Sable Mining Africa Regulatory News (SBLM)

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

1 April 2010

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

Offer for Delta Mining Consolidated Ltd

Sable Mining Africa Limited, the AIM listed resource investment company, is pleased to announce that it has today entered into an agreement to acquire a further 36.5% of South African-based exploration and mining company, Delta Mining Consolidated Ltd ('DMC') and has made an offer to acquire the balance of DMC's share capital not currently held by Sable's wholly owned subsidiary, Tanaka Investments Limited. 

The proposed acquisitions, which are fully supported by the Board of DMC, are in line with the Company's strategy to invest in and acquire resource exploration and development projects in sub-Saharan Africa.

Sable Mining has today entered into an agreement to purchase, subject to the satisfaction of certain conditions and the operation of pre-emptive rights on transfer, 490,374 DMC shares from the Avalon Trust ('Avalon') and 25,613 DMC shares from Mikakor CC ('Mikakor'). These shares represent 36.5% of DMC's issued share capital and will be acquired for a total consideration of US$36,934,517 to be satisfied by the allotment to Avalon and Mikakor of, in aggregate, 81,533,150 new ordinary shares in the capital of Sable Mining ('the Consideration Shares'). 

In addition, Sable Mining has today made an offer (the 'Offer') to acquire the remaining DMC shares (representing 27.5% of DMC's share capital) from Rannerdale Limited ('Rannerdale'), which is a wholly owned subsidiary of AIM-listed London Mining PLC ('London Mining'). As required by the South African Securities Regulations Code on Takeovers and Mergers, which currently applies to DMC, the Offer extended to Rannerdale is on the same terms as the offer made to Avalon and Mikakor. As such, if Rannerdale accepts the Offer it can elect either to receive the consideration in the form of shares in Sable Mining (at a price per DMC share of US$71.58) or in the alternative to elect to receive cash (at a price per DMC share of US$63.67). London Mining has publicly expressed its interest in reviewing its options with regards to its investment in DMC in its announcement released on 30 March 2010, but the Company has not yet received confirmation from London Mining as to whether or not they intend to accept the Offer.

Sable Mining CEO Andrew Groves said, "DMC has what we believe to be world class coal assets in proven mining jurisdictions. This acquisition represents a significant opportunity for Sable, and we believe that with our support and guidance, its well defined coal portfolio can be rapidly advanced towards production."

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 Consideration Shares represent approximately 12.99% of the issued share capital of the Company and following Admission, the Consideration Shares will represent 11.49% of the enlarged issued share capital, which will then comprise 709,299,172 ordinary shares.

The Offer is, inter alia, conditional on admission of the Consideration Shares being admitted trading on AIM ('Admission'). The Company will make a further announcement as to the expected date of Admission in due course.

The Consideration Shares will, when issued, rank pari passu in all respects with the existing issued shares of Sable Mining, including the right to receive any dividends and other distributions declared following Admission.

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