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Wits Gold award

MDM and Sedgman merger update

15 May 2013

MDM Engineering Group Limited (“MDM” or the “Company”) (AIM: MDM), the minerals process and project management company focused on the mining industry, notes the announcement made by Sedgman Limited (“Sedgman”) today and provides the following update on its proposed merger with Sedgman (the “Merger”) which was originally announced on 28 November 2012, and further to the release made on 13 March 2013.

As stated in the announcement on 28 November 2012, the Merger remained subject to a number of conditions precedent. Recent volatility in commodity prices, notably the gold price, has led to some of MDM’s prospective clients reassessing the timing of commencement of certain large scale expansion projects. The delay in a couple of these projects will result in MDM not being able to satisfy the condition precedent contained in the Merger Implementation Agreement (“MIA”) agreed with Sedgman as announced on 28 November 2012 relating to the Company's orderbook.

As certain condition precedents have not been waived, the parties are currently in the late stages of negotiating revised Merger terms. MDM and Sedgman still believe that there are strong strategic merits to the Merger, and an amended and re-stated MIA to reflect the revised terms is expected to be finalised shortly.

Despite the delay experienced in the commencement of the projects noted above, MDM continues to field a high level of enquiries regarding project feasibility and construction work and is confident of securing additional execution projects during the course of the 2014 financial year, to supplement the Company’s existing record order book.

As previously announced on 5 February 2013 and 13 March 2013, both approvals from Tanzania and South Africa competition commissions have already been obtained and therefore new approvals are not required.

Further updates will be provided once the amended and re-stated MIA is executed and the MDM notice of meeting is issued.


MDM Engineering Group Limited

Martin Smith (CEO)
George Bennett (Executive Director)
Dominique de la Roche (Finance Director)
Tel: +27 (0) 11 993 4300

Canaccord Genuity Limited

Andrew Chubb / Christopher Fincken
Tel: +44 (0)20 7523 8000

Tavistock Communications Limited

Jos Simson / Emily Fenton
Tel: +44 (0)20 7920 3150

Sedgman Limited (ASX: SDM) was established in 1979 and is a leading provider of mineral processing and associated infrastructure solutions to the global resources industry. Specialising in the design, construction and operation of coal handling and preparation plants (CHPPs), Sedgman is recognised internationally for its mineral processing and materials handling technologies.

Sedgman listed on the ASX in June 2006. The company has approximately 900 employees and services the global coal and metalliferous markets by offering innovative Engineering and Operations capabilities.

Head Office is in Brisbane with international offices established in Beijing, Shanghai, Ulaanbaatar, Santiago and Johannesburg targeting the growth regions of China/Mongolia, South America and southern Africa.

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