Great Basin Gold Ltd. (fka GBGLF)

[nagoya1]

http://ih.advfn.com/p.php?pid=nmona&article=62012085&symbol=SBGL

chief executive’s report continued

Ÿ Finally, in December 2013, Sibanye agreed to acquire the entire issued ordinary share capital of Wits Gold for a cash consideration of approximately R410 million, thereby securing substantial gold and uranium resources. The majority of these resources are adjacent to our Beatrix Operation and, through synergy with existing operations and infrastructure, will secure the long-term future of Beatrix. Wits Gold also held a binding offer to acquire Southgold Exploration Proprietary Limited (Southgold) – being the sole owner of the Burnstone gold mine. Following the successful conclusion of a detailed due diligence, a decision was taken to proceed with the option to acquire the Burnstone mine. The offer to acquire Southgold is still subject to certain conditions precedent, including amongst others, the approval of the Minister of Mineral Resources, and Wits Gold confirming that the acquisition of Southgold does not give rise to any adverse tax consequences for Wits Gold and/or Southgold. The decision to acquire Southgold was based on the already significant investment in mine development and infrastructure and the favorable terms on which this acquisition can be concluded. The acquisition of Burnstone will contribute positively to free cash flow and enhance the

Company’s long term value, consistent with our strategy to extend the operating life of the Company in support of our dividend yield strategy.

Sibanye expects to conclude all of these transactions early in 2014. Based on the solid progress towards restoring operational credibility in 2014 at our existing operations and the implementation of an effective operating strategy, we are well positioned to seamlessly integrate these acquisitions into Sibanye and deliver on synergies with our current operations.

Funny to see these guys here again
How much were they on the hook for with GBG?

Credit Suisse
On April 17, 2012, Sibanye, Orogen and GFO, subsidiaries of Gold Fields (the former parent of Sibanye), entered into a U.S.$500 million syndicated revolving loan facility. The purpose of the facility was to refinance existing facilities and for general corporate and working capital purposes. Credit Suisse AG, London Branch, or Credit Suisse, was a lender under the U.S.$500 million syndicated revolving loan facility. See “Operating and Financial Review and Prospects—Liquidity and Capital Resources—Credit Facilities and Other Capital Resources—U.S.$500 million Syndicated Revolving Credit Facility” for further details regarding this facility.
Richard Menell, who is both a senior advisor to Credit Suisse Securities Jhb Ltd and a non-executive director of Gold Fields, has been a director of Credit Suisse Securities Jhb Ltd since September 2012. As a director of Gold Fields, Mr. Menell declared his interest in the above mentioned agreements between Credit Suisse and Gold Fields, pursuant to South African requirements, and did not participate in the decision of Credit Suisse to enter into the agreements with Gold Fields.

Witwatersrand Consolidated Gold Resources Limited acquisition
Sibanye announced on December 11, 2013 that it had offered to acquire the entire issued share capital of Witwatersrand Consolidated Gold Resources Limited, or Wits Gold, for a cash consideration of approximately $39 million, or the Scheme Consideration. The transaction was subject to the fulfilment of various conditions precedent which were completed on April 14, 2014.
Sibanye was required to deposit the full Scheme Consideration into an escrow account to comply with regulations 111(4) and 111(5) of the Companies Act Regulations, 2011. As at December 31, 2013, $39.6 million was held in the escrow account and forms part of the Group’s cash and cash equivalents balance as reported.
On March 13, 2014 at the Wits Gold shareholders meeting, the shareholders of Wits Gold approved the proposed transaction by voting in favor of the various resolutions to give effect to the transaction.

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Table of Contents
Sibanye Gold Limited
Notes to the Consolidated Financial Statements
($ in millions unless otherwise noted)

On April 14, 2014 Sibanye paid the Scheme Consideration to Wits Gold shareholders and obtained control (100%) of Wits Gold. The acquisition was accounted for as an asset acquisition in which the consideration paid for the acquisition is allocated to the individual identifiable assets acquired and liabilities assumed based on their relative fair values.
On July 5, 2013 Wits Gold announcement to its shareholders that it had submitted a final binding offer, or the Offer, to Mr Peter van den Steen, the business rescue practitioner of Southgold Exploration Proprietary Limited, or Southgold, to acquire Southgold, the sole owner of the Burnstone gold mine and assets, or Burnstone, located in South Africa’s Mpumalanga Province. The Offer was included in the business rescue plan that was approved by the creditors of Southgold on July 11, 2013.
Sibanye has successfully concluded its detailed due diligence investigation in relation to Southgold and took the final decision to proceed with the acquisition of Southgold subject to the fulfilment of certain outstanding conditions precedent listed below.
Summary of the key terms of the Offer:

• Wits Gold will acquire all of the issued share capital of Southgold together with all shareholder and inter-group loans against Southgold for a purchase price of R100;

• Reduction of Southgold total debt to US$177.3 million, or the Southgold Debt, on the following terms:

• Upfront payment of US$7.25 million on transaction completion;

• Back-ranked to new funding to be injected by Wits Gold and to be repaid from the Burnstone mine’s free cash flow;

• Moratorium on interest and capital repayments for 36 months from transaction completion;

• Southgold Debt attracts interest at LIBOR +4%;

• Option to settle outstanding balances at any time without penalty; and

• Southgold Debt ring-fenced to Southgold.

• Wits Gold to provide up to R 950 million of new funding by means of a loan, or Wits Gold Loan, over time, as working capital to support the production plan:

• Wits Gold Loan attracts interest at JIBAR +4%;

• Wits Gold Loan to be repaid first:

• 90% free cash to Wits Gold Loan; 10% to Southgold Debt

• On settlement of the Wits Gold Loan and interest, Southgold Debt will be repaid from free cash flow:

• 70% to Wits Gold; 30% to Southgold Debt

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Table of Contents
Sibanye Gold Limited
Notes to the Consolidated Financial Statements
($ in millions unless otherwise noted)

The Offer is still conditional upon the fulfilment of, or waiver by Wits Gold of conditions precedent standard to a transaction of this nature, including but not limited to signature of all definitive transaction agreements, obtaining all necessary regulatory approvals, including, amongst others, the approval of the of the Department of Mineral Resources and Wits Gold confirming that the acquisition of Southgold does not give rise to any adverse tax consequences for Wits Gold and/or Southgold.