Metals One PLC (AIM:MET1, FRA:HT7, OTCQB:MTOPF), the critical and precious metals developer, has agreed to acquire full ownership of South African gold and power business Lions Bay Resources for £6.5 million in shares, and is bringing in the former chief executive of Harmony Gold (NYSE:HMY) as chair.
In a two-stage deal, the company intends to exercise its existing option to lift its stake in LBR from 30% to 49.99%, then buy the remaining 50.01% from Lions Bay Capital (LBI) and Salamander Consulting.
The vendors will receive 500 million new Metals One shares at 1.3 pence each, together with 125 million warrants exercisable at 3 pence for three years.
The key asset is the Barbrook Gold Mine in Mpumalanga Province, South Africa, which LBR is in the process of acquiring through a business rescue process.
Barbrook carries a historical resource of 2.1 million ounces of gold, with an existing processing plant and supporting infrastructure already in place.
LBR also owns a cogeneration plant in Newcastle, South Africa, equipped with a 6 megawatt steam turbine, which has an independently assessed replacement value of $39.6 million and could offset Barbrook’s power requirements.
Metals One said it was targeting initial gold concentrate production at Barbrook within six months of completing the acquisition, using the plant and infrastructure already on site.
Managing director Daniel Maling described the deal as “a truly transformational transaction” following 18 months of financing and business development work.
Metals One also intends to advance up to a further $15 million to LBR to support completion of the Barbrook asset acquisition, subject to agreement and regulatory approval.
In the same announcement, investors were told Graham Briggs, the former chief executive of Harmony Gold, South Africa’s largest gold producer by volume, is proposed to become non-executive chair of Metals One following completion.
Briggs led Harmony from 2007 until his retirement in 2016, having joined the company in 1996 and worked across its operations in Canada, Australia and Papua New Guinea.
