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PAM - Palabora Mining Company Limited - Updated information regarding Palabora`s

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PAM - Palabora Mining Company Limited - Updated information regarding Palabora`s
Broad Based Black Economic Empowerment Transaction                              
PALABORA MINING COMPANY LIMITED                                                 
(Incorporated in the Republic of South Africa)                                  
Registration number - 1956/002134/06                                            
JSE Code: PAM        ISIN: ZAE000005245                                         
("Palabora" or "the Company")                                                   
TRANSACTION ("BBBEE Transaction")                                               
1.   Introduction                                                               
    Shareholders of Palabora ("Shareholders") are referred to the initial       
announcement of the BBBEE Transaction (the terms of which were approved by  
    Shareholders in general meeting) published on the Securities Exchange News  
    Service on 15 June 2010, the subsequent announcements dated 15 October      
    2010, 7 February 2011 and 20 June 2011 (which provided updates on the       
status of the BBBEE Transaction), and the announcement dated 19 December    
    2011 wherein Palabora announced the conversion, subject to certain          
    administrative corrections, of seven of its eight existing old order mining 
    rights into new order mining rights, a key step to enabling Palabora to     
move forward with the implementation of the BBBEE Transaction.  The         
    conversions of the remaining old order mining right remains subject to a    
    third party dispute. Such dispute will, however, not prevent the            
    implementation of the BBBEE Transaction insofar as the seven converted new  
order mining rights are concerned.                                          
    Following extensive engagement with the Department of Mineral Resources     
    ("DMR") and the trade unions representing the employees of Palabora, as     
    well as other stakeholders, Palabora is pleased to announce that it has     
made significant progress with negotiating certain amendments to the BBBEE  
    Transaction agreements ("BBBEE Transaction Agreements"), necessary for      
    achieving the fulfilment of the outstanding suspensive conditions and the   
    implementation of the BBBEE Transaction.                                    
2.   BBBEE Transaction amendments                                               
    The engagement with stakeholders has resulted in the following amendments   
    to the BBBEE Transaction Agreements being agreed upon between the parties:  
-    the intellectual property relating to the mining methods of Palabora   
         will be included in the sale of Palabora`s business to Palabora Copper 
         Proprietary Limited ("Palabora Copper") (being the newly formed        
         subsidiary of Palabora in which the BBBEE Partners will hold their     
interests in Palabora`s business);                                     
    -    the minimum dividend payable by Palabora Copper to its shareholders    
         annually will be paid with effect from the implementation of the BBBEE 
         Transaction and not only with effect from the end of the first year    
thereafter, effectively bringing the dividend payment regime forward   
         by one year; and                                                       
    -    in addition to providing a guarantee in respect of the minimum         
         dividend payable to the Community Trust (which is presently provided   
for in the relevant transaction agreement), Palabora will further      
         undertake to Palabora Copper to pay the minimum dividend payable to    
         the Employee Trust in circumstances where Palabora Copper is itself    
         unable to effect such payment (with Palabora having a right of         
recourse against Palabora Copper in respect of such payment).          
    Palabora further wishes to advise Shareholders that a payment of R17 058.82 
    was made to each of its approximate 2 300 employees in December 2011, which 
    payment was distributed equally to all permanent employees of Palabora and  
all permanent employees of the Palabora Foundation, excluding the Chief     
    Executive Officer of Palabora and employees who are expatriates.            
3.   Suspensive conditions                                                      
    As some of the suspensive conditions to which the BBBEE Transaction is      
subject are still in the process of being fulfilled, Palabora and its BBBEE 
    Partners have agreed to extend the longstop date for the fulfilment or      
    waiver of the suspensive conditions from 30 March 2012 to 30 June 2012.     
    The key suspensive conditions which remain to be fulfilled include:         
-    the relevant administrative corrections being made by the DMR in       
         respect of the seven old order mining rights referred to under         
         paragraph 1 above, together with the receipt of written approval from  
         the DMR for the cession of Palabora`s new order mining rights (save    
for the mining right forming the subject matter of the third party     
         dispute) to Palabora Copper, and the registration of such new order    
         mining rights in the name of Palabora Copper in the Mineral and        
         Petroleum Titles Registration Office;                                  
-    the adoption or amendment of the constitutional documents of the BBBEE 
         Partners and Palabora Copper to the satisfaction of Palabora and the   
         BBBEE Partners;                                                        
    -    the receipt of consents from counterparties to certain key contracts   
as identified by Palabora for the transfer of such contracts to        
         Palabora Copper;  and                                                  
    -    the obtaining of all consents and/or approvals as may be required      
         under any Senior Finance Document to which Palabora is party for the   
implementation of the BBBEE Transaction.                               
    Palabora is working towards securing fulfilment of all of the remaining     
    suspensive conditions as soon as is practicably possible.  Shareholders     
    will be kept apprised of developments in this regard.                       
23 March 2012                                                                   
One Capital                                                                     
Joint corporate advisers                                                        
NM Rothschild & Sons South Africa (Proprietary) Limited                         
Legal adviser                                                                   
Webber Wentzel                                                                  
Date: 23/03/2012 16:00:01 Produced by the JSE SENS Department.                  
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