the BIC. The Critical Zone which is known
to host both PGE targets, the Merensky Reef and the UG2, lies directly
below the Main Zone.
Throughout the BIC the PGE and other mineral layers are tabular
bodies extending laterally over hundreds of square kilometres, resulting
in extensive mineral resources whose continuity has been established
over years of exploration and mining.
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 11
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
Using exploration information from public domain of companies
surrounding the Bauba properties a series of reef contours were
constructed by S. Gain and used to predict the behaviour of the
mineralisation on the Central Cluster. These showed that the reefs
should have shallowed to dips of about 11 to 12to the west compared
to the Northern Cluster.
Merensky and UG2 mines in the area and the extent to which Absolute's
strategy to explore the deeper extension of the existing operation is
technically feasible.
7.
The Central Cluster area is traversed by faults and dykes and has a
known presence of unconformable pegmatoids on adjacent properties.
Destructive intrusions in the form of IRUP (iron rich replacement
pegmatites) are recorded on the adjacent Marula Platinum property.
These together with potholes have been known to disturb the Critical
Zone on the Eastern limb.
8.
Depth of Mineralisation
The first intersections of the Merensky are expected to be between
1,400m and 2,400m below surface under the Central Cluster and the
parting between the Merensky and UG2 is expected to be 400m.
Central
Cluster
Fernkloof
W
C
Quartzhill
2000m
FIGURE 4 : SCHEMATIC E-W CROSS SECTION OF THE EASTERN BIC INCLUDING THE
CENTRAL CLUSTER
Tjate
Twickenham
LEGEND:
E
D
Implats
(Marula)
Main Zone
mamsl
0m
-2000m
6.
EXPLORATION TARGETS
Surrounding properties and projects were studied and used to predict
the resource parameters for the Central Cluster target area. Information
was obtained from reports by S. Gain, Qinisele internal reports,
Snowden as well as projects' and mines' reports posted on the public
domain. The summary of these is shown in Table 3.
4,8km
Merensky Reef
UG2 Reef
Chromitite Layer
Lower Zone
Marginal Zone
5km
Scale:
Upper/Lower
Critical Zone
1:100 000
TABLE 3: EXPLORATION TARGETS FOR THE CENTRAL CLUSTER AS DEDUCED FROM THE EASTERN NEIGHBOURS
EXPECTED
DIPS
REEF
0
MR
12 WSW
UG2
MR
160W
UG2
MR
11 0 to 120W
UG2
PROPERTY
Tjate Project
Twickenham Mine
Central Cluster
1,400
MR-UG2
WIDTH
GEO
GRADE
MAX PARTING (m) (m)
RD LOSS (%) 4E (g/t)
900
1.01 2.93
25
4.00
400
0.98 3.85
30
6.00
1.00
5.04
5.77
2,400
1.01 2.93
25
4.52
0.98 3.85
30
5.89
FARM NAME
Central Cluster*
Magnetsvlakte
Dingaanskop
TOTAL
AREA
(ha)
RD
1,129 3.39
1,036 3.39
2,164
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WIDTH
(m)
1.01
1.01
MERENSKY
GRADE
(Mt)
4E (g/t)
38.5
35.3
73.7
4.52
4.52
GEO
MR
LOSS (%) (Moz)
25
25
UG2
WIDTH
GRADE GEO
UG2 TOTAL
RD (m)
(Mt) 4E (g/t) LOSS (%) (Moz) (Moz)
5.5 3.85
5.1 3.85
10.6 3.85
0.98
0.98
42.6
39.1
81.7
5.89
5.89
30
30
8.0
7.3
15.3
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 12
77
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
Central Cluster
Project Area
Project Area
Chromitite Reef
UG2 Reef
Merensky Reef
Farm Boundary
Boreholes
MT - 001
MAGNEETSVLAAKTE
541 KS
MT - 002
MT - 003
Jubilee
Platinum
MT - 004
DINGAANSKOP
543 KS
Scale:
3km
Nkwe
Platinum
Tjate Project
The project area lies down-dip between Twickenham and the Central
Cluster and is owned by Jubilee. It consists of these farms; Tjate 249,
Fernkloof 539 and Quartzhill 542. Diamond drilling to date has
intersected both reefs. Snowden reports that the Merensky has been
intersected at depths between 722 to 900m and the UG2 between
1,076 and 1,290m. The average separation in the area is about 400m.
The two reefs are reported to be similar to the Twickenham ones. The
entire sequence of rocks at Tjate strikes south-southeast and dips at
12 south-westerly.
10.
A study was carried out to show the shaft depths of existing mines and
expected shaft depths of future mines. The Bauba Clusters lie in the
middle range as shown in Figure 7.
OWNERSHIP
100% Anglo Platinum
CATEGORY (Mt)
Proved
Probable
TOTAL
MERENSKY
4E PGE (g/t) 4E (Moz)
UG2
(Mt)
4E PGE (g/t) 4E (Moz)
1.0
4.99
0.2
73.5
4.96
11.7
74.5
4.96
11.9
ST
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78
OWNERSHIP
100% Anglo Platinum
MERENSKY
CATEGORY (Mt) 4E PGE (g/t) 4E (Moz)
Measured
23.5
5.02
3.80
Indicated
29.9
5.20
5.00
Inferred
108.0
5.00
17.40
TOTAL 161.4
5.04
26.20
UG2
(Mt)
4E PGE (g/t) 4E (Moz)
5.9
6.34
1.2
25.8
6.21
5.1
133.8
5.66
24.3
165.5
5.77
30.7
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 13
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
11.
Nkwe
(Inferred)
Jubilee
(Feasibility)
Marikana
Union Richard
Amandebult #3
Northam #1
Impala #17
Amandebult
500
1000
Northam #2
DEPTH (m)
1500
SHAFT DEPTH
0
The reefs have partings in excess of 350m and this may have advantages in
that the two reefs can be co-extracted with minimum effect on mining
sequences and geotechnical properties between the reefs. as part of the
second generation group of mines, the Central Cluster would be considered
an averagely deep mine when the second generation mines come into
production in the future.
Though collectively the Clusters are considered potentially deep mines,
South Africa has the capabilities and the technology to mine beyond
2,000m to 4,000m below surface as evidenced by the current deep mining
in the Witwatersrand gold mines.
13. REFERENCE TO RISK IN THE FULL CPR
As of the effective date, Venmyn is not aware of any significant risk that
could affect Absolute's business plan and production plans other than the
normal risks associated with a mining of the PGE's, construction and
operation of a PGE processing plant as detailed in Section 18 of the CPR.
2500
2000
12.
The Central Cluster is situated within a prime segment of the Eastern Limb
of the BIC, where numerous neighbouring companies are prospecting and
successfully mining PGE's from the Merensky Reef and UG2. The
proximity of the Central Cluster to the Tjate, well drilled and explored
properties, would expedite the understanding of the geology and
mineralisation in this area.
The exploration approach for the project is systematic and appropriate for
the style of mineralisation; and the estimated target is of a sufficient quantity
to support the exploration programme being suggested. Prospecting rights
are still valid and the company should initiate exploration. Absolute has
already got plans in place to explore the target fully.
InterAction
Corporate Reporting & Identity Specialists,
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Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 14
79
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
TABLE OF CONTENTS
! Locality, Property Description And
Neighbouring Properties
! Physiography Climate And Access
! Legal Tenure And Agreements
! Regional Geology
! Local Geology
Statement
These documents comply with the Executive Summary requirements of Section 12.9 (h)
KEY FEATURES
Mr. Andy Clay, M.Sc. (Geol), M.Sc. (Min. Eng.), Dip.Bus.M. Pr.Sci.Nat., MSAIMM, FAusIMM, FGSSA, IOD,
AAPG, CIMMP.
Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA
Compiled by:
Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA
Effective Date :
Prepared For :
Purpose:
This is an Independent assessment and verification of Bauba's PGE prospective properties on behalf of
Absolute Holdings. Absolute's strategic objective is to initially build a 0.35Moz p.a. PGE mine within the next
10 years and ramp it up to 1 Moz p.a. within 20 years. The Company has entered into a binding agreement
with Bauba A Hlabirwa Mining Investments (Pty) Limited (Bauba) whereby Absolute will acquire a 60%
share in the PGE explorer.
Technical Reports as supplied by Qinisele Resources including Press releases of 16th February 2010
Sources of Information :
Business Day article, Absolute takes 60% stake in the PGE explorer Bauba, as well as reports from the
public domain of adjacent mineral properties. Property areas were obtained from Win Deed, a Deeds and
Office Enquiry website.
Personal Inspection :
A site inspection was carried out on 25th February by Venmyn, S. Gain from Gain Consulting cc and Qinisele
Bauba holds prospecting rights, in the North Eastern Bushveld Igneous Complex (BIC), over nine farms
Resources personnel. The Southern and Central Clusters were visited at the time.
extending over an area of approximately 56km in length and 6km in width (approximating 14,480ha). The
farms have been grouped into three areas namely the Northern, Central and Southern Clusters. The
PROJECT
AREA
Johannesburg
Durban
Southern Cluster is being dealt with in this report. It consists of Groot Vygenboom 284 KT, Genokakop
285KT and Houtbosch 323 T.The total area covers just over 4,626ha. All the Bauba farms lie along the Leolo
mountain range in the Limpopo Province approximately 40km northwest of the Limpopo Province town of
Steelpoort and 245km northeast of Johannesburg. To the east and up-dip, the Bauba mineral assets are
surrounded by several current operating mines and development projects.
Cape Town
License Status:
Prospecting Right No. 256/2006PR due to expire on the 6th July 2011.
Ownership Details:
Bauba owns the prospecting rights. These were ceded to Bauba, on 9th April 2007, by King Moruthane Ben
Sekhukhune and Motubatse Ben Bokgobela representing Sekhukhune Rhyne Thulare for and on behalf of
the Bapedi Nation. Absolute Holdings is in the process of acquiring 60% of the PGE explorer, Bauba.
The Southern Cluster lies in rugged terrain inter-spaced with flat valleys. Elevations lie between 1,487m in
the valleys and 1,886m on the peaks. The elevation difference between the three farms forming the Southern
Cluster is about 400m. The climate of the area is typical of sub-tropical Highveld with warm moist summers
and cool dry winters. The rainfall on the escarpments is higher at 700mm compared to about 500mm in the
valleys. Temperatures recorded at Steelpoort vary between 300C and 17.6 0C in January and 21.60C to 3.8 0C
in July. Extremes of 40 0C and -2.3 0C have also been recorded.
The farms are relatively easy to access but field camps will have to be constructed. Access roads will be cut
The Bauba prospects are located on the North Eastern Limb of the BIC, which lies on the eastern portion of
with the aid of bulldozers and water for drilling will have to be taken to site using bowsers.
the world's largest layered igneous intrusion and known to host more that 80% of the world's PGE's and
associated base and precious metal deposits. The farms lie down dip of existing mines and exploration
Northern Limb
Eastern Limb
Mokopane
Western Limb
Steelpoort
PROJECT
AREA
Rustenburg
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80
Chromitite, lies directly below the Main Zone. These two layers are expected to be at least a 1,050m below
o
surface and between 350 to 365m apart, with dips ranging between 7 W and 8 W in the Southern Cluster.
Middelburg
Pretoria
SCALE:
projects. Reconnaissance mapping carried out to-date shows that the farms lie in the Main and Upper Zones
of the BIC. The Critical Zone which is known to host both PGE targets, the Merensky Reef and the UG-2
100km
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 15
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
1.
2.
FIGURE 1: LOCATION MAP SHOWING THE BAUBA SOUTHERN CLUSTER ON THE EASTERN BIC
FIGURE 2. PICTURE TAKEN ON GENOKOP FARM
SHOWING THE ROAD THAT WILL BE USED TO
ACCESS THE SOUTHERN CLUSTER
Anooraq
(Bokoni)
Northern Cluster
Project Area
SCHOONOORD
462 KS
Lesego
Platinum
(Phosiri)
disp
port uted
ion
AngloPlat/Anooraq
(Ga Phasha)
INDIE 474 KS
ZWITZERLAND 473 KS
AngloPlat
(Twickenham)
FISANT LAAGTE 506 KS
MAGNEETSVLAAKTE 541 KS
Jubilee
Platinum
Central Cluster
Project Area
EASTERN CHROME
INES
(Clapham)
Implats
(Marula)
DINGAANSKOP 435 KS
MOOIHOEK
GROOTVYGENBOOM
Anglo Platinum Operating Mine
204 KT
Anglo Platinum Prospecting
E
Right/Option
Anooraq/Anglo Platinum
Southern Cluster
Project Area
Operating Mine
GENOKAKOP
Bauba Project Areas
285 KT
(Absolute Holdings Ltd)
Implats/Misc Operating Mine
HOUTBOSCH
African Rainbow/Anglo Platinum
323 KT
Operating Mine
Jubilee
Lesego
Nkwe Platinum
TABLE 1: LEGAL TENURE
Anooraq
FARM
Chrome Mines
COUNTRY PROVINCE CLUSTER
NAME
Smelters
South
Africa
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Southern
DILOKONG
Mooihoek
African Rainbow/
Angloplat
(Modikwa)
EASTERN
CHROME MINES
(Montrose)
Nkwe
Platinum
FARM
No.
Bothashoek
MR
CR
Steelpoort
7.5km
Scale:
AREA
(ha)
Grootvygenboom 284KT
1,610
Genokakop
285KT
1,304
Houtbosch
323KT
1,712
APPLICATION PROSPECTING
NAME
RIGHT No.
Bauba A
Hlabirwa
Mining
Investments
(Pty) Limited
256/2006PR
UG2 Reef
Merensky Reef
Chromite Reef
Fault
Road
Railway
River
Limit
Town
Cross Section Lines
DATE
ISSUED
EXPIRY
DATE
7-Jun-06
6-Jul-11
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herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 16
81
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
REGIONAL GEOLOGY
The Bauba prospects are located on the eastern limb of the BIC as
shown in Figure 3. The limb forms part of three layered maficultramafic bodies, defined as the northern, western and eastern limbs.
These form an ellipse in plan, some 200km by 370km in extent with
granites and felsic volcanic in the central and southern regions.
The BIC exhibits remarkably consistent layering that can be
correlated extensively throughout the geologic expression of the
whole complex. Figure 3 portrays the plan view as well as the vertical
representation of the stratigraphy of the Bauba Project area in relation
to the geology of the Eastern BIC. The units in Table 2 are the units as
they have been described by S. Gain.
Anooraq
(Bokoni)
Lesego
Platinum
(Phosiri)
A
A
CR
VMR
Chromite Reef
Vandiferous Reef
Fault
Road
Railway
River
Limit
Town
Chrome Mines
Smelters
SCHOONOORD
462 KS
INDIE
474 KS
ZWITZERLAND
473 KS
Northern Cluster
Project Area
AngloPlat/Anooraq
(Ga Phasha)
FISANT
LAAGTE
506 KS
AngloPlat
(Twickenham)
MR
MAGNEETSVLAAKTE
541 KS
Central Cluster
Project Area
D
DINGAANSKOP
543 KS
Jubilee
Platinum
Implats
(Marula)
MOOIHOEK
MERENSKY REEF
Upper
Group
UG2
UG1
Southern Cluster
Project Area
UPPER ZONE
MG4
PYROXENITE MARKER
Middle
Group
MAIN ZONE
MG3
MG2
MG1
DILOKONG
F
E
GENOKAKOP
285 KT
LEGEND:
African Rainbow/
Angloplat
(Modikwa)
Mooihoek
Bothashoek
EASTERN
CHROME MINES
(Montrose)
Chromitite
Anorthosite
F
HOUTBOSCH
323 KT
Norite
Pyroxenite
LG7
Lower
Group
Nkwe
Platinum
MARGINAL ZONE
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Steelpoort
LG5
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D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 17
Scale:
7.5km
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
This work, together with diamond drilling, has
allowed for the production of a map in which the
general structural setting is defined. S. Gain
outlines that this work has determined the
following:-
THICKNESS
Upper Zone
Varies
Main Zone
3,900m
Upper Critical
Zone
DOMINANT LITHOGLOGY
DESCRIPTION
LOCAL GEOLOGY
Reconnaissance mapping carried out has revealed that the farms lie in
the Main and Upper Zones of the BIC. The Critical Zone which is
known to host both PGE targets, the Merensky Reef and the UG2, lies
directly below the Main Zone.
Throughout the BIC the PGE and other mineral layers are tabular
bodies extending laterally over hundreds of square kilometres,
resulting in extensive mineral resources whose continuity has been
established over years of exploration and mining. Using exploration
information from public domain of companies surrounding the
Southern Cluster, a series of reef contours was constructed by S. Gain
and used to predict the behaviour of the mineralisation on the farms.
These showed that both the MR and the UG2 reefs should have
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D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 18
83
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
6.
The southern area of the Eastern BIC is traversed by faults and dykes
and has a known presence of unconformable pegmatoids on adjacent
properties. These together with potholes have been known to disturb
the Critical Zone on the Eastern Limb. The precise extent of the
structural complexity of the area will be a focus of the technical
assessment of the area by Absolute.
5.
EXPLORATION TARGETS
Surrounding properties and projects were studied and used to predict
the resource parameters for the Southern Cluster target area.
Information was obtained from reports by S. Gain, Qinisele internal
reports, Snowden as well as projects and mines on the public domain.
The summary of these is shown in Table 3.
The parameters were then used to estimate a reconnaissance
estimate for the Southern Cluster in table 4. The areas used are as
given through the Deeds' office website.
7.
Depth of Mineralisation
The Merensky layer is expected to be at least 1,050m to 2,150m below
surface in the Southern Cluster and the parting between the Merensky
and UG2 is expected to be between 350 and 365m. Of the three
Clusters, mineralisation should be closest to surface under the
Southern Cluster.
FIGURE 4: SCHEMATIC E-W CROSS SECTION OF THE SOUTHERN CLUSTER ILLUSTRATING THE MR, UG2 AND CHROMITITE LAYERS IN
THE EASTERN BIC
W
Main Zone
Upper/Lower
Critical Zone
Genokakop
285 kt
Groot
Vygenboom
ASA Metals
(Dilo Kong Chrome)
Angloplats
(Modikwa)
Nkwe
mamsl
Merensky Reef
UG2 Reef
Chromitite Layer
2000m
LEGEND:
Upper Zone
0m
Marginal Zone
-2000m
Lower Zone
0
3,9km
5km
Scale:
1:100 000
TABLE 3: EXPLORATION TARGETS FOR THE SOUTHERN CLUSTER AS DEDUCED FROM THE EASTERN NEIGHBOURS
Modikwa
Nkwe
Southern Cluster
MR-UG2
WIDTH
GEO
GRADE
PARTING (m) (m)
RD LOSS (%) 4E (g/t)
1.00
4.43
0.58 3.72
30
5.97
700
1.00 3.35
17
4.74
350-365
1,100
1.20 3.75
17
5.44
2,150
1.00 3.35
17
4.59
400
0.89 3.75
24
5.71
EXPECTED
DIPS
REEF
MR
100W
UG2
MR
UG2
MR
70 to 8 0W
UG2 70 to 8 0W
PROPERTY
0 to 350
0 to 700
1,050
AREA
(ha)
1,610
1,304
1,712
4,626
RD
3.35
3.35
3.35
3.35
WIDTH
(m)
1.00
1.00
1.00
1.00
Merensky
GRADE
(Mt)
4E (g/t)
53.9
43.7
57.4
155.0
GEO
LOSS (%)
4.59
4.59
4.59
4.59
17%
17%
17%
17%
MR
(Moz)
RD
7.89
6.39
8.39
22.67
3.74
3.74
3.74
3.74
WIDTH
(m)
0.89
0.89
0.89
0.89
(Mt)
53.5
43.4
56.9
153.8
UG2
GRADE
4E (g/t)
5.71
5.71
5.71
5.71
GEO
LOSS (%)
UG2
(Moz)
24%
24%
24%
24%
9.8
7.9
R 10
28.05
TOTAL
Moz
17.7
14.3
18.77
50.7
*The potential quantity, quality and content as expressed above are conceptual in nature and there has been insufficient exploration to define Mineral Resources and it is unclear if further
exploration will result in the determination of a Mineral Resource.
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D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 19
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
LEGEND
GROOTVYGENBOOM
204 KT
Project Area
Chromitite Reef
UG2 Reef
Merensky Reef
Farm Boundary
Boreholes
BAUBA - 002
BAUBA - 003
BAUBA - 006
African Rainbow/
Angloplat
(Modikwa)
BAUBA - 007
BAUBA - 001
GENOKAKOP
285 KT
BAUBA - 005
Scale:
BAUBA-001
3km
Southern Cluster
Project Area
8.
0
HOUTBOSCH
323 KT
Scale:
3km
These holes should go at least 1m into the footwall of the reef. S. Gain
has reviewed the Snowden work and has proposed starting with
seven exploration boreholes (BAUBA-001 to BAUBA-007) in the
Southern Cluster. A total of about 14,000m is expected to be drilled
initially. The approximate drilling positions are shown in Figure 5.
9.
10 to the west. The UG2 gently undulates with amplitudes of less than
2m. This phenomenon is pervasive throughout the mine. Snowden
records a UG2 seam width of 0.60m.
SOUTHERN CLUSTER No. OF DEPTH PERTOTAL COST ZAR (m) COST ZAR (m)
COST ITEM
HOLES HOLE (m) METRES EXCL VAT
INCL VAT
Geology Staff
2.35
2.68
Road building
3.50
3.99
Diamond Drilling
19.25
21.95
7
2,000
14,000
Analytical costs
1.52
1.73
other
1.13
1.29
TOTAL
27.75
31.64
The exact positions of the rest of the boreholes will be determined after
geologic mapping and ground magnetometer surveys. The depth per
hole is expected not to exceed 2,000m.
Nkwe Platinum
Nkwe properties lie due east and up-dip of the Southern Cluster.
Diamond drilling has been carried out and over 37km worth of drilling
has been recorded. Both reefs outcrop to the east and have been
intersected at depths of no more than 700m for the Merensky and no
more than 1,100m for the UG2.
All the reef drilling, sampling, core storage, logging and database
management will be carried out in accordance with the accepted
industrial QA/QC normal practices as defined in Table 1 of the
SAMREC Code.
TABLE 6: MINERAL RESOURCE BY MINE/PROJECT AS AT 31ST December 2009
MINE/PROJECT
OWNERSHIP
CATEGORY (Mt)
Proved
Probable
TOTAL
MERENSKY
4E PGE (g/t) 4E (Moz)
UG2
(Mt)
4E PGE (g/t) 4E (Moz)
21.4
5.02
3.4
26.8
4.87
4.2
48.2
4.94
7.6
OWNERSHIP
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MERENSKY
CATEGORY (Mt) 4E PGE (g/t) 4E (Moz)
Measured
18.0
2.94
1.6
Indicated
54.0
2.73
4.8
Inferred
136.8
2.65
11.6
TOTAL 208.8
2.70
18.0
UG2
(Mt)
4E PGE (g/t) 4E (Moz)
54.2
5.84
10.2
94.8
5.88
17.8
75.6
6.19
15.0
224.6
5.97
43.0
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D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 20
85
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th
As at 14 April 2010
On the Garatau reef widths have been recorded by Snowden as 2.42m
up to a depth of 350m for the Merensky and 0.79m to a depth 700m for
the UG2. On the Eerste Geluk farm the Merensky outcrops and
averages about 2.18m and the UG2 0.77m at a depth of about 300m.
The proximity of the well drilled Nkwe properties to the Southern Cluster will
expedite the understanding of the geology and mineralisation. In this area,
the mineral intersections are expected to be closest to surface compared to
the other two Clusters.
Though collectively the Clusters are considered potentially deep mines,
South Africa has the capabilities and the technology to mine down to
4,000m below surface as evidenced by the current deep mining in the
Witwatersrand gold mines.
Nkwe
(Inferred)
Jubilee
(Feasibility)
Marikana
Union Richard
Amandebult #3
Northam #1
Impala #17
Amandebult
500
1000
Northam #2
DEPTH (m)
2500
2000
1500
SHAFT DEPTH
0
Neither Venmyn, its staff, nor associates have or have had any interest in
this project capable of affecting their ability to give an unbiased opinion and
have not and will not, receive any pecuniary or other benefits in connection
with this assignment, other than normal consulting fees. Absolute Holdings
Limited has warranted in writing that it has openly provided all material
information to Venmyn, which, to the best of its knowledge and
understanding, is complete, accurate and true.
The Southern Cluster has some relatively flat and easily accessible areas
that require the least amount of preparation in comparison to the other
Clusters.
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D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 21
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Bauba Project Of The Bauba Mineral Platinum Properties For Absolute Holdings
EXPLORATION TARGET*
Northern Cluster
Merensky
UG2
Merensky
UG2
Merensky
UG2
GRAND TOTAL
Central Cluster
Southern Cluster
Moz
3 PGE+Au
35.70
44.69
10.61
15.33
22.67
28.05
157.05
The Absolute transaction results in the following share payments amounting to a total of ZAR445.57m expressed as follows: SHARES
68,124,600
21,189,600
89,314,200
Payment Shares
Additional
Total
Current Value
ZAR
ZAR/SHARE
340,623,000
5.00
105,948,000
5.00
446,571,000
CURRENT PRICE
5.20
5.20
464,433,840
The Exploration Target Resources were used to determine the transaction value and Venmyn provided the following market related value per PGE comparison
values resulting in a total of ZAR573.23m: 3 PGE+Au
Moz
80.39
25.94
50.72
7.3
PROJECT
Northern Cluster
Central Cluster
Southern Cluster
Exchange Rate (ZAR/USD)
* Low value used for current value estimate.
