AltX-listed Mine Restoration Investments (MRI) has signed a share purchase agreement with the shareholders of Langpan Mining Company.
Under the terms of the agreement, the vendors of Langpan will dispose of their entire shareholding in Langpan for R550-million in shares.
MRI listed on the alternative exchange of the JSE in 2012, with the aim of tackling the challenges of acid mine drainage in South Africa, but it is currently a cash shell.
Langpan mines and processes chrome ore to form chrome concentrate, with a by-product having a high concentration of platinum-group metals (PGMs).
Langpan owns the plant, machinery and mining rights, respectively, in relation to the chrome and PGM mining and associated beneficiation operations on the Langpan 371KQ farm, in Limpopo.
Langpan is currently mining the high-grade chrome seams on site to sell high-grade unprocessed chrome ore to the market. It has a five-year supply agreement in place with Scutella Ventures, which was signed in October last year.
The proposed transaction is a first step towards MRI’s transformation into a mining house that promotes rural investment into sustainable mining projects on an inclusive and equitable basis.
The transaction will enable MRI to transform from a cash shell and position itself to achieve its rural investment mandate.
Meanwhile, MRI will seek to raise about R15-million through a partially underwritten renounceable rights offer, at a subscription price of 0.1c per rights offer share. These shares will be issued simultaneously with the consideration shares for the Langpan shareholders.
To facilitate the proposed transaction and the rights offer, it will be necessary to increase the authorised share capital of the company.
However, to reduce the number of shares in issue, MRI will seek the approval of its shareholders to consolidate its shares in a ratio of one consolidated MRI share for every 1 000 MRI shares currently in issue.