Sable Mining Africa Regulatory News (SBLM)

Sable Mining Africa Ltd / Index: AIM / Epic: SBLM / Sector: Natural Resources

23 April 2010

Sable Mining Africa Limited ('Sable Mining' or 'the Company')

Acquisition of Delta Mining Consolidated Ltd

Sable Mining Africa Limited, the AIM listed resource investment company, announces that Rannerdale Limited ('Rannerdale'), a wholly owned subsidiary of AIM-listed London Mining PLC ('London Mining'), has accepted the Company's offer to acquire its 27.50% interest Delta Mining Consolidated Limited ('DMC') for a cash consideration of US$24.8m. The transaction is subject to the same regulatory conditions as the acquisition of the 36.50% interest in DMC announced on 1 April 2010. Following the completion of both transactions, Sable Mining will own the entire issued share capital of DMC.

Sable Mining CEO Andrew Groves said, "DMC has a world-class portfolio of coal assets in South Africa and Botswana which we plan to fund and develop rapidly towards production. The recent equity placing, which raised US$125 million for Sable Mining, will enable us to put DMC in a strong position to fast-track the development of its assets to generate cash flow through production. We are also active in evaluating additional opportunities, including iron ore projects, to build our portfolio and create a major sub-Saharan African focussed mining company."

DMC controls four major coal interests in South Africa and Botswana in established coal producing regions, all with active development programmes in place to raise their current resource base. In South Africa these include the Rietkuil coal deposit, which has short term production potential utilising the current metallurgical and thermal coal resource of 200 million tonnes; the Springbok Flats project, which has in-situ gross tonnages currently modelled at over 2 billion tonnes of metallurgical and thermal coal; and the Limpopo coal project, which has a current provisional gross in-situ tonnage estimate in excess of 135 million tonnes and a resource target of 400 million tonnes of metallurgical and thermal coal. In Botswana DMC has 12 greenfield concession blocks covering 8,682 sq km and straddling known coal bearing sediments in eastern Botswana.

The Company notes London Mining's announcement issued this morning in which London Mining asserts that it has a private agreement with Heine van Niekerk and Pieter Wiese, CEO and CFO respectively of DMC, whereby private investment vehicles of Heine van Niekerk and Pieter Wiese, amongst other parties, (the 'Interested Parties') guarantee that London Mining will receive a total consideration of US$40 million in the event of the sale of DMC, and that London Mining expects to receive US$15.2m in Sable Mining shares from the Interested Parties. 

This arrangement is a private matter between London Mining and the Interested Parties and is subject to the prior approval of the South African Reserve Bank.

Should London Mining receive any Sable Mining shares from the Interested Parties (such transfer in any event being subject to the prior written approval of the board of Sable Mining in accordance with the terms of the agreement entered into and announced by Sable Mining on 1 April 2010 ('the SPA')) such shares will continue be subject to the same lock in provisions as are imposed on the shares in accordance with the terms of the SPA.

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