LOWER
0.50
0.50
0.50
UNIT VALUE
(USD/oz)
UPPER
1.00
1.00
1.00
PRE-SPEND PRE-SPEND
RAISE
RAISE
MID
(USDm) *
(ZARm) *
0.75
40.19
293.41
0.75
12.97
94.68
0.75
25.36
185.14
Total
78.52
573.23
UPSIDE
POTENTIAL
(ZARm)
586.81
189.36
370.28
1,146.45
For comparison the following table outlines six relevant transactions used by Venmyn to value the Bauba properties that occurred in the platinum industry,
obtained from public domain documentation, between August 2007 and October 2009:COMPARABLE ARM'S LENGTH PLATINUM INDUSTRY TRANSACTIONS
TRANSACTION
DATE
VALUE
(USDm)
Jan-08
Sep-09
432.00
388.12
Oct-09
Jun-09
Jun-09
Aug-07
119.46
47.67
328.67
928.48
MEASURED
(Moz)
INDICATED
(Moz)
25.76
9.72
27.74
0.40
20.02
INFERRED
(Moz)
UNIT VALUE
(USD/oz)
33.70
1.53
12.82
10.49
22.33
5.30
48.35
94.00
5.35
8.36
3.42
9.88
Venmyn maintains a comprehensive database of platinum transactions and unit market capitalisations of platinum companies, which is continually updated. This
information is collated to produce a Platinum Valuation Curve and is illustrated in the platinum curve. The curve which demonstrates the range of indicative
market-related values of in situ USD/oz attributed to the different categories of Mineral Resource and Mineral Reserve.
The Comparative Value per resource ounce was calculated upon the basis of Venmyn's database of historical PGE transactions within the southern African
context. Therefore, at this stage the value of the Bauba properties is ZAR573.23m or USD0.50/oz.
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D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 22
87
EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Bauba Project Of The Bauba Mineral Platinum Properties For Absolute Holdings
100.00
10.00
1.00
2
3
1
USD/oz
0.50
1.00
0.75
1 LOW COMPARATIVE
2 HIGH COMPARATIVE
3 PREFERRED VALUE
0.10
0.5
1.5
2.5
COST APPROACH
Classification
June 2009 Market Cap
3.5
4.5
5.5
The SAMVAL Code definition states that the cost approach relies on historical and/or future expenditure on the Mineral Asset. Unfortunately, the cost approach
cannot be applied at this stage as no cash has transacted.
VALUATION SUMMARY AND CONCLUDING OPINION
The Absolute Bauba transaction is essentially a straight paper deal reflecting in an underlying market cap per ounce method and the equity purchase method
which are both part of the market approach. Absolute has managed to prepare the basis of the new PGE business on a relatively low USD0.50oz basis. Providing
the company exploration spend is systematically successful in moving Exploration Target resources into properly quantified SAMREC compliant mineral
resources the resources value should move up the value curve as shown in the valuation graph. Where the upside will settle will be dependent on demonstrating
the true value of the company's strategic drivers in the BIC
CONCLUSIONS
The global mineral resources market is experiencing unusual and exceptional circumstances, with commodity prices reaching record levels. This is particularly
relevant for PGE's and this has led to a significant revival of interest in the exploration of deeper mineral resource in the BIC. Absolute has acquired deeper level
PGE mineral resources in the Eastern BIC and needs to spend exploration monies to move the value proposition up the value curve. Venmyn will assist in the
future to assess the levels of statistical confidence that new borehole results generate for both the Merensky Reef and the UG2 so that the move towards
generating Indicated Resources and then Probable Reserves for commercial exploitation can be achieved.
COMPETENT PERSONS DECLARATION
Venmyn is an independent advisory company. Its consultants, have extensive experience in preparing competent persons', technical advisors' and valuation
reports for mining and exploration companies. Venmyn's advisors have, collectively, more than 75 years of experience in the assessment and evaluation of mining
projects and are members in good standing of appropriate professional institutions. The signatories, advisors and associates to this report are qualified to express
their professional opinions on the values of the mineral assets described. To this end, Competent Persons and Competent Valuators Certificates are presented in
the full CPR.
Neither Venmyn, its staff, nor associates have or have had any interest in this project capable of affecting their ability to give an unbiased opinion and have not and
will not, receive any pecuniary or other benefits in connection with this assignment, other than normal consulting fees. Absolute Holdings Limited has warranted in
writing that it has openly provided all material information to Venmyn, which, to the best of its knowledge and understanding, is complete, accurate and true.
Venmyn have prepared this Section 12 Executive Summary from the Independent Competent Persons' Report on the Northern Cluster of the Bauba Mineral
Platinum Properties for Absolute Holdings Limited and state that the Executive Summary is a true reflection of the full CPR.
REFERENCE TO RISK IN THE FULL CPR
As of the effective date, Venmyn is not aware of any significant risk that could affect Absolute's business plan and production plans other than the normal risks
associated with a mining of the PGE's, construction and operation of a PGE processing plant as detailed in Section 18 of the CPR.
MR. ANDY CLAY
M.Sc.(Geol), M.Sc.(Min. Eng.), Dip.Bus.M.,
Pr.Sci.Nat., MSAIMM, FAusIMM, FGSSA,
IOD, AAPG, CIMMP.
MANAGING DIRECTOR
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D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 23
C. A. TAYLOR
B.Sc.Hons (Geol),
Pr Sci Nat, MGSSA, MGASA,
MINERAL PROJECT ADVISOR
ANNEXURE 9
LOCATION MAP
89
ANNEXURE 10
The Directors
Absolute Holdings Limited
Arcay House
Number 3 Anerley Road
Parktown
2193
22 April 2010
Dear Sirs
REPORT OF THE INDEPENDENT PROFESSIONAL EXPERT TO ABSOLUTE HOLDINGS LIMITED
REGARDING THE CHANGE IN CONTROL OF ABSOLUTE
Introduction
Moore Stephens Corporate Finance has been appointed by the board of directors of Absolute Holdings
Limited (Absolute, or the company) to provide an independent fairness opinion to the shareholders of
Absolute with regard to the conclusion of the following agreements:
(i) The acquisition of an effective 60% interest in Bauba A Hlabirwa Mining Investments (Proprietary) Limited
(Bauba) for a purchase consideration of R340 623 000 to be settled through the issue of 68 124 600
new shares in Absolute at an issue price of R5.00 per share; and
(ii) The proposed further acquisition of an effective 60% interest in the Houtbosch prospecting right, subject
to the notarial execution and registration of the already granted prospecting right, for a purchase
consideration of R105 948 000, which will be settled though the issue of 21 189 600 new shares in
Absolute at an issue price of R5.00 per share,
(together the transaction).
Following the transaction and after the capital raising and partial settlement of advisory fees via the issue of
new Absolute shares, the shareholders of Bauba will hold 89,314,200 shares, or an effective 65.1% equity
interest in the combined entity (which will be renamed Bauba Platinum Limited) . The transaction will result
in a change in control of Absolute and consequently is an affected transaction as defined in Section 440A of
the Companies Act, which is subject to the provisions of the Securities Regulation Code on Takeovers and
Mergers (the SRP Code).
Fairness opinion required in terms of the SRP Code
The transaction will result in an effective change in control of Absolute and the directors of Absolute are
required, in terms of Rule 3 of the SRP Code, to obtain appropriate external advice on the transaction as to
how it affects all holders of securities in Absolute.
Responsibility
Compliance with the SRP Code is the responsibility of the directors of Absolute. Our responsibility is to report
to the shareholders on the fairness of the terms and conditions of the proposed transaction.
Explanation as to how the term fair applies in the context of the transaction
The fairness of a transaction is based on quantitative issues. In the case of a sale of shares or assets, a
transaction may be said to be fair if the value of the consideration received is greater than or equal to the
value of the asset that is the subject of the transaction.
90
The transaction would be considered fair to the shareholders of Absolute if the value received by Absolute
shareholders in terms of the transaction is equal to or greater than the value of the 89,314,200 shares to be
issued to the Bauba shareholders, which consequently will result in the value of one Absolute share after
implementation of the transaction being equal to or greater than the value of one Absolute share before
implementation of the transaction.
Conversely, the transactions would be considered unfair if the value received by Absolute in terms of the
transaction is less than the value of the 89,314,200 shares to be issued to the Bauba shareholders, which
would result in the value of one Absolute share after implementation of the transaction being less than the
value of one Absolute share before implementation of the transaction.
Details and sources of information
In arriving at our opinion we have relied upon the following principal sources of information:
Signed Agreements in respect of the transaction;
Historical Financial information in respect of Absolute for the year ended 30 June 2009 and the period
ended 31 December 2009;
Historical Financial information in respect of Bauba for the years ended 28 February 2009 and
28 February 2010;
Selected additional financial information in respect of Absolute and Bauba up to 31 March 2010;
Draft Circular to Absolute shareholders relating to the transaction (the circular);
Independent competent persons report (CPR) and mineral asset valuation reports in respect of the
Platinum group elements mineral assets held by Bauba, including the Houtbosch project (the Bauba
projects), prepared by A Clay M.Sc (Geol), MSc (Min Eng), Pr.Sci.Nat, MSAIMM, FAusIMM, FGSSA, IOD,
AAPG, CIMMP and C Taylor, BSc.Hons (Geol), Pr.Sci.Nat, MGSSA, MGASA of Venmyn Rand (Pty) Limited
as at 14 April 2010;
Independent CPR and mineral asset valuation report in respect of the Lekkersing Quartzite project
attributable to Absolute, prepared by J Hattingh, BSc.Hons (Geol), M.Sc (Geol), PhD (Geol), Pr.Sci.Nat
and J Botha B.Sc (Geol), Pr.Sci.Nat of Creo Consulting as at 28 February 2010;
Short-form techno Economic report on the Lekkersing Quartzite project, prepared by A Clay and C Taylor
of Venmyn Rand (Pty) Limited as at 14 April 2010;
Short-form SAMREC compliant statement on the Greenfields Assets of Absolute Holdings Limited,
prepared by A Clay and C Taylor of Venmyn Rand (Pty) Limited as at 14 April 2010;
Discussions with Absolute and Bauba directors and management regarding the financial information
presented as well as the settlement calculations and the rationale for the transaction;
Discussions with Absolute and Bauba directors and management and advisors in respect of Absolute and
Baubas mineral assets and rights;
Discussions with Absolute and Bauba directors and management and advisors on prevailing market,
economic, legal and other conditions which may affect underlying value;
Publicly available information relating to Absolute and Bauba that we deemed to be relevant, including
company announcements, analysts reports and media articles; and
Publicly available information relating to the industry in which Absolute and Bauba operate that we deemed
to be relevant, including company announcements, analysts reports and media articles.
The information above was sourced from:
Directors and management of Absolute and Bauba and their advisors; and
Third party sources, insofar as such information related to publicly available economic, market and other
data applicable to or potentially influencing our valuation.
91
Assumptions
We arrived at our opinion based on the following assumptions:
That all agreements that will be entered into in terms of the transaction will be legally enforceable;
That reliance can be placed on the audited financial information of Absolute and Bauba; and
That reliance can be placed on the independent CPRs and mineral asset valuations in respect of the
mineral assets of Absolute and Bauba.
Appropriateness and reasonableness of underlying information and assumptions
We satisfied ourselves as to the appropriateness and reasonableness of the information and assumptions
employed in arriving at our opinion by:
Reliance on audit reports in the financial statements of Absolute and Bauba;
Conducting reviews on the financial and economic data and forecasts set out in the CPRs; and
Determining the extent to which representations from management were confirmed by documentary
evidence as well as our understanding of Absolute and Bauba and the economic environment in which
they operate.
Limiting conditions
This opinion is provided to the board of directors and shareholders of Absolute in connection with and for
the purposes of the transaction. The opinion does not purport to cater for each individual shareholders
perspective, but rather that of the general body of Absolute shareholders.
Individual shareholders decisions regarding the transaction may be influenced by such shareholders
particular circumstances and accordingly individual shareholders should consult an independent advisor if
in any doubt as to the merits or otherwise of the transaction.
We have relied upon and assumed the accuracy of the information provided to us in deriving our opinion.
Where practical, we have corroborated the reasonableness of the information provided to us for the purpose
of our opinion, whether in writing or obtained in discussion with management of Absolute, by reference
to publicly available or independently obtained information. While our work has involved an analysis of,
inter alia, the annual financial statements, and other information provided to us, our engagement does not
constitute an audit conducted in accordance with generally accepted auditing standards.
Where relevant, forward-looking information on Absolute relates to future events and is based on assumptions
that may or may not remain valid for the whole of the forecast period. Consequently, such information cannot
be relied upon to the same extent as that derived from audited financial statements for completed accounting
periods. We express no opinion as to how closely the actual future results of Absolute will correspond to
those projected. Where practicable, we have compared the forecast financial information to past trends as
well as discussing the assumptions inherent therein with management.
We have also assumed that the transaction will have the legal consequences described in discussions with,
and materials furnished to us by representatives and advisors of Absolute and we express no opinion on
such consequences.
Our opinion is based on current economic, regulatory and market as well as other conditions. Subsequent
developments may affect this opinion, and we are under no obligation to update, review or re-affirm our
opinion based on such developments.
Independence
We confirm that Moore Stephens Corporate Finance has no equity interest in Absolute or in any other party to
the transaction. We further confirm that there is no existing relationship between Moore Stephens Corporate
Finance and any of the parties to the transaction.
Furthermore, we confirm that our professional fees are not contingent upon the success of the proposed
transaction.
92
Valuation
Moore Stephens Corporate Finance performed a valuation of Absolute and Bauba to determine the value of
the shares to be issued to Bauba shareholders and the value received by Absolute shareholders, respectively.
We have used the net asset value (NAV) methodology as our primary basis for the valuation of Absolute
and Bauba.
Under the net asset valuation approach, total equity value is based on the sum of tangible net asset value
plus the value of intangible assets not recorded on the balance sheet.
The NAV method of valuation is normally most appropriate for the valuation of a pure investment company.
This valuation approach is considered to value an investment company, where the value attributable to such
company would be determined on a sum of the parts basis. As such, a net asset methodology is most
applicable for businesses such as Absolute and Bauba where the value lies in the underlying assets and not
the ongoing operations of the business.
Net asset value is determined by marking every asset and liability on and off the companys balance sheet
to current market values.
Absolute
Absolutes principal assets set out in the table below:
Dikopane NM Mining (Pty) Limited
49%
Coal prospecting
rights
Greenfields exploration
asset
100%
Limestone prospecting
rights
Greenfields exploration
asset
100%
Greenfields exploration
asset
90%
Quartzite mining
operation
Production asset
25.1%
Resources sector
advisory firm
Professional service
firm
Cash, loan accounts, receivables and payables were valued at amortised cost, whereas inventories were
valued at the lower of costs and net realisable value. The values of the mineral assets were assessed based
on the approaches prescribed in the South African Code for the Reporting of Exploration Results, Mineral
Resources and Mineral reserves (the SAMREC code) and the South African Code for the Reporting of
Mineral Asset Valuation (the SAMVAL code).
There are two generally accepted valuation approaches used in the valuation of exploration properties:
Cost approach; and
Market or comparative value method.
Where previous and future committed exploration expenditures are known, or can be reasonably estimated,
the Multiple of Exploration Expenditures (MME) method can be applied to derive a cost-based technical
value. The method requires establishing a relevant Expenditure Base (EB) from past and future committed
exploration expenditure. A premium or discount is then assigned to the EB through application of a
Prospectivity Enhancement Multiplier (PEM), which reflects the success or failure of exploration done to
date and the future potential of the asset. The basic tenet of this approach is that the amount of exploration
expenditure justified on a property is related to its intrinsic technical value.
Where comparable transactions relating to the sale, joint venture or farm-in/farm-out of mineral assets are
known, such transactions may be used as a guide to, or means of, valuation. For a transaction to be considered
comparable, it should be similar to the asset being valued in terms of location, timing and commodity and the
transaction regarded as of arms length.
93
Information in respect of the greenfields exploration assets is limited as all are at an early stage of development.
As such, we valued these mineral assets using the costs approach. The Lekkersing Quartzite project was
valued using a cash flow approach, which relies on the value in use principle, requiring determination of the
cash flows attributable to a project over the projects useful life. As set out in the CPR, because of the unique
characteristics of the Lekkersing quartzite deposit, market and cost approaches were not considered to be
applicable.
The valuation of QR has been determined based upon the Income Approach. The net present value is
considered to be equal to QRs forecast post-tax pre-finance income, discounted at a rate equal to the
required cost of capital.
Bauba
The Bauba project consists of Platinum Group Metals prospecting rights over nine farms. We applied the
standard comparative value method to the Bauba projects. The outcomes were also benchmarked against
current market value of listed entities holding similar assets.
Valuation considerations
The valuations were performed taking cognisance of risk and other market and industry factors affecting
Absolute and Bauba. Additionally, sensitivity analyses were performed considering key value drivers to the
mineral asset valuations.
Key internal value drivers to the valuations of the exploration mineral assets included estimated geological
data and expected future exploration expenditure. External value drivers, including commodity prices,
interest rates, CPI rates and prevailing market and industry conditions were also considered in assessing the
mineral asset valuations and risk profiles of Absolute and Bauba.
The most important value driver to the Lekkersing Quartzite project DCF is the commodity price assumption.
Other factors that were reviewed were production rates, the discount rate, working capital and capital
expenditure requirements.
Valuation summary
In undertaking the valuation exercise above, incorporating certain assumptions regarding the future realisable
value of Absolutes and Baubas mineral assets, we determined a valuation range for Absolute shares prior to
the transaction of R47.1 million to R82.5 million. Following the transaction, incorporating the valuation of the
Bauba assets and the net proceeds of the capital raising, we determined a valuation range for the shares in
the combined entity held by the Absolute shareholders of R60.3 million to R108.0 million. The value of a single
share held by an Absolute shareholder therefore increases by 28% to 31% as a result of the transaction.
Procedures
In arriving at our opinion we have undertaken the following procedures and taken into account the following
factors in evaluating the fairness of the transaction:
Reviewed the terms and conditions of the transaction;
Reviewed the terms and conditions of the agreements in respect of the secured loans;
Reviewed the audited and unaudited financial information related to Absolute and Bauba, as detailed
above;
Held discussions with directors and management of Absolute and Bauba and considered such other
matters as we considered necessary, including assessing the prevailing economic and market conditions
and trends;
Reviewed the CPRs and the basis of the assumptions therein, including the saleability and development
potential of the projects, as well as the reasonableness of the outlook assumed based on discussions with
management;
Compiled a financial model using the information contained in the CPRs and applied Moore Stephens
Corporate Finances assumptions and inputs to produce a valuation of the Absolute and Bauba mineral
assets;
94
Performed a sensitivity analysis on key assumptions included in the financial models, specifically relating
to in situ reserves and expected project advancement;
Assessed the long-term potential of Absolute and Bauba;
Evaluated the relative risks associated with Absolute and Bauba, its mineral assets and the industry in
which they operate;
Reviewed certain publicly available information relating to Absolute and Bauba that we deemed to be
relevant, including company announcements, analysts reports and media articles; and
Where relevant, representations made by management and/or directors were corroborated to source
documents or independent analytical procedures were performed by us, to examine and understand the
industry in which Absolute and Bauba operate, and to analyse external factors that could influence the
value of Absolute and Bauba.
Opinion
Moore Stephens Corporate Finance has considered the terms and conditions of the transaction and, based
on and subject to the conditions set out herein, is of the opinion that the transaction is fair to the shareholders
of Absolute.
Our opinion is necessarily based upon the information available to us up to 22 April 2010, including in
respect of the financial information as well as other conditions and circumstances existing and disclosed to
us. We have assumed that all conditions precedent, including any material regulatory and other approvals or
consents required in connection with the transaction have been fulfilled or obtained.
Accordingly, it should be understood that subsequent developments may affect this opinion, which we are
under no obligation to update, revise or re-affirm.
Yours faithfully
Moore Stephens (Jhb) Corporate Finance (Pty) Limited
Andrew Naude
Director
Nick Lazanakis
Director
95
Notice is hereby given that a general meeting of shareholders of Absolute will be held at Arcay House
II, Number 3 Anerley Road, Parktown, Johannesburg at 10h00 on Monday, 7 June 2010 to consider, and
if deemed fit, to pass, with or without modifications the special and ordinary resolutions set out below.
The definitions and interpretations set out on pages 4 to 11 of this circular, to which this notice is attached,
have been used in this notice of general meeting:
SPECIAL RESOLUTION NUMBER 1 Increase in authorised share capital
Resolved that the authorised share capital of the Company be and is hereby increased from R25 000 000
comprising 25 000 000 ordinary shares of R1.00 each through the creation of 175 000 000 new shares of
R1.00 each to R200 000 000 comprising 200 000 000 shares of R1.00 each.
Reason for and effect of Special Resolution Number 1:
The Company requires an increase in the authorised share capital in order to facilitate the acquisition of Bauba,
the share issue for cash, the Houtbosch payment shares and the issue of shares to Qinisele Resources. The
effect will be to increase the authorised share capital of the Company.
ORDINARY RESOLUTION NUMBER 1 Acquisition of Bauba and share issue for cash
Resolved that, subject to the approval of special resolution number 1 and ordinary resolution number 2, the
acquisition of an effective 60% interest in Bauba, in terms of the acquisition agreement dated 12 February
2010 between Absolute, Bauba, the Bauba sellers, NMR and the NMR sellers, for a purchase consideration
of R340 623 000, to be settled through the issue of 68 124 600 new shares in Absolute at R5.00 per share and
incorporating the minimum capital raising, as well as the potential acquisition of the Houtbosch prospecting
right, through the issue of a further 21 189 600 new shares in Absolute at R5.00 per share is hereby approved.
ORDINARY RESOLUTION NUMBER 2 Share issue for cash
Resolved that, subject to the approval of special resolution number 1 and ordinary resolution number 1,
the Company be and is hereby authorised to raise up to R150 million through the issue of up to 30 000 000
new shares at an issue price to be determined at the date of agreement to issue the shares based on market
conditions prevailing at the time of the capital raising, to various local and off-shore institutions and investors,
excluding related parties as defined in the JSE Listings Requirements, and that such placing and pricing of
shares be under the control of the directors of the Company.
96
In accordance with the Listings Requirements, approval of the specific issue for cash resolution by 75%
majority of the votes cast in favour of such resolution by all shareholders present or represented by proxy at
the general meeting, excluding any parties and their associates participating in the specific issue for cash,
are required to pass this resolution.
ORDINARY RESOLUTION NUMBER 3 Waiver of offer to minority shareholders
Resolved that, subject to the passing and becoming effective of ordinary resolution number 1 and ordinary
resolution number 2, (save for any condition in such resolution that this resolution be passed and become
effective) the obligation of the vendors, a waiver, as provided for in Rule 8.7 of the SRP Code, of any obligation
by the vendors to make a mandatory offer at R5.00 per share in terms of Rule 8.1 of the SRP Code be and is
hereby approved.
It is a requirement of the SRP Code that this ordinary resolution be passed by a majority of independent votes
cast, being the votes cast by shareholders of Absolute other than the Bauba Sellers and NMR Sellers and any
person acting in concert (as defined in the SRP Code) with the vendors.
As a result, this resolution is subject to a majority of shareholders of Absolute (excluding the Bauba Sellers
and NMR Sellers and any person acting in concert (as defined in the SRP Code) with the vendors) voting, in
person or represented by proxy, in favour of the resolution in General Meeting.
SPECIAL RESOLUTION NUMBER 2 Potential repurchase of shares
Resolved that the repurchase and cancellation of up to 37 033 200 (thirty-seven million, thirty-three
thousand, two hundred) shares of R1.00 each in terms of the claw back, sections 85(2), 85(3) and 89 of the
Act and in terms of the Rules and Requirements of the JSE, in the event that any or both of the prospecting
rights held by Bauba on the farms in the Southern Cluster, namely Groot Vygenboom 284KT and Genokakop
285KT are overturned or withdrawn, for no consideration or a maximum consideration of R1.00 in terms of the
Bauba acquisition agreement, which repurchase will have the effect of the voiding of the issue of such shares
ab initio, be and is hereby approved.
Reason for and effect of Special Resolution Number 2:
The Company requires a resolution to effectively provide for the potential repurchase and cancellation of
certain shares issued for the Bauba acquisition in terms of the claw back provisions of the Bauba acquisition
agreement. The passing and registration of this special resolution will have the effect of authorising the
Company to repurchase and cancel shares issued by the Company for the Southern Cluster prospecting
rights in the unlikely event that such rights are lost.
The following additional information, some of which may appear elsewhere in the circular of which this notice
forms part, is provided in terms of the Listings Requirements for purposes of this specific authority:
Directors and management see paragraph 13 of the circular;
Major beneficial shareholders see paragraph 11 of the circular;
Directors interests in ordinary shares see paragraph 13.2 of the circular;
Share capital of the Company see paragraph 12 of the circular;
Litigation statement see paragraph 18 of the circular;
Directors responsibility statement see paragraph 21 of the circular; and
Material changes see paragraph 17 of the circular.
Statement by the board of directors of the Company
Pursuant to, and in terms of, the Listings Requirements, the board of directors of the Company hereby state
that:
97
the Company and group will, after the repurchase, be able to pay their debts as they become due in the
ordinary course of business for the next 12 (twelve) months after the date of approval of this circular;
the consolidated assets of the Company and the group fairly valued and recognised and measured in
accordance with the accounting policies used in the latest consolidated audited financial statements, will,
after the repurchase, be in excess of the consolidated liabilities of the Company and its subsidiaries for
the next 12 (twelve) months after the date of this circular;
the issued share capital and reserves of the Company and the group will, after the repurchase, be adequate
for the ordinary business purposes of the Company and its subsidiaries for the next 12 (twelve) months
after the date of approval of this circular; and
the working capital available to the Company and the group will, after the repurchase, be sufficient for the
ordinary business requirements of the Company and its subsidiaries for the next 12 (twelve) months after
the date of approval of this circular.
ORDINARY RESOLUTION NUMBER 4 Approval of independent non-executive director appointment
KV Dicks
Resolved that, subject to the approval of ordinary resolution numbers 1 and 2, the appointment of
Mr Kenneth Dicks as an independent non-executive director, be and is hereby approved.
