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African Rainbow Min. (ARB)

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Wednesday 09 November, 2005

African Rainbow Min.

Scheme of Arrangement


ASSORE LIMITED

(Incorporated in the Republic of South Africa)

(Registration number 1950/037394/06)

Share code: ASR

ISIN: ZAE000017117

('Assore')

ASSMANG LIMITED

(Incorporated in the Republic of South Africa)

(Registration number 1935/007343/06)

Share code: ASG

ISIN: ZAE000030789

('Assmang')

African Rainbow Minerals Limited

(Incorporated in the Republic of South Africa)

(Registration number 1933/004580/06)

JSE Share code: ARI

LSE Share code: AGM

ISIN: ZAE000054045

('ARM')

JOINT ANNOUNCEMENT BY ASSORE AND ASSMANG IN RESPECT OF THE FIRM INTENTION BY
ASSORE TO MAKE AN OFFER TO ALL ASSMANG SHAREHOLDERS OTHER THAN ASSORE AND ARM

1. INTRODUCTION

Assore and Assmang shareholders are advised that Assore has submitted to the
board of directors of Assmang ('the Assmang Board') a notice of its firm
intention to acquire all the shares in the issued ordinary share capital of
Assmang ('Assmang's shares'), other than those already held by Assore and ARM
('the offer'). The consideration payable in terms of the offer will be R2 600
in cash for each Assmang share ('the offer price'). On this basis, the total
consideration amounts to R368 million ('the cash consideration') and values
100% of Assmang at R9.2 billion.

The offer to be proposed by Assore will be implemented by way of a scheme of
arrangement in terms of section 311 of the Companies Act No. 61 of 1973, as
amended ('the Companies Act') ('the scheme'), between Assmang and all of its
shareholders, other than Assore and ARM ('the scheme members'). Should the
scheme be implemented, Assore will acquire all of the scheme members' issued
shares ('scheme shares') being 141 630 Assmang shares or approximately 4.0% of
Assmang's shares.

In addition, Assore and ARM have entered into an agreement ('the acquisition
agreement'), in terms of which Assore will acquire from ARM at the offer price,
all of the Assmang shares held by ARM in excess of 50% of the total number of
Assmang's shares. As a result, Assore and ARM will each hold 50% of Assmang's
shares, will jointly own and control Assmang and the listing of Assmang shares
on the JSE Limited ('JSE') will be terminated.

2. THE CONSIDERATION

Each scheme member registered on the envisaged record date of the scheme, which
is expected to be Friday, 24 February 2006, will be entitled to receive R2 600
in cash per scheme share.

The cash consideration represents a premium of 28.6% to the 30-day volume
weighted average Assmang share price of R2 022 up to and including Tuesday, 8
November 2005.

3. RATIONALE FOR THE OFFER

Assmang is currently jointly controlled by Assore and ARM, who collectively own
96.0% of Assmang's shares. As a result, Assmang does not comply with the JSE's
minimum spread requirements and the Assmang shares trade infrequently on the
exchange.

The offer will facilitate the revision of the agreement governing the
relationship between Assore and ARM and a modified joint control agreement
('the joint control agreement') will be implemented once the scheme becomes
unconditional. The new shareholding structure and the joint control agreement
will simplify the existing control arrangement in respect of Assmang and will
reduce a number of unnecessary costs relating to the listing of Assmang's
shares on the JSE.

4. INDEPENDENCE OF THE ASSMANG BOARD

As a result of the joint control agreement between the two shareholders, Assore
and ARM are defined as controlling shareholders of Assmang in terms of the
Securities Regulation Panel ('SRP') Code on Takeovers and Mergers and the Rules
of the SRP, and both companies have therefore elected not to vote their Assmang
shares at the scheme meeting. The Assmang Board is also constituted solely by
representatives from Assore and ARM.

The Assmang Board is expected by the SRP to provide Assmang shareholders with a
recommendation to either vote in favour or against the resolutions to be
proposed at the scheme meeting to give effect to the scheme. The Assmang
Board's recommendation is provided in paragraph 5 below and details of an
unqualified irrevocable undertaking is provided in paragraph 9 below.

5. OPINION AND RECOMMENDATIONS

KPMG Services (Proprietary) Limited ('KPMG'), in its capacity as independent
professional expert to Assmang, has been appointed by the Assmang Board to
advise it on whether the terms and conditions of the offer are fair and
reasonable to scheme members.

