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Related Party Loan Agreement
MINE RESTORATION INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
(Registration No. 1987/004821/06)
Share code: MRI
ISIN: ZAE000164562
(“MRI” or “the Company”)
RELATED PARTY LOAN AGREEMENT
1. Introduction
Further to the terms announcement released by the Company on the Stock Exchange News Service
(“SENS”) on 10 October 2019, shareholders are advised that MRI has concluded a loan agreement
with Langpan Mining Co Proprietary Limited (“Langpan”) for the advancement of R3 000 000 (“the
Loan”). The Loan is unsecured and bears interest at the prime lending rate from time to time, plus eight
percent.
2. Overview of MRI And Langpan
MRI has been listed on the Alternative Exchange of the JSE since June 2012 and exists as a cash shell.
Langpan mines and processes chrome ore to form chrome concentrate, with a by-product having a high
concentration of Platinum Group Metals. Langpan entered into a share purchase agreement with MRI
on 10 October 2019 for MRI’s acquisition of 100% of the ordinary shares of Langpan (“the Proposed
Transaction”). The acquisition is part of MRI’s strategy to become a mining house that promotes rural
investment into sustainable mining projects on an inclusive and equitable basis.
3. Rationale for the Loan
The Loan was advanced to Langpan in anticipation of the Proposed Transaction. The agreement
governing the terms and conditions of the Loan (“the Loan Agreement”) stipulates that the loaned
funds are to be utilised in the settlement of the costs, fees and expenses related to the Proposed
Transaction and for the operating expenses and working capital requirements of Langpan, in
anticipation of the Proposed Transaction being implemented.
4. Categorisation and Related Party Transaction
Langpan is currently owned by the following parties:
- Jurgens Johannes Nel (7.9%);
- Scott Austin Gaskell (6.1%);
- BLM Global Partners RSA (Pty) Ltd (2.4%);
- Disruption Capital Limited (“DCL”) (53.9%);
- Kianalily Proprietary Limited (“Kianalily”) (8.5%); and
- Palugen Proprietary Limited (21.2%).
Mike Miller and Alistair Collins, both directors of MRI, collectively own 56% of DCL. In addition, Ulrich
Bester, the financial director of MRI, and his associates own 100% of Kianalily. Accordingly, in terms of
the Listings Requirements of the JSE Limited, the Loan is classified as a Category 2, small related party
transaction.
The independent directors of MRI are in the process of appointing an independent professional expert
(“the IPE”) to opine on the fairness of the Loan Agreement. The opinion of the IPE will be announced
on SENS as soon as it has been finalised.
5. Conditions precedent and effective date
No conditions precedent to the Loan Agreement remain outstanding. Accordingly, the Loan became
effective on 1 September 2018. To the extent that the IPE opines that the terms of the Loan Agreement
are not fair, the Loan will be referred to MRI shareholders in general meeting for approval.
6. Financial information
The face value of the Loan as at 1 September 2018 was R3 000 000. As at 30 June 2020, the total
outstanding amount under the Loan Agreement was R3 862 305.77, comprising capital of
R2 933 320.70, and interest of R928 985.07. These figures are unaudited and have not been reviewed
by MRI’s auditors.
Johannesburg
6 July 2020
Designated Advisor
Questco Proprietary Limited
Date: 06-07-2020 05:24:00
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