A brief CV of Mr Dicks is set out in Appendix 6 to the Revised Listing Particulars forming part of the circular
to shareholders, to which this notice of general meeting is attached.
ORDINARY RESOLUTION NUMBER 5 Approval of chief executive officer appointment
PC (Pine) Pienaar
Resolved that, subject to the approval of ordinary resolution numbers 1 and 2, the appointment of Mr Pine
Pienaar as the new CEO of Absolute, be and is hereby approved.
A brief CV of Mr Pienaar is set out in Appendix 6 to the Revised Listing Particulars forming part of the circular
to shareholders, to which this notice of general meeting is attached.
ORDINARY RESOLUTION NUMBER 6 Approval of non-executive director appointment
Dr NM (Mathews) Phosa
Resolved that, subject to the approval of ordinary resolution numbers 1 and 2, the appointment of
Dr Mathews Phosa as a non-executive Director of Absolute, be and is hereby approved.
A brief CV of Dr Phosa is set out in Appendix 6 to the Revised Listing Particulars forming part of the circular
to shareholders, to which this notice of general meeting is attached.
ORDINARY RESOLUTION NUMBER 7 Approval of independent non-executive director appointment
JG Best
Resolved that, subject to the approval of ordinary resolution numbers 1 and 2, the appointment of
Mr Jonathan Best as the Chairman of Absolute, be and is hereby approved.
A brief CV of Mr Best is set out in Appendix 6 to the Revised Listing Particulars forming part of the circular to
shareholders, to which this notice of general meeting is attached.
ORDINARY RESOLUTION NUMBER 8 Approval of independent non-executive director appointment
SM Dolamo
Resolved that, subject to the approval of ordinary resolution numbers 1 and 2, the appointment of Mr Sholto
Dolamo as an independent non-executive Director of Absolute, be and is hereby approved.
A brief CV of Mr Dolamo is set out in Appendix 6 to the Revised Listing Particulars forming part of the circular
to shareholders, to which this notice of general meeting is attached.
98
99
100
FORM OF PROXY
(for use by certificated and own name dematerialised shareholders only)
For use by certificated and own name registered dematerialised shareholders of the Company (shareholders) at the general meeting of shareholders
of Absolute to be held at the Companys registered office, Arcay House II, Number 3 Anerley Road, Parktown, Johannesburg at 10h00 on Monday,
7 June 2010 (the general meeting).
I/We (Please print names in full)
of (insert address)
being the holder/s of
1.
or failing him,
2.
or failing him,
Against
Abstain
on
2010
Signature
Assisted by me (where applicable)
Name
(Please print in BLOCK LETTERS)
Please read the notes on the reverse hereof.
Capacity
Signature
Notes:
1. Each member is entitled to appoint one or more proxies (who need not be members of the Company)
to attend, speak and, on a poll, vote in place of that member at the general meeting.
2. A member may insert the name of a proxy or the names of two alternative proxies of the members choice
in the space provided, with or without deleting the chairman of the general meeting. The person whose
name stands first on the form of proxy and who is present at the general meeting will be entitled to act
as proxy to the exclusion of those whose names follow.
3. A members instructions to the proxy must be indicated by the insertion of the relevant number of votes
exercisable by that member in the appropriate box/es provided. Failure to comply with the above
will be deemed to authorise the chairperson of the general meeting, if he is the authorised proxy,
to vote in favour of the special and ordinary resolutions at the general meeting, or any other proxy to
vote or to abstain from voting at the general meeting as he deems fit, in respect of all the members
votes exercisable thereat.
4. A member or his proxy is not obliged to vote in respect of all the ordinary shares held or represented
by him but the total number of votes for or against the special and ordinary resolutions and in respect
of which any abstention is recorded may not exceed the total number of votes to which the member
or his proxy is entitled.
5. Forms of proxy must be lodged with or posted to the transfer secretaries, Computershare Investor
Services (Proprietary) Limited, Ground Floor, 70 Marshall Street, Johannesburg 2000 (PO Box 61051,
Marshalltown, 2107) to be received by no later than 10h00 on Thursday, 3 June 2010.
6. The completion and lodging of this form of proxy will not preclude the relevant member from attending
the general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed
in terms hereof, should such member wish to do so.
7. Any alterations or corrections to this form of proxy must be initialled by the signatory/ies.
8. Documentary evidence establishing the authority of a person signing this form of proxy in a representative
capacity must be attached to this form of proxy unless previously recorded by the Companys transfer
office or waived by the chairman of the general meeting.
9. The chairman of the general meeting may reject or accept any form of proxy which is completed and/or
received other than in accordance with these instructions, provided that the chairman is satisfied as to
the manner in which a member wishes to vote.
Total
I/We irrevocably and in rem suam authorise you to produce the signature of such documents that may be necessary
to complete the replacement of the Absolute ordinary shares with shares in the new name of Bauba Platinum Limited.
I/We hereby instruct you to forward the replacement share certificate/s to me/us by registered post, at my/our own risk,
to the address overleaf and confirm that, where no address is specified, the share certificate/s will be forwarded to
my/our address recorded in the share register of Absolute.
My/Our signature(s) on the form of surrender constitutes my/our execution of this instruction.
Signature of shareholder
Assisted by (where applicable)
Name
Capacity
Signature
Date
2010
Postal code
Telephone number including area code (office hours) (
INSTRUCTIONS:
1. A receipt will not be issued for this form of surrender, or the documents lodged with it. Lodging agents
who require special transaction receipts are requested to prepare such receipts and submit them
for stamping with the other documents lodged.
2. A shareholder married in community of property or a minor must ensure this form of surrender is also
signed by his/her spouse or parent or guardian, as the case may be.
3. Where Absolute ordinary shares are jointly held, this form must be signed by joint holders.
4. If this form is signed under power of attorney, such power of attorney must be produced, unless it has
already been registered with the transfer office of Absolute.
5. If this form is signed on behalf of a company, close corporation, pension or provident fund, it must
be accompanied by a certified copy of the resolution authorising the signature, unless it has already
been registered with the transfer office of Absolute.
All the directors of the Company, whose names are given in paragraph 13.1 of the circular, collectively and individually,
accept full responsibility for the accuracy of the information given and certify that, to the best of their knowledge and
belief, there are no facts that have been omitted, which would make any statement false or misleading, and that all
reasonable enquiries to ascertain such facts have been made and that these Revised Listing Particulars contain all the
information required by law and the JSE Listings Requirements.
All the advisors, whose names and reports are included in these Revised Listing Particulars, have given and have not
withdrawn, prior to publication of these Revised Listing Particulars, their written consents to act in the capacity stated
and for the inclusion of their names and, where applicable, reports, in the form and context in which they appear in this
document.
Corporate Advisor
Sponsor
Auditors to Absolute
Attorney
Competent Person
105
CORPORATE INFORMATION
Directors
PC Pienaar (Chief Executive Officer)
MW Rosslee (Financial director)
JG Best (Chairman) *#
KV Dicks *#
SM Dolamo *#
NM Phosa *
* Non-executive
# Independent
Sponsor
Arcay Moela Sponsors (Proprietary) Limited
(Registration number 2006/033725/07)
Arcay House II
Number 3 Anerley Road
Parktown, 2193
(PO Box 62397, Marshalltown, 2107)
Corporate Advisors
Qinisele Resources (Proprietary) Limited
(Registration number 1997/022049/07)
6th Floor, West Towers
Sandton City Towers
Cnr Rivonia Road and 5th Street
Sandton, 2146
(PO Box 2345, North Riding, 2162)
Transfer Secretaries
Computershare Investor Services (Proprietary) Limited
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Banker
Nedbank Limited
(Registration number 1951/000009/06)
2nd Floor, Block F
Corporate Place
135 Rivonia Road
Sandown, 2196
(PO Box 1144, Johannesburg, 2000)
106
CONTENTS
The definitions and interpretations commencing on page 4 of the circular apply, mutatis mutandis, to this
contents page.
Page
Corporate information
106
109
110
110
3. Directors
114
4. Share capital
116
119
119
7. Dividends
119
120
120
120
11. Material borrowings, inter-company balances, material commitments and loan capital
120
121
121
121
121
121
17. Litigation
121
122
122
122
122
123
107
Page
Appendices
1. Historical financial information of Absolute for the three years ended 30 June 2009 and
the six months ended 31 December 2009
124
162
169
171
174
175
177
8. Competent Persons Report on Lekkersing Diamond Quartzite Natural Stone Tile Project
and Other Mineral Assets
178
193
200
202
108
The definitions and interpretations contained in the circular, commencing on page 4, apply to these Revised
Listing Particulars.
109
1. INTRODUCTION
1.1
At the general meeting of shareholders held on Monday, 7 June 2010, shareholders approved the
transaction, which included the acquisition of Bauba, shares issues, a change in control of the
Company and a change in the name of the Company to Bauba Platinum Limited.
1.2
These Revised Listing Particulars are issued to provide shareholders with additional information on
Bauba Platinum after the transactions.
1.3
Shareholders are referred to the circular to which these Revised Listing Particulars are attached,
which sets out the rationale for the transactions and the details thereof.
110
Significant funding was required to commence the diamond mining operations. Following the
termination of negotiations for a capital injection into the Company with Ifa Lesizwe Investments
(Proprietary) Limited as announced on 23 April 2003, the marine diamond mining rights lapsed.
The acquisition of Absolute Tiles provided a relationship between the property industry and the
mining industry. Absolute Tiles supplied tiles to the property development industry, and had two
retail outlets in Fourways and Pretoria. Effective 1 March 2009 the Company disposed of its interest
in Absolute Tiles.
On 20 January 2005 shareholders approved the acquisition of 51% of Lenopodi from Calulo
Investments, which acquisition resulted in the injection of assets, turnover and profits into the
Absolute group in the area of mining, which was to be the focus of the group going forward. The
Companys name was changed from Gilboa Properties Limited to Absolute Holdings Limited with
effect from 31 January 2005.
In terms of a circular to shareholders dated 22 September 2008, Absolute raised R12 840 485
by way of an unconditional, fully underwritten, renounceable rights offer for 214 008 081 new
ordinary shares in Absolute at a subscription price of 6 cents per rights offer share in the ratio of
1 right offer share for every 4.00160 Absolute shares held. These monies were applied to fund the
capitalisation of the mining projects at the Diamond Quartzite and Picture Stone quarries as well
as provide additional working capital to the Absolute group. The rights offer was underwritten by
Calulo Resources, which resulted in a change in control of the Company to Calulo Resources.
At a general meeting held on 10 December 2008, shareholders approved the purchase of 25.1%
of the Qinisele Resources shareholders shareholding in Qinisele Resources with effect from 1 July
2008. In terms of the sale of shares agreement, the consideration of R20 000 000.04 was settled
through the issue of 333 333 334 new ordinary shares in Absolute at an issue price of 6 cents per
share (equating to 3 333 333 shares at R6.00 post consolidation).
On 29 July 2009 Absolute purchased 49% of the issued share capital in and 49% of the shareholders
claims against Dikopane from African Wilddogs Resources (Pty) Limited and Mafatiki Mining
Resources (Pty) Limited (the Dikopane shareholders) for an initial purchase price of R1 million,
which was settled in equal proportions of cash of R500 000 and via the issue of 8 333 333 new
ordinary shares in Absolute at an issue price of 6 cents per share (equating to 833 333 shares at
R6.00 post consolidation). Upon conclusion of a Bankable Feasibility Study, Absolute shall have an
option to purchase a further 11% of the issued share capital of and claims against Dikopane via the
issue of new ordinary shares in Absolute.
At the end of August 2009, the Company raised R7 million through the issue of 189 135 135 new
shares for cash at an issue price of 3.7 cents per share (equating to 1 891 351 shares at R3.70 post
consolidation).
On 17 February 2010, shareholders approved the consolidation of the share capital of the Company
on the basis of 1 share for every 100 shares held as well as an odd lot offer to repurchase shares at
R4.00 per share post the consolidation.
At a general meeting on 7 June 2010, shareholders approved, inter alia, the acquisition of Bauba,
the share issue for cash, the Houtbosch payment shares and the change in name of the Company
to Bauba Platinum Limited, which resulted in a change in control to Highland.
2.2
111
Bauba Platinum
The Bauba Project consists of prospecting rights over eight farms which are prospective for platinum
mineralisation in the Eastern Bushveld Igneous Complex, encompassing an area of approximately
50km in length and 6km in width along the Leolo mountain range in the Limpopo Province. The
farms cover the down dip extent of several current development projects and operating mines on
the Eastern limb of the Bushveld Igneous Complex. The geological location should reveal both
Merensky Reef and UG-2 Chromitite Layer occurrences as extensive exploration programs are
being conducted on the properties neighbouring the Bauba Project.
A targeted resource has been estimated by geologist Stephen Gain (Pr.SciNat Msc) using average
modifying factors from projects and mines on adjacent properties. An estimate of the in situ resource
tonnages on the farms is 700 Mt which could include in excess of 100 m oz Platinum Group Metals
(PGM) metal content. This in situ targeted resource estimation is considered conservative but is
not SAMREC Code compliant.
Bauba has designed a detailed investigative exploration programme that will be initiated by
diamond drilling, geological and geophysical mapping, and sophisticated interpretation of the areas
of interest. The drilling sequence will commence on the Southern Cluster, followed by the Central
and Northern Clusters to determine the mineral resource base and the style of mineralisation. The
drilling programme will extend through to the base of the Bushveld Igneous Complex to establish
the form and style of the PGM mineralisation in the Middle and Lower groups of the Bushveld
Igneous Complex, based on public information from adjacent properties. The programme will focus
on the known mineralisation targets of the Merensky Reef and UG-2 Chromitite.
Results from the initial drilling which commenced in April 2010, will form the basis of the balance
of the drilling programme on the Southern Cluster with the aim of establishing the extent of the
resource, which would be converted to a fully compliant reserve statement to form the basis of the
Bankable Feasibility Study.
Bauba has advised Absolute that they are aware of a review application pending in respect of
two prospecting rights which have already been executed. The Sellers and Absolute have both
obtained an independent view that this application is unlikely to succeed.
Lenopodi Natural Stone
Lenopodi commenced business in the second half of 2003 when it applied for a prospecting permit
and later a mining licence for permission to mine slate, dimension stone and other sedimentary
deposits in the North West Province. Subsequently, Lenopodis subsidiary, Lubtalk Investments,
has secured a mining right to develop a quartzite deposit at the Diamond Quartzite quarry in
Namaqualand. A Competent Persons Report was included in a circular to shareholders dated
22 December 2004, which report ascribed a base valuation of R110 million for the Diamond
Quartzite deposit.
The group, through Lenopodi, has identified an opportunity to enter into the mining and marketing
of natural stone products. Natural stone entails dimension stone (granite, marble and sandstone)
and natural cleft stone (quartzite and slate). This niche segment of mining offers relatively high
returns and has significant job creation capabilities, as it is generally labour intensive. Lenopodi
also offers the opportunity to consolidate medium sized mining operations into the group. To this
extent, granite is specifically excluded from the Lenopodi natural stone portfolio, as the local and
export market is volatile to worldwide colour trends.
Lekkersing Diamond Quartzite Sandstone
As announced on 30 June 2008, Lubtalk entered into a Sale of Business Agreement with Richtersveld
Quartzite and Allied Quartzite to acquire the businesses of these two companies, at a cost of
R1.8 million, which purchase price was settled through the vendor issue of shares in Absolute.
A mining licence from the Department of Minerals & Energy (DME) was initially applied
for in terms of the Minerals Act, subject to the approval of the Environmental Management
Programme Report (EMPR), which was submitted on 15 September 2003. An updated
application was required to be submitted under the new mining order which included a social
responsibility programme, and which was resubmitted in October 2004. The mining rights were
finally registered in the Mineral and Petroleum Titles Registration Office in Pretoria on 27 July 2007.
112
Diamond Quartzite is in essence sandstone, over 800 million years old, the hardness of which
distinguishes it from most quartzite worldwide, hence the reference to diamond in its name.
Diamond Quartzite is a metamorphic high grade assemblage of quartz (96% 98%), micas
(2% 3%) and other metallic minerals in trace. It is a continuous alternate of thick quartzite beds
(ex sand sandstone) and thin micaceous layers (ex silt siltstone), the softening and weathering
of the latter resulting in the natural separation of quartzite slabs (natural cleft stone). The Hilda
formation (quartzite) extends from 20km south of the Steinkopf Port Nolloth road northwards,
past Lekkersing, to the Orange River and represents an almost internationally unique deposit.
Although this type of deposit does occur elsewhere, nowhere else in the world is it of such a high
quality as the Richtersveld deposit (96% 98% quartz content) with associated smooth edges and
parallel bedding.
The formation consists of thinly bedded Flagstone quartzitic sandstone of sufficient strength and
quality to be used for tile manufacturing. The difference between this quartzite and other dimension
stone operations (in massive deposits) is that the bedding of this quartzite is of a suitable thickness
and therefore does not require cutting to obtain the tile thickness required by customers. The only
cutting necessary is that which is required to cut the stone into square shapes. Micaceous bedding
planes separate the beds/layers of quartzite.
Picturestone Sandstone
Lenopodi acquired the entire issued share capital of Niemller Marmer (Eiendoms) Beperk
(Niemller Marmer) on 31 March 2008 for R2 000 000, which purchase price was settled through
the issue of shares for 3 cents per share by Absolute. Niemller Marmer holds a valid mining and
prospecting right over a sandstone deposit in the Northern Cape Province, known as Picturestone.
The company is in the process of finalising the conversion of the mining right to a new order mining
right and operations at the site are planned to commence before the end of the year. The majority
of the product to be mined is earmarked for the export market.
Dikopane Coal
Dikopane has been granted a Prospecting Right over various farms located in the Northern part
of the Free State Province, approximately 26km south-southeast of Sasolburg and 28km north of
Heilbron.
This Prospecting Right has been secured over 14,500ha in the Vereeniging-Sasolburg coalfields.
According to the geological model an estimated 1.4 billion tons (gross in-situ resource tonnage)
of coal is present on the prospecting area. The coal deposit can be classified as an inferred coal
resource with borehole grid spacing in the order of 1 km and a drilling density average of less than
1 borehole per 100 Ha (K Dippenaar: Pr Sci. Nat).
The acquisition of the shareholding in Dikopane presents Absolute with an opportunity to develop a
prospective coal exploration project in line with the Companys stated strategy.
Qinisele Resources
Qinisele Resources is a specialist resources corporate finance boutique focussed on providing
advisory services to companies operating in the mining sector, with a specific emphasis on merger
and acquisition transactions, capital raising and investment advice.
Prospects
To maximise shareholder value, the immediate objectives of the Company are:
to produce a SAMREC compliant resource statement, through the execution of a detailed
investigative exploration programme focussed on the known mineralisation targets of the
Merensky Reef and UG-2 chromatite, initiated by diamond drilling, geological and geophysical
mapping, an interpretation of the areas of interest;
followed by a scoping study and bankable feasibility study.
113
3. DIRECTORS
3.1
Details of directors
The full names, ages, business addresses as well as occupations of the directors of Absolute,
pursuant to the reverse listing are as follows:
Name and designation
Age
Business address
Occupation
Pine Pienaar
(Chief Executive Officer)
Mark Rosslee
(Financial Director)
Jonathan Best
(Chairman) *#
Kenneth Dicks *#
Sholto Dolamo *#
44
Chartered
Accountant
Chartered
Accountant
Businessman
Dr Mathews Phosa *
48
61
70
38
57
Businessman
Analyst/Fund
Manager
Businessman
* Non-executive
# Independent
Also directors of subsidiaries of the Company
All the directors are South African. Details of other directorships and/or partnerships held by the
directors are set out in Appendix 3 to these Revised Listing Particulars.
None of the directors have been convicted of an offence involving dishonesty, declared bankrupt,
insolvent or entered into voluntary compromise arrangements, nor have they been publicly criticised
by any statutory or regulatory authorities or disqualified by a court from acting as a director, manager
or conducting the affairs of a company.
There were no receiverships, compulsory liquidations, creditors voluntary liquidations,
administrations, company voluntary arrangements or any compromise with creditors generally or
any class of creditors, where any director is or was a director with an executive function of such
company at the time of, or within 12 months preceding such events.
All of the above directors have completed directors declarations in terms of Schedule 21 of the
Listings Requirements relating to the appointment of new directors. Copies of the declarations are
available for inspection.
3.2
3.3
Directors interest
The directors interests in the ordinary share capital of the Company after the transactions are as
follows:
2009
Total shares
held
Total
PC Pienaar
MW Rosslee
Dr NM Phosa *
JG Best *#
KV Dicks *#
SM Dolamo *#
3 499 993
8 871 973
3 499 993
8 871 973
2.6%
6.5%
Total
12 371 966
12 371 966
9.1%
* Non-executive
# Independent
114
Beneficially held
Direct
Indirect
Changes in directors interests which have occurred between 30 June 2009 and the last practicable
date are detailed in paragraph 13.2 of the circular. PC Pienaar and NM Phosa acquired their
shareholding as part of the transactions through the Orata Trust and the Math-Pin Trust, respectively,
as vendors.
3.4
PC Pienaar
MW Rosslee
NM Phosa *
KV Dicks *#
JG Best *#
SM Dolamo *#
Salaries
R
Bonuses
R
2 500 000
2 400 000
**
**
**
**
Total
Share
options
R
Share
benefits
R
Fees Expenses
R
R
* Non-executive
# Independent
^ Refer to paragraph 3.4 above
** Fees are payable to directors on attendance per meeting as follows:
Position
Chairman of the board
Member of the board
Chairman of board committee
Member of board committee
Rand
34 000
27 200
30 000
25 500
3.4.1 Other than as disclosed above, no material benefits were received by the directors.
3.4.2 Other than MW Rosslee, the directors do not hold any share options.
3.4.3 The group does not have a pension or provident plan. The shareholders have approved
a share incentive scheme at a general meeting held on 31 March 2009. The scheme
is pending registration with the Master of the High Court. A minor amendment to the share
incentive scheme was made at the general meeting held on 7 June 2010, which amendment
will also be lodged with the Master of the High Court. Salient features of the share incentive
scheme are set out in Appendix 9 to these Revised Listing Particulars.
3.4.4 There have been no commission, gain or profit sharing arrangements entered into with the
directors other than the interest in the underwriting agreement as detailed in paragraph 13.3
of the circular and paragraph 19.3 below.
115
3.4.5 Arcay Client Support (Proprietary) Limited acts as company secretary to the Company at a
fee of R8 000 per month.
3.4.6 No fees have been paid, or are payable, to third parties in lieu of directors fees for any of the
directors.
3.4.7 No other technical, consulting or other fees are payable, directly or indirectly, a part of which
is then paid to a director of the Company.
3.4.8 No payments have been made to any director, either directly or indirectly, by the Company or
any other person in the three years preceding the date of these Revised Listing Particulars
to induce him to become, or to qualify him as a director on in connection with the promotion
or formation of the Company, other than as disclosed in the attached circular.
3.4.9 No loans have been made by the Company to any of its directors nor has any security been
furnished by the Company on behalf of any of its directors or managers.
3.5
4. SHARE CAPITAL
4.1
After the implementation of the transactions and assuming the issue of the Houtbosch payment
shares, the share capital of the Company will be as follows:
R000
Authorised
200 000 000 ordinary shares with a par value of R1.00 each
Issued
137 201 646 ordinary shares with a par value of R1.00 each
Share premium
No treasury shares are held at the last practicable date.
116
200 000
137 202
4.2
At the Annual General Meeting held on 27 November 2007, shareholders approved the
increase in the authorised share capital of the Company from R10 000 000 divided into
1 000 000 000 ordinary shares with a par value of R0.01 per share by R5 000 000 to
R15 000 000 by the creation of an additional 500 000 000 ordinary shares with a par value
of R0.01 per share.
4.2.2
At the Annual General Meeting held on 10 December 2008, shareholders approved the
increase in the authorised share capital of the Company from R15 000 000 divided into
1 500 000 000 ordinary shares with a par value of R0.01 per share by R10 000 000 to
R25 000 000 by the creation of an additional 1 000 000 000 ordinary shares with a par value
of R0.01 per share.
4.2.3
At the General Meeting held on 17 February 2010, shareholders approved the consolidation
of the authorised share capital of the Company from R25 000 000 divided into 2 500 000 000
ordinary shares with a par value of R0.01 per share to R25 000 000 divided into 25 000 000
ordinary shares with a par value of R1.00 per share and the consolidation of the issued
share capital of the Company from R16 011 848 divided into 1 601 184 758 ordinary shares
with a par value of R0.01 per share to R16 011 848 divided into 16 011 848 ordinary shares
with a par value of R1.00 per share.
4.2.4
At the General Meeting held on 17 February 2010, shareholders approved the repurchase
of up to 21 414 odd lot offer shares at R4.00 per share, subject to the approval of the
consolidation of the share capital of the Company as detailed in paragraph 4.2.3 above.
The odd lot offer closed on 1 April 2010 and the Company repurchased 17 996 odd lot offer
shares, which shares were immediately placed under the Companys general authority to
issue shares for cash. The Company does not hold any treasury shares at the last practicable
date.
4.2.5
Details of shares issued during the preceding three years at the last practicable date are as
follows:
Date issued
Details
12 May 2008
18 July 2008
45 000 000 shares at 4 cents per share for the acquisition of both
Allied Quartzite and Richtersveld Quartzite Company Ltd, being a
premium of 3 cents per share
13 October 2008
9 December 2008
333 333 334 shares at 6 cents per share for the acquisition of 25.1%
of Qinisele Resources being a premium of 5 cents per share
2 September 2009
21 October 2009
8 333 333 shares at 6 cents per share for the acquisition of Dikopane
Coal, being a premium of 5 cents per share
117
Details
18 June 2010
68 124 600 new shares at R5.00 per share for the acquisition of Bauba
being a premium of R4.00 per share
18 June 2010
30 000 000 shares at R5.00 per share for the share issue for cash
(assumed), being a premium of R4.00 per share
18 June 2010
21 189 600 new shares at R5.00 per share for the Houtbosch
prospecting right, being a premium of R4.00 per share
18 June 2010
4.2.6
The ordinary shares are listed on the JSE. All the authorised and issued ordinary shares are
of the same class and rank pari passu in all respects, including voting, par value, dividends
and capital distributions. In terms of a resolution passed at the Annual General Meeting held
on 27 January 2010, the unissued ordinary shares are under the control of the directors of
Absolute until the next annual general meeting of the Company, subject to the provisions of
section 221 of the Act and the Listings Requirements. No other class of shares exists.
