Metals One (MET1) has flagged an announcement by investee Lions Bay Capital that its associate Lions Bay Resources (LBR) has made an offer for all assets of the Vantage Goldfields Group in South Africa’s Barberton region.
Vantage was placed in Business Rescue following a crown pillar collapse at the Lily mine in 2016 and comprises numerous mining leases with a historical resource inventory of 4.5 million ounces of gold, a central metallurgical complex and extensive underground development.
LBR has offered C$46.5 million for the Vantage assets: an initial C$12.7 million cash payment, a second payment of C$18.8 million to be settled via shares, and a final C$15.0 million payable as a royalty on gold revenue. The second payment is expected to be partly met through Lions Bay Capital shares at a deemed C$0.50 per share.
Lions Bay Capital owns 47.39% of LBR. Metals One itself holds 19.1% of Lions Bay Capital, has agreed a binding term sheet to lend Lions Bay Capital C$4.0 million, and also holds 5% of LBR alongside US$1.8 million of convertible loan notes (CLNs) in LBR. Assuming Metals One advances the full US$1.8 million, then on conversion of the CLNs and based on LBR’s pre-offer share capital, Metals One said its LBR stake would be at least 30% on a fully diluted and enlarged basis.
Metals One’s Managing Director Daniel Maling said: "Lions Bay Resources' bid for Vantage marks an exciting step in its strategy to create a vertically integrated gold business in South Africa. As a stakeholder in both Lions Bay entities, Metals One could create significant value for its shareholders from these opportunities."
View from Vox
This looks like a well-timed attempt to secure a sizeable, established asset base in a proven South African gold district, and potentially lock in long-life feed for LBR’s planned gold roaster project. As a stakeholder in both Lions Bay companies, Metals One could generate significant value for its own shareholders from this opportunity.