SouthernEra Resources (SUF-T) has agreed to swap more than 10.5 million of its own shares to boost by 18.4% its stake in Johannesburg-listed platinum miner Messina.
The SouthernEra shares represent 12.4% of its issued and outstanding share-count, and will net the company more than 3.7 million shares of Messina. In the end, SouthernEra will own 91.5% of Messina. The newly minted SouthernEra shares are subject to hold period of one year.
Based on SouthernEra’s closing price of $3.93 on the Toronto Stock Exchange on May 14, the deal is valued at around $41.5 million.
Messina owns the Voorspoed, Doornvlei and Zebediela sections of the Greater Messina platinum project in South Africa’s Bushveld igneous complex (BIC). Measured resources at Greater Messina total 26.3 million tonnes grading 5.4 grams platinum, palladium, rhodium, ruthenium, iridium plus gold (5PGE plus gold); an additional 66.6 million tonnes running 5.05 grams 5PGE plus gold classified as the indicated resources. The inferred category is home to another 32.53 million tonnes averaging 5.4 grams 5PGE plus gold.
“For the past several years, we have been pursuing different strategies to increase our ownership in Messina. The equity dilution resulting from this transaction will be more than offset by the increase in ownership of Messina," said SouthernEra chief executive Patrick Evans in a prepared statement.
The proposed deal is subject to regulatory approval.
In diamond news, SouthernEra has been awarded prospecting permits for the Hope and Prieska diamond projects on the Kaapvaal Craton in South Africa.
The Hope project covers around 11 sq. km of state-owned mineral rights in Limpopo province. The property lies along the regional structural lineament that hosts SouthernEra’s Marsfontein diamondiferous kimberlite cluster. In less than two years, the Marsfontein diamond mine produced US$246 million in revenue for the company and joint-venture partner DeBeers.
SouthernEra has begun loam-sampling and ground geophysics; an airborne survey will soon be flown in anticipation of drilling.
The 70-sq.-km Prieska property is situated 25 km northeast of the like-named town in Northern Cape Province. Ongoing exploration is focussed on six kimberlitic indicator mineral anomalies distinctly separate from the known Sanddrift Group 2-type diamondiferous kimberlite fissure and blow.
SouthernEra has lined up a black economic empowerment consortium, comprising Imbewu Mineral Resources and Ten G’s Investments that will take a 30% participating interest in the two projects. A 5% interest in the projects will also be set aside for a community trust that will provide for social and economic development in the area of any eventual mine.
The deal satisfies the requirements of South Africa’s Mining Charter, which calls for 26% ownership by disadvantaged groups in mining ventures within 10 years.
SouthernEra recently said it is considering splitting its platinum and diamond holdings into two separately listed companies. The company says it will only do so if there are no negative tax implications, and financing can be guaranteed for the diamond company. The scheme requires board and regulatory approval.