4.2.7
4.2.8
In accordance with the Companys articles of association, any variation of rights attaching
to the ordinary shares will require the consent of the shareholders in general meeting.
4.2.9
In accordance with the Companys articles of association, at any general meeting, every
member present in person or by proxy (or, if a body corporate, duly represented by an
authorised representative) shall have one vote on a show of hands and, on a poll, every
member present in person or by proxy, shall have one vote for each ordinary share of which
he is a holder.
4.2.10 Pursuant to the transactions, 68 124 600 new ordinary shares of R1.00 each have been
issued as purchase consideration for the acquisition and settlement thereof, 30 000 000
shares have been assumed to be issued in terms of the share issue for cash, 21 189 600
new shares have been assumed to be issued in terms of the Houtbosch payment shares
and 1 875 598 shares have been assumed to be issued to Qinisele Resources, resulting in
a total issued share capital of 137 201 646 ordinary shares.
118
4.3
Other than the repurchase of shares pursuant to the odd lot offer detailed in paragraph 4.2.4 above,
there have been no repurchases of the Companys securities, nor any repurchases of any of the
subsidiaries securities, over the past three years. The shares repurchased under the odd lot offer
were immediately reissued under the Companys general authority to issue shares for cash.
4.4
At the Annual General Meeting held on 27 January 2010, the requisite majority of shareholders
approved special and ordinary resolutions:
4.4.1 Placing the authorised but unissued shares under the control of the directors of Absolute
until the next annual general meeting, subject to the provisions of Sections 221 and 222 of
the Companies Act and the Listings Requirements; and
4.4.2 approving a general authority to issue up to 15% of the issued shares for cash, subject to the
following limitations:
this authority shall not endure beyond the next annual general meeting of the Company
nor shall it endure beyond 15 months from the date of that meeting;
there will be no restrictions in regard to the persons to whom the shares may be issued,
provided that such shares are to be issued to public shareholders (as defined by the JSE
in its Listings Requirements) and not to related parties;
upon any issue of shares which, together with prior issues during any financial year, will
constitute 5% or more of the number of shares of the class in issue, the Company shall
by way of an announcement on SENS give full details thereof, including the effect on net
asset value of the Company and earnings per share;
the aggregate issue of a class of shares already in issue in any financial year will not exceed
15% of the number of that class of shares (including securities which are compulsorily
convertible into shares of that class); and
the maximum discount at which shares may be issued is 10% of the weighted average
traded price of the Companys shares over the 30 business days prior to the date that the
price of the issue is determined or agreed by the directors of the issuer.
5. CONTROLLING AND MAJOR SHAREHOLDERS AND SHAREHOLDER SPREAD
Shareholders, excluding directors that, directly or indirectly, are beneficially interested in 5% or more in
the ordinary share capital of the Company pursuant to the transactions is as follows:
Number of shares
Percentage
Highland (direct)
61 085 027
44.5%
Total
61 085 027
44.5%
In terms of the Companys articles of association, any dividend that remains unclaimed for three
years after having been declared and become payable by the Company, may be forfeited by the
directors for the benefit of the Company.
7.2
No dividends were declared or paid by the Company in the past three years, there is no dividend
policy in place at present and there are no fixed dates on which entitlement to dividends arises.
7.3
The provisions of the articles of association of the Company relating to dividends are set out in
Appendix 2 to these Revised Listing Particulars.
119
The share trading history of the Company is set out in Annexure 7 to the circular to which these
Revised Listing Particulars are attached.
8.2
The JSE is the only stock exchange on which Bauba Platinum shares are listed.
120
121
122
MW Rosslee
BAUBA PLATINUM LIMITED
Johannesburg
17 May 2010
FOR AND ON BEHALF OF ALL THE OTHER DIRECTORS OF BAUBA PLATINUM LIMITED, IN TERMS
OF POWERS OF ATTORNEY GRANTED TO HIM BY SUCH DIRECTORS.
123
Appendix 1
This appendix contains a report on the historical financial information of Absolute, which Company has
been renamed Bauba Platinum Limited. The information is taken from the Companys published unaudited
financial statements for the six months ended 31 December 2009 and the audited results for the years ended
30 June 2009, 30 June 2008 and 30 June 2007. The accounting policies adopted for purposes of this report
comply, and have been consistently applied in all material respects, with International Financial Reporting
Standards. The same accounting policies and methods of computation have been followed as compared to
the prior year. The financial statements have been audited by Tag Incorporated and they were reported on
without qualification.
GENERAL INFORMATION
CURRENT EVENTS, NATURE OF BUSINESS AND FUTURE PROSPECTS
Extract from the directors report for the year ended 30 June 2009
RESULTS
Group Transition
The group has effectively completed its transition to a mining company as the tile retail operation has been
disposed of and the focus will move to the mining activities of the group. As at the date of this report, the
group employs approximately 78 employees most of which are in the mining division and the remainder in
the head office of the Company.
Early stage mining activities commenced at the Diamond Quartzite Quarry in the second quarter of 2008
following the granting of the mining rights, with revenues which have commenced from both local and limited
export sales. A second mining operation has been secured, whereby mining of the Picture Stone deposit
will commence before the end of the next financial year. This mining operation has been delayed due to the
downturn in European economies, the primary markets earmarked for the output from this operation.
Lenopodi
Mining rights for Lekkersing, (held 90% by Lenopodi through Lubtalk Investments (Proprietary) Limited
(Lubtalk), were granted in the first half of last year and preliminary mining activities commenced involving,
inter alia, the rehabilitation of the quarry mining areas and beneficiation factory, the employment of staff and
contractors and the finalisation of agreements with the local authorities. Commencement of development
activities began in the second quarter of this year in order to develop the mining areas for production
build up.
The remaining 10% of Lubtalk is held by Richtersveld Ontwikkelings Maatskappy Beperk, a company
representing over 2,700 residents of the Richtersveld Community in Namaqualand. The effective BEE
shareholding of Lubtalk exceeds 26%, as required by the Mineral and Petroleum Resources Development
Act.
Absolute Tiles
Included in the overall loss for the year of R8 million of the Group and reflected as Discontinued Operations
is a loss of R2.3 million which is attributable to the losses incurred by Absolute Tiles in the financial year until
28 February 2009, this being the date of disposal.
Shareholders are also referred to subsequent events below.
124
RIGHTS OFFER
The Company has issued a rights offer circular to raise capital by way of a renounceable rights offer of new
Absolute shares to shareholders on the basis of a subscription price of 6 cents per rights offer share, in the
ratio of one rights offer share for every 4.0016 Absolute shares held. The proceeds of the rights offer have
been applied to the initial mining activities, the retirement of long-term debt as well as the provision of working
capital for the group. Calulo Resources (Proprietary) Limited (Calulo Resources), being the principal BEE
shareholder of the Company, fully underwrote the rights offer.
FINANCIAL RESULTS
The results are more fully set out in the annual financial statements. The accounting policies adopted have
been consistently applied in all material respects, with International Financial Reporting Standards (IFRS),
the Companies Act of South Africa, No 61 of 1973, as amended, and the Corporate Laws Amendment Act,
No 24 of 2006, and the JSE Listings Requirements. There has been no change to the audited financial
information with regard to any change in accounting policies or in relation to any fundamental error.
GOING CONCERN
The directors have continued to adopt the going concern basis for the preparation of the financial statements.
As is common with many junior mining companies, the Company raises money resources for exploration
and capital projects as and when required. However, the availability of these resources is dependent new
shareholder funding and revenue streams from investments, and there can be no certainty in relation to
these matters. There can be no assurance that the Groups projects will be fully developed in accordance
with current plans or completed on time or to budget. Future work on the development of these projects, the
levels of production and financial returns arising there from may be adversely affected by factors outside the
control of the Group.
ACQUISITIONS AND DISPOSALS
During the year ended 30 June 2009 Absolute acquired a 25.1% interest in Qinisele Resources settled by
means of the issue of 333 333 334 shares at 6 cents in Absolute Holdings Limited.
Shareholders are referred to subsequent events for acquisitions after the year end, being 30 June 2009.
During the year ended 30 June 2009 Absolute disposed of 100% of its shareholding in Absolute Tiles for a
cash consideration of R500 000 effective 1 March 2009.
AUDITORS
TAG Incorporated is the auditor for the holding Company as well as the subsidiaries. The audit committee is
satisfied as to the independence of the auditors.
SPONSOR
The sponsor of the Company is Arcay Moela Sponsors (Proprietary) Limited.
COMPANY SECRETARY
All the directors have access to the advice and services of the company secretary. The board is of the
opinion that the management representing the company secretary has the requisite attributes, experience
and qualifications to fulfil its commitments effectively. Arcay Client Support (Proprietary) Limited remains in
office as company secretary.
SHARE CAPITAL AND ISSUE OF SHARES
The authorised and issued share capital of the Company at 30 June 2009 is set out in note 15 to the financial
statements. As at 30 June 2009 there were 1 403 716 290 ordinary shares of one cent each in issue and
1 096 283 710 unissued ordinary shares.
125
During the year ended 30 June 2009, the Company issued 214 008 081 new shares in terms of a rights offer
to raise capital by way of a renounceable rights offer of new Absolute shares to shareholders on the basis
of a subscription price of 6 cents per rights offer share, in the ratio of one rights offer share for every 4.0016
Absolute shares held. The proceeds of the rights offer have been applied to the initial mining activities, the
retirement of long-term debt as well as the provision of working capital for the group. Calulo Resources, being
the principal BEE shareholder of the Company, had fully underwritten the rights offer in order to guarantee
its success. At the Annual General Meeting held on Wednesday 7 November 2008, eligible shareholders
approved a waiver from making a mandatory offer to minority shareholders in accordance with Section 8.7
of the SRP Code, in the event of Calulo Resources shareholding increasing to over 35% of the Companys
share capital as a result of the underwriting of the rights offer.
In addition, 333 333 334 shares were issued to shareholders of Qinisele Resources at 6 cents in consideration
for a 25.1% interest in Qinisele Resources.
Shareholders are also referred to subsequent events below.
DIVIDEND
No dividend was declared for the year ended 30 June 2009 (2008: R Nil).
SUBSEQUENT EVENTS
Issue of shares for cash
In accordance with the general authority to issue shares for cash as approved by shareholders on
10 December 2008, the Company successfully placed 189 135 135 ordinary shares (the placed shares),
equating to 13.47 per cent of the Companys issued share capital, thereby raising approximately R7 million.
In terms of the private placing, the placed shares were issued at a price of R0.037 per ordinary shares, which
equates to a 9.62% discount to the 30-day volume weighted average price of Absolutes shares on the JSE
as at 11 August 2009.
Coal Prospecting right
In addition, African Wilddogs Resources (Proprietary) Limited and Mafatiki Mining Resources (Proprietary)
Limited (the Dikopane shareholders) accepted a binding offer by Absolute to purchase 49% of the issued
share capital in and 49% of the shareholders claims against Dikopane. Dikopane has been granted a
Prospecting Right over various farms located in the Northern part of the Free State Province, approximately
26km south-southeast of Sasolburg and 28km north of Heilbron. This Prospecting Right has been secured
over 14,500 hectares in the Vereeniging Sasolburg coalfields. The acquisition of the shareholding in
Dikopane presents Absolute with an opportunity to develop a prospective coal exploration project in line with
the Companys stated strategy. The acquisition price of R1 million, was settled in equal proportion in cash
and via the issue of 8 333 333 new ordinary shares at 6 cents per share in Absolute.
Limestone Prospecting rights
The Board also announce that the applications submitted by Canyon Springs Investments 116 (Proprietary)
Limited, a subsidiary of Absolute, for prospecting rights for shale/brick clay and limestone in respect of the
following properties has been granted in terms of section 23(1) of the Mineral and Petroleum Resources
Development Act, 2002 (Act 28 of 2002).
The Remhoogte Project, Western Cape This prospecting right area is approximately 868 hectares in
size. Geological interpretations have indicated that the area contains the strike extension of the limestone
horizon mined at the Soutkloof and Vondeling quarries by Pretoria Portland Cement;
The Zoutrivier Project, Western Cape This prospecting right area is approximately 1,971 hectares in
size. The target area was selected on the basis of geological interpretations that shows that the area is
underlain by the same limestone horizon as that already being mined in the Riebeeck West area;
The Brakfontein Project, Western Cape this prospecting right area is situated to the north of the Zoutrivier
Project and is thus also interpreted to contain the extension of the limestone deposit mined at a quarry
near Riebeeck West. This area is approximately 4,023 hectares in size; and
126
The Oude Bosch Kloof Project, Eastern Cape The prospecting right area measures approximately
1,418 hectares. It is understood that the same limestone horizon was mined on the adjoining property
(Loerie Quarry) until recently. Extensive exploration drilling has been done on the Oude Bosch Kloof
limestone deposit in the late 1980s and early 1990s, and it is understood that a limestone deposit (cement
grade) was present on the property.
NUMBER OF EMPLOYEES
At 30 June 2009 the group had 78 employees (30 June 2008: 80) and the Company had three employees
(30 June 2008: Nil).
Analysis of profits/(losses) for the year:
R
Absolute
Lenopodi
Stand 315
Lubtalk
Diamond Quartzite
Niemoller
Canyon Springs
(8 898)
10
(1)
(32)
(81)
(16)
(34)
Total
(9 051)
Income statements
for the year ended 30 June 2009
Notes
Continuing operations
Revenue
Profit on sale of subsidiary
General and administrative expenses
Impairment of investment in subsidiaries
Loss on disposal of subsidiary
Loss from operations
Finance charges
Interest income
Dividend income from subsidiary
Loss before taxation
Taxation
Loss for the year from continuing
operations
Discontinued operations
Loss for the year from discontinued operations
30 June
2009
R000
30 June
2008
R000
30 June
2007
R000
602
(3 002)
(2 400)
(538)
13
956
250
(7 110)
(5 904)
(44)
55
(2 269)
(2 269)
(81)
37
(1 079)
(1 149)
(760)
28
(2 925)
(5 893)
(2 313)
15
(1 881)
(2 925)
(5 893)
(2 298)
(1 881)
(2 331)
(5 723)
(4 114)
(2 925)
(8 224)
(8 021)
(5 995)
19
19
(0.19)
(0.69)
(0.67)
(1.07)
(1.07)
(0.81)
(0.81)
19
(0.19)
(0.49)
(0.31)
(0.25)
19
(0.20)
(0.76)
(0.56)
19.2
(0.48)
(0.31
(0.25)
19.2
(0.19)
(0.76)
(0.56)
9
3
4
7.2
31 December
2009
R000
127
Balance sheets
At 30 June 2009
31 December
2009
R000
30 June
2009
R000
30 June
2008
R000
30 June
2007
R000
51 875
46 394
20 536
16 245
30 365
20 000
25 987
20 000
407
20 536
3 110
3 455
1 022
4 631
11
12
13
20.4
1 553
942
330
285
2 015
985
142
313
462
102
123
335
3 327
959
107
238
1 183
3 710
54 985
49 849
22 741
24 586
28 338
24 115
745
4 816
16 011
112 063
(99 736)
14 037
106 889
(96 811)
8 563
80 769
(88 587)
7 397
77 985
(80 566)
19 426
18 138
14 991
6 217
18 904
522
17 616
522
14 991
6 202
7 221
7 596
5 822
9 955
18
16
20.4
4 225
2 996
4 199
521
2 876
953
4 869
4 908
33
5 009
1 183
3 598
54 985
49 849
22 741
24 586
Notes
Assets
Non-current assets
Property, plant and equipment
Investments in financial assets
Investments in subsidiaries
Long-term receivables
Loans to group companies
6
8
9
10
Current assets
Inventory
Trade and other receivables
Short-term loan receivable
Cash and cash equivalents
Disposal group held for sale
Total assets
Equity and liabilities
Capital and reserves
Share capital
Share premium
Accumulated loss
15
15
Non-current liabilities
Other financial liabilities
Loans from group companies
Rehabilitation liability
16
10
17
Current liabilities
Trade and other payables
Other financial liabilities
Bank overdraft
Liabilities associated with disposal
group held for sale
Total equity and liabilities
128
24 115
24 115
1 403 716 289
1.72
1.72
30 June
2008
Company
30 June
30 June
2009
2008
745
30 429
30 429
7451
856 374 874 1 403 716 289
0.09
2.17
0.09
7 733
7 733
856 374 874
0.90
2.17
0.90
Share Accumulated
premium
loss
R000
R000
Total
R000
Refer to note 6 where Mineral Rights have been reclassified and are part of tangible assets
Share
capital
R000
7 397
77 985
(74 571)
(5 995)
10 811
(5 995)
7 397
1 166
77 985
2 784
(80 566)
(8 021)
4 816
3 950
(8 021)
8 563
5 474
80 769
27 367
(1 247)
(88 587)
(8 224)
745
32 841
(1 247)
(8 224)
14 037
1 974
106 889
5 524
(350)
(96 811)
(2 925)
24 115
7 498
(350)
(2 925)
16 011
112 063
(99 736)
28 338
129
20.1
20.5
20.3
30 June
2009
R000
30 June
2008
R000
30 June
2007
R000
(7 658)
(7 823)
(4 717)
(5 338)
(44)
55
(2 331)
(2 514)
(777)
21
(4 548)
(5)
(874)
(1 467)
28
(2 404)
(5 092)
2 923
(157)
(4 935)
3 860
(993)
(84)
56
88
14 721
5 143
4 270
204
(1 247)
15 262
(19)
8 757
4 342
130
20.4
521
(16)
(69)
(3 598)
(3)
1 971
(4 534)
243
(6)
(4 771)
(531)
(4 240)
(2 563)
(4 534)
(4 771)
Effective date
01-Jul-09
Amendments relating to oil and gas assets and determining whether an arrangement
contains a lease
01-Jan-10
01-Jan-09
01-Jul-09
01-Jan-10
01-Jul-09
01-Jul-09
01-Jan-10
01-Jul-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-10
01-Jan-09
01-Jan-09
01-Jan-10
01-Jan-09
01-Jan-10
131
132
Effective date
01-Jan-09
01-Jan-09
01-Jul-09
01-Jan-09
01-Jan-09
IAS 17 Leases
Classification of leases of land and buildings
01-Jan-10
IAS 18 Revenue
Costs of originating a loan
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jul-09
01-Jul-09
01-Jan-09
01-Jan-09
01-Jul-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jul-09
01-Jan-09
01-Jan-09
Effective date
01-Jan-09
01-Jan-10
01-Jan-09
01-Jan-09
01-Jul-09
01-Jul-09
01-Jan-10
01-Jan-10
01-Jan-10
01-Jan-09
01-Jan-09
01-Jan-09
IAS 41 Agriculture
Discount rate for fair value calculations
Additional biological transformation
Examples of agricultural produce and products
Point-of-sale costs
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09
01-Jul-09
01-Jul-09
01-Jul-09
01-Jan-08
01-Jul-08
01-Jan-08
01-Jan-09
01-Oct-08
01-Jul-09
01-Jul-09
01-Jul-09
These standards will be adopted on their effective date and the potential effect of these standards, where
applicable, is not likely to be material.
IAS 23 Borrowing Costs, have been adopted in the current year which resulted in the capitalisation of
borrowing costs relating to qualifying assets.
133
134
135
The acquirees identifiable assets, liabilities and contingent liabilities that meet the conditions for
recognition under IFRS 3, Business Combinations, are recognised at their fair values at the acquisition
date, except for non-current assets (or disposal groups) that are classified as held for sale in
accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, which are
recognised and measured at fair value less costs to sell.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the
excess of the cost of the business combination over the groups interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Groups
interest in the net fair value of the acquirees identifiable assets, liabilities and contingent liabilities
exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.
Foreign currency
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet
date are translated into Rands at the foreign exchange rate ruling at that date. Foreign exchange
differences arising on transactions are recognised in profit or loss. Non-monetary assets and liabilities
that are measured in terms of historical cost in a foreign currency are translated using the exchange rate
at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies
that are stated at fair value are translated into Rands at foreign exchange rates ruling at the dates the
fair value was determined.
Financial instruments
Financial instruments carried on the balance sheet include cash and bank balances, investments,
receivables, trade payables, loans and borrowings. The particular recognition methods adopted are
disclosed in the individual policy statements associated with each item.
Initial recognition
Financial assets and financial liabilities are recognised on the balance sheet when the group becomes
a party to the contractual provisions of the instruments.
The group classifies financial instruments and their component parts, on initial recognition, as a
financial asset, a financial liability or an equity instrument in accordance with the substance of the
contractual arrangement.
Fair value determination
The fair values of quoted investments are based on current trading prices. If the market for a financial
asset is not active (and for unlisted securities), the group establishes fair value by using valuation
techniques. These include the use of recent arms length transactions, reference to other instruments
that are substantially the same, discounted cash flow analysis, and option pricing models making
maximum use of market inputs and relying as little as possible on entity-specific inputs.
Measurement
Financial instruments are initially measured at fair value, net of directly attributable transaction costs.
The only exception to these financial instruments classified at fair value through profit or loss in which
case these transaction costs are expensed immediately. Subsequent to initial recognition these
instruments are measured as set out below.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term
highly liquid investments that are readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value. These are initially and subsequently recorded at fair value.
Trade and other receivables
Trade receivables are classified as loans and receivables and measured at amortised cost. Appropriate
allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective
evidence that the asset is impaired.
136
Financial liabilities
Financial liabilities are recognised subsequently at amortised cost, namely original debt less principal
payments and amortisations, except for derivatives, which are subsequently measured at fair value.
Loans to/(from) group companies
These include loans to subsidiaries and are recognised initially at fair value plus direct transaction
costs.
Subsequently these loans are measured at amortised cost using the effective interest rate method.
On loans receivable, an impairment loss is recognised in profit or loss when there is objective evidence
that it is impaired. The impairment is measured as the difference between the investments carrying
amount and the present value of estimated future cash flows discounted at the effective interest rate
computed at initial recognition.
Impairment losses are reversed in subsequent periods when an increase in the investments recoverable
amount can be related objectively to an event occurring after the impairment was recognised, subject
to the restriction that the carrying amount of the investment at the date the impairment is reversed
does not exceed what the amortised cost would have been had the impairment not been recognised.
Derivative instruments
Derivative financial instruments consisting of forward exchange contracts are initially measured at fair
value on the contract date and are re-measured to fair value at subsequent reporting dates. Fair value
is based on the value of equity instruments at balance sheet date.
Gains and losses on subsequent measurement
Gains and losses arising from a change in the fair value of financial instruments that are not part of a
hedging relationship are included in profit or loss in the period in which the change arises.
Gains and losses from measuring the hedging instruments relating to a fair value hedge at fair value
are recognised immediately in net profit or loss.
Gains and losses from re-measuring the hedging instruments relating to a cash flow hedge to fair
value are initially recognised directly in equity. If the hedged firm commitment or forecast transaction
results in the recognition of an asset or liability, the cumulative amount recognised in equity up to the
transaction date is adjusted against the initial measurement of the asset or liability. For other cash flow
hedges, the cumulative amount recognised in equity is included in net profit or loss in the period when
the commitment or forecast transaction affects profit or loss.
Where the hedging instrument or hedge relationship is terminated but the hedged transaction is
still expected to occur, the cumulative unrealised gain or loss at that point remains in equity and is
recognised in accordance with the above policy when the truncation occurs. If the hedged transaction
is no longer expected to occur, the cumulative unrealised gain or loss is recognised in the income
statement immediately.
Trade and other payables
Trade payables are initially measured at fair value less transaction costs and are subsequently
measured at amortised cost using the effective interest rate method.
Bank overdraft and borrowings
Bank overdrafts and borrowing are initially measured at fair value less transaction costs and are
subsequently measured at amortised cost using the effective interest rate method.
Property, plant and equipment
Development costs
Development costs relating to major programmes at a mine are capitalised. Development costs consist
primarily of expenditure to expand the capacity of the mine. Day-to-day mine development costs
to maintain production are expensed as incurred.
137
Initial development and pre-production costs relating to a new ore body, including amortisation,
depreciation and interest on borrowed funds used to develop the ore body, are capitalised until
commissioning of production facilities and commercial levels of production are achieved. This is
evaluated on a quarterly basis and would occur when the mine has achieved breakeven profitability
and is likely to maintain these levels for at least the next quarter.
The Group reviews the carrying amount of mineral assets and development costs when circumstances
suggest the carrying amount may not be recoverable. Recoverability is assessed using estimates
of future cash flows on a discounted basis, including revenues, operating costs and future capital
expenditures. Where necessary a reduction in carrying amount is recorded.
Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment
losses (see note 7). Certain items of property, plant and equipment that have been revalued to fair
value on or prior to 1 July 2005, the date of transition to IFRS, are measured on the basis of deemed
cost, being the revalued amount at the date of the revaluation. Thereafter the cost model continued
to be used. Where parts of an item of property, plant and equipment have different useful lives or
depreciation methods, they are accounted for as separate items of property, plant and equipment if
they have a cost that is significant in relation to the cost of the remainder of the asset.
Leased assets
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are
classified as finance leases. Lease payments are accounted for as described in accounting policy
above.
Subsequent costs
The Group recognises in the carrying amount of an item of property, plant and equipment the cost
of replacing part of such an item when the cost is incurred if it is probable that the future economic
benefits embodied with the item will flow to the Group and the cost of the item can be measured
reliably. All other costs are recognised in profit or loss as an expense as incurred.
