Metals One (MET1 ) has entered into new conditional heads of terms involving Venture-listed Lions Bay Capital, in which it holds a 19.1% stake and Lions Bay Resources, in which it holds a 30% stake with an option to acquire a further 19.99%. 

Lions Bay Resources was established to build an integrated South African gold and energy platform via the acquisition of the Barbrook and Vantage gold assets, initially by taking them out of business rescue. These assets will then be able to use Lions Bay Resources’ recently purchased cogeneration assets to support lower-cost, more reliable power for the mining operations.

The acquisition of the Barbrook and Vantage assets is proceeding, and the Section 11 application for the transfer of the mining rights has been submitted to the relevant South African government department. 

The Lions Bay Resources transaction also involves Salamander Consulting Group, Lions Bay Energy and Lions Bay Mining. 

The net effect of the share-for share transaction will be that Lions Bay Capital will acquire 100% of Lions Bay Resources. This will include Metals One’s 30% stake and option for 19.99%, and Salamander’s 35%.

In turn, Metals One is expected to go to 54.3% of Lions Bay Capital, prior to any forthcoming fundraising. This shareholding includes the issue of additional shares in return for the partial cancellation of debt. Salamander will hold 23.9% of Lions Bay Capital.

Subject to completion of the proposed transaction, including an associated fundraise by Lions Bay, this implies, subject to audit, an initial market equity valuation on Metals One’s Lions Bay ownership of approximately C$27.83 million. 

That valuation follows total investments made by Metals One in Lions Bay Capital and Lions Bay Resources of approximately C$8.25 million net. This represents an unrealised gain on investments of 237%.

In connection with the transaction, Lions Bay Capital will also transfer 16,926,802 shares of Fidelity Minerals Corp. to Metals One in partial repayment of the remaining Metals One debt. 

This will give Metals One increased exposure to the highly prospective Las Huaquillas gold, copper and silver project in Northern Peru. Metals One already holds 12.96% of Fidelity.

Fidelity’s main focus is the brownfield Las Huaquillas project in northern Peru, with an open gold resource flanked by two discovered potential copper porphyry systems. It has a near-term objective to confirm and expand the historic resource. Following the share transfer, Metals One will own 40.5% of Fidelity’s shares. 

The balance of the remaining debt owed to Metals One, expected to be approximately US$2.3 million, would become a loan owed by Lions Bay Resources to Metals One.

John Byrne is expected to retire from Lions Bay’s board upon completion of the transaction.

“After our initial investment in Lions Bay Capital in August 2025, we are very pleased to see the long-term plan coming into fruition,” said Daniel Maling, managing director of Metals One. 

“It has been 10 months of collaborative work in developing and executing the South African integrated gold business strategy to culminate in this transaction. Through the proposed transaction, Metals One’s equity would be firmly set in a listed vehicle that has a defined strategy and clear structure. We look forward to further supporting Lions Bay and are excited by the upside potential of the project and investment.”

 

View from Vox

 

Worth noting that although Metals One will technically go to over 50% of Lions Bay Capital, the delivery of shares to Metals One will take place in stages, so that in reality it will likely stay under the 50% threshold as new capital is raised. Either way, this is a welcome development for Metals One, not least because the ownership structure of Lions Bay Capital and Lions Bay Resources was highly convoluted, and therefore difficult to value. The new arrangements will be much simpler – a highly significant suite of South African gold assets will be 100% owned by a Venture Exchange-listed vehicle, in which Metals One, in turn, will have a controlling stake. It’s a big development for all parties concerned, but a necessary step to take before Lions Bay takes custody of its new South African assets.