2 Jul 2008 07:00
Strategic Natural Resources PLC
("SNR" or the "Company"); Ticker: (SNRP)
SNR SUBSIDIARY SECURES LIKETH UNION (PTY) LIMITED AS ITS BEE PARTNER
Strategic Natural Resources PLC announces that its subsidiary, Acharnian Mining Company Limited ("AML"), has completed the sale of a 21 per cent. interest in Elitheni Coal (Pty.) Limited ("Elitheni Coal"), the holder of the coal prospecting rights over the Elitheni Area, to Liketh Union (Pty) Limited ("Liketh"), a group of broadly-based black economic empowerment ("BEE") interests led by VUWA Investment (Pty) Limited ("Vuwa"). The consideration is approximately UK £3.972 million, payable as to ZAR 10 million in cash now (approximately £640,000) and the balance of approximately £3.253 million is to remain outstanding on a loan account with AML and shall be paid in ZAR together with interest at the then effective exchange rate on or before 12th December 2008.
At the same time Christopher Mazizandile Msutu, an entrepreneur specialising in municipality relationships, has completed the purchase of 5 per cent. interest in Elitheni Coal for approximately £945,000 which amount shall remain outstanding on a loan account with AML and shall be paid in ZAR together with interest at the then effective exchange rate on or before 31st May 2009. Christopher Msutu's purchase also includes a 3 per cent. interest in Elitheni Coal which, it was previously reported, was proposed to be sold to a trust representing the local community, However, the community represented by the local municipality have agreed to a royalty per tonne as opposed to a shareholding. The terms of this royalty are being negotiated but will comprise pre-tax royalty payments which will not exceed a 3per cent. equivalent of the dividend stream of Elitheni Coal.
SNR anticipates that it will recognise a profit on the sale of this share stake. The proceeds will be used to increase the level of drilling on SNR's newly enlarged exploration area and to fund existing working capital requirements.
The completion of the aforementioned transactions gives Elitheni Coal a 26% BEE holding, which is one of the final outstanding requirements for the granting of the mining licence by the DME. Consequently the Board of SNR now anticipates that the Company will meet all of the tests required for Elitheni Coal to be granted a mining licence.
Liketh is a BEE investment company that has been created specifically to invest in mining businesses. African Pioneer Ltd ("APL") our original lead BEE investment group has withdrawn in favour of Liketh on the grounds that Liketh are better placed to support the further development of Elitheni Coal.
Commenting on the importance of SNR's BEE deal, Jeremy Metcalfe, SNR's Chief Executive, said, "The addition of Liketh as our BEE partner will be a great asset to SNR as we continue to explore and develop our coal interests in South Africa".
For further information contact:
Jeremy P. Metcalfe
Chief Executive
Strategic Natural Resources PLC
Tel: +44(0)1303 874 798
Allan Piper
First City Financial Public Relations
Tel: +44 (0) 20 7242 2666
Rod Venables / Cecil Jordaan
HB Corporate
Tel: +44 (0) 20 7510 8600