TORONTO, Sept. 3 /CNW/ - Thistle Mining Inc. ("Thistle" or the "Company")
(AIM: TMG) wishes to announce that on August 30 it received an indicative
non-binding offer from Pamodzi Gold Limited ("Pamodzi") (JSE: PZG) for the
purchase of all of the direct and/or indirect interests in President Steyn
Gold Mines (Free State) (Proprietary) Limited ("President Steyn"). On
September 3, 2007 (the "Acceptance Date"), Thistle notified Pamodzi of its
acceptance of the terms of the indicative non-binding offer.
Pamodzi is a South African gold mining company that is controlled by
Pamodzi Resources (Pty) Limited, a South African black owned resources company
("Pamodzi Resources"). Pamodzi owns established mining operations in both the
western and eastern parts of the Witwatersrand. In the west, Pamodzi owns the
Middelvlei mine, an open cast operation currently in ramp-up stage. In the
east, the interest consists of a group of operating mines namely Grootvlei,
Cons Modder and Nigel. Pamodzi is also in discussions to acquire Harmony's
Orkney mines. The stated objective of the company is to be a 1,000,000 oz per
annum producer in the short to medium term. The acquisition of President Steyn
will secure for Pamodzi a foothold in the Free State goldfields of South
Africa and contribute towards the realization of its stated objective. Pamodzi
is in a good position to secure the capital needed to develop President
Steyn's Golden Triangle project and explore its Eldorado reefs thus securing a
sound future for the employees of President Steyn.
Under the terms of the indicative non binding offer the purchase
consideration for all the direct and/or indirect interests in President Steyn
payable to Thistle (on its behalf and on behalf of all other holders of such
interests) will be ZAR300 million (Three Hundred Million South African Rands)
(approximately U.S.$ 41.0 million (Forty one Million United States Dollars) at
an exchange rate of ZAR 7.25 to the U.S.$) which will be allocated as to
ZAR100 (One Hundred South African Rands) in respect of the entire issued share
capital of President Steyn, or Thistle's South African holding companies,
Dissel Holdings SA (Proprietary) Limited or Mindserv (Proprietary) Limited, as
applicable, and the remainder to all claims on loan account held against such
company and all of its subsidiaries by Thistle and all of its other
subsidiaries (the "Purchase Consideration").
The Purchase Consideration is to be satisfied through the payment on
completion of ZAR 150.0 million (One Hundred and Fifty Million South African
Rands) in cash and ZAR 150.0 million (One Hundred and Fifty Million South
African Rands) to be paid in convertible interest bearing debt securities (the
"Pamodzi SPV Securities") issued by a special purpose vehicle wholly owned by
Pamodzi Resources which will acquire a specified number of ordinary shares in
Pamodzi (the "Pamodzi Gold Shares") for an amount of ZAR 150.0 million (One
Hundred and Fifty Million South African Rands).
On or after May 31, 2009 (or in limited circumstances, prior thereto),
Thistle will be entitled to repayment of the outstanding debt including
interest together with an agreed percentage of any increase in the value of
the Pamodzi Gold Shares which will be settled by way of a transfer of Pamodzi
Gold Shares to Thistle or out of the proceeds of sale of the Pamodzi Gold
Pamodzi and Thistle have agreed to negotiate and deal exclusively with
each other in good faith until November 30, 2007, subject to early termination
of such exclusivity in certain limited circumstances. In return for this grant
of exclusivity, Pamodzi has agreed to pay to Thistle an exclusivity fee of
ZAR3.5 million (Three Million Five Hundred Thousand South African Rands).
Pamodzi has also agreed to pay a break fee of ZAR3.5 million (Three Million
Five Hundred Thousand Rands) to Thistle in certain limited circumstances.
Although Pamodzi and Thistle are confident that they will be able to
conclude required transaction agreements and secure regulatory approval within
a three month period there can however be no assurance that these discussions
will result in a transaction.
Should negotiations proceed as planned, it is envisaged that a meeting of
the Company's shareholders to consider the proposed sale of President Steyn
will take place during late October or November 2007 in Toronto. A meeting of
Pamodzi shareholders, as required, will be held in Johannesburg at or about
the time of the meeting of the Company's shareholders to consider the proposed
sale of President Steyn.
Forward Looking Information: This press release may contain or refer to
forward-looking information based on current expectations. Forward-looking
statements are subject to significant risks and uncertainties, and other
factors that could cause actual results to differ materially from expected
results. These forward-looking statements are made as of the date hereof and
the Company assumes no responsibility to update or revise them to reflect new
events or circumstances.
For further information:
For further information: Anton Kakavelakis, Group Financial Controller,
+ 27 57 391 9026 or email to email@example.com; Gerry Beaney, Maureen Tai
or Troy MacDonald, Grant Thornton Corporate Finance at +44 (0) 207 383 5100