RNS Number:5707T
South China Resources PLC
01 May 2008
1 May 2008
South China Resources PLC to purchase 70.5% beneficial interest in
Elof open pit coal project near Johannesburg
Proposed name change to Universal Coal PLC
Highlights
* Shallow, largely open pittable predominantly domestic grade thermal coal
resources, as well as some export grade thermal coal.
* 112Mt gross in-situ tonnes of which 87Mt is currently at JORC inferred
category, 70.5% to be attributed to South China Resources PLC
* Adjacent to several power stations for mine gate sales to ESKOM
* Rail, road, power and water infrastructure less than 1000 meters away
* Raw coal qualities meet ESKOM guidelines with strong domestic prices
* Management and development team to join Board/Company with extensive local
coal mining experience
* Plan to advance toward production through completion of Bankable
Feasibility Study as soon as is practicable
* Strong BEE partner with extensive project pipeline in Southern Africa
* Raising up to GBP 4m to fund purchase and project development
* Name change to Universal Coal PLC and reverse takeover triggered
South China Resources plc ("The Company" or "SCR") announces that its 100% owned
South African subsidiary will acquire 70.5% of the Elof prospecting rights from
Injula Mining Operations Pty Ltd.
This transaction is a reverse takeover under the AIM Rules and is subject to
shareholder approval. Consequently, SCR's shares have been suspended from
trading on AIM until an admission document is posted to shareholders. Approval
will also require Ministerial consent to and registration of the transfer by the
Department of Minerals and Energy as well as South African Reserve Bank
approval.
The Company is in receipt of an Independent Competent Persons Report ("CPR")
report on The Elof Coal Project in South Africa ("the Project" or "Elof").,
which was completed by global mining consultancy RSG Global Coffey Mining (S.A.)
Pty Ltd ("RSG Coffey").
About the Elof Coal Project
Located in the Witbank Coal Field some 65km E of Johannesburg, the Elof Coal
Project, which comprises the Middelbult, Wolvenfontein and Modderfontein areas,
contains ESKOM quality domestic thermal coal suitable for power generation. The
project is located proximal to several coal-fired power stations and has road,
rail and power infrastructure running within 1000 meters of the project.
The Witbank Coal Field is economically the most important in South Africa and of
the 5 defined coal seams exploited in the Witbank Coal Field, the Elof Coal
Project contains an abundance of Seam 2 and Seam 4 which are the most widely
exploited coal types, primarily used for domestic and export thermal product.
The Project does contain some potentially economically exploitable Seam 5, which
is generally classified as high-grade blending coking coal.
The Elof Coal Project consist of a group of 3 granted prospecting rights that
together form one contiguous area. These rights are as follows: (588/2006 -
Portions 40 & 82 of the farm Middelbult No 235 IR, 654/2006 - Portions 1 & RE of
the farm Wolvenfontein 244 IR and 93/2007 - Portion 1 of the farm Modderfontein
236 IR).
Elof Coal Project Resources as calculated by RSG Coffey are as follows:
Area Gross In situ t Mineable In-situt Classification Gross in Situ t to Mineable in Situ t to
Middelbult JORC Company (70.5%) Company (70.5%)
Seam 2 12,226,777 8,681,000 Inferred 8,619,877 6,120,105
Seam 4 25,208,352 17,900,000 Inferred 17,771,888 12,619,500
Total 37,435,129 26,581,000 Inferred 26,391,765 18,739,605
Wolvenfontein JORC
Seam 2 1,138,000 808,000 Indicated 802,290 569,640
Seam 4 49,232,000 34,955,000 Inferred 34,708,560 24,643,275
Total 50,370,000 35,763,000 Inferred 35,510,850 25,212,915
Total JORC 87,805,129 62,344,000 Inferred 61,902,615 43,952,520
Modderfontein SAMREC
Seam 2 9,949,000 7,064,000 Reconnaissance 7,014,045 4,980,120
Seam 4 8,672,000 6,157,000 Reconnaissance 6,113,760 4,340,685
Seam 5 5,638,000 4,003,000 Reconnaissance 3,974,790 2,822,115
Total SAMREC 24,259,000 17,224,000 Reconnaissance 17,102,595 12,142,920
Grand Total 112,064,129 79,568,000 JORC + SAMREC 79,005,210 56,095,440
The Company intends to rapidly advance the JORC inferred resources at Middelbult
and Wolvenfontein to JORC measured category with a view to establishing open pit
mining operations at Elof as soon as is practicable. The Company also intends to
advance resources at Modderfontein to JORC inferred category as soon as is
practicable.
The Transaction
The Company will acquire a 70.5% interest in the Elof Coal Project. As
consideration the Company intends to issue to the shareholders of Injula Mining
Operations a total of 107,000,000 ordinary shares in the Company. On the basis
of 2.39p per share (being the closing mid-market price on 30 April 2007) this
represents consideration of GBP 2,557,300.
In addition to the consideration paid to Injula the Company has entered into a
Facilitation Agreement by which the Company will issue 30,000,000 shares in the
Company by way of an introduction fee to Maclure Capital Limited. The Company
will also pay Black Economic Empowerment ("BEE") reorganization costs of 6
Million Rand (approximately #400,000) in cash and issue 15,060,000 shares in the
Company to the outgoing BEE partner in the Project.
The consideration for the Acquisition, Facilitation Agreement and BEE
reorganization cost are only payable upon successful re-admission.
Following completion of the transaction the capital structure is expected to be
as follows:
Shareholder Shares On Issue Equity
SCR Shareholders 161,500,009 31.45%
Injula Vendors 107,000,000 20.83%
Facilitation Fee 30,000,000 5.84%
Capital raising (estimated) 200,000,000 38.94%
BEE reorganization 15,060,000 2.93%
Total 513,560,009 100.00%
Injula Mining Operations is an active participant in the South African coal
mining industry and amongst other activities, owns and operates a sizable
contract coal mining fleet. Injula is currently a contract miner for Anglo Coal
elsewhere in South Africa. It is proposed that key individuals from Injula
Mining Operations will join both the Board and Executive Team to advance these
projects.
The Company intends to re-name itself as Universal Coal PLC to better reflect
its future business.
South China Resources is also pleased to report that it is in advanced
negotiation with other holders of South African mining assets and hopes to be
able to update the market as to these transactions shortly.
- END -
Enquiries
South China Resources plc Nabarro Wells & Co. Limited Parkgreen Communications
Tim Horgan Hugh Oram Justine Howarth / Laura Llewelyn
+44 (0) 20 7493 7671 +44 (0) 20 7634 4700 +44 (0) 20 7851 7480
This information is provided by RNS
The company news service from the London Stock Exchange
END
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South China Resources (LSE:SCR)
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