Acquisition

RNS Number:5804H
Metorex Ld
17 February 2003

                                METOREX LIMITED

                 (Incorporated in the Republic of South Africa)

                     (Registration number: 1934/005478/06)

                  Share code: MTX          ISIN: ZAE 000022745

                               Issuer code: MEMTX

                          ("Metorex" or "the Company")


The acquisition of an effective 54 per cent interest in the assets and
liabilities of the ETC division of Avgold Limited and further cautionary
announcement



1.                   INTRODUCTION



Further to the cautionary announcements published in the press on 3 December
2002 and 10 January 2003 ("the cautionary announcements"), Investec Bank Limited
is authorised to announce that Metorex, Millenium Consolidated Investments
Limited ("MCI") and Crew Development Corporation Inc. ("Crew") ("the Consortium
") have concluded an agreement with Avgold Limited ("Avgold") ("the acquisition
agreement"), in terms of which the Consortium has, subject to certain conditions
precedent, effectively acquired the assets and liabilities, excluding any gold
hedge agreements, of the ETC division ("ETC") of Avgold with effect from the
date on which the last condition precedent is fulfilled ("the ETC acquisition").



2.                   THE ETC ACQUISITION



2.1               Metorex has, as a member of the Consortium, participated in
the ETC acquisition, in accordance with its stated strategic objective of
seeking to acquire new, longer-life projects to supplement its existing mining
portfolio.

2.2               In terms of the acquisition agreement, the Consortium has,
through Barberton Mines Limited ("Newco"), subject to the fulfilment of the
conditions precedent referred to in paragraph 5 below, acquired ETC for a cash
consideration of R300 million ("the ETC purchase consideration").

2.3               The ETC purchase consideration will be funded by Newco as
follows:

-                      R150 million in interest bearing debt;

-                      R120 million funded by Metorex; and

-                      R30 million funded by Crew.

The R120m funded by Metorex and the R30 million funded by Crew will be in the
form of shareholders' loans. Prior to any shareholders' distributions to the
Consortium members by Newco both the interest bearing debt and shareholders'
loans will be repaid.

2.4               Metorex's shareholders' loan to Newco will comprise R30
million from internal cash resources and R90 million to be raised by the placing
of new Metorex shares with institutional investors ("the Metorex placing shares
")

2.5               The shareholdings of the Consortium members in Newco will be
as follows:

-                      Metorex 54%;

-                      Crew 20%; and

-                      MCI 26%.









3.                   RATIONALE FOR THE ETC ACQUISITION



3.1               The ETC acquisition is expected to be both value and earnings
enhancing for Metorex over the medium to long term.

3.2               The ETC acquisition will enhance the diversification and
growth of Metorex's current mining portfolio whilst simultaneously bolstering
Metorex's exposure to gold revenues.

3.3               The ETC acquisition will create a mining vehicle with
significant Black Economic Empowerment ("BEE") credentials through the
shareholding of MCI.  Metorex is committed to making significant progress in
fulfilling the empowerment requirements outlined in the recently published
mining charter and the Minerals and Petroleum Resources Development Act, Act 28
of 2002.

3.4               The Metorex share placing is expected to result in increased
liquidity in Metorex shares.



4.                   SALIENT INFORMATION ON ETC



4.1               Background information



ETC is a South African-based Greenstone gold mining operation, situated in the
Magisterial District of Barberton, in the Mpumalanga Province, some 370
kilometres east of Johannesburg.



ETC operations currently comprise three operating mines, namely Sheba Mine, New
Consort Mine and Fairview Mine, currently producing approximately 100 000 ounces
of gold per annum.



4.2               Salient features



The table below summarises the salient features of ETC:


                                                 6 months          12 months       12 months
                                              31 December            30 June         30 June

                                                     2002               2002            2001
Ore milled            Tonnes                      162 748            315 523         309 506
Gold sold             Kg                            1 486              2 805           2 842
Yield                 G/t                            9.13               8.89            9.18
Cash cost             R/kg                         71 097             69 805          58 698




As at 30 June 2002 the reported gold reserves of ETC amounted to 8 950 kilograms
(proved) and 9 394 kilograms (probable). Measured, indicated and inferred gold
resources  (exclusive of gold reserves) totalled 27 355 kilograms.




5.                   CONDITIONS PRECEDENT



The ETC acquisition is subject to the fulfilment of the following conditions
precedent, the:



5.1               granting of the requisite regulatory approvals, including
inter-alia the Competition Commission;

5.2               assignment of the Biox License agreement between Avgold and
Biomin Technologies SA to Newco; anf

5.3               approval of the ETC acquisition by a simple majority of
Metorex's shareholders in general meeting.



The JSE Securties Exchange SA ("JSE") and the London Stock Exchange ("LSE") will
be required to approve the documentation to be sent to Metorex shareholders and
the listing of the Metorex placing shares on the JSE and the LSE.



6.                   CIRCULAR TO METOREX SHAREHOLDERS



A circular to Metorex shareholders containing the details of the ETC acquisition
and notice of general meeting will be posted to Metorex shareholders in due
course.



7.                   PRO-FORMA FINANCIAL EFFECTS



In light of the fact that Metorex is expected to release its interim financial
results for the six-month period ended 31 December 2002 on or about Thursday, 20
February 2003 ("interim results") the pro-forma financial effects of the ETC
acquisition on Metorex ("pro-forma financial effects") will be published
simultaneously with the interim results.



8.                   FURTHER CAUTIONARY ANNOUNCEMENT



Metorex shareholders are referred to the cautionary announcements and are hereby
advised to continue to exercuse caution until such time as the pro-forma
financial effects have been published.



Sandton

17 February 2003


Merchant bank                                 Sponsor                       Legal adviser to Metorex


  (Investec Corporate Finance)    (Barnard Jacobs Mellet Corporate              Bowman Gillfillan
                                       Finance (Pty) Limited)







                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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