Located in Ontario, Manley Steels have been supplying the mining industry since 1981 and predominantly supplies, drill steels, couplings, shanks and adaptors to the North American market.

The company currently has an annual turnover of approximately $4-5 million per annum and employs 18 people.

The proposed transaction will involve the purchase of shares in Manley Steels Ltd. and Mansteels Equity Corp. and will be funded by an equal combination of shares and cash, with the purchase price to be determined by the book value of the Net Tangible Assets, expected to be between $2.5 million to $3.5 million.

SDS views this potential acquisition as an exciting opportunity to expand its product range and market diversification.

In its half-yearly report released in January SDS announced that revenue from operations for the six month period to December 2003 had reached $41,580,000, a 60.8% increase on the corresponding period in 2002 of $25,857,000.

During the year the company actively acquired three companies including Premier Rock Tools, Seismic Supply and automated drill sampling equipment manufacturer, Metal Craft.

Towards the end of the year, hot on the heals of its $16 million dollar placement which was used to cut debt and replenish working capital, SDS signed a Heads of Agreement to acquire hard rock mining supplier Normet Australia for $1.05 million.

The acquisition is to be finalised in early 2004 and will be funded by a combination of cash and new ordinary shares.