Depreciation
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of
each part of property, plant and equipment so as to write it down to its residual value. Land is not
depreciated. The estimated useful lives are as follows:
Office furniture and equipment
Computer software
Motor vehicles and leasehold improvements
10 years
2 years
5 years
The estimated useful lives, residual values and depreciation method are reviewed at each year-end.
Intangible assets
Goodwill
All business combinations are accounted for by applying the purchase method. Goodwill represents
amounts arising on acquisition of subsidiaries, associates and joint ventures. In respect of business
acquisitions that have occurred since 1 January 2003, goodwill represents the difference between the
cost of the acquisition and the fair value of the net identifiable assets acquired.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cashgenerating units and is tested annually for impairment. In respect of associates, the carrying amount
of goodwill is included in the carrying amount of the investment in the associate.
Any excess of the interest in the net fair value of the acquirees identifiable assets, liabilities and
contingent liabilities over cost arising on an acquisition is recognised immediately directly in profit or
loss.
138
139
For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available
for use, the recoverable amount is estimated at each balance sheet date and whenever there is an
indicator of impairment.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating
unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the
carrying amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce
the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
When a decline in the fair value of an available-for-sale financial asset has been recognised directly
in equity and there is objective evidence that the asset is impaired, the cumulative loss that had been
recognised directly in equity is recognised in profit or loss even though the financial asset has not been
derecognised. The amount of the cumulative loss that is recognised in profit or loss is the difference
between the acquisition cost and current fair value, less any impairment loss on that financial asset
previously recognised in profit or loss.
Calculation of recoverable amount
The recoverable amount of the Groups investments in held-to-maturity investments and loans and
receivables carried at amortised cost is calculated as the present value of estimated future cash
flows, discounted at the original effective interest rate (i.e., the effective interest rate computed at initial
recognition of these financial assets). Receivables with a short duration are not discounted unless the
effect thereof is material.
The recoverable amount of other assets is the greater of their fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset. For an asset that does not generate largely independent cash inflows,
the recoverable amount is determined for the cash-generating unit to which the asset belongs.
Reversals of impairment
An impairment loss in respect of a held-to-maturity investment and loans or receivables carried at
amortised cost is reversed if the subsequent increase in recoverable amount can be related objectively
to an event occurring after the impairment loss was recognised.
An impairment loss in respect of an investment in an equity instrument classified as available for sale
is not reversed through profit or loss. If the fair value of a debt instrument classified as available-forsale increases and the increase can be objectively related to an event occurring after the impairment
loss was recognised in profit or loss, the impairment loss shall be reversed, with the amount of the
reversal recognised in profit or loss.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment
loss is reversed if there has been a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the assets carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs.
Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any
difference between cost and redemption value being recognised in profit or loss over the period of the
borrowings on an effective interest basis.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of economic benefits will be
required to settle the obligation. If the effect is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market assessments of the time value
of money and, where appropriate, the risks specific to the liability.
140
Where some or all of the expenditure required to settle a provision is expected to be reimbursed
by another party, the reimbursement is recognised when, and only when, it is virtually certain that
reimbursement will be received if the group settles the obligation. The reimbursement is treated as
a separate asset. The amount recognised for the reimbursement does not exceed the amount of the
provision.
If the group has a contract that is onerous, the present obligation under the contract is recognised and
measured as a provision.
Environmental rehabilitation
Long-term environmental obligations are based on the groups environmental management plans, in
compliance with current environmental and regulatory requirements in the jurisdiction in which the
group operates. Full provision is made based on the estimated cost of restoring the environmental
disturbance that has occurred up to the balance sheet date with a corresponding increase in the
related property, plant and equipment. Increases due to additional environmental disturbances are
capitalised and amortised over the life of the mine.
Annual increases in the provision relating to the change in the provision and inflationary increases are
shown separately in profit or loss, except where the related mine is under development and has not
yet reached commercial levels of production, in which case such adjustment is charged or credited in
the balance sheet to the carrying value of mineral assets.
The estimated costs of rehabilitation is reviewed annually and adjusted as appropriate for changes in
legislation or technology.
Annual contributions are made to fund the estimated cost of rehabilitation during and at the end of the
life of the mine. The funds contributed are included under cash and cash equivalents and shown as
restricted cash.
Revenue
Goods sold and services rendered
Revenue from the sale of goods is recognised when all the following conditions have been satisfied:
the group has transferred to the buyer the significant risks and rewards of ownership of the goods;
the group retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the group; and
the costs incurred in respect of the transaction can be measured reliably.
When the outcome of a transaction involving the rendering of services can be estimated reliably,
revenue associated with the transaction is recognised by reference to the stage of completion of the
transaction at the balance sheet date. The outcome of a transaction can be estimated reliably when
all the following conditions are satisfied:
When the outcome of the transaction involving the rendering of services cannot be estimated reliably,
revenue is recognised only to the extent of the expenses recognised that are recoverable.
Revenue is measured at the fair value of the consideration received or receivable and represents the
amounts receivable for goods and services provided in the normal course of business, net of trade
discounts and volume rebates, and value-added tax.
Interest income is recognised in profit or loss as it accrues, using the effective interest method.
141
Dividend income is recognised in profit or loss on the date the groups right to receive payments
is established which, in the case of quoted securities, is usually the ex-dividend date. Where the
income relates to investments in the mining and associated industries, the income is reflected as trade
investment income
The interest expense component of finance lease payments is recognised in profit or loss using the
effective interest rate method.
Expenses
Leases
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental
to ownership to the lessee. All other leases are classified as operating leases.
Operating lease payments
Payments made under operating leases are recognised on the straight-line bases over the term of
the lease. Lease incentives received are recognised as an integral part of the total lease expenses.
The difference between the amounts recognised as an expense and the contractual payments are
recognised as an operation lease liability. This liability is not discounted.
Any contingent rents are expensed in the period in which they are incurred.
Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the
outstanding liability. The finance charge is allocated to each period during the lease term so as to
produce a constant periodic rate of interest on the remaining balance of the liability.
Income tax
Current tax assets and liabilities
Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount
already paid in respect of current and prior periods exceeds the amount due for those periods, the
excess is recognised as an asset.
Current tax liabilities/(assets) for the current and prior periods are measured at the amount expected
to be paid to/(recovered from) the tax authorities, using the tax rates (and tax laws) that have been
enacted or substantively enacted by the balance sheet date
Deferred tax assets and liabilities
A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the
deferred tax liability arises from:
the initial recognition of goodwill; or
the initial recognition of an asset or liability in a transaction which:
is not a business combination; and
at the time of the transaction, affects neither accounting profit nor taxable profit/(tax loss).
A deferred tax liability is recognised for all taxable temporary differences associated with investments
in subsidiaries, except to the extent that both of the following conditions are satisfied:
the parent, investor or venturer is able to control the timing of the reversal of the temporary difference;
and
it is probable that the temporary difference will not reverse in the foreseeable future.
A deferred tax asset is recognised for all deductible temporary differences to the extent that it is
probable that taxable profit will be available against which the deductible temporary difference can
be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in
a transaction that:
is not a business combination; and
at the time of the transaction, affects neither accounting profit nor taxable profit/(tax loss).
142
A deferred tax asset is recognised for all deductible temporary differences arising from investments in
subsidiaries, to the extent that it is probable that:
the temporary difference will reverse in the foreseeable future; and
taxable profit will be available against which the temporary difference can be utilised.
Tax expenses
Current and deferred taxes are recognised as income or an expense and included in profit or loss for
the period, except to the extent that the tax arises from:
a transaction or event which is recognised, in the same or a different period, directly in equity; or
a business combination.
Current tax and deferred taxes are changed or credited directly to equity if the tax relates to items that
are credited or charged, in the same or a different period, directly to equity.
Share-based payment expenses
Goods or services received or acquired in a share-based payment transaction are recognised when
the goods or as the services are received. A corresponding increase in equity is recognised if the
goods or services were received in an equity-settled share-based payment transaction. For equitysettled share-based payment transactions, the goods or services received are measured, and the
corresponding increase in equity, directly, at the fair value of the goods or services received, unless
that fair value cannot be estimated reliably. If the share-based payments granted do not vest until the
counterparty completes a specified period of service, company accounts for those services as they
are rendered by the counterparty during the vesting period (or on a straight-line basis over the vesting
period). If the share-based payments vest immediately the services received are recognised in full.
Non-current assets held for sale and discontinued operations
Immediately before classification as held for sale, the measurement of the assets (and all assets and
liabilities in a disposal group) is brought up-to-date in accordance with applicable IFRSs. Thereafter,
on initial classification as held for sale, non-current assets and disposal groups are recognised at the
lower of carrying amount and fair value less costs to sell.
Impairment losses on initial classification as held for sale are included in profit or loss. The same
applies to gains and losses on subsequent measurement.
A discontinued operation is a component of the Groups business that represents a separate major
line of business or geographical area of operations or is a subsidiary acquired exclusively with a view
to resale.
Classification as a discontinued operation occurs upon disposal or when the operation meets the
criteria to be classified as held for sale, if earlier. A disposal group that is to be abandoned may also
qualify.
Share capital and equity
An equity instrument is any contract that evidences residual interest of the asset of an entity after
deducting all of its liabilities.
Borrowing costs
Borrowing costs are recognised as an expense in the period in which they are incurred, except to the
extent that they are capitalised where they are directly attributable to the acquisition, construction or
production of a qualifying asset and are capitalised as part of the cost of that asset.
Leases
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to
ownership to the lessee. A lease is classified as an operating lease if it does not transfer substantially
all the risks and rewards incidental to ownership to the lessee.
Operating segments
A segment is a distinguishable component of the group that is engaged in providing products or
services which is subject to risks and rewards that are different from those other segments. The groups
primary format for segment reporting is based on its business activities.
143
Group
30 June
30 June
2009
2008
R000
R000
Company
30 June
30 June
2009
2008
R000
R000
2. REVENUE
An analysis of the revenue of the group for the
year is as follows:
Retail sales
Dividend income
Administration fees are paid to the Company
by its subsidiaries.
4 673
956
4 402
956
600
5 629
4 402
1 556
Attributable to:
Continuing operations
Discontinued operations
956
4 673
4 402
1 556
Total revenue
5 629
4 402
1 556
Auditors remuneration
230
169
123
82
Audit fees
Other services
192
38
165
4
98
25
81
1
Attributable to:
Continuing operations
Discontinued operations
166
64
109
60
123
82
230
169
123
82
1 479
2 089
144
Premises
Office equipment
Vehicles
1 354
31
94
1 718
52
319
144
Attributable to:
Continuing operations
Discontinued operations
144
1 335
113
1 976
144
1 479
2 089
144
Staff costs
4 140
2 656
3 076
532
Attributable to:
Continued operations
Discontinued operations
3 076
1 064
930
1 726
3 076
532
4 140
2 656
3 076
532
3.2
3.3
3.4
144
(57)
102
(4)
Attributable to:
Continued operations
Discontinued operations
(4)
(53)
150
(48)
(4)
(57)
102
(4)
Group
30 June
30 June
2009
2008
R000
R000
Company
30 June
30 June
2009
2008
R000
R000
3.6
Depreciation
48
167
Office equipment
Computer equipment
Leasehold improvements
Furniture and fittings
Motor vehicles
Mining equipment
2
7
6
7
26
8
9
87
13
29
21
Attributable to:
Continuing operations
Discontinued operations
6
42
21
146
48
167
217
172
214
172
Directors remuneration*
2 104
56
2 104
56
Executive directors
Non-executive directors
2 024
80
16
40
2 024
80
16
40
195
672
21
(656)
684
12
81
10
672
11
232
777
693
44
188
81
696
693
232
777
693
3.7
4. FINANCE CHARGES
Bank accounts
Group companies
Payables
Long-term loans
Less: Amounts capitalised to mining development
Attributable to:
Continuing operations
Discontinued operations
145
Group
30 June
30 June
2009
2008
R000
R000
Company
30 June
30 June
2009
2008
R000
R000
5. TAXATION
Continuing operations:
Deferred tax
Reversal of timing differences.
15
15
1 575
3 317
No provision has been made for normal taxation by the group as the group had no taxable income for the
year. As the Company does not trade it has no taxable income or losses available to be set-off against
future income.
6. PROPERTY, PLANT AND EQUIPMENT
Group
Motor
vehicle
R000
At cost 1 July 2007
Less: Accumulated depreciation
Carrying value as at 1 July 2007
Plus: Additions
Less: Depreciation
Less: Disposals
Transfers to disposal group held
for sale
Carrying value as at 30 June 2008
Computer
equipment
R000
Total
R000
338
(154)
893
(743)
303
(290)
209
(75)
9 717
184
(29)
(89)
150
133
(87)
13
(9)
134
9 849
(21)
(15)
9 717
858
(66)
(63)
133
(4)
(98)
19 566
837
(231)
20 536
19 566
(21)
858
(21)
20 557
96
(17)
(10)
19 566
5 355
718
837
19
(44)
(585)
20 536
5 525
(65)
(10)
10 840
(21)
11 460
(1 262)
10 198
(167)
(104)
133
55
(4)
133
(133)
51
69
25 639
228
25 987
Cost
Accumulated depreciation
55
(4)
84
(15)
25 639
292
(64)
26 070
(83)
146
Leasehold
improvements
R000
Mining
Furniture
developand
ment and
and office prospecting
Mining
equipment
right1 equipment
R000
R000
R000
Included in property above are mineral rights in respect of Diamond Quartzite and Picture Stone. Mineral rights have not been
amortised yet as the activities for the year consisted mostly of clearing the area to start active mining of the quarry.
Total
R000
Cost
Less: Accumulated depreciation
34
(6)
34
(6)
28
28
Cost
Less: Accumulated depreciation
34
(6)
34
(6)
At 1 July 2008
231
1 506
501
6
(1 061)
1 183
(1 147)
(36)
(1 183)
Net assets or liabilities of retail outlet business classified as held for sale
147
7.2
Discontinued operations
Disposal of the tile retail outlet of the group
The group has concluded an agreement to dispose of the retail outlet of the group, Absolute Tiles
(Propriety) Limited effective from 1 March 2009.
The results of the discontinued operations included in profit or loss are set out below. The
comparative loss and cash flows from discontinued operations have been represented to include
those operations classified as discontinued in the current period.
Group
30 June
30 June
2009
2008
R000
R000
Revenue
Cost of sales
4 673
(3 202)
4 402
(3 277)
Gross profit
Other income
Expenses
Impairment loss on write down of disposal group
1 471
(3 802)
1 125
190
(5 977)
(1 061)
(2 331)
(5 723)
25.1%
Percentage
held
2008
30 June
2009
R000
30 June
2008
R000
20 000
The Companys investment in Qinisele Resources has not been equity accounted for but has been treated
as an investment as the Company cannot exercise significant influence over its operating philosophies
and strategic direction.
The fair value of the above asset approximates the cash flows discounted using a rate based on market
interest rate 12% and the risk premium specific to these securities.
148
9. INVESTMENT IN SUBSIDIARIES
Company
Percentage
held
2009
R000
Percentage
held
2008
R000
30 June
2009
R000
30 June
2008
R000
20 000
31 244
100
100
100
20 000
7 710
20 000
100
100
3 534
(11 244)
(7 710)
(3 534)
20 000
20 000
20 000
20 000
Company
30 June
30 June
2009
2008
R000
R000
Comprising:
Non-current assets:
Loans to subsidiaries
Non-current liabilities:
Loans from subsidiaries
(5)
(4 090)
339
2 586
2 716
3 327
1 908
7 981
13
1 946
13 635
3 086
13 635
7 181
13 635
(4 095)
3 086
Loans are unsecured, interest free and there are no fixed repayment terms, except for the loan to Diamond
Quartzite Processing (Proprietary) Limited which bears interest at prime.
149
Group
30 June
30 June
2009
2008
R000
R000
Company
30 June
30 June
2009
2008
R000
R000
11. INVENTORY
The amounts attributable to the different
categories are as follows:
Finished goods
Less: Classified as part of disposal group
held for sale
2 015
2 015
1 968
(1 506)
75
462
181
760
44
211
(80)
263
210
417
(502)
985
102
417
75
80
49
31
80
142
123
142
123
(80)
150
Group
30 June
30 June
2009
2008
R000
R000
Company
30 June
30 June
2009
2008
R000
R000
Authorised
2 500 000 000 ordinary shares of
1 cent each (2008: 1 500 000 000)
Issued
1 403 716 289 ordinary shares of
1 cent each (2008: 856 374 874)
15
(15)
25 000
15 000
25 000
15 000
14 037
8 563
14 037
8 563
106 889
80 769
106 889
80 769
151
Group
30 June
30 June
2009
2008
R000
R000
Company
30 June
30 June
2009
2008
R000
R000
17 526
14 901
17 526
14 851
90
90
521
521
Non-current liabilities
Current liabilities
17 616
521
14 991
17 526
521
14 851
18 137
14 991
18 047
14 851
522
522
In terms of the Mineral and Petroleum Resources Development Act, 2002, there is a responsibility
to execute an environmental management programme approved for the Lekkersing Quartzite mine. Refer
note 21. To facilitate this, an amount of R261 708 held in a call account and included in cash and cash
equivalents serves as collateral for a guarantee from Nedbank Limited of R200 000 on behalf of Lubtalk
Investments (Proprietary) Limited for the rehabilitation of land disturbed by mining activities.
152
Group
30 June
30 June
2009
2008
R000
R000
Company
30 June
30 June
2009
2008
R000
R000
4 040
159
Payables
4 199
2 100
(1 147)
953
2 981
154
608
3 135
608
No. of
shares
No. of
shares
(8 224)
(8 021)
(8 224)
(8 021)
(5 893)
(2 298)
(5 893)
(2 298)
(2 331)
(5 723)
(2 331)
(5 723)
No. of
shares
No. of
shares
153
Group
30 June
30 June
2009
2008
R000
R000
Company
30 June
30 June
2009
2008
R000
R000
(8 224)
(250)
(8 021)
1 061
57
(102)
(8 417)
(7 062)
(0.71)
(0.94)
(8 417)
(7 062)
(0.69)
(0.94)
(5 893)
(2 313)
154
(8 898)
(6 276)
6 509
(1 581)
44
6
(150)
81
21
693
6
(250)
150
2 912
150
(55)
(21)
(666)
(6 148)
810
(2 232)
(282)
(5 953)
2 185
(1 197)
(254)
(883)
(1 553)
3 246
123
(91)
(314)
(342)
2 527
(76)
(178)
(5 338)
(2 514)
(3 768)
(1 451)
Group
30 June
30 June
2009
2008
R000
R000
Company
30 June
30 June
2009
2008
R000
R000
(2)
(2)
(5)
Taxation paid
313
(2 876)
335
(4 869)
(2 876)
31
(2 563)
(4 534)
(2 876)
31
Cash and cash equivalents consist of cash on hand and balances with banks.
The bank overdraft is secured via a letter of support from Calulo Resources (Proprietary) Limited
and the facility is limited to R 3 million. It is repayable on demand and bears interest at prime plus
2% (2008: prime plus 2%).
In terms of the Mineral and Petroleum Resources Development Act, 2002, there is a responsibility to
execute an environmental management program approved for the Lekkersing Quartzite mine. Refer
note 17. To facilitate this, an amount of R261 708 held in a call account and included in cash and
cash equivalents serves as collateral for a guarantee from Nedbank Ltd of R200 000 on behalf of
Lubtalk Investments (Proprietary) Limited for the rehabilitation of land disturbed by mining activities.
Group
30 June
30 June
2009
2008
R000
R000
Company
30 June
30 June
2009
2008
R000
R000
(2 331)
(5 723)
146
696
48
1 061
37
(813)
(4 548)
(2 331)
155
156
Significant shareholders
Subsidiaries
MK Diale
MW Rosslee
GP Sequeira
AM Sher
JJ Serfontein
Group
30 June
30 June
2009
2008
R000
R000
Company
30 June
30 June
2009
2008
R000
R000
(5)
(4 090)
339
2 586
2 716
7 981
13
13 635
Shareholder loan:
Calulo Resources (Pty) Ltd
Tucker Boys Trust
Related party balances Associates
Qinisele Resources (Pty) Ltd (included under
accounts payable)
Related party transactions
Admin fees received from Diamond Quartzite
Processing (Pty) Ltd
Corporate advisory fee paid to Qinisele
Resources (Pty) Ltd
Interest paid on shareholders loan Calulo
Resources (Pty) Ltd
Interest paid on shareholders loan
Tucker Boys Trust
Office rent paid to Calulo Resources (Pty) Ltd
Dividends received Qinisele Resources (Pty) Ltd
Compensation to directors and other key
management
Directors remuneration (see note 25)
17 526
521
14 901
1 189
3 327
1 908
1 946
3 086
17 526
521
14 851
1 189
(600)
900
225
651
21
144
(956)
2 104
900
225
651
21
144
(956)
56
2 104
56
157
24. RISKS
The Companys activities expose it to a variety of financial risks: these include market risk (including
interest rate risk and foreign exchange risk), credit risk and liquidity risk. The Companys overall risk
management programme focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Companys financial performance.
24.1 Liquidity risk
Liquidity risk is the risk that the group will encounter difficulty in raising funds to meet commitments.
Whilst the group manages liquidity risk by monitoring cash flows and ensuring that adequate cash
is available or by maintaining or renewing borrowing facilities as appropriate, formal policies and
procedures regarding these risks have not been drawn up.
The group does however manage its borrowings by only dealing with well-established financial
institutions of high credit standing or through enacting secured funding through its direct or indirect
shareholders.
As at 30 June 2008
Less than
1 year
R000
Between
1 and
2 years
R000
Between
2 and
5 years
R000
Over
5 years
R000
953
12 000
2 901
Less than
1 year
R000
Between
1 and
2 years
R000
Between
2 and
5 years
R000
Over
5 years
R000
953
12 000
1
2 901
As at 30 June 2009
The Group is exposed to cash flow interest rate risk as it borrows funds at floating interest rates.
The risk is managed by the Group by policies adopted to ensure all its borrowings are at marketrelated rates. The impact of any changes in interest rates would be as follows: Bank overdraft a
2% increase would impact net profit by R60 000 on annual basis.
Shareholders loans a 2% increase would impact net profit by R350 000 on annual basis.
24.3 Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations.
Financial assets, which potentially subject the Group to concentrations of credit risk, consist
principally of investments, loans, trade and other receivables and cash and cash equivalents.
Loans are granted to subsidiaries. The loans have no repayment terms however the Group considers
all loan balances to be recoverable and therefore no impairment provision is required.
The Group only deposits cash surpluses with major banks of high quality credit standing.
At balance sheet date the Group had trade receivables and sundry debtors amounting to
R985 000 (2008: R102 000).
158
Company
30 June
30 June
2009
2008
R000
R000
2 000
24
16
2 000
24
16
2 024
16
2 024
16
40
40
40
16
40
16
80
40
80
40
2 104
56
2 104
56
159
7 500 000
7 500 000
6 cents
15 000 000
7 500 000
Group
30 June
30 June
2009
2008
Company
30 June
30 June
2009
2008
26. PERSONNEL
Number of personnel employed by the group
160
78
80
Corporate
R000
2009
Revenues from external
customers
Interest expense
Depreciation and amortisation
Net profit/(loss)
Assets
Non-current assets classified
as held for sale
Liabilities
Capital expenditure
2008
Revenues from external
customers
Interest expense
Depreciation and amortisation
Net loss
Assets
Non-current assets classified
as held for sale
Liabilities
Capital expenditure
44
6
(6 697)
Continuing
operations
Mining Investment
R000
R000
(152)
956
956
Discontinued
operations
Total
Trading
R000
R000
956
44
6
(5 893)
4 673
188
42
(2 331)
852
28 997
20 000
49 849
10 420
34
15 314
5 491
20 000
25 734
25 525
4 402
81
(1 369)
21
(929)
81
21
(2 298)
696
146
(5 723)
107
21 451
21 558
1 138
1 138
13 147
7 667
10 840
20 813
10 840
1 138
161
Appendix 2
The information below has been extracted from the articles of Bauba Platinum:
JOINT HOLDERS OF SHARES
7. Where two or more persons are registered as the holders of any share they shall be deemed to hold
that share jointly, and:
7.1
notwithstanding anything to the contrary in these articles, on the death, sequestration, liquidation
or legal disability of any one of such joint holders the remaining joint holders may be recognised,
at the discretion of the directors, as the only persons having title to such share;
7.2
anyone of such joint holders may give effectual receipts for any dividends, bonuses or returns
of capital or other accruals payable to such joint holders;
7.3
only the joint holder whose name stands first in the register shall be entitled to delivery of the
certificate relating to that share, or to receive notices from the Company (and any notice given
to such joint holder shall be deemed to be notice to all the joint holders);
7.4
any one of the joint holders of any share conferring a right to vote may vote either personally
or by proxy at any meeting in respect of such share as if he were solely entitled thereto, and if more
than one of such joint holders is present at any meeting, either personally or by proxy, the joint
holder who tenders a vote and whose name stands in the register before the other joint holders who
are present in person or by proxy shall be entitled to vote in respect of that share.
8. Similarly in the case of joint beneficial owners of an uncertificated share, where it is indicated in the share
register that the beneficial owner has requested to receive notices, then only the joint beneficial owner
whose name stands first in the register shall be entitled to receive notices from the Company (and any
notice given to such joint beneficial owner shall be deemed to be notice to all the joint beneficial owners).
VARIATION OF RIGHTS
35. If at any time the share capital is divided into different classes of shares, the rights attached to any class
(unless otherwise provided by the terms of issue of the shares of that class) may be amended, modified,
varied or cancelled with the consent in writing of the holders of three-fourths of the issued shares
of that class or with the sanction of a resolution passed at a separate general meeting of the holders
of the shares of that class, and the provisions of Section 199 of the Act shall mutatis mutandis apply
to the said resolution and meeting as if the resolution were a special resolution. To every such separate
general meeting the provisions of these articles relating to general meetings shall mutatis mutandis apply
but so that the necessary quorum, unless the Company has only one member, shall be three persons
holding or representing by proxy at least one-third of all the issued shares of the class, provided that
if a quorum is not so present the meeting shall be adjourned to the fifth business day thereafter and the
members present or represented at the meeting to which the adjournment takes place shall constitute
a quorum.