KPMG has provided a favourable preliminary opinion ('preliminary opinion') to
the Assmang Board based on information available to KPMG until 10 October 2005.
The preliminary opinion will be formalised at the last practicable date prior
to the publication of the circular to be posted to scheme members ('the scheme
circular') and is subject to a review of, inter alia, the scheme circular and
any new material factors applicable since 10 October 2005, as well as the
limitations and conditions to be set out in KPMG's formal opinion.

The Assmang Board has considered the terms and conditions of the offer and
KPMG's favourable preliminary opinion and is of the opinion that the terms and
conditions of the offer are fair and reasonable to Assmang shareholders.
Subject to the receipt of the final opinion from KPMG, confirming that the
offer is fair and reasonable to the scheme members, the Assmang Board
recommends that scheme members vote in favour of the resolutions required to
give effect to the scheme.

6. CONDITIONS PRECEDENT

6.1 The making of the offer and therefore the issuing of the circular detailing
the scheme, are subject to the fulfilment of the following conditions
precedent:

6.1.1 the receipt by the Assmang Board of a favourable fair and reasonable
opinion from an independent professional expert on the terms and conditions of
the offer;

6.1.2 the JSE, the SRP and the South African Reserve Bank approving the
necessary documentation to be distributed to the shareholders of Assmang; and

6.1.3 the High Court of South Africa ('Court') ordering the convening of the
meeting of scheme members ('scheme meeting') to approve the scheme.

6.2 The condition precedent referred to in paragraph 6.1.1 above, is stipulated
for the benefit of Assore and may be waived by Assore at any time, if
permissible in law.

6.3 The implementation of the scheme is subject to the fulfilment of the
following conditions precedent:

6.3.1 the acquisition agreement becoming unconditional, other than for any
condition in that agreement requiring the scheme to become unconditional;

6.3.2 the approval of the scheme by a majority of Assmang shareholders,
excluding Assore and ARM, representing not less than three-fourths of the votes
exercisable by scheme members present and voting either in person or by proxy,
at the scheme meeting;

6.3.3 the Court sanctioning the scheme in terms of the Companies Act; and

6.3.4 the lodging of a certified copy of the Order of Court sanctioning the
scheme with, and registration by, the Registrar of Companies in terms of the
Companies Act.

7. RESERVATION OF RIGHTS

The terms of the scheme may, subject to the written consent of Assore, be
amended, varied or modified, provided that no such amendment, variation or
modification may have the effect of diminishing the rights which will accrue to
a scheme member in terms of the scheme.

8. CONFIRMATION OF SUFFICIENT FUNDS

The SRP has been provided with appropriate confirmation, in terms of its
requirements, that Assore has sufficient resources to discharge its obligations
in terms of the offer.

9. IRREVOCABLE UNDERTAKINGS

Irrevocable undertakings to vote in favour of the scheme have been received
from:

* shareholders holding 2.8% of Assmang's shares, representing 70.5% of the
scheme shares; and

* Mr Desmond Sacco, the Chairman of Assmang, for 0.1% of Assmang's shares held
beneficially, representing 1.0% of the scheme shares.

10. PRO FORMA FINANCIAL EFFECTS ON ASSMANG SHAREHOLDERS

The unaudited pro forma financial effects on Assmang shareholders have been
prepared for illustrative purposes only, in order to provide information about
how the scheme might have affected the historical financial information
presented by Assmang. Due to their nature, the unaudited pro forma financial
effects may not provide a true reflection of Assmang's historical financial
position. The table below sets out the pro forma financial effects of the
scheme on Assmang shareholders, based on the assumptions set out below:

                                        Before the      After the               
                                                                                
                                            scheme      scheme(4)               
                                                                                
                                            (Rands         (Rands     Percentage
                                                                                
                                        per share)     per share)         change
                                                                                
Market value on 8 November 2005(1)           2 601          2 600           0.0%
                                                                                
30-day volume weighted average                                                  
market value                                                                    
                                                                                
up to 8 November 2005(2)                     2 022          2 600          28.6%
                                                                                
Net asset value(3)                             941          2 600         176.3%
                                                                                
Net tangible asset value(3)                    940          2 600         176.7%

Notes:

1. The 'Before the scheme' column reflects the closing JSE market value per
Assmang share on Tuesday, 8 November 2005, being the last trading day preceding
the publication of this announcement. The 'After the scheme' column shows the
consideration to be received per Assmang share.

2. The 'Before the scheme' column reflects the 30-day volume weighted average
JSE market value per Assmang share calculated for the 30 trading days up to and
including Tuesday, 8 November 2005, being the last trading day preceding the
publication of this announcement. The 'After the scheme' column shows the
consideration to be received per Assmang share.

