Brainworks_Capital_Management_2012_Annual_Report

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LETTER TO SHAREHOLDERS
Investee Company: PUMA ENERGY ZIMBABWE (PRIVATE) LIMITED
2012 PERFORMANCE HIGHLIGHTS
We have continued to progress the fuel storage project by obtaining Environmental Management
Agency (EMA) approval for the facility, as well as agreeing to the Throughput and Tie-in Agreement and
associated fee with the Ministry of Energy. Final documentation is being processed and the board is yet
to be appointed.
The shareholding structure of Puma Energy Zimbabwe is as follows:
Puma Energy LLC 70%
Brainworks Capital Management 30%
2. ADVISORY SERVICES
The Company was licensed by the Securities and Exchange Commission as a financial advisor. During the
year the Company successfully acted as financial advisor on a number of advisory transactions, notably:
The largest empowerment deal to-date in Zimbabwe: US$ 971 million Zimplats Mining Company
disposal of 51% shareholding to Indigenous Entities led by the Government of Zimbabwe;
The US$ 550 million Mimosa Mining Company disposal of 51% shareholding to Indigenous Entities
led by the Government of Zimbabwe;
The US$ 142 million empowerment deal between the Johannesburg Stock Exchange-listed Anglo
American Platinum Limited and Indigenous Entities led by the Government of Zimbabwe;
The US$ 28 million empowerment deal between the Johannesburg Stock Exchange-listed Pretoria
Portland Cement and Indigenous Entities led by the Government of Zimbabwe; and
The US$ 30 million empowerment deal between the Toronto Stock Exchange-listed Caledonia Mining
and Indigenous Entities led by the Government of Zimbabwe.
Post signing of the term sheets between the Government of Zimbabwe and various foreign-owned mining
companies seeking to comply with Zimbabwe’s indigenisation laws, various Government regulatory
bodies could not agree on the implementation of the term sheets. The term sheets were meant to pave
the way for substantive agreements to be drawn up, which would have led to closure of the transactions.
The resultant evaluations of the term sheets advised by the Company led to widespread media coverage
of these issues and, in some cases, some sections of the media attempted to turn the participation of
Brainworks on these mandates into a scandal. Consequently, the Government is reviewing the term sheets,
as well as exploring other methods of achieving its objectives and in that regard, transactions totaling
US$ 1.8 billion in which the Company has advised, remain open. The fee that would have been earned
by the Company on these transactions has not been accrued pending the nature of implementation of
the deals that the Government of Zimbabwe will choose.
BRAINWORKS CAPITAL MANAGEMENT (PRIVATE) LIMITED
2012 ANNUAL REPORT