36. Unless otherwise provided by the terms of issue or by these articles, any right or restriction attached
to all or any class of shares shall be deemed not to be directly or indirectly adversely affected by:
36.1 the creation or issue of any other shares ranking pari passu with (but not in priority to) any such
shares already issued by the Company;
36.2 the cancellation in terms of the Act of any shares of any class in the capital of the Company, other
than the class of shares which is being cancelled.
162
GENERAL MEETINGS
37. Subject to the provisions of the Companies Act:
37.1 a general meeting shall be held at such time and place as may be determined by the directors;
37.2 for so long as the shares of the Company are listed on the JSE notices of general or annual general
meetings shall in addition to being sent to members also be:
37.2.1 sent to the JSE at the same time it is sent to the members;
37.2.2 sent to all beneficial owners of uncertificated shares that are not members who have elected
to receive notices, provided that such election has been appropriately recorded in the
Companys register of beneficial owners; and
37.2.3 announced through SENS,
however, any failure to do so shall not affect the validity of any general meeting; and
37.3 the notice of a general meeting shall state the place, day and hour of, and the nature of the business
to be transacted at the general meeting.
38. A member shall be entitled to appoint a proxy to attend, speak and vote (whether on a show of hands
or on a poll) in his stead at any general meeting in accordance with the Act.
PROCEEDINGS AT GENERAL MEETINGS
45. Subject to the provisions of the Act, it shall not be necessary to give notice of any adjournment
of a general meeting.
46. Subject to any rights or restriction as to voting, to which any member, or to which any class or classes
of shares, may be subject, a member who is present:
46.1 in person, by authorised representative or by proxy shall have one vote on a show of hands;
46.2 in person, by authorised representative or by proxy shall, on a poll, have that proportion of the total
votes in the Company which the aggregate amount of the nominal value of the shares held by that
member bears to the aggregate of the nominal value of all the shares issued by the Company.
47. The parent or guardian of a minor, and the curator bonis of a lunatic member, and also any person
entitled under the transmission clause to transfer any shares, may vote at any general meeting in respect
thereof in the same manner as if he were the registered holder of those shares: Provided that forty-eight
hours at least before the time of holding the meeting at which he proposes to vote he shall satisfy the
directors that he is such parent, guardian or curator or that he is entitled under the transmission clause to
transfer those shares, or that the directors have previously admitted his right to vote in respect of those
shares. Co-executors of a deceased member in whose name shares stand in the register shall, for the
purpose of this article, be deemed to be joint holders of those shares.
DIRECTORS
63. Subject to the provisions of the Act, unless otherwise determined by a general meeting, the number
of directors shall be not be less than four or more than twenty and the names of the first directors may
be determined in writing by a majority of the subscribers of the memorandum. Until directors are
appointed, whether or not the directors have been named by a majority of the subscribers of the
memorandum every subscriber of the memorandum shall be deemed for all purposes to be a director
of the Company.
64. The directors shall have the power at any time and from time to time to appoint anyone as a director,
either to fill a casual vacancy in the directors or as an additional director, provided that the total number of
directors shall not at any time exceed the maximum number fixed by or in accordance with these articles
and the appointment of any director so appointed shall cease at the conclusion of the next annual general
meeting, unless it is confirmed at that annual general meeting. Notice of such meeting shall be sufficient to
allow nominations to be sent to the Companys office from any part of the Republic of South Africa.
163
65. The continuing directors may act, notwithstanding any vacancy in their number, but if and for so long
as their number is reduced below the minimum number of directors required to act as such for the time
being, the continuing directors may act only to:
65.1 increase the number of directors to the required minimum; or
65.2 summon a general meeting for that purpose, provided that if there is no director able or willing
to act, then any member may convene a general meeting for that purpose.
66. Neither a director nor an alternate director shall be obliged to hold any qualification shares. A director
who is not a member shall be entitled to receive notice of and to attend and speak, but not vote, at any
general meeting of the Company.
67. The Company in a general meeting as such shall determine the remuneration of the directors for their
services from time to time.
68. The directors shall be paid all their travelling, subsistence and other expenses properly and necessarily
incurred by them in and about the execution of their duties in the Company or in and about the business
of the Company, and in attending meetings of the directors or of committees thereof; If any director
is required to perform extra services or to go to reside abroad or otherwise shall be specifically occupied
about the Companys business, or perform services which, in the opinion of the directors, are outside
the scope of the ordinary duties of a director, they shall be entitled to receive such extra remuneration
as is determined by a disinterested quorum of directors, which may be either in addition to or in substitution
for any other remuneration.
69. Subject to the provisions of the Act, a director may be employed in any other capacity in the Company
or as a director or employee of a company controlled by, or itself a subsidiary of, this company, other
than that of auditor of the Company or of any subsidiary company, and that in this event, the terms
of their appointment, remuneration and otherwise in respect of such other office must be determined
by a disinterested quorum of directors, and any remuneration so paid may be in addition to any other
remuneration payable.
BORROWING POWERS OF THE DIRECTORS
75. The directors may exercise all the powers of the Company to borrow money and to mortgage or encumber
its undertaking and property or any part thereof (both present and future) and to issue debentures
or debenture stock (whether secured or unsecured), whether outright or as security for any debt, liability
or obligation of the Company or of any third party, as they deem fit.
76. Debentures, debenture stock and other securities may be made assignable, free from any equities
between the Company and the person to whom the same may be issued.
77. Any debentures, debenture stock, bonds or other securities may be issued at par or at a discount
or at a premium, and with any special privileges as to redemption, surrender and drawings, but no special
privileges as to allotment of shares or stock, attending and voting at general meetings, appointment
of directors or otherwise shall be given without the sanction of the Company in general meeting.
78. The directors shall cause a proper register to be kept in accordance with the provisions of the Act
of all mortgages and charges specifically affecting the property of the Company, and they shall cause
to be entered in such register in respect of each mortgage or charge a short description of the property
mortgaged or charged, the amount of the charge created, the name of the mortgagee or person entitled
to such charge and such further particulars as the provisions of the Act require.
79. For the purpose of the provisions of article 75, the borrowing powers of the directors shall be unlimited.
164
is prohibited from being, or is removed as, or is disqualified from acting as, a director of a company
in terms of the Act;
1.2
without the consent of the Company in general meeting holds any other office of profit under the
Company except that of managing director or manager; or
1.3
is directly or indirectly interested in any contract or proposed contract with the Company and fails
to declare his interest and the nature thereof in the manner required by the Act;
1.4
gives notice to the Company and the registrar of his resignation as a director with effect from the
date thereof, or such later date as is provided for in, such notice;
1.5
absents himself from meetings of directors for six consecutive months without the permission of the
other directors, and they resolve that his office shall be vacated; Provided that this provision shall
not apply to a director who is represented by an alternate director who does not so absent himself;
1.6
is given notice, signed by members holding in the aggregate more than 50% of the total voting
rights, on a poll of all members then entitled to vote on a poll, at a general meeting, of the termination
of his appointment.
ROTATION OF DIRECTORS
94. The directors shall retire from office in the following manner:
94.1 At the first annual general meeting of the Company all the directors shall retire from office, and at
the annual general meeting in every subsequent year one-third of the directors for the time being, or
if their number is not three or a multiple of three, the number nearest to but not less than one-third,
shall retire from office, provided that:
94.1.1 a managing director and any executive director referred to in article 92 are excluded;
94.1.2 no account shall be taken of any director appointed pursuant to article 92 where such
directors appointment has not been confirmed pursuant to article 92;
94.2 the directors who retire in terms of 94 shall be those who have been longest in office since their last
election, provided that:
94.2.1 if more than one of them were elected a director on the same day, those to retire shall be
determined by lot unless those directors agree otherwise between themselves;
94.2.2 if at any general meeting any director will have held office for three years since his last
election, he shall also retire at such annual general meeting, either as one of the directors to
retire in terms of the foregoing or additionally thereto. The length of time a director has been
in office shall, save in respect of directors appointed or elected in terms of the provisions of
article 92 be computed from the date of his last election or appointment;
165
94.3 any director appointed as such after the conclusion of the Companys preceding annual general
meeting shall retire from office at the conclusion of the annual general meeting held immediately
after his appointment;
94.4 a retiring director shall act as a director throughout the meeting at which he retires;
94.5 a retiring director shall be eligible for re-election, and, if re-elected, shall be deemed not to have
vacated his office;
94.6 the annual general meeting at which a director retires may elect another person to fill the vacated
office, and if it is not so filled the retiring director shall, if he has offered himself for re-election,
be deemed to have been re-elected unless the annual general meeting expressly resolves not to fill
such vacated office or not to re-elect such retiring director;
94.7 no person other than a retiring director shall be eligible for election as a director at any
annual general meeting unless the directors recommend otherwise, or unless not less than
three nor more than twenty-one days before the date appointed for the annual general meeting
a member who is entitled to attend and vote at such annual general meeting shall have lodged
written notice proposing or nominating such person as a director, together with the consent of that
person to be elected as a director.
DIVIDENDS
98. Subject to the provisions of the Statutes:
98.1 The Company may make payments to its members (or any of its members) from time to time.
For the purpose of this article and without detracting from the definition of payment ascribed
to the word in the Act, payment will include any writing off or reduction in the Companys issued
share capital or share premium account in any manner authorised. Provided that capital shall not
be repaid on the basis that it may be called up again.
98.2 The Company in general meeting (subject to obtaining the declaration of the directors referred
to in article 98.8 or the directors, may from time to time declare a dividend to be paid or make
any other payment to the members and to the holders of share warrants (if any) in proportion
to the number of shares held by them in each class. Dividends shall be declared payable
to members recorded in the register on a date subsequent to the date of the declaration of the
dividend or subsequent to the date of confirmation of the dividend, whichever is the later.
98.3 No larger dividend or other payment to members shall be declared by the Company in general
meeting than is recommended by the directors, but the Company in general meeting may declare
a smaller dividend.
98.4 The directors may, before recommending any dividend, set aside out of the profits of the Company
such sums as they think fit as a reserve or reserves, which shall, at the discretion of the directors,
be applicable for any purpose to which the profits of the Company may be properly applied and,
pending such application may, at the like discretion, either be employed in the business of the
Company or be invested in such investments as the directors may from time to time think fit.
The directors may also without placing the same to reserve carry forward any profits that they may
think prudent not to divide.
98.5 Any dividend so declared or other payments approved may be paid either wholly or in part,
by the distribution of specific assets, and in particular of paid up shares or debentures of any
other company, or in cash or in any one or more of such ways as the members in general meeting
or directors may at the time of declaring the dividend or approving the payment determine and
direct, and where any difficulty arises in regard to the distribution, the directors may settle the same
as they think expedient, and in particular may fix the value for distribution of such specific assets
or any part thereof, and may determine that cash payments shall be made to any members upon
the basis of the value so fixed in order to adjust the rights of all parties, and may vest any such
assets in trustees upon such trusts for the persons entitled to the dividend or other payment as may
seem expedient to them.
166
98.6 Unless otherwise determined by the board of directors in respect of any particular dividend
to be declared by the Company, dividends shall not carry interest as against the Company.
Dividends may be declared either free of or subject to the deduction of income tax and any other
tax or duty in respect of which the Company may be chargeable.
98.7 Where any business, property or other asset is acquired by the Company as from a past date on
the terms that the Company shall as from that date take the profits and bear the losses thereof, such
profits or losses, as the case may be, at the discretion of the directors and so far as the Statutes
allow, be credited or debited wholly or in part to the revenue account and in that case the amount so
credited or debited shall so far as the Statutes allow be treated for all purposes as profits or losses
of the Company. Subject as aforesaid, if any shares or securities are acquired by the Company cum
dividend or interest, that dividend or interest may be treated at the discretion of the directors as
revenue and it shall not be obligatory to capitalise the same or any part thereof.
98.8 The declaration of the directors as to whether:
98.8.1 the Company is, or would after the payment be able to pay its debts as they become due
in the ordinary course of business; and
98.8.2 the consolidated assets of the Company, fairly valued, would after the dividend or other
payment not be less than the consolidated liabilities of the Company, shall be conclusive.
98.9 In the case where several persons are registered as joint holders of any share any one of such
persons may give effectual receipts for all dividends and payments in respect of such share.
98.10 Any dividend, interest or other moneys payable to the registered certificated or dematerialised
holder of shares may be paid by cheque, electronically, warrant, coupon or otherwise as the
directors may from time to time determine, and the payment of such cheque or warrant if purporting
to be duly endorsed, or the surrender of any coupon, shall be a good discharge to the Company in
respect thereof.
98.11 Dividends or other payments shall be declared in the currency of the republic. The declaration
of any dividend or other payment may, however, provided that all or any members whose registered
addresses are outside the Republic or who have given written instructions requesting payment
at addresses outside the Republic subject to any Exchange Control Regulations then in force,
be paid in such other currency or currencies as may be stipulated in the declaration. The declaration
may also stipulate the date (hereinafter referred to as the currency conversion date) upon which,
and a provisional rate of exchange at which, the currency of the Republic shall be converted into
such other currency or currencies, provided that the currency conversion date shall be a date not
earlier than the date of the declaration of the dividend or other payment and not later than the date
of its payment. If, in the opinion of the directors, there is no material difference between the rate/s
of exchange ruling on the currency conversion date and the provisional rate/s of exchange
stipulated in the declaration then the currency of the Republic shall be converted at such provisional
rate/s. If, in the opinion of the directors, there is a material difference, then the currency of the
Republic shall be converted into such other currency or currencies at the rate/s of exchange ruling
on the currency conversion date, or at rate/s of exchange which, in the opinion of the directors,
is/are not materially different. Any subsequent rise or fall of rate/s of exchange determined
as above shall be disregarded for payment of the dividend or other payment in question.
98.12 The Company shall be entitled at any time to delegate its obligations to any member, in respect
of unclaimed dividends or other payments, to any one of the Companys bankers, from time to time.
98.13 All entitlements by certificated shareholders of the Company to shares or dividends with a value
of 5 (five) Rand or less per shareholder transaction will be aggregated and the proceeds donated
to a registered charity approved by the directors of the Company.
98.14 The Company may transmit any dividend or other amount payable in respect of a share by ordinary
post to the address of the holder thereof recorded in the register or such other address as the
holder thereof may previously have given to the Company in writing, and the Company shall not be
responsible for any loss in transmission, whether or not it was sent at his request.
167
168
Appendix 3
Details of the companies, excluding subsidiaries, and partnerships of which directors of the Company and its
subsidiaries have been a partner at any time during the five years preceding the circular are set out below:
Company
PC Pienaar
Mvelaphanda Resources
TransHex
Northam
Gold Fields SA
Harmony subsidiaries only
AVMIN (Anglovaal)
Grootvlei Gold Mining
East Rand Proprietary Mine
Orata Resources (Proprietary) Limited
MW Rosslee
Tekiba 10
Cinzaco 103
Absolute Holdings
Central African Gold Mining and Exploration (SA)
Central African Gold Technical Services
Chessboard Trade and Invest 106
Dancarl Diamonds
Messina
Messina Platinum Mines
Metallon Gold
Southernera Management Services South Africa
Southernera Mining and Exploration South Africa
Vleiloerie Beleggings
Dr NM Phosa
African Legal Networks
Alliance Mining Corporation Limited
Altivex 354 (Proprietary) Limited
Asambeni Holdings (Proprietary) Limited
Braemore Resources Plc
Business Venture Investments No 930 (Proprietary) Limited
Comati Logging (Proprietary) Limited
Corridor Development Corporation
Day Star Technology Limited
du Toit Smuts & Mathews Phosa Incorporated
Earthwize Group
Echo Structured Investments (Proprietary) Limited
Empowergro Investments (Proprietary) Limited
Enercorp Africa (Proprietary) Limited
Enterprise Outsourcing Holdings Limited
Eveni Investments & Consulting (Proprietary) Limited
Forge Marketing (Cedar Point Trading 5 (Proprietary) Limited)
Forum Trust
Hans Merensky Holdings (Proprietary) Limited
HWJ Timbers (Proprietary) Limited
Indiza Terra Housing Projects (Proprietary) Limited
Current
Past
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
In liquidation
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
169
Company
Dr NM Phosa (continued)
Karimu 2005 Investments (Proprietary) Limited
Kgato Investments (Proprietary) Limited
Mafika Group
Main Street 169 (Proprietary) Limited
Majorshelf 33 (Proprietary) Limited
Mathews Phosa & Associates (Proprietary) Limited
Mbombela Group
Multisource Telecoms (Proprietary) Limited
Ndarama Mineral Resources (Proprietary) Limited
Nelspruit Project Management & Development Service
Ndonsa Investments (Proprietary) Limited
Power Matla (Proprietary) Limited
SJW Motors (Proprietary) Limited
Time Business Innovations Consultancy (Proprietary) Limited
Tornado Transport (Proprietary) Limited
Tsb Sugar Holdings (Proprietary) Limited
Ubuntu-Botho Investments (Mpumalanga) Limited
Value Logistics Limited
VelaVKE Consulting Engineers (Proprietary) Limited
Vuka Alliance (Proprietary) Limited
Vuka Forestry Holding Group of Companies
Zero Pollution Motors South Africa (Proprietary) Limited
Current
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
JG Best
Metair Investments
Metair Management Services
JSC Polymetal
Anglogold Ashanti Holdings Plc (Isle of Man)
Sentula Mining Limited
*
*
*
*
*
SM Dolamo
Mmaditsela Road Logistics
KV Dicks
Harmony Gold Mining Company
170
Past
Appendix 4
The board has continued implementing various aspects of compliance with the King Report during the
financial year ended 30 June 2009 and to the last practicable date, as more fully detailed below. The Company
is in the process of reviewing and implementing the new requirements in terms of King III.
THE BOARD
Structure of the board
The Company has a unitary board with an independent non-executive chairman. The directors bring a wide
range of experience, diversity, insight and independence of judgment on issues of strategy, performance
resources and standards of conduct, to the board.
Independence of the board
The roles of the chairman and the chief executive officer are separate. The non-executive directors
do not have service contracts and their remuneration is not tied to the groups performance.
Board responsibilities
The board is responsible for the strategy, acquisition and disinvestment policy, risk management, financing
and corporate governance policies of the Company, is accountable for stakeholder relations, protecting
and enhancing the Companys wealth and resources, timely and transparent reporting and for acting
at all times in the best interest of the Company and its shareholders. The board ensures that there
is an appropriate balance of power and authority on the board, such that no one individual or block
of individuals can dominate the boards decision taking.
Appointments to the board
No formal procedure exists for appointment to the board or for the delegation of the functions of the board
and the company does not have a nomination committee at present due to the nature and size of the
Company. Future appointments to the board will, however, be considered by the board as a whole. With the
resignation of the chief executive officer, the chairman and financial director are responsible for reviewing
the content and implementation of the authorised delegation of functions and will report thereon to the board.
Access to company secretary
The directors all have unfettered access to the Company Secretary who, inter alia, is responsible for ensuring
that proper procedures are followed regarding board matters. It requires a decision of the board as a whole
to remove the company Secretary, should this become necessary. directors are furthermore entitled to ask
any questions of any personnel and enjoy unrestricted access to all company documentation, information
and property.
Board and committee meetings and attendance thereof
Directors board packs are prepared and distributed before each board meeting, so as to ensure that
the directors are fully informed of the issues at hand and to give full consideration to all the matters
under discussion.
Two board meetings and three audit committee meetings were held during the financial year ended
30 June 2009. The remuneration committee, although constituted has not formally met as of yet.
171
172
REMUNERATION COMMITTEE
A remuneration committee consisting of the non-executive directors has been established comprising
Messrs Abe Sher and Jan Serfontein. Pursuant to the approval of the transactions, the composition
of the remuneration committee will be reconstituted. The committee is, inter alia, responsible for making
recommendations to the board, within agreed terms of reference, on the Companys framework of executive
remuneration and its costs. The committee will strive to ensure that levels of remuneration are sufficient
to attract and retain directors and senior management of the calibre required to ensure the successful running
of the Company.
COMPANY SECRETARY
The directors all have unfettered access to the company secretary who, inter alia, is responsible for ensuring
that proper procedures are followed regarding board matters. It requires a decision of the board as a whole
to remove the company secretary, should this become necessary. Directors are furthermore entitled to ask
any questions of any personnel and enjoy unrestricted access to all group documentation, information and
property.
The company secretary is required to provide the members of the board with guidance and advice regarding
their responsibilities, duties and powers and to ensure that the board is aware of all legislation relevant
to or affecting the Company. The company Secretary is required to ensure that the Company complies with
all applicable legislation regarding the affairs of the Company, including the necessary recording of meetings
of the board, board committees and shareholders of the Company.
CODE OF ETHICS
The board subscribes to the highest level of professionalism and integrity in conducting its business and
dealing with all of its stakeholders.
In adhering to its code of ethics, the board is guided by the following broad principles:
Businesses should operate and compete in accordance with the principles of free enterprise;
Free enterprise will be constrained by the observance of relevant legislation and generally accepted
principles regarding ethical behaviour in business;
Ethical behaviour is predicated on the concept of utmost good faith and characterised by integrity,
reliability and a commitment to avoid harm;
Business activities will benefit all participants through a fair exchange of value or satisfaction of needs;
and
Equivalent standards of ethical behaviour are expected from individuals and companies with whom
business is conducted.
173
Appendix 5
At the last practicable date and including the acquisition included in the circular but excluding the application
of funds from the share issue for cash, Bauba Platinum had the following material borrowings and intercompany loans:
Loans payable and inter-company loans
Amount
payable/(receivable)
R000
Borrower
Lender
Unsecured
Bauba Platinum
Nedbank Limited
2 996
Bauba Platinum
Calulo Resources*
18 814
Bauba Platinum
Bauba Platinum
Bauba Platinum
Bauba Platinum
Lenopodi
Lubtalk
DQP
Canyon Springs
Investments 116
Niemoller Marmer
Bauba Platinum
Repayment
terms
Interest
rate
Overdraft facility of
R3 million, repayable
on demand, initially
advanced in
June 2009
Prime
plus 2%
No fixed terms of
repayment
Prime
(2 568)
(2 716)
(10 641)
(1 048)
None inter-company
None inter-company
None inter-company
None inter-company
Interest free
Interest free
Prime
Interest free
(13)
None inter-company
Interest free
* The loan is secured by the investments in Lekkersing Diamond Quartzite, other Absolute Mineral Assets and Qinisele Resources
and arose through Calulo Resources funding the working capital requirements of the group and the commencement of mining
activities of Absolute. The remaining balance owed at the last practicable date amounted to approximately R19 million and will be
settled out of cash flow generated by the above investments as well as the proceeds from any disposal of all or part of the above
investments over the next 18 months, following which any remaining balance of the loan may be capitalised in accordance with the
requirements of the Listings Requirements at that point in time. There was no initial loan amount or loan agreement and the above loan
has increased and decreased on an ad hoc and monthly basis over the last four years.
There are no debentures in issue or convertible loans as at the last practicable date. There is no loan capital
outstanding at the last practicable date.
Loans receivable from third parties
Entity
Secured
N/A
Lender
Amount
R
Repayment
terms
Security
Interest
rate
Inception
date
Period
of loan
N/A
N/A
N/A
N/A
N/A
N/A
N/A
174
Lender
Amount
R
Repayment
terms
Security
Interest
rate
Inception
date
Period
of loan
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Appendix 6
175
176
Appendix 7
Name and
registration
number
Diamond Quartzite
Processing
(2007/026130/07)
Golden Dividend 40
(2005/008812/07)
Lenopodi
(2002/004142/07)
Canyon Springs
Investments 116
(Pty) Limited
(2007/028950/07)
Date
business
commenced
Date of
becoming a
subsidiary
Issued
share
capital
Percentage
held
12 September
2007
11 January
2008
R100
24 March
2005
24 April
2005
22 February
2002
Held
by
Nature of
business
100%
Lubtalk
Investments
General
trading in all
aspects
R100
100%
Lenopodi
General
trading in all
aspects
11 July
2003
R100
100%
Bauba
Platinum
Mining of
slate,
quartzite and
other
dimensional
stone
9 October 17 September
2007
2008
R100
100%
Bauba
Platinum
Dormant
1 October
2003
31 December
2005
R120
90%
Lenopodi
Investments
in movable
and
immovable
property
8 February
1967
31 March
2008
R200
90%
Lenopodi
Investments
in movable
and
immovable
property
R25
60%
Bauba
Platinum
and NMR
Platinum
exploration
and mining
100%
Bauba
Platinum
Investment
holding
Lenopodi
International S.L.
Lubtalk Investments
(2003/024338/07)
Niemller Marmer
(Pty) Limited
(2967/001191/07)
8 February 1967
Bauba
NMR
19 December
2006
9 November
2006
3 June 2010*
* Expected date
Shareholders are also referred to Appendix 10, detailing Bauba Platinums group structure.
177
Appendix 8
KEY FEATURES
! Modifying Factors
! Mineral Resources
! Valuation Summary
! Valuation Summary and Conclusions
! Previous Valuations
! Sources of Information
! Conclusion
Project Name:
Compliance:
Competent Persons:
Other Experts:
Effective Date:
Prepared For:
Purpose:
Personal Inspection:
PURPOSE
Absolute Holdings Limited (Absolute) is a junior mining and exploration company listed
on the Venture Capital Market bourse of the JSE Limited (JSE). Absolute has developed
a natural stone portfolio, produced and marketed by Lenopodi (Pty) Limited (Lenopodi), a
wholly-owned subsidiary of Absolute. The current company structure is depicted in
Figure 1.
Polokwane
Pretoria
Witbank
Klerksdorp
Vryheid
28 February 2010.
Upington
LEGEND:
Sishen
Travertine
Slate
Sandstone
Quartzite
Marble
Granite
Project Area
This Technical Statement was done for the Lekkersing Mine held by
Absolute, in the form of an Executive
Summary of the CPR to be included in the
reverse-listing documents as required by
Section 12 of the JSE Listing
Requirements.