3. The 'Before the scheme' column reflects the unaudited net asset value and
net tangible asset value per share at 30 June 2005, as extracted, without
adjustment, from the audited results of Assmang for the year ended 30 June
2005.

4. The 'After the scheme' column shows the cash consideration to be received
per Assmang share.

11. IMPORTANT DATES AND TIMES

                                                                           2005
                                                                               
Anticipated date of posting of the scheme circular to                          
                                                                               
Assmang shareholders on                                   Wednesday, 7 December
                                                                               
                                                                           2006
                                                                               
Last day to trade in Assmang shares on the JSE in         Wednesday, 18 January
order to be recorded in the register of members of                             
Assmang to vote at the scheme meeting on                                       
                                                                               
Record date to vote at the scheme meeting on              Wednesday, 25 January
                                                                               
Last day for receipt of forms of proxy for the scheme      Thursday, 26 January
meeting by 12:00 on                                                            
                                                                               
Scheme meeting to be held at 12:00 on                        Monday, 30 January
                                                                               
Announcement of results of the scheme meeting on SENS        Monday, 30 January
on                                                                             
                                                                               
Announcement of results of the scheme meeting in the        Tuesday, 31 January
press on                                                                       
                                                                               
Court hearing to sanction the scheme at 10:00 on            Tuesday, 7 February
                                                                               
Announcement on SENS regarding the sanctioning of the       Tuesday, 7 February
scheme on                                                                      
                                                                               
Announcement in the press regarding the sanctioning       Wednesday, 8 February
of the scheme on                                                               
                                                                               
If the scheme is sanctioned and implemented:                                   
                                                                               
Expected last day to trade in Assmang shares on the         Friday, 17 February
JSE in order for Assmang shareholders to be eligible                           
to receive the scheme consideration on                                         
                                                                               
Assmang share suspended at the commencement of              Monday, 20 February
trading on the JSE on                                                          
                                                                               
Expected scheme consideration record date, being the        Friday, 24 February
date on which Assmang shareholders must be recorded                            
on the register of members of Assmang in order to be                           
scheme participants and so become entitled to receive                          
the scheme consideration, at close of business on                              
                                                                               
Expected operative date of the scheme, at the               Monday, 27 February
commencement of trading on the JSE on                                          
                                                                               
The scheme consideration is expected to be                  Monday, 27 February
transferred or posted (as the case may be), to                                 
certificated scheme participants whose documents of                            
title are received by the transfer secretaries before                          
12:00 on Friday, 24 February 2006 on or about                                  
                                                                               
Or                                                                             
                                                                               
Failing receipt of documents of title before 12:00 on       Monday, 27 February
Friday, 24 February 2006, within five business days                            
of receipt thereof by the transfer secretaries. The                            
scheme consideration is expected to be credited to                             
the dematerialised scheme participants' accounts held                          
at their CSDP or broker on                                                     
                                                                               
Assmang share terminated at commencement of trading        Tuesday, 28 February
on the JSE on                                                                  

Notes:

1. The abovementioned times and dates are South African times and dates and are
subject to change. Any such change will be released on SENS and published in
the press.

2. Assmang shareholders are advised that, as trading in shares on the JSE is
settled within the STRATE environment five business days following the trade,
shareholders acquiring dematerialised shares after Wednesday, 18 January 2006
will not be eligible to vote at the scheme meeting.

3. If a form of proxy for the scheme meeting is not received by the time and
date shown above, it may be handed to the chairperson of the scheme meeting by
not later than 10 minutes before the scheme meeting is due to commence.

4. If the scheme meeting is adjourned or postponed, forms of proxy must be
received by no later than 48 hours prior to the time of the adjourned or
postponed scheme meeting or not later than 10 minutes before the scheme meeting
is due to commence, if handed to the chairperson of the scheme meeting,
provided that, for the purpose of calculating the latest time by which forms of
proxy must be received, Saturdays, Sundays and South African public holidays
will be excluded.

5. Assmang shareholders may not dematerialise or rematerialise their Assmang
shares after Friday, 17 February 2006.

12. FURTHER DOCUMENTATION

A circular providing further information on the scheme and containing, inter
alia, a notice of scheme meeting, a form of proxy and a form of surrender, will
be posted to Assmang shareholders on or about Wednesday, 7 December 2005.

Illovo

Johannesburg

9 November 2005

Investment bank and transactional sponsor

Standard Bank

Attorneys to the transaction

Webber Wentzel Bowens

Independent professional expert to Assmang

KPMG

Auditors and reporting accountants to Assore and Assmang

Ernst & Young

Attorneys to ARM

Jowell Glyn & Marais Inc.


                                                                                                                                                     

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