Acquisition

RNS Number:0869K
Metorex Ld
15 April 2003

Metorex Limited

   (Incorporated in the Republic of South Africa)

   (Registration number 1934/005478/06)

   Share code: MTX   ISIN: ZAE000022745

   Issuer code: MEMTX

   ("Metorex" or "the company")

Amendment to the purchase consideration for the acquisition of  the business of
the ETC division of Avgold Limited, incorporating all the assets and
liabilities, in which Metorex will acquire an effective 54% interest ("the ETC
acquisition")

1. INTRODUCTION

   Further to the announcement dated 17 February 2003 dealing with the ETC
acquisition and the interim results announcement dated 19 February 2003 dealing
with the financial effects of the ETC acquisition, the directors of Metorex
advise that the purchase consideration relative to the ETC acquisition, and
consequently the funding arrangements for the purchase consideration, have been
amended.

2. THE ETC ACQUISITION

   2.1 In terms of the amendments to the ETC acquisition agreement and subject
to the fulfilment of the remaining condition precedent referred to in paragraph
4 below, the purchase consideration for the ETC acquisition, which now excludes
certain residential houses in Barberton, has been reduced from a cash
consideration of R300 million to a cash consideration of R255 million.

   2.2 The reduction of R45 million in the purchase consideration will result in
a reduction of the external interest bearing debt funding utilised from R150
million to R105 million.

   2.3 The balance of the purchase consideration will be funded as follows:

       - R115 million funded by Metorex;

       - R30 million funded by Crew Metorex Denmark ApS; and

       - R5 million funded by MCI Gold (Proprietary) Limited.

3. RATIONALE FOR THE AMENDED PURCHASE CONSIDERATION

   3.1 The purchase consideration has been amended having regard to the negative
impact of the following on the earnings of the ETC division of Avgold Limited:

       - the current strength of the Rand against the US dollar;

       - the current Gold price;

       - the current uncertainty surrounding international equity markets; and

       - the publication of the Mineral and Petroleum Royalty Bill.

   3.2 The R45 million reduction in the purchase consideration will reduce the
level of external debt funding required to fund the ETC acquisition, reducing
the associated risk due to a lower debt to equity ratio.

4. CONDITION PRECEDENT

   The transaction is subject to the fulfilment of the remaining condition
precedent, namely approval, by a simple majority, of Metorex's shareholders in
general meeting.

   The following conditions precedent set out in the announcement dated 17
February 2003 have now been fulfilled:

   4.1 granting of approval by the Competition Commission; and

   4.2 consent for the assignment of the Biox License agreement between Avgold
and Biomin Technologies SA to Barberton Mines Limited.

5. THE REVISED SHARE PLACEMENT

   Metorex's contribution to fund the ETC acquisition will comprise R25 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").

   In light of:

   *  the negative impact of the economic parameters mentioned in paragraph 3
above; and

   *  the current depressed market price of Metorex shares,

   Metorex has been required to revise the issue price of the Metorex placing
shares from 300 cents per Metorex placing share to 250 cents per Metorex placing
share, representing a premium of 2% to the 30-day weighted average share price
of Metorex shares on 10 April 2003.

   This will result in the raising of the R90 million by Metorex through the
issue of 36 million (30 million previously) Metorex placing shares.

6. REVISED PRO FORMA FINANCIAL EFFECTS

   The pro forma financial effects of the ETC acquisition have been revised as a
result of:

   6.1 the reduction in the external interest bearing debt funding by R45
million; and

   6.2 the issue of an additional six million Metorex placing shares as a result
of the revised share placement price.

                              Unaudited before      Pro forma after

                           the ETC acquisition  the ETC acquisition   Change

                                        (cents)              (cents)      (%)

Earnings per share                        20,7                 23,5     13,5

Headline earnings per share               22,0                 24,5     11,4

Net asset value per share                276,0                270,6     (2,0)

Net tangible asset value per share       258,8               257,02     (0,7)

  6.3 The earnings per share and headline earnings per share, net asset value
per share and net tangible asset value per share figures in the "Unaudited
before the ETC acquisition" column have been extracted from the unaudited
financial information of Metorex for the six-month period ended 31 December
2002.

  6.4 The earnings per share and headline earnings per share figures in the "Pro
forma after the ETC acquisition" column for the six months ended 31 December
2002 have been calculated:

      - on the basis that the ETC acquisition was implemented with effect from 1
July 2002;

      - on the basis that Metorex's 54% interest in ETC has been included in
Metorex's results with effect from 1 July 2002;

      - on the basis that interest of 16,81% pre-tax was incurred by Barberton
Mines on the R105 million interest bearing debt;

      - on the basis that interest of 16,81% pre-tax was incurred by Barberton
Mines on the shareholders' loans from the Consortium.  This differs from the
basis used in the announcement published on 19 February 2003, as the
shareholders' agreement has subsequently been finalised stipulating the terms
and conditions of the shareholders' loans;

      - on the assumption that Metorex issued 36 million new ordinary Metorex
shares with effect from 1 July 2002;

      - on the basis that the life of the ETC mine is 10 years; and

      - without taking into account the estimated transaction costs in relation
to the ETC acquisition.

  6.5 The net asset value per share and the net tangible asset value per share
figures in the "Unaudited before the ETC acquisition" column have been extracted
from the unaudited financial information of Metorex at 31 December 2002.

  6.6 The net asset value per share and net tangible asset value per share
figures in the "Pro forma after the ETC acquisition" column have been calculated
on the basis that the ETC acquisition and the share placement were implemented
with effect from 31 December 2002.

7. CIRCULAR TO METOREX SHAREHOLDERS

   A circular to Metorex shareholders containing full details of the ETC
acquisition and including a notice convening a general meeting to be held on or
about 21 May 2003 at which general meeting, Metorex shareholders will be
required to consider and if deemed fit, approve the resolution to approve the
ETC acquisition, will be posted to Metorex shareholders on or about 25 April
2003.

   Sandton

   15 April 2003

Merchant bank

  Investec Corporate Finance

  Investec Bank Limited

  (Registration number 1969/004763/06)

Sponsor

  BJM Corporate Finance

Legal adviser to Metorex

  Bowman Gilfillan

  John& Kernick * Findlay& Tait


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

ACQUVUBROVRSAAR