Welkom
Ladysmith
Richardsbay
Pietermaritzburg
Kimberley
Bloemfonetin
DURBAN
Prieska
De Aar
Umtata
Saldanha
CAPE TOWN
Bisho
East London
Port Elizabeth
Mosselbay
SCALE:
0
100%
100%
90%
Richtersveld
Onwikkelsings
Maatsappy Bpk
10%
Lubtalk Investments
(Pty) Ltd
100%
Niemller
Marmer
(Edms) Bpk
100%
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate
PAGE 1
178
JOHANNESBURG
100%
Taung Marble
(Pty) Ltd
200 km
am
ib
ia
Durban
PROJECT
AREA
Cape Town
Nababeeps Mountains
(Swartberge)
N1
Lekkersing
an d
lex
y
Ba
er
Apart from the mine being temporarily closed, there are no material
changes. Neither Venmyn nor its staff or Creo Design have or have
had any interest in this project capable of affecting their ability to give
an unbiased opinion, and have not and will not receive any pecuniary
or other benefits in connection with this assignment, other than
normal consulting fees.
Johannesburg
er
eRiv
Orang
A
To
Vioolsdrif To
Eksteenfontein
Atlantic Ocean
Steinkopf
PORT NOLLOTH
382
382
N1
LEGEND:
Powerline
River
Neighbouring Country (Namibia)
Project Area
National Road
Route
Gravel Road
Old Railway Line
2. PROJECT OUTLINE
Absolute has developed a natural stone resource portfolio with
deposits in the Northern Cape and North West Provinces. These are housed
by Lenopodi (Pty) Ltd (Lenopodi), a wholly owned subsidiary of Absolute.
Projects which have been secured by Lenopodi but not yet developed
include a sandstone deposit, known as Picture Stone, near the town of
Vioolsdrif in the Northern Cape. The converted old order mining rights are
owned by Niemoller Marmer Edms Bpk, which Lenopodi acquired in March
2008. Operations are expected to commence in the latter half of 2008. A
marble deposit near the North West town of Taung, known as Taung Marble,
was identified and a new order mining right application was submitted by
Golden Dividend 40 (Pty) Ltd, a subsidiary of Lenopodi, in August 2008.
Currently the project is under care and maintenance.
3. LOCALITY
The Lekkersing quartzite mine is located directly adjacent to the town
Lekkersing on the south western outskirts of the town Lekkersing
(Coordinates 28 59' 58 S, 17 05' 23 E), Northern Cape Province, South
Africa, in an area known as the Richtersveld.
The area is characterised by a mountainous to slightly undulating terrain.
Some minor perennial streams drain the area in a westerly direction south of
the mine site.
The town of Lekkersing lies about 40km northeast of Port Nolloth (see Figure
2) and about 120km northwest of Springbok at an altitude of 350masl and
approximately 35km north of the Steinkopf - Port Nolloth main road. The
mine itself lies directly adjacent to the town on a quartzite ridge. This very
conspicuous north-south trending quartzite ridge, rising in places some
400m above its surroundings is visible in the north from the Steinkopf - Port
Nolloth main road some 20km east of Port Nolloth.
Infrastructure is generally well established, with a good quality tarred and
gravel roads. Lekkersing has no surface water available for mining and
quartzite processing, however, abundant ground water is extracted from the
quartzite aquifer underlying the Lekkersing area. Lekkersing received
Eskom electricity supply in 2000, with power line runs alongside the gravel
road from the junction at the Steinkopf - Port Nolloth road. The Eskom power
is supplied through a 1 MVA line to the town with a 100 kVA supply line
dedicated to the processing factory.
178.998
305.328
337.177
191.93
337.079
1 350.315
189.762
397.432
372.838
256.687
1 216.719
2 567.034
LEASE EXPIRY
DATE
29-Jun-66
29-Jun-66
29-Jun-66
29-Jun-66
29-Jun-66
29-Jun-66
26-Jan-69
26-Jan-69
26-Jan-69
26-Jan-69
26-Jan-69
The assets and quartzite business, including the cessions of the old-order
mineral leases, were acquired for R 2,300,000. Lubtalk has negotiated a
surface rental agreement with the Richtersveld Community, including a
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate
PAGE 2
179
2/71
3/71
LEGEND:
Venmyn has reviewed the legal title documentation and, whilst this does
not constitute a legal opinion, Venmyn has satisfied itself, after
consultation with Absolute's legal advisors, that the information as
presented here is materially correct.
Unregistered sub-divisions of
farm The Richtersveld # 11
Registered portion (Ptn 5) of
farm The Richtersveld # 11
Existing Mining Lease Areas
Roads
Lease owner - Richtersveld
Lease owner - Allied Quartzite
5. GEOLOGICAL SETTING
The Lekkersing quartzite deposits occur in a quartzite horizon, the
Lekkersing Formation, belonging to the Stinkfontein Subgroup of the
Gariep Supergroup. The formation consists of two quartzite horizons
separated and overlain by conglomerate units. Sediments of the
Stinkfontein Subgroup were deposited during the Pre-Cambrian Namibian
era (approximately 900ma years ago) in a shallow marine environment
(see Figure 3).
Brakfontein Section
4/71
5/71
269
270
The Lekkersing area occupies the upper near horizontal limb of a major
regional asymmetric fold verging east. The main fold axis is orientated
north-northeast to south-southwest, gently plunging in a southsouthwesterly direction (Figure 4).
Lekkersing
273
Remainder of farm
The Richtersveld # 11
Remainder of farm
The Richtersveld # 11
The main axial plane is generally parallel to the upper limb resulting in the
bedding planes being very regular, unfolded and therefore always parallel.
Remainder of farm
The Richtersveld # 11
SCALE:
0
2.5 km
Steinkopf - 7km
SCALE:
0
4 km
Lekkersing
B
LEGEND:
West
East
Blommyn Quarry
Strykop Quarry
Lekkersing Factory
and Office Complex
f
Road to Brackfontein
SCALE:
f
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate
PAGE 3
180
150m
At Lekkersing the best quality quartzite is obtained from the beds that exhibit bedding with
a pronounced lamination, the planes of which are from approximately 2.5mm to 80mm
apart.
Mica rich layers tend to enhance the cleavability of the quartzite and therefore the recovery
of good quality cleft stone. The uniqueness of the deposit lies in the nature and quality of
the flat-bedded quartzite, traditionally referred to as flagstone.
The quartzite slab exhibits a very uniform thickness and sufficient hardness to allow the
production of high quality natural tiles at a very low cost. These factors render the
Lekkersing quartzite highly suitable for the manufacture of a range of products by the
processing facility on site. Figures 5 to 7 are examples of the quartzite formation.
6. EXPLORATION PROGRAMME AND BUDGET
There is no exploration programme planned for the future. However on-going exploration
will be initiated once the measured mineral resources are near exhaustion. However, for
the operation to be reopened the following capital is required new equipment and working
capital:-
The existing stone cutting equipment currently being utilised is outdated and inefficient. A
complete new set of tile cutting production lines will be installed, over a phased two year
period, as production increases. Materials handling and factory processes will be
improved through the installation of the required workstations and the acquisition of a
forklift.
Heavy earthmoving equipment will improve productivity at the quarries and to this extent a
front-end loader with a hydraulic forklift adapter will be essential. A front-end loader will be
required towards the end of the first year of operation as forecast production increases
toward 180 000 m2 per annum. One tractor and a customised trailer will be purchased
initially and a second tractor will be required in the second year of operation.
A small office and accommodation facility will be upgraded with communications,
computing equipment and furniture. The capex budget forecast would be implemented in
a phased approach over a two year period as and when production volumes increase.
Approximately half of the total budget as indicated in Table 2 will be required initially whilst
the remainder is forecast for the beginning of the second year of operation.
Total working capital funding of approximately ZAR 2.6 million is forecast, which will be
repaid by the end of the first year of operations.
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate
PAGE 4
181
6 790 400
LSK_07
LSK_08
LSK_09
LSK_10
6 790 350
LSK_05
LSK_06
LSK_12
6 790 300
Programme Report (Site Plan Consulting, 2003) that was submitted on 15th
September 2003. The EMPR is very clear in the type of mining and
rehabilitation methodology to be employed thus ensuring minimal future
liabilities.
LSK_03
LSK_04
LSK_11
LSK_01
6 790 250
LSK_02
LEGEND:
6 790 200
Borehole Positions
Resource Boundary
703 600
703 650
703 700
703 750
703 800
Indicated Resource
Measured Resource
LEGEND:
th
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate
PAGE 5
182
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate
PAGE 6
183
?
Absolute's Vioolsdrift Picture Stone
?
SAMREC Table 1, Items 2-9
?
SAMVAL Valuation (JSE 12.9 (f))
?
JSE Listing Requirement 12.9 (e)
?
Concluding Opinion
KEY FEATURES
Compliance:
Competent Persons:
Sources of Information:
Personal Inspection:
Reliance on Other Experts:
Access:
Property Description and Location:
Licence Status:
Ownership Details:
This Competent Persons Report (CPR) is compliant with the SAMREC- and SAMVAL Codes (Table 1) and the
JSE Ltd (JSE) Listings Requirements and has been annotated with T for Table 1 of the SAMREC Code and JSE
for the JSE Listings Requirements, respectively.
Mr. Andy Clay, M.Sc. (Geol), M.Sc. (Min. Eng.), Dip.Bus.M. Pr.Sci.Nat., MSAIMM, FAusIMM, FGSSA, IOD,
AAPG, CIMMP.
Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA.
5th May 2010.
This is an Independent assessment and verification of Absolute's Greenfields Exploration Assets on behalf of
Absolute. Absolute's strategy is to develop its PGE assets as their priority and to package all other mineral
commodities for potential disposal within the next 12 months. It must be noted that the properties described here
have recently been acquired and are at an early stage. Therefore, a full Competent Persons Report per project
would largely result in statements of not applicable or not available and hence this Short Form summary has
been prepared to describe the assets location, basic geology and prospectivity. Absolute intends providing ongoing feedback to its shareholders as geological assessment information becomes available.
Historical and Technical Reports as supplied by Qinisele Resources (Pty) Limited namely:?
Report Back On A Desktop Coal Resource Study and Geological Model For The Farms Boomplaats 566:
Portions 1, 3, 4, 7 & 8; Modderkuil 1804: Portions 1 & 2;Schaapplaats 1789: Portions 1-17, 19-24, 27-29,
32-34, 36, 38, 41 & 42; and Soetmelksvlei 1791; Magisterial District of Heilbron, Free State,' by Kobus
Dippenaar, July 2009;
?
Presentation Calula_Limestone.pptx' undated; and
?
A Preliminary Report on the Picture Stone Deposit South of Vioolsdrift, Northern Cape by J.G. Botha dated
20th October 2009.
The information available with regards to the coal, limestone and picture stone assets is limited, since all projects
are at their early stages of exploration.
No site inspections were carried out at this stage.
None
No information available
Absolute's exploration assets are geographically dispersed throughout four provinces of South Africa. The coal
properties are found in the Vereeniging-Sasolburg Coalfield of the Free State Province, the Limestone Assets in
the Western and Eastern Cape Provinces and Picture Stone in the Northern Cape.
One Coal Prospecting Right No.30/5/1/1/2/711-PR due to expire in December 2014. Four Limestone Prospecting
Rights, namely (WC)30/5/1/1/2/365PR, (WC) 30/5/1/1/2/362PR, (WC)30/5/1/1/2/364PR and (EC)
30/5/1/1/2/0119PR are due to expire in December 2014. One Old Order Mining Right No.ML 6/99 on Portion of
Vioolsdrift South Commonage due to expire in 2014 which mining right is currently being converted into a New
Order Mining Right and Prospecting Right 296/2007 in the Portion of Remainder Lot 226 Vioolsdrift Settlement in
Namaqualand. Both are for the picture stone.
Dikopane NN Mining (Pty) Limited, a 49% owned subsidiary of Absolute owns the Coal Rights. Canyon Springs
Investments 116 (Pty) Limited a wholly-owned subsidiary of Absolute owns the Limestone Rights. Niemoller
Marmer (Pty) Limited a wholly-owned subsidiary of Absolute owns the Picture Stone Mining Right On Portion Of
Vioolsdrift South Commonage and a Prospecting Right in the Portion Of Remainder Lot 226 Vioolsdrift Settlement
In Namaqualand.
GENERAL
Venmyn was requested by Absolute, a company listed on the JSE Limited
(JSE), to prepare an Independent Competent Person and Valuation Report
on Bauba A Hlabirwa Mining Investments (Pty) Limited's (Bauba) Platinum
Group Elements (PGE) mineral properties as well as a Short-Form Report
on other greenfields mineral assets held by Absolute. This is in order for
Absolute to describe its mineral assets in accordance with the JSE Listings
Requirements (the Listings Requirements) and to fulfil the
obligations of the SAMCode.
Venmyn's primary obligation in preparing mineral asset reports in the public
domain is to describe the mineral projects in compliance with the reporting
codes applicable under the jurisdiction in which the company is listed or the
project's geographical location. In this case, the information that can be
presented includes the licences, basic location, limited geology and a
description of prospectivity. Absolute has not yet determined exploration
activities and budgets.
Venmyn's professional advisors and directors are Competent Persons as
defined by the SAMREC Code and the JORC Code. Venmyn's advisors are,
therefore, internationally accredited. They are also members of the
Australasian Institute of Mining and Metallurgy (AusIMM) which embodies
the Code and Guidelines for Assessment and Valuation of Mineral Assets
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr
PAGE 1
184
po
Li
m
po
Windhoek
BOTSWANA
Polokwane
Gaborone
Pretoria
NAMIBIA
SWAZILAND
Vryburg
Vioolsdrift
Lekkersing Mine
Kroonstad
Heilbron
Coal Assets
Upington
Bethlehem
ge
an
Or
Okiep
Kimberley
Bloemfontein
Richard's
Bay
LESOTHO
Durban
30
LEGEND
RemhoogteCalvinia
Vanrhynsdorp
Coal Assets
Limestone Assets
Quartzite Assets
Roads
Railway
Rivers
Towns
Capital Cities
Oude Bosch
Cape Town
Port Elizabeth
EON
Cenozoic ERA
30
22
30E
22S
26E
Li
po
po
U
IQ
MB
ZA
MO
Mussina
pop
o
Schweizer-Reineke
ts
ar
Bloemhof
l
Vaa
SWAZILAND
Mbabane
Kimberley
Tu
g
el
Klein Zee u
B
Durban
IC
NT
LA
AT
Remhoogte
Middleburg
N
EA
OC
ea
Oc
Archaeozoic
Randian
Swazian
In
Oude Bosch
34S
De Aar
Cape Town
250
Maseru
LESOTHO
ng
ra
O
30S
Bloemfontein
Okiep
ls
ffe
Cenozoic deposits
Kalahari Group
Uitenhage and Zululand Groups
570
Vioolsdrift
Orange
65
Namibian
NAMIBIA
Proterozoic
Mokolian
26S
Pretoria
Johannesburg
Witbank
Phanerozoic
Mesozoic
Palaeozoic
Lim
Rustenburg
Lekkersing Mine
LITHOSTRATIGRAPHIC UNIT
BOTSWANA
Vaalian
18E
Port Elizabeth
Alkaline Complexes
Bushveld Complex felsic rocks
2050
2650
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr
PAGE 2
185
25.1%
100%
Qinisele
Lenopodi
Resources (Pty)
Ltd
(Pty)
Ltd
90%
Lubtalk
Dikopane
Niemller
Marmer (Pty) Ltd
(Picture Stone)
100%
Taung Marble
Canyon Springs
(Pty) Ltd
(Pty) Ltd
(Limestone)
296/2007
Lekkersing Diamond
Quartzite Mine
(NC) 30/5/1/2/2/506 MR
NN
100%
100%
Investments
(Pty) Ltd
49%
Brakfontein
(WC) 30/5/1/1/2/365 PR
Zout Rivier
(WC) 30/5/1/1/2/364 PR
Remhoogte
(WC) 30/5/1/1/2/362 PR
Heilbron Coal
30/5/1/1/2/711 AR
ML 6/99
1
4
80 000
90 000
Sharpeville
?
100000
? Viljoensdrif
?
Loch Vaal
?
Gauteng
Vaal
?
Sasolburg
?
Coalbrook
?
North
West
Mpumalanga
North West
Sasolburg
Coalfield
Gauteng
11
7
12
Swaziland
13
10
9
Free State
15
16
17
14
18
Kwazulu Natal
Lesotho
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Limpopo (Tuli)
Waterberg (Ellisras)
Soutpansberg West (Mopane)
Soutpansberg Central (Tshipise)
Soutpansberg East (Venda-Pafuri)
Springbok Flats
Witbank
Kangwane
Free State
Vereeniging-Sasolburg
South Rand
Highveld
Ermelo
Klip River
Utrecht
Vryheid
Nongoma
Somkhele
Molteno-Indwe
Wolwehoek ?
?
?
MpumaCoalbrook Collieries ?
Sasolburg langa
Oranjeville
Dover
?
Free State
Koppies
?
Heilbron
?
B
Z
CD
-2 990 000
-2 980 000
Wolwehoek
Northern Province
E
F
G
Y
J
X S
W V
T
U
Q
M
19
Eastern Cape
Lebombo/Drakensburg Group
Molteno, Elliot, Clarens Formations
Beaufort Group
Ecca Group
-3 000 000
LEGEND
LEGEND
Project Area
Secondary Roads
Urban Area
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr
PAGE 3
186
Scale:
0
5km
PROSPECTING
RIGHT No.
DATE
ISSUED
EXPIRY
DATE
30/5/1/1/2/711-PR
GEOLOGY
Regional Geology
The farms are located in the Vereeniging-Sasolburg Coalfield as shown in Figure 4. According to the 1:250 000
geological map, mudstone and sandstones of the overlying Beaufort Group (Adelaide Subgroup) are found on
surface on Modderkuil1804 and the southeast of Schaapplaats 1789 properties. These are underlain by the
Volksrust Formation of the Permian Ecca Group, a formation with a thickness of approximately 100m in the
Heilbron area. It consists mostly of argillaceous rocks which are found on the surface of the farms Schaapplaats
1789, Modderkuil 1804, Boomplaats 566 and Soetmelksvlei 1791. The Volksrust Formation consists
predominantly of grey to black silty shale, whereas thin siltstone and sandstone lenses/beds, that are frequently
bioturbated, generally occur near the upper and lower boundaries of the succession. This formation is not known
to contain significant coal-bearing strata in the Vereeniging-Sasolburg Coalfield (Kobus Dippenaar, 2009).
The Vryheid Formation underlies the Volkrust Formation and is the main coal-bearing formation. Outcrops occur
in the far north of Schaapplaats 1789. The coal zone in this coalfield is approximately 40m thick and consists of
three coal units;?
the lower coal unit can be separated into at most three benches by sandstone partings. The unit has an
average thickness of 3m;
?
the middle coal unit consists of the No. 2A and 2B Seams and their associate rock layers (resulting in
successions that can each be up to 8m thick). This middle unit, however, is not always split by clastic
partings; and
TABLE 3: VARIATION IN COAL PROPERTIES (AIR-DRY BASIS),
?
the upper coal unit has a thickness of nearly 5m and includes the No
VEREENIGING-SASOLBURG COALFIELD
3 Seam and the Coal Marker Seam.
ASH
(%)
VM
(%)
CV
(MJ/kg)
19.1
Top Unit
5.2
29.7
21.3
Middle Unit
5.2
29.6
20.8
18.6
Bottom Unit
6.3
25.6
21.8
19.2
HISTORY
Anglo American Corporation of SA Limited (Anglo), Iscor Limited (Iscor),
Goldfields of South Africa Limited (Goldfields) and Sasol explored for coal in
this area between 1960 and 1985. Despite the drilling that the companies
carried out, no interest was shown in the potential commercial extraction of
the coal and no mining has taken place on the Heilbron farms. Data for the 49
boreholes drilled by Anglo, Iscor, Goldfields and Sasol between 1960 and
1985 was obtained by Absolute from the Council for Geosciences. Figure 6
shows the location of historical boreholes drilled on the Heilbron Farms.
94 000
-2 982 000
82 000
-2 988 000
Local Geology
Drilling done on the Heilbron Farms (see Figure 6) supports the general
geological description stated in the regional geology section. The borehole
information revealed the following:?
the depth of the coal zone varies between 125m and 270m. The
average for the area being between 180 and 220m in depth for the
coal zone. General stratigraphic columns of the Sigma area suggest
that the roof of the 40m thick coal zone (Coal Marker Seam) occurs
at a depth of roughly 180m;
?
the upper coal unit is situated approximately 20m above the middle
unit. This unit is in close proximity to a prominent dolerite sill of 80 to
100m thickness that is situated above the coal zone. This has
resulted in strata-displacement as well as the coal of the upper unit
having a lower volatile content;
?
the lower and middle coal units are separated by a clastic parting
with a thickness of roughly 5m; and
?
the Vryheid Formation is underlain by basement rocks comprising
diamictites of the Dwyka Group and unidentified volcanic rocks.
IM
(%)
-2 994 000
The general dip in the area is to the south-south-east following the basinmorphology.
COAL UNIT
LEGEND
Licence Boundary
Boreholes
-3 000 000
Later intrusions in the form of dolerite dykes and sills have disturbed the
strata. Displacements of up to 85m, by the sills, are a common occurrence in
this coalfield. Minor faults with maximum displacements of 5m are also
encountered in the region.
Scale:
0
5km
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr
PAGE 4
187
PROSPECTIVITY OPINION
The farms fall within an area that is known to contain coal and neighbouring
farms actively mine coal. Only further exploration can reveal if the coal found
by historic exploration could possibly be economically extracted on these
farms. Absolute intends to remodel historical information and prepare a
comprehensive exploration program that should reveal reef thickness, coal
grade, properties and geological losses and the potential to mine the coal.
However, at this early stage, too little information is known to reveal any
potential upside or downside.
FARM
NAME
Biesiesfontein 413
Brakfontein 339
Brakfontein 341
Brakfontein 107
Brakfontein 1137
Western Cape/
Hartebeestfontein 412
Malmesbury
Hooggelegen 329
Karnemelksvalley 379
Kraalbosch Vlei 396
Swartfontein 331
Zwartfontein 414
De Koppies 224
Western Cape/
Malmesbury Maatjesfontein 217
Y
22,849.40
21,775.60
19,516.19
21,213.15
18,167.92
16,967.97
14,092.78
15,484.04
16,080.62
18,157.85
19,686.76
21,642.13
X
Brakfontein
3,676,524.68
A
3,675,864.19
B
3,675,381.04
C
3,677,478.07
D
3,678,992.58
E
3,680,297.69
F
3,682,558.39
G
3,683,803.72
H
3,683,430.69
J
3,681,731.91
K
3,680,006.22
L
3,678,242.73
M
N
AREA
(ha)
PORTION
3, 8 and 9
6, 12, 17 and 20
1
3,8
Remhoogte
868
(WC)
6, 10, 16, 17,25,26-28
30/5/1/1/2/362PR
and 33
3 and 6
1
1,971
1-5 and 6
10 and 14
(EC)
30/5/1/1/2/0119PR
X
3,657,813.21
3,656,705.66
3,660,508.39
3,665,347.50
3,666,299.38
3,668,009.98
3,673,963.55
3,675,381.04
3,675,864.19
3,676,524.68
3,670,585.04
3,664,434.40
3,662,866.21
29,411.17 3,661,629.08
30,159.82 3,660,663.82
30,349.88 3,660,141.93
30,732.31 3,659,800.44
Rem Hoogte
A
B
C
D
E
F
G
H
J
K
L
M
N
Y
15,465.75
15,404.34
15,320.64
15,262.58
15,185.66
15,140.81
15,112.35
15,089.37
14,652.64
14,537.92
14,455.65
14,057.39
13,999.89
X
Oude Bosch
3,657,847.72
A
3,657,809.13
B
3,657,786.16
C
3,657,770.84
D
3,657,741.10
E
3,657,714.38
F
3,657,683.46
G
3,657,141.97
H
3,657,230.94
J
3,657,681.73
K
3,657,186.23
L
3,657,714.47
M
3,657,807.88
N
PAGE 5
Y
11,805.34
9,806.31
7,221.60
6,824.32
6,321.61
5,989.78
5,859.74
5,591.56
6,080.58
6,153.83
6,333.93
6,560.97
7,758.30
X
3,737,908.35
3,737,764.67
3,739,011.50
3,739,641.10
3,739,559.28
3,739,505.27
3,739,484.14
3,740,656.53
3,740,753.22
3,740,769.35
3,740,808.95
3,740,858.91
3,741,122.35
12,516.73 3,661,964.15
7,969.93 3,741,168.70
9,997.72 3,659,503.70
10,346.28 3,740,090.04
10,906.49 3,662,874.58
10,947.45 3,741,095.76
R
S
T
U
V
15,509.31
15,452.35
14,582.27
13,783.78
12,232.08
R
S
T
U
V
W
10,942.73
11,047.54
11,146.98
11,181.23
11,217.54
11,220.92
11,388.10 3,740,669.27
11,629.49 3,739,592.29
3,661,893.90
3,659,971.06
3,658,793.17
3,657,983.08
3,657,902.79
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr
188
(WC)
30/5/1/1/2/364PR
2 and 4
Y
32,057.99
30,490.92
27,810.06
25,535.41
25,043.23
24,270.35
21,858.80
21,213.15
21,775.60
22,849.40
25,228.36
28,116.40
28,732.93
PROSPECTING
RIGHT
(WC)
Brakfontein 4,023 6, 1 Or 4
30/5/1/1/2/365PR
1 and 6
5, 8 and Portion 9
1-3, 7-0, 12-14, 16-18
1, 2 and 3
11
Remhoogte 222
PROJECT
NAME
3,741,026.04
3,740,971.26
3,740,887.43
3,740,844.55
3,740,752.84
3,740,612.85
Eastern Cape
Steytlerville
Northern
Cape
Citrusdal
-15 000
-10 000
Kirkwood
Velddrif
FIGURE 7: LOCALITY OF
OUDE BOSCH KLOOF 159
G
E
ABC FH
D
V
U
Uitenhage
Hankey
Port Elizabeth
Kruisfontein
-10 000
Prospecting Right
Area
Piketberg
JK L
-5 000
Humansdorp
Porterville
M
N
Moorreesburg
Saron
Western Cape
Ceres
Darling
Hermon
Malmesbury
Wolseley
Mamre
Wellington
Worcester
Paarl
Z
-3 740 000
E F
-3 660 000
C
G
P
X W
V T
R
S Q
MLK
O N
LEGEND
Project Area
Secondary Roads
Urban Area
Rivers
Scale:
2.5 km
Scale:
0
2.5 km
LEGEND
Western Cape
-30 000
Urban Area
Railway Line
Project Area
Secondary Roads
-20 000
Velddrif
Piketberg
Vredenburg
Saldanha
Hopefield
Western Cape
Velddrif
-3 675 000
-20 000
-15 000
Piketberg
Vredenburg
-3 660 000
Moorreesburg
Saldanha
Darling
Q
P
C
O
Hopefield
Moorreesburg
Malmesbury
Darling
Malmesbury
Mamre
M
F
-3 670 000
-3 680 000
Moorreesburg
H
J
Kilometers
Kilometers
0
2km
LEGEND
LEGEND
Project Area
Arterial Route
Main Road
Secondary Road
Project Area
Urban Area
National Road
Main Road
Secondary Road
Other Access Roads and Streets
Tracks
Rivers and/or Streams
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr
PAGE 6
189
HISTORY
The Project is at an early stage of prospecting. No work has been conducted
in this area to the knowledge of Venmyn or Absolute. The only work done so
far on the Project is the Environmental Impact Assessment. Absolute's aim is
to identify, package and dispose of these properties within a 12 month
period.
