Wednesday, July 6, 2022

Sable Platinum buys 4 percent stake in Makgekgenene’s Global Initiatives

Sable Platinum, the JSE listed exploration company, will have access to BCL tailings dump following its move to acquire a stake in Global Initiatives owned by Atang Makgekgenene for about P32 million.

In an emailed note to Sunday Standard, Sable said it has entered into an agreement with Makgekgenene pursuant to which and subject to the fulfillment of certain conditions to acquire 4 percent of the equity interest for the Botswana company at a purchase price of $4 000 000 (about P32 million) .

Equally, Sable Platinum has also been granted an option to acquire a further 22 percent in tranches in Global over the coming years.

The move to by the South African platinum company to invest in Makgekgenene’s company is to allow it access to the tailings and slag dump at the BCL Limited’s nickel and copper mines and smelter situated near Selebi Phikwe town.

“The board of Sable is satisfied that because the Selebi Phikwe operation has been producing slag for some 40 years there is significant potential for metals including iron in the slag heap and Sable is investigating alternative methods to economically recover any such metals,” the company said on Friday.

Sable has already started investigating the possibility of mining vanadium and iron ore present on four of the five project areas on the Western Limb of the Bushveld Complex in South Africa. It is believed that development of these properties will provide an earlier route to cash flow.

“The Selebi Phikwe project is a logical extension of this strategy. Early assessment of this project indicates that the acquisition of up to 26 percent of Global and a management contract on the Selebi Phikwe project will provide a significant uplift to Sable shareholders,” it added.

BCL is copper/ nickel company owned 93.6 percent by Botswana government and 6.4 percent by Norilsk Nickel and under a partnership public/ private partnership Global Initiatives (Pty) Limited was awarded the rights to the BCL dumps.

The deal proposed retreating existing tailings and smelter slag at BCL’s operations at Selebi Phikwe to recover significant nickel, in addition to copper and cobalt from these dumps. An initial scoping study had shown a measured resource of 178 000 tonnes of Nickel in the tailings dump.

Sable Platinum is a platinum exploration company with holdings across 63067 ha in the Gauteng, Northwest and Limpopo provinces of South Africa. The company has five project areas in the Western Bushveld Complex, of which two are in previously unknown areas. Target resources are from surface down to 3000 m in vertical depth.

Sable has a target attributable resource base of 70m target ounces shallower than 2500m. An exploration programme has been instituted that will have a minimum duration of two years.

The company expects to finish all the regulatory paperwork in order to execute the deal and it plans to place shares to raise the cash. Sable Platinum will also have to complete legal, financial and technical due diligence on Global Initiatives and the Selebi Phikwe project and complete a comprehensive sale of shares and shareholders agreements.

Sable Platinum has also been given three options to acquire a further 22 percent on Makgekgenene’s company over the coming years.

Under the first option, Sable can acquire a further 6 percent of the equity interest at a price equal to the lesser of US$ 6 million and the option can be exercised by Sable after a one year period and one day after the payment of $4 000 000 pursuant to the share acquisition and the commencement of the construction of a blast furnace for the Selebi Phikwe project.

Sable can also acquire a further 5 percent equity interest in Global from Makgekgenene at a price equal to the lesser of $15 000 000 (plus the amount of the first option shortfall) and an amount equal to 24.9 percent of the market capitalisation of Sable at the time (being the aggregate market value of all the listed shares of Sable (excluding treasury securities).

The second option may be exercised by Sable at any time after the later of one year and one day after the payment of the price payable in respect of the 6 percent equity interest in Global under the first option and the date of production of the first pig iron from the blast furnace.

Sable has been granted an option to acquire a further 11 percent equity interest in Global from Makgekgenene at a price equal to the lesser of $27 000 000 (plus the amount of the second option shortfall) and an amount equal to 24.9 percent of the market capitalisation of Sable at the time (being the aggregate market value of all the listed shares of Sable (excluding treasury securities).

This option may be exercised by Sable at any time after one year and one day after the payment of the price payable in respect of the 5 percent equity interest in Global under the second option.

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