LBR is a South African private company formed earlier this year to manage partnership assets. It is jointly owned by Lions Bay Capital Inc. (“Lions Bay”) (TSX-V: LBI) (Metals One: 19.1%) and from the management team of Salamander Mining (“Salamander”) led by Graham Briggs (non-executive chairman), the former CEO of Harmony Gold, South Africa’s largest gold producer, and Lloyd Birrell (CEO), the founder and former CEO of Theta Gold (ASX:TGM).
LBR has acquired a US$1.36 million option on a large cogeneration plant in the Karbochem Industrial Park, Newcastle, South Africa (“plant”). Research and planning has begun around adapting the plant to produce power and steam, while also roasting refractory gold concentrates, which is common in mines in the region. Metals One and LBR recently conducted due diligence on the plant and agreed to use part of the CLN’s resources to exercise the option.
The factory currently has the following specifications and associated infrastructure:
- 2 x 30 tons per hour (“TPH”) Thermax combustion boilers
- 6 MW GE-Triveni steam turbine
- The plant is configured to source coal from local landfills and biomass as feedstock
- Boiler house, turbine, control room and engine control center
- Compressed air installation and electrical substation
- Inclined conveyor belt to six silos (1,500 m3 each)
The plant was inspected and verified by Terravista Solutions P. Ltd in October 2025 and had a replacement value of $39.6 million. Subject to receipt of a report from competent persons, which will be financed from CLN revenues, it is expected that the plant will require approximately US$4.5 million to restart steam and electricity production.
A large chrome smelter has been commissioned next to the factory, requiring power and steam, and discussions are underway for a mutually beneficial offtake agreement.
Pending confirmatory research and studies, LBR plans to reconfigure the plant with a gold concentrate roasting complex, an alternative solution for the export of gold-bearing concentrate from South Africa to Asian smelters. This process has the potential to create a further revenue stream for the plant through toll processing of material from regional mines, while maintaining steam and electricity production. If Metals One is elected, part of the proceeds from the CLN will be used to commission a further technical report on the reconfiguration of the factory with a gold burner.
The region is home to numerous multi-million ounce gold deposits and tailings, the mining of which generates concentrate, all within a 300 km radius of the facility. In addition to the larger mining complexes, there are several small mining complexes that cannot meet the high capital requirements of stand-alone operations that would benefit from a large centralized roaster such as LBR’s.
The near-term strategy for LBR is to acquire regional gold mining and tailings assets as potential feedstock for the gold burner. Metals One and LBR have worked together to identify acquisition opportunities that fit the potential configuration of the plant and gold burner, some with significant gold deposits and mining infrastructure.
Figure 1: Map of South African historical and operational gold mines in the region. Source: Council for Geoscience, South Africa 2015. |
CLN
Metals One has conditionally agreed to subscribe in tranches for up to US$1.8 million CLNs in LBR, subject to the satisfaction of certain conditions in relation to each tranche, as set out below.
- Metals One is satisfied with the legal, financial and technical due diligence on LBR and its assets (including the factory)
- In relation to tranche 1: a technical report confirming that the replacement value of the Installation has been issued by an authorized person
- In relation to Tranche 2, LBR and Lions Bay have entered into legally binding transaction documents relating to the plant, pursuant to which LBR will acquire a 100% legal and economic interest in the plant
- First rank security, granted in agreed form to Metals One
- The warranties and representations remain true and accurate in all respects
- LBR and Lions Bay have fulfilled all their obligations under the agreement
- LBR has received shareholder and board approval, to the extent required, to issue the CLNs and allot shares upon a conversion
- No breach of contract has occurred and it continues
Tranches 1 and 2 are expected to amount to $175,000 and $1.625 million, respectively. Any further tranches must be made available at Metals One’s sole discretion and Metals One must have the ability to require LBR to withdraw amounts.
In consideration for the subscription of Metals One, LBR has agreed to issue to Metals One on the date of the convertible loan such number of new shares as is equal to 5% of the issued share capital of LBR on a fully diluted and expanded basis (“Introductory Shares”).
The CLNs must be redeemable for cash upon default or at Metals One’s option on the first anniversary of the grant of the respective CLNs (the “Maturity Date”).
Metals One is to have the option to convert the CLNs into the most favorable share class in the capital of LBR under certain circumstances, including (but not limited to) at the time LBR acquires the plant and on the relevant maturity date.
Assuming Metals One advances the full US$1.8 million to LBR, upon conversion of the CLNs, Metals One’s shareholding will amount to at least 30% of LBR’s issued share capital on a fully diluted and expanded basis. Until conversion or redemption, the CLN attracts a 10% compounded annual coupon, to be rolled up and payable in cash on the relevant maturity date, or convertible into LBR shares, at the option of Metals One.
The CLNs must be secured, among other things, by having the highest priority over LBR’s assets.
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Figure 2: Aerial photo of the factory, taken during Metals One’s site visit. |
Dan Maling, Managing Director of Metals One, commented:
“South Africa has historically been the world’s largest gold producer, and we believe the country has the perfect ingredients of abundant resources, infrastructure and mining expertise to become a leader again.
With the acquisition of the gold burner and the associated infrastructure, LBR, together with Salamander’s experienced mining team, has the Foundations to become a major, vertically integrated South African gold company.
Metals One remains well funded with over £9 million in cash and liquid investments. Our network and easy access to capital enable us to facilitate such downstream acquisitions. We look forward to providing further updates on the growth opportunities at Lions Bay Resources in the coming months.”
To ask:
Metal One Plc Daniel Mag. Craig Moulton, Chairman | info@metals-one.com +44 (0)20 7981 2576 |
Beaumont Cornish Limited (nominated advisor) James Biddle/Roland Cornish | +44 (0)20 7628 3396 |
Capital Plus Partners Limited (broker) Jonathan Critchley | +44 (0)207 432 0501 |
Vigo Consulting (UK investor relations) Ben Simons/Fiona Hetherington/Anna Stacey | IR.MetalsOne@vigoconsulting.com +44 (0)20 7390 0230 |
Fairfax Partners Inc (North America Investor Relations) | connect@fairfaxpartners.ca +1 604 366 6277 |
About Metal One
Metals One is committed to a strategic portfolio of projects and investments in critical and precious metals, supported by the Western world’s urgent need for reliable and responsibly sourced raw materials – and record high gold prices. Metals One’s shares are listed on the AIM Market (MET1) of the London Stock Exchange and on the OTCQB Venture Market in the United States (MTOPF).
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Appointed advisor
Beaumont Cornish Limited (“Beaumont Cornish”) is the nominated adviser to the firm and is authorized and regulated by the FCA. Beaumont Cornish’s responsibilities as the Company’s Nominated Advisor, including the responsibility to advise and guide the Company in relation to its responsibilities under the AIM Rules for Companies and the AIM Rules for Nominated Advisors, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and is not responsible to other persons for providing protection to Beaumont Cornish customers, nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to therein.
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