REG - Thungela Resources - ACQUISITION OF 15% INTEREST IN THE ENSHAM BUSINESS

Thungela ResourcesAnnouncement

23/12/2024 14:00

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RNS Number : 1638R  Thungela Resources Limited  23 December 2024

THUNGELA RESOURCES LIMITED

(Incorporated in the Republic of South Africa)

(Registration number: 2021/303811/06)

JSE Share code: TGA

LSE Share code: TGA

ISIN: ZAE000296554

('Thungela' or the 'Company' and, together with its affiliates, the 'Group')

 

ACQUISITION OF REMAINING 15% INTEREST IN THE ENSHAM BUSINESS

 

1. Introduction

 

Thungela is pleased to announce that, subject to the receipt of regulatory
approvals and to the fulfilment or waiver (where capable of waiver) of the
conditions precedent set out in paragraph 2 below, it has, on 20 December
2024, entered into a share sale and purchase agreement with Bowen Investment
(Australia) Proprietary Limited ("Bowen") in terms of which, inter alia,
Thungela, through its wholly-owned subsidiary Thungela Resources Australia
Proprietary Limited ("Thungela Australia"), will acquire Bowen's 15% interest
in the Ensham Joint Venture, Ensham Coal Sales Proprietary Limited, the Nogoa
Pastoral Joint Venture and Nogoa Pastoral Proprietary Limited (collectively,
the "Ensham Business") for a total purchase consideration of AUD48 million
("the Transaction").

 

Thungela assumed operational control of the Ensham Business, in Australia,
from 1 September 2023, following an initial share and asset sale agreement
signed in February 2023 for the acquisition of an 85% interest in the Ensham
Business, through its 73.5% held subsidiary, Sungela Holdings Proprietary
Limited. Thungela Australia will now acquire the remaining 15% interest in the
Ensham Business.

 

2. Conditions precedent

 

The Transaction is subject to the fulfillment or waiver (where capable of
waiver) of the following conditions precedent:

 

2.1 Foreign Investment Review Board approval

Thungela Australia obtaining approval for the Transaction under the Foreign
Acquisitions and Takeovers Act 1975 or pursuant to Australia's Foreign
Investment Policy.

 

2.2 Ministerial approval

Thungela Australia obtaining approval from the relevant government Minister
under the Mineral and Energy Resources (Financial Provisioning) Act 2018
(Qld), the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld)
and/or the Mineral Resources Act 1989 (Qld) (as applicable), for the transfer
by Bowen of the mining tenements of the underlying Ensham Business pursuant to
the Transaction.

 

2.3 South African Reserve Bank approval

To the extent legally required, Thungela Australia having obtained all
necessary South African exchange control approvals, authorisation, consents or
exemptions for the Transaction under the South African Exchange Control
Regulations, 1961, made in terms of the South African Currency and Exchanges
Act, No. 9 of 1933, and all directives and rulings issued thereunder, from the
South African Reserve Bank.

 

3. Rationale for the Transaction

 

Our geographic diversification strategy into Australia continues to enhance
the Group's production profile. The Transaction enables us to further execute
on our strategy by diversifying geographically in a commodity where we are
able to utilise our technical and marketing capabilities to create further
value for the Group. In line with our strategic priorities, this opens up new
markets in Japan and Malaysia, diversifying our customer base and providing
exposure to the Newcastle Benchmark coal price. The Ensham Business continues
to benefit from our operational expertise as it extracts coal using mechanised
underground bord and pillar mining methods, similar to those used in our South
African operations.

 

We are pleased with the operational performance of the Ensham Business, which
is expected to contribute approximately 35% of the Group's profit before net
finance income and tax (on an 85% basis) by the end of the financial year
ending 31 December 2024. The Transaction galvanises our economic participation
in the Ensham Business. The Transaction will streamline administrative
processes and it is expected that synergies will arise from the technical and
operational services offered to the Ensham Business from our shared services
in South Africa. The Transaction will further enable us to optimise the flow
of coal through Thungela Marketing International.

 

4. Other

 

The intention is to fund the total purchase consideration payable in terms of
the Transaction from the Group's existing net cash resources. The Company will
continue to have sufficient headroom to provide the necessary liquidity to
continue to fund the completion of existing life extension projects.

 

5. Categorisation of the Transaction

 

The Transaction is not a categorisable transaction for purposes of Section 9
of the JSE Limited Listings Requirements and, as such, this announcement is
published voluntarily, for information purposes.

 

 

Rosebank

23 December 2024

 

 

Disclaimer

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by the Market Abuse (Amendment) (EU Exit)
Regulations 2019. Upon the publication of this announcement via the regulatory
information service, this inside information is now considered to be in the
public domain.

 

 

Investor Relations

Hugo Nunes

Email: hugo.nunes@thungela.com

 

Shreshini Singh

Email: shreshini.singh@thungela.com

 

Media

Hulisani Rasivhaga

Email: hulisani.rasivhaga@thungela.com

 

South African Attorneys

Webber Wentzel

 

Australian Legal Advisers

Allens

 

UK Financial Adviser and Corporate Broker

Panmure Liberum Capital Limited

 

Sponsor

Rand Merchant Bank

(A division of FirstRand Bank Limited)

 

 

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