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Acquisition of Movable Assets
MANTENGU MINING LIMITED
Incorporated in the Republic of South Africa
(Registration number 1987/004821/06)
Share code: MTU ISIN: ZAE000320347
("Mantengu" or "the Company")
ACQUISITION OF MOVABLE ASSETS
1. Introduction
The board of directors of Mantengu ("Board") is pleased to inform shareholders that the Company has
entered into a Purchase Agreement: Movable Assets ("Agreement") dated 5 February 2025 ("Signature
Date") with Park Village Auctions & Property Sale Proprietary Limited as "the Agent", appointed by
Ntandazo Aviwe Ndyamara, Mohammed Yaseen Khammissa and Ebrahim Mehnaaz being the "Joint
Liquidators" representing Masorini Iron Beneficiation Proprietary Limited ("MIB" or "the Seller") (in
liquidation), to acquire certain assets owned by the Seller ("Assets"), for R18 975 000.00 (including VAT)
("Purchase Price") ("the Acquisition").
Neither MIB, nor the Joint Liquidators, nor the Agent, are related parties to Mantengu.
2. The Acquisition
2.1 Nature of the Assets
The Assets, as detailed in the Agreement, constitute an iron beneficiation plant ("Iron Plant"), which
is located in Phalaborwa, Limpopo ("Site"). The Iron Plant converts superfine iron ore into high quality
metallic products using low-cost thermal coal. The Iron Plant is modular by design and will be
deployed at strategic locations to significantly reduce the cost of production, in terms of feedstock,
logistics, and energy consumption. The process itself is energy efficient with significantly lower
emissions than other traditional iron making processes.
2.2 Rationale
The Assets were owned by MIB, a company owned by IMBS Proprietary Limited ("IMBS") (62.70%)
and the Industrial Development Corporation of South Africa Limited ("IDC") (37.30%). Having
borrowed funds from the IDC to acquire the Iron Plant, the IDC, as MIB's only secured creditor, has
a (i) pledge and cession of IMBS' 62.70% stake in MIB; and (ii) security over the Iron Plant.
In July 2024, MIB entered into final liquidation and the Joint Liquidators appointed the Agent to
auction the Assets. Mantengu has acquired the Assets through the auction process.
The Acquisition will complement Mantengu's current investments in the metals sector. The Iron
Plant/s will produce high grade iron units at the lowest section of the production cost curve. The
Acquisition is expected to create significant value for its shareholders whilst, at the same time,
combatting areas exposed to the environmental risk of superfine iron ore.
2.3 Purchase Price
2.3.1 The Purchase Price is payable by Mantengu to the Agent on behalf of the Seller as follows:
2.3.1.1 a deposit equal to 20% of the Purchase Price ("Deposit"), being R3 795 000.00
(including VAT), which amount has been settled by the Company; and
2.3.1.2 the balance of the Purchase Price ("Balance"), being R15 180 000.00 (including
VAT), which amount is expected to be settled by the Company on or before
28 February 2025.
2.3.2 In addition to the Purchase Price, Mantengu will pay a commission on the Acquisition to the
Agent ("Commission"), calculated at 10% of the Purchase Price, being R1 897 500.00
(including VAT), simultaneously with the Balance.
2.3.3 Payment of the Purchase Price and the Commission ("Payments") is required in order for
Mantengu to discharge its obligations arising from the Agreement.
2.4 Conditions precedent and effective date
Save for the completion of the Payments, the Acquisition is not subject to any conditions precedent.
Transfer of ownership, possession and constructive delivery of the Assets will pass and be given to
Mantengu at the Site by the Agents or the Seller once the Payments to the Agent have cleared in
the Agent's bank account.
2.5 Financial information
In light of the circumstances set out in paragraph 2.2 above, the latest financial information of MIB
available to the Board is the audited financial statements for the year ended 31 December 2020.
These financial statements have been prepared in accordance with International Financial Reporting
Standards.
The audited equity of MIB in the balance sheet as at 31 December 2020, was negative R203 million.
The audited loss of MIB in the income statement for the year ended 31 December 2020 was
R10 million. The value of the Plant and Machinery, being the Assets which have been acquired by
Mantengu on auction, in the balance sheet as at 31 December 2020, was R210 million. The Board
is of the view that the Plant and Machinery is worth significantly more than R210 million.
2.6 Exclusion of warranties
In terms of the Agreement, the Assets are sold 'voetstoots'. No express or implied warranties or
guarantees have been given by either the Agent or the Seller in respect of the Assets.
3. Categorisation of the Acquisition
The Acquisition is classified as a Category 2 transaction in terms of the Listings Requirements of the JSE
Limited ("JSE").
4. Further potential acquisition
Shareholders are further informed that it is the intention of the Joint Liquidators to propose a section 155
compromise ("S155 Compromise") under the Companies Act, 2008 (Act 71 of 2008), as amended, to
reach a compromise or arrangement with MIB's creditors to restructure the company's financial obligations
and take it out of liquidation. Subject to the requisite S155 Compromise approvals being obtained and the
sanction of the court, it is Mantengu's intention to acquire IMBS' 62.70% shareholding in MIB for a nominal
value. As at the Signature Date, however, the S155 Compromise process has not yet commenced, and no
formal agreements have been concluded by Mantengu with any party in this regard.
In the event that the Company's potential acquisition of IMBS' stake in MIB were to be formalised, the
transaction will be categorised in accordance with the JSE Listings and shareholders will be notified by
way of a SENS announcement. Mantengu views the IDC as an extremely important stakeholder and looks
forward to growing the business of MIB together.
Johannesburg
6 February 2025
Designated Adviser
Merchantec Capital
Date: 06-02-2025 05:19:00
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