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2 Jul 2008 07:00
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Strategic Natural Resources PLC
("SNR" or the "Company"); Ticker: (SNRP)
SNR SUBSIDIARY SECURESΒ LIKETHΒ UNIONΒ (PTY) LIMITEDΒ AS ITSΒ BEEΒ PARTNER
Strategic Natural Resources PLC announces thatΒ itsΒ subsidiary, Acharnian Mining Company Limited ("AML"),Β hasΒ completed theΒ saleΒ of aΒ 21Β per cent.Β interest inΒ Elitheni Coal (Pty.) Limited ("Elitheni Coal"), the holder of the coal prospecting rights over the Elitheni Area,Β toΒ Liketh UnionΒ (Pty)Β Limited ("Liketh"),Β aΒ group ofΒ broadly-based black economic empowerment ("BEE")Β interests ledΒ byΒ VUWA Investment (Pty) Limited ("Vuwa"). The consideration isΒ approximately UKΒ Β£3.972Β million,Β payableΒ as to ZAR 10 million in cash nowΒ (approximately Β£640,000)Β and the balance ofΒ approximatelyΒ Β£3.253Β millionΒ isΒ toΒ remain outstanding on a loan account with AML and shallΒ be paidΒ in ZARΒ together with interestΒ at theΒ thenΒ effective exchange rateΒ on or beforeΒ Β 12thΒ DecemberΒ 2008.
At the same time Christopher Mazizandile Msutu, an entrepreneur specialising in municipality relationships,Β has completed the purchase of 5Β per cent.Β interest inΒ Elitheni CoalΒ forΒ approximately Β£945,000Β which amount shall remain outstanding on a loan account with AML and shall be paidΒ in ZARΒ together with interestΒ at theΒ thenΒ effective exchange rateΒ on or before 31stΒ May 2009. Christopher Msutu's purchase also includes a 3 per cent. interest in Elitheni Coal which,Β itΒ Β was previouslyΒ reported,Β wasΒ proposed to be sold to a trust representing the local community,Β However,Β the community represented by the local municipality have agreed to a royalty per tonne as opposed toΒ aΒ shareholding. The terms of this royalty are being negotiated but will comprise pre-tax royalty payments which will not exceed a 3per cent.Β 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 onΒ SNR'sΒ newly enlarged exploration area and to fund existing working capital requirements.
The completion of the aforementioned transactions givesΒ Elitheni Coal a 26% BEE holding, which is one of the finalΒ outstandingΒ requirements for the granting of the mining licence by the DME.Β Consequently the Board of SNR now anticipates that the Company will meet all of the tests required for ElitheniΒ CoalΒ toΒ be granted a mining licence.
LikethΒ is aΒ BEEΒ investment companyΒ that has been created specifically to invest in mining businesses. African Pioneer Ltd ("APL")Β Β ourΒ originalΒ Β leadΒ BEEΒ investment groupΒ hasΒ Β withdrawnΒ in favour ofΒ LikethΒ on the grounds thatΒ LikethΒ are better placed to support the further development of Elitheni Coal.
Commenting on the importance of SNR's BEE deal,Β Jeremy Metcalfe,Β SNR's Chief Executive,Β said,Β "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 inΒ South Africa".
For further information contact:Β
Jeremy P. MetcalfeΒ
Chief ExecutiveΒ
Strategic Natural Resources PLCΒ
Tel: +44(0)1303 874 798Β
Β
Allan PiperΒ
FirstΒ CityΒ Financial Public RelationsΒ
Tel: +44 (0) 20 7242 2666Β
Β
Rod Venables / Cecil JordaanΒ
HB CorporateΒ
Tel: +44 (0) 20 7510 8600Β
Β
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