PROSPECTIVITY OPINION
The farms fall within an area known to host limestone deposits. However,
due to the lack of information on the farms, neither Venmyn nor Absolute can
provide any information to adequately demonstrate any potential upside or
downside.
Due to the extremely hot and arid climate, sheep and goat farming are the
main activities. Lucerne is grown using irrigation water from the Orange
River.
-3 205 500
-720 000
LEGEND
2km
Project Area
Urban Area
Main Road
Secondary Road
Tracks
NAMBIA
-720 000
?
Vioolsdrif
-716 500
Vioolsdrif
-3 209 000
LOCATION
The deposit lies directly south of Vioolsdrift in the South African Province of
the Northern Cape. Vioolsdrift is a small border-post town directly south of
the Orange River. It is located between Cape Town in South Africa and
Windhoek in Namibia. The town is accessed by the National route N7
highway. Figures 11 and 12 show the location of the farms. Vioolsdrift is
within a 10km radius of the Lekkersing Quartzite Mine, which is also owned
by Absolute.
Kotzehoop
Vioolsdrif
Province of South Africa. The Old Order Rights are in the process of being
converted to New Order Rights. The current tenure period is for 10 years.
Table 7 is a summary of the Rights of the Vioolsdrift Picture Stone assets:-
-3 210 000
Northern Cape
Kilometers
0
2km
LEGEND
Project Area
Urban Area
Main Road
Secondary Road
Tracks
GEOLOGY
The material belongs to the Nama Sedimentary Formation of the Vioolsdrift
Suite of the Namaqualand Metamorphic Complex. The occurrence at
Vioolsdrift is a classic example of a sedimentary outlier, surrounded by rocks
of the much older Nama Group. The Vioolsdrift Picture Stone deposit rests
discordantly on the flat top of a Dwyka limestone horizon. The material is
only found above a certain contour in the Vioolsdrift area (+/-280m) and
varies in depth from 10cm to several metres.
The so-called Picture Stone are metamorphosed light brown siltstone to
fine-grained sandstone which displays decorative wood grain type patterns
throughout the texture of the rock. Figure 13 shows some specimens of the
rock patterns.
The patterns, known as Liesegang bands, form by precipitation of iron
oxides precipitating from groundwater that has permeated the slightly
porous rock after deposition. According to J.G. Botha there are only a few of
these type of deposits in the world and in South Africa none that are nearly as
appealing as the ones directly south of Vioolsdrift, where they mainly occur
as erosion resistant small hilltops within the large Orange River valley.
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr
PAGE 7
190
RIGHT
No.
Portion of
Vioolsdrift
South
Commonage
ML 6/99
Portion of
Remainder
Lot 226
Vioolsdrift
Settlement
296/2007
TYPE OF
RIGHT
AREA APPLICATION
(ha)
NAME
Old Order
34.97
Mining Right
New Order
Prospecting
Right
DATE
ISSUED
EXPIRY
DATE
17-Aug-04
2014
17-Aug-04
2014
Niemoller
Marmer (Pty)
Limited
664.8
HISTORY
No information is available on previous work done on these farms. Prospecting has shown
that Picture Stone occurs in the area.
The metamorphosed quartzitic sediments that make up the
Picture Stone are, internationally, a very rare occurrence.
Absolute holds the largest Picture Stone deposit in South
Africa.
PROSPECTIVITY OPINION
Not enough information is known to provide a potential upside or downside to the project.
The area is known to host occurrences of a rare form of Picture Stone that could be
economic if it is present in sufficient volume but further exploration would be needed to
delineate the deposit and the properties of the deposit.
ASSESSMENT CRITERIA
Heilbron Coal
Limestone
Assets
Vioolsdrift
Picture Stone
T2
Project Data
Not Available
Not Available
Not Available
T3
Sampling
Not Available
Not Available
Not Available
T4
Interpretation / Modelling
Not Available
Not Available
Not Available
T5
Not Available
Not Available
Not Available
T6
Risk Analysis
Not Available
Not Available
Not Available
T7
Not Available
Not Available
Not Available
T8
Balanced Reporting
Not Available
Not Available
Not Available
T9
Not Available
Not Available
Not Available
T10
Other Considerations
Not Available
Not Available
Not Available
SAMVAL VALUATION
Due to the lack of historical data, a lack of historical expenditure, no committed future exploration budget, no SAMREC Code compliant mineral resources or
reserves, the Project is ascribed a value ZAR0.00.
The Absolute Greenfields projects have no value at this stage. Only if money is available in the future will Absolute consider further exploration and valuation
of the properties. No allowance for future exploration expenditure on the Project has been made as of yet.
COMPLIANCE
These properties are still at the Greenfields stage. To-date, Absolute has only incurred minimal expenditure and the exploration programmes are still to be
designed. At this stage insufficient information is available for the Project upon which to present SAMREC/SAMVAL compliant documentation, and this will be
prepared in the future if exploration is to be undertaken. That information will be reported to shareholders at an appropriate time.
Neither Venmyn nor Absolute can provide additional geological and prospectivity information for the Project in a manner that can adequately demonstrate
potential downside or upside. No value is ascribed to these properties.
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr
PAGE 8
191
C. A. TAYLOR
B.Sc.Hons (Geol),
Pr Sci Nat, MGSSA, MGASA,
MINERAL PROJECT ADVISOR
Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr
PAGE 9
192
Appendix 9
The salient terms of the Absolute Holdings Limited Share Incentive Scheme are set out below:
1.
1.2.3 Capitalisation Issue means the issue of Shares on a capitalisation of the Companys
profits and/or reserves (including the Share premium account and the capital redemption
reserve fund);
1.2.9
Employee means anyone employed in a full-time capacity by the Company or any Group
company, who is entitled, in terms hereof or in terms of any provision of the Act, to acquire
Shares or rights from the Trust such as is referred to therein; including executive directors
but excluding non-executive directors;
BxC
=
=
=
1.2.27 Reserved Share means a Scheme Share which a Participant has undertaken to purchase,
or has purchased, from the Trust in terms of this Deed;
1.2.29 Scheme means the Scheme set out in this Deed, as may be amended from time to time
in terms of clause 26;
1.2.30 Scheme Allocation means, initially, the amount of 100 000 000 (one hundred million)
Ordinary Shares which will initially be the subject matter of the Scheme, together with any
further Shares or rights which are allocated by or in terms of this Deed or in terms of an
authority granted by the Company in general meeting for purposes of the Scheme, subject
to the limits stated in this Deed and the Listings Requirements;
1.2.31 Scheme Share means any Share acquired by the Trustees in terms of the Scheme while
it is either an Unreserved Share or a Reserved Share;
193
1.2.32 Secretary means the Secretary for the time being of the company or another person
nominated by the Directors as the secretary for the purposes of the Deed;
1.2.34 Share Debt means the original Purchase Price of the Scheme Shares together with any
interest levied in respect thereof from time to time by the Trustees;
1.2.35 Share means an Ordinary Share in the capital of the Company;
1.2.40 Unreserved Share means a Scheme Share which is not a Reserved Share;
1.2.41 Vesting Date/s means the date(s) the Ordinary Shares will vest in the Participants,
as set out in clause 18.1.3;
1.2.42 Voluntary Termination of Employment means the lawful dismissal of the Employee by the
Group or the resignation of the Employee from the Group or if a Participant is finally
sequestrated or liquidated or where the Scheme Shares of a Participant are attached for
purposes of a sale in execution; and
1.2.43 VWAP means the 30 (thirty)-day volume weighted average price for the period ending
on the trading day immediately preceding the Offer Date.
2. PURPOSE
The Scheme is intended as an incentive to Employees to promote the continued growth of the
Company and its subsidiaries by giving them an opportunity to acquire Ordinary Shares or rights therein.
The Scheme may not trade in the Companys securities.
8. DUTIES OF TRUSTEES
In addition to any other duty imposed by this Deed, the Trustees shall:
8.1
administer the Scheme in order to achieve and maintain the objectives of the Scheme;
8.2
make Offers to Offerees as directed in terms of clause 16, but always subject to the provisions of
the Act and the Listings Requirements;
8.3
procure that all Reserved Shares and Capitalisation Shares be registered in the names of the
relevant Offeree subject thereto that the Offeree pledges those Shares to the Trust until such time
as the Offerees obligation to pay for Scheme Shares has been extinguished in terms hereof (and
subject to the provisions of clauses 21 and 27) and provides the Trust with signed Share transfer
forms in respect of the Shares so pledged (as detailed in clause 25) and ensure that they remain so
pledged and registered for so long as they remain Scheme Shares;
8.4
procure that all circulars, letters and other documents issued to Shareholders of the Company in
any Rights Issue are issued to Participants as well;
8.5
cause to be released to a Participant upon his complying with the provisions of clause 20, the
Reserved Shares and all Capitalisation Shares linked thereto;
8.6
ensure that all Reserved Shares and Capitalisation Shares in respect of which an Offer has been
accepted and which are transferred to an Offeree, are pledged to the Trustees by way of security
for the payment of the full Purchase Price and interest thereon payable by such Offeree in respect
thereof, the form of such pledge to be determined by the Trustees.
194
14.2 The purchase or subscription price of Shares acquired by the Trust in terms of clause 13, the costs
incurred by the Trust in the acquisition thereof, any duties payable by the Trust upon the transfer
thereof to Participant and any monies required to effect payment of any previous borrowings
by the Trustees, as for the proper execution of their duties in terms hereof, will be met out of:
14.2.1 the Trusts own resources, if any; and/or
14.2.2 loans to be made to the Trust by Group companies in accordance with the provisions
of Section 38(2)(b) of the Act; and/or
14.2.3 loans by third parties to the Trust to be procured by the Directors or the Trustees upon such
terms as the Directors or the Trustees are able to arrange; and/or as the Directors may from
time to time direct.
14.3 The Company shall be entitled to levy interest in respect of any loans made to the Trust at such rate
as may be agreed between it and the Trustees at the time when any such loan is made, and shall be
repaid from amounts received by the Trustees in terms of clauses 20 and 21. The aforementioned
provision shall also be applicable to loans from third parties.
15. ELIGIBILITY
15.1 Employees shall be eligible to and shall participate in the Scheme only if and to the extent that
Offers are made to and are accepted by them.
15.2 The Directors, in their sole Discretion, but subject to the provisions hereof and of the Act, may from
time to time by resolution direct the Trustees to Offer Unreserved or Reserved Shares or rights
to Offerees named or referred to therein.
15.3 Every resolution in terms of clause 15.3 shall specify:
15.3.1 the name of the Offeree;
15.3.2 the number of Unreserved Shares or Options Offered;
15.3.3 the Offer Date;
15.3.4 the Vesting Date; and
15.3.5 the Purchase Price.
16. OFFERS
16.1 The maximum number of Scheme Shares in respect whereof any one Offeree shall be entitled
to accept an Offer pursuant to the Trust shall not exceed such number of Shares as may
be determined from time to time by the Directors, in consultation with the JSE, which number
of Shares shall not exceed 60 000 000 (sixty million) (6 000 000 or six million post consolidation
on 100:1 basis) of the issued Ordinary Shares of the Company: provided that no such maximum
imposed shall be less, in respect of any Participant, than the number of Shares in respect of which
such Participant has already accepted Offers prior to that date.
16.3 An Offer:
16.3.1 shall be made at the Purchase Price, subject to such provisions applicable to Shares
reserved or issued in terms of clause 13.1, on the Offer Date;
16.3.2 shall be governed by the provisions of this Deed and shall, without limiting the generality
of the aforegoing, be subject to clause 20, and the conditions that until the full Purchase
Price has been paid to the Trustees:
16.3.2.1 those Shares and all Capitalisation Shares linked thereto shall be registered as
provided in clause 8.3 and such Shares shall be deemed to have been pledged
to the Trustees as required in terms of clause 8.6;
195
16.3.2.2 those Shares and all Capitalisation Shares linked thereto may not be sold,
lent or transferred (other than to the Trustees in the manner and on the basis
as is expressly provided in clause 21), or, subject to the provisions of clause 8.6,
in any way be mortgaged, pledged or otherwise encumbered, unless the Trustees
in their Discretion consent thereto in writing;
16.3.2.3 the sale resulting from the acceptance thereof may be cancelled in terms of this
Deed;
16.3.2.4 the voting rights attaching to all Shares sold to Participants in terms of the Scheme
and the Capitalisation Share linked thereto shall at all times vest in the Trustees
until final payment of the Share Debt in respect thereof has been received by the
Trust and until the period as detailed in clause 22 has elapsed, provided that
Scheme Shares will have no voting rights for approval of resolutions in respect
of the Listings Requirements or for determining categorisation of transactions
in terms of the Listings Requirements;
16.3.3 shall be personal to and only accepted by the Offeree to whom it is addressed (or the
executor of the deceased estate of the Employee concerned);
16.3.4 shall, unless otherwise specified in it, be accepted by notice in writing in such form as the
Company may stipulate, delivered to the Secretary within 1 (one week) after it is made;
16.3.5 may be accepted in part (in respect only of 100,000 (one hundred thousand) Shares
or multiples thereof) or in full; and
16.3.6 to the Directors shall, to the extent required by law, be approved by the Shareholders of the
Company.
16.4 Each acceptance of an Offer shall:
16.4.1 be accompanied by an amount per Share stipulated in the Offer, payable in respect
of the number of Shares in respect of which the Offer is accepted;
16.4.2 be regarded as complete only when the relevant cheque or other instrument of payment
has been honoured or full payment in respect thereof has been made;
16.4.3 be in terms of and be subject to and governed by the provisions of this Deed; and
16.4.4 specify an address.
17. SHARE OPTIONS
17.1 Notwithstanding anything to the contrary contained herein, the Trustees will first Offer Options or
rights to the Companys Chief Executive Officer, upon such terms and conditions and in form and
substance substantially similar to that contained in the Offer letter as more fully described and
attached hereto marked annexe A. Thereafter, any further Offers of Options or rights will be made
in accordance with the provisions of clause 17.2.
17.2 Subject to the provisions of clause17.1, the Directors may at their Discretion direct the Trustees to
Offer Options or rights to eligible persons, and in the event of their doing so the following provisions
will apply:
17.2.1 for the purposes of this clause17.2, exercise price means the price per Option Share
payable by an eligible person upon the exercise of an Option and will not be less than the
Purchase Price;
17.2.3 in the event of a capitalisation of its distributable or non-distributable reserves at any time
during which an Option is outstanding, the Company may, at its Discretion, either:
17.2.3.1 reduce the exercise price and increase the number of Shares relative to that Option
by multiplying the exercise price by a fraction of which the numerator will be the
number of Shares ranking for the Capitalisation Issue prior to capitalisation and
the denominator the aggregate number of Shares in issue after the Capitalisation
Issue, and by multiplying the number of Shares relative to that Option on the
registration date for the Capitalisation Issue by the inverse of the above fraction;
or
196
17.2.3.2 not alter the number, exercise price and other terms relating to the Option but issue
additional Shares to the Participant after a Capitalisation Issue for no consideration
at the time he exercises the Option, such additional Shares to be determined
on the basis of the ratio used in the Capitalisation Issue. The Company will ensure
that it has sufficient reserves available to issue the additional Shares fully paid;
17.2.4 if at any time the Shares of the Company are consolidated or subdivided then the
number of Shares that may be acquired in terms of Options after such consolidation
or sub-division will be reduced or increased proportionately so that the Shares to be issued
on the exercise of an Option will have the same aggregate par value as they would have
had if the consolidation or subdivision had not taken place, and the exercise price will be
increased or reduced proportionately in accordance with the consolidation or sub-division.
18. VESTING
18.1 Subject to the provisions of clause 17.1, any Offer made under the Scheme will be either exercised:
18.1.1 in full on the Offer Date; or
18.1.2 in the proportions contemplated in clause 18.1.3 at least 10 (ten) days prior to the relevant
Vesting Dates.
18.1.3 Notwithstanding payment of the Purchase Price the Shares will only vest on the Vesting
Dates listed below:
18.1.3.1 25% (twenty-five percent) on the third anniversary of the Offer Date;
18.1.3.2 25% (twenty-five percent) on the fourth anniversary of the Offer Date;
18.1.3.3 25% (twenty-five percent) on the fifth anniversary of the Offer Date;
18.1.3.4 25% (twenty-five percent) on the sixth anniversary of the Offer Date;
18.1.4 if a Participants Vesting Date falls within a closed period in respect of the Companys
shares, as defined in the Listings Requirements, then the Vesting Date shall be postponed
until the first business day following the end of such closed period, and Vesting Date shall
be construed accordingly; and
18.1.5 the Participants shall upon issue or transfer of the Shares to them be entitled to exercise
all rights attached to such Shares including to receive distribution of the assets or capital
of the Company (including dividends, other payments to which holders of Ordinary Shares
are entitled or subject to the provisions of clause 12.2 distributions upon winding-up of the
Company).
22. DISPOSAL OF SCHEME SHARES
22.1 When a Participant becomes entitled to dispose of his Scheme Shares in terms hereof or in terms
of his unique Offer document a Participant will only be entitled to dispose of his Scheme Shares
by first offering it for sale, in writing, to the Trust for a period of 24 (twenty-four) hours if the offer
in writing is received by the Trustees before 9:00 am in the morning, otherwise for 48 (forty-eight)
hours, within which time the Trust must indicate in writing if it wishes to acquire the Scheme Shares
and at what price. The Participant shall be entitled to accept or decline the offer of the Trust. Should
the Participant decline the Offer of the Trust, if any, the Participant may then only dispose of his
Scheme Shares on the JSE.
22.2 Should a Participant cease to be an Employee at any time after this Deed takes effect then the
following terms and conditions will apply to any Offer made to the Participant:
Voluntary Termination of Employment:
22.2.1 Where the Participants shares are not subject to any restrictions on the sale thereof and
subject thereto that the Share Debt has been paid in full, the Participant will be entitled
to dispose of his Scheme Shares in accordance with the provisions of clause 22.1.
197
22.2.2 In respect of Scheme Shares which the Participant is not entitled to dispose of due
to restrictions on the sale, transfer or disposal thereof the Trustees shall be entitled at their
sole discretion but upon notice in writing within 10 (ten) trading days from the lapsing
of the 60 (sixty) trading days referred to below, to re-acquire the shares at the lower of any
average price achieved by the Shares over 10 (ten) consecutive trading days during the
60 (sixty) trading days after the voluntary termination of the employment of the Employee or
at the value of the Share Debt. The amount which then remains outstanding shall be repaid
by the Participant on demand.
22.2.3 Where no restrictions are applicable in respect of the disposal of Scheme Shares but the
Participant has not extinguished his Share Debt the Trustees will at their sole Discretion, but
within 10 (ten) trading days from the lapsing of the 60 (sixty) trading days referred to below
and upon notice in writing to the Participant, be entitled to re-acquire, in whole or in part,
the Scheme Shares from the Participant at the lower of any average price achieved by the
Shares over 10 (ten) consecutive trading days during the 60 (sixty) trading days after the
Voluntary Termination of Employment of the Participant. The amount which then remains
outstanding will be repaid by the Participant on demand.
Involuntary Termination of Employment:
22.2.4 Where the Participants shares are not subject to any restrictions on the sale thereof and
subject thereto that the Share Debt has been paid in full, the Participant will be entitled
to dispose of his Shares in accordance with the provisions of clause 22.1.
22.2.5 In respect of Scheme Shares which the Participant is not entitled to dispose of due
to restrictions on the sale, transfer or disposal thereof, the Trustees shall be entitled
at their sole Discretion but upon notice in writing, within 5 (five) trading days from the
lapsing of the 20 (twenty) trading-day period referred to below to re-acquire the Shares
at the higher of any average price achieved by the Shares over 5 (five) consecutive trading
days during the 20 (twenty) trading days after the involuntary termination of the employment
of the Participant, or the value of the Share Debt and apply set-off.
22.2.6 Where no restrictions are applicable in respect of the disposal of scheme Shares but
the Participant has not extinguished his Share Debt, the Trustees will be entitled at their
sole Discretion but within 5 (five) trading days from the lapsing of the 20 (twenty) day
trading period referred to below and upon notice in writing to the Participant, be entitled
to re-acquire, in whole or in part, the Scheme Shares from the Participant at the higher
of any average price achieved by the Shares over 5 (five) consecutive trading days during
the 20 (twenty) trading days immediately after the Involuntary Termination of Employment
of the Participant.
Procedure after the Scheme Shares fully paid:
22.2.7 An Offeree may trade in his Scheme Shares solely in terms of his unique Offer Document.
22.2.8 Notwithstanding the provisions of clause 21.1, the Trustees may in their sole Discretion
determine by notice in writing, not to enforce the restrictions applicable to the disposal
of the Scheme Shares of that Participant and the Participant or his trustee or executor
or curator may then within 60 (sixty) days from receipt of such notice pay the Share Debt
and dispose of the Scheme Shares as is contemplated in clause 22.
22.2.9 Notwithstanding the provisions of clause 22.2.7, if so determined by the Directors at any
time after an offer to all shareholders of the Company other than to the Participant, to acquire
their Shares, or a scheme of arrangement between the Company and its Shareholders
(or any class of them), or any other scheme of arrangement including a sale, reorganisation
or reconstruction of the Companys Share capital by virtue of which control of the Company
would pass, becomes unconditional (whether in its original or revised form), or is sanctioned
by the court, as the case may be, the Shares may be disposed of pursuant to such offer.
198
199
Appendix 10
25.1%
Qinisele
Resources (Pty)
Ltd
90%
Lubtalk
Investments
(Pty) Ltd
100%
Diamond Quartzite
Processing
(Pty) Ltd
200
100%
Lenopodi
(Pty)
Ltd
100%
Niemller
Marmer (Pty) Ltd
(Picture Stone)
49%
Dikopane NN
Mining (Pty) Ltd
(Coal)
100%
Taung Marble
(Pty) Ltd
100%
Canyon Springs
(Pty) Ltd
(Limestone)
Bauba
Platinum
Limited
(JSE listed)
25.1%
100%
Qinisele
Resources
(Pty) Ltd
90%
Lubtalk
Investments
(Pty) Ltd
Lenopodi
(Pty)
Ltd
100%
Niemller
Marmer (Pty)
Ltd
(Picture Stone)
49%
100%
Dikopane NN
Mining (Pty) Ltd
(Coal
100%
Taung Marble
(Pty) Ltd
100%
Canyon Springs
(Pty) Ltd
(Limestone)
Ndarama
Mineral Res.
(Pty) Ltd
34.4%
25.6%
Bauba A
Hlabirwa
Mining Inv.
(Bauba)1
100%
Diamond
Quartzite
Processing
(Pty) Ltd
Note 1: Combined (direct and indirect) shareholding of Bauba Platinum in Bauba = 60%
201
Appendix 11
LEASEHOLD PROPERTIES
The Company did not have any leasehold properties at the last practicable date. The Company has signed
a lease agreement which is subject to the approval of the transactions set out in the circular to shareholders,
which lease details are set out below:
Company
Address
Lease
Tangmere
Investment
Corporation
(Pty) Ltd
2nd Floor
West Wing
Longpoint
Fourways
Premises
202
Lease
term
3-year
lease
commencing
1 May 2010
Current
rental
per
month
R39 182
(excluding
VAT)
End of
lease
date
30 April
2013
Escalation
Date of
increase
203
204
REF. W2CF00000
The authorised share capital of the Company at the date of issue of this circular is R25 000 000 comprising
25 000 000 ordinary shares with a par value of R1.00 each. The issued share capital is R16 011 854,
comprising 16 011 854 ordinary shares, with a par value of R1.00 each. The share premium of the Company
is R112 063 000. There are no treasury shares. The reverse listing will be subject to the Company retaining
the spread of shareholders as required in terms of the JSE Listings Requirements.
All the advisors, whose names and reports are included in this circular, have given and have not withdrawn,
prior to publication of this circular, their written consents to act in the capacity stated and for the inclusion of
their names and, where applicable, reports, in the form and context in which they appear in this document.
Corporate Advisor
Sponsor
Auditors to Absolute
Attorney
Competent Person