Metals One (AIM:MET1), the mineral exploration and investment company, has agreed new heads of terms governing its interests in Lions Bay Resources (LBR) and Lions Bay Capital, consolidating its position in an integrated South African gold and energy platform that combines a dormant gold mine with cogeneration power assets.
LBR is pursuing the Barbrook gold mine out of business rescue, a process that cleared a significant hurdle in April when 84% of creditors approved the rescue plan; approximately ZAR 151 million has been paid out since, including ZAR 45.5 million to former employees, and a Section 11 application for transfer of the mining rights has been submitted to South Africa's Department of Mineral Resources and Energy.
Under the proposed transaction, the balance of remaining debt owed to Metals One, expected to be approximately US$2.3 million, would convert into a loan from Metals One to LBR on equivalent terms to existing facilities, while all parent-level third-party debt at Lions Bay would be cleared before or at closing, leaving the parent entity debt-free on completion.
As at 31 May, LBR held total assets of approximately US$12.1 million against liabilities of US$10.3 million, and had recorded a net loss of US$0.15 million over the preceding five months, with no revenue yet generated.
Managing Director Daniel Maling said the deal would place Metals One's equity "firmly in a listed vehicle that has a defined strategy and clear structure," adding that the company is "excited by the upside potential of the project and investment."
Completion remains conditional on definitive documentation, regulatory and exchange approvals, and the granting of Section 11 consent for the Barbrook mining rights transfer.
