Metals One (MET1) has outlined progress in building a vertically integrated gold business in South Africa, centred on Lions Bay Resources (LBR), including the acquisition of a cogeneration plant and a proposed deal for Vantage Goldfields assets.
The company has committed US$1.8 million via convertible loan notes, which it intends to convert into a 30% equity stake in LBR following completion of the plant acquisition. Meanwhile, LBR is expected to imminently settle the remaining US$1.36 million to acquire the cogeneration plant located in Newcastle, South Africa, which has an independently assessed replacement value of US$39.6 million.
Initially, the Newcastle cogeneration plant is expected to be used to generate electricity and steam. However, subject to further studies, the same plant may later be reconfigured to include a gold concentrate roasting facility, supporting a move towards in-country processing rather than exporting concentrate at discounted prices.
In parallel, LBR has agreed a plan in principle with the Business Rescue Practitioner to acquire the assets of Vantage Goldfields. These assets include mining leases in the Barberton region with a historical resource of 4.5 million ounces of gold, alongside a central metallurgical complex and extensive underground development.
If completed, Vantage could provide gold-bearing concentrate feed for potential processing at the Newcastle plant, linking resource production with domestic processing infrastructure. Meanwhile, Metals One has increased its secured loan facility to Lions Bay Capital to C$10.0 million to support the acquisition and working capital requirements.
Metals One’s Managing Director Daniel Maling said: “With our key partners, the Company's vertically integrated South African gold business development strategy is now being implemented. LBR has secured the cogeneration plant in Newcastle which could play a key role in unlocking value in our targeted mining assets, including Vantage, as a source of cheap power initially, and as a gold roaster in the longer term.
“Thanks to the tireless efforts of the team at LBR, we now have a plan agreed to acquire the Vantage assets through the Business Rescue process.
“We believe these assets will be potentially transformational for LBR, and to Metals One as a 30% owner, and look forward to providing further updates as the Plant acquisition and Vantage plan progress.
“Metal One's significant cash and liquid investments held on its balance sheet have enabled it to position itself, and LBR, as front runners in the Vantage Business Rescue process.
“LBR is now in the position of considering several offers for project level financing for the balance of cash required to complete the Vantage asset acquisition and mine startup capital.”
View from Vox
Metals One is now linking infrastructure and resource strategy around a single asset - the Newcastle plant - which could evolve from a power solution into a processing hub. The key test will be execution, particularly securing funding and completing the Vantage acquisition.