TIDMGDP
RNS Number : 7920F
Goldplat plc
20 July 2021
G ol dp lat plc / Ti cker: GDP / Index: AIM / Secto r: M in i ng
& E x p l o rati on
20 July 2021
Goldplat plc
( 'Goldplat', t he 'Group' or 'the Company ')
Corporate Transactions and dividend policy
G ol dp lat pl c, the AIM li sted g o ld p r o ducer, w ith
internati onal g o ld reco very o perati ons l o cated in South Afr
i ca and Ghana, is p leased to announce that it is increasing the
Group's interest in Goldplat Recovery (Pty) Limited ("GRL"), its
principal operating subsidiary, from 74% to 90.63% through the
buy-back by GRL of GRL shares from its minority shareholders ("the
Transaction").
GRL has two minority shareholders, Amabubesi Property Holdings
Proprietary Limited ("Amabubesi") and Dartingo Trading 161
Proprietary Limited ("Dartingo"), who respectively hold an 11% and
a 15% interest in GRL. Following a notification received from the
two minority shareholders indicating their intention to dispose of
their shareholdings, GRL has agreed to repurchase all of the
Dartingo shareholding and 7.33% of the shares held by Amabubesi for
ZAR 89.3 million (approximately GBP4.5 million). Amabubesi and
Dartingo are companies connected with Goldplat's Non-Executive
Director, Mr Sango Ntsaluba. Subsequent to the Transaction, GRL
will issue to Aurelian Capital Proprietary Limited ("Aurelian"), a
company associated with Mr Ntsaluba, shares amounting to 4.90% of
GRL, at the same valuation as the share repurchase, for ZAR 16
million (approximately GBP807,000) as described further below. As a
result of the Transaction, Goldplat will own 90.63% of GRL and Mr
Ntsaluba will own, directly and indirectly, 9.37% of GRL.
The consideration for the repurchased shares of ZAR 89.3 million
(approximately GBP4.5 million) will be settled in two instalments,
with 50% settled when the first payment is received from the
funding arrangement with Nedbank as described below and the
remainder not later than 180 days thereafter. Separately GRL has
agreed with the minority shareholders to bring forward the
settlement date of the second instalment as far as is practical for
GRL. The net cost to GRL of the Transaction will be ZAR 73.4
million (approximately GBP3.7 million), and Goldplat's share of the
net cost of the Transaction to GRL will be 90.63%, effectively
resulting in its additional 16.63% interest in GRL costing Goldplat
ZAR 66.52 million (approximately GBP3.35 million).
The Transaction values GRL at ZAR 400 million (approximately
GBP20.2 million). For the year ended 30 June 2020, GRL made a
post-tax profit of ZAR 90.3 million (approximately GBP4.55 million)
and had net assets of ZAR 227 million (approximately GBP11.7
million).
Funding Arrangements
The Transaction will be financed in part through a South African
Rand denominated bank facility of ZAR 60 million (approximately
GBP3.02 million) provided by Nedbank, of which 50% will be drawn
within the next 30 days and the remainder 180 days later. The
remainder of the consideration will be settled through a set-off
against the existing Amabubesi vendor loan of ZAR 12.6 million
(approximately GBP635,000) outstanding to the Group with the
balance being paid in cash.
The principal on the bank facility will be repayable monthly
over 36 months. The interest payable on the facility will be the
South African Prime Rate plus 1.75%.
As a condition of the facility from Nedbank, the Group's
facility with Scipion, currently standing at GBP33,000, will be
settled in full and its securities over GRL will be cancelled.
Further to above, GRL will grant security over its debtors as
well as have a negative pledge over its moveable and any immovable
property and a general notarial bond over all movable assets of GRL
will be registered. The Group will further enter into a limited
suretyship for ZAR 60 million (approximately GBP3.02 million), in
favour of Nedbank.
Related Party Transactions with Mr Sango Ntsaluba
Conditional on the share repurchase from Amabubesi and Dartingo
occurring, GRL has agreed to issue 4.90% shares in GRL (after the
share repurchase) to Aurelian, a company controlled by Mr Sango
Ntsaluba, in order to maintain a BEE partner in GRL and to reduce
the cost to the Group of the share repurchase transaction. The
issue of the shares is subject to regulatory approvals and the
waiver of pre-emptive rights by the remaining minority shareholders
of GRL. Aurelian will settle the ZAR 16 million (approximately
GBP807,000) consideration as follows:
-- ZAR 5 million (approximately GBP252,000) will be settled in
cash in 35 days;
-- A further ZAR 5 million (approximately GBP252,000) will be
settled in cash in 180 days; and
-- A vendor loan has been granted for a further ZAR 6 million
(approximately GBP302,000), which will be repayable from
distributions to be declared by GRL in respect of 1.84% of the
shares in GRL held by Aurelian.
After the completion of above transactions and cancellation of
the repurchased shares, the Group will hold 90.63% of GRL (an
increase of 16.63%), Amabubesi will hold 4.47% and Aurelian
4.90%.
By virtue of their size and because Mr Ntsaluba is both a
director of Goldplat and a major shareholder of Amabubesi and
Dartingo, both the share repurchases by GRL of 22.33% of shares
held by Amabubesi and Dartingo and the subsequent issue by GRL of
shares to Aurelian constitute related party transactions under Rule
13 of the AIM Rules for Companies. The independent directors, being
the Goldplat board members with the exception of Mr Ntsaluba,
consider, having consulted with the Company's Nominated Adviser,
Grant Thornton UK LLP, that the terms of the transactions are fair
and reasonable insofar as Goldplat's shareholders are
concerned.
With the share repurchase by GRL of the shares, the Group:
-- increases its shareholding in the historically most
profitable subsidiary in the Group and therefore the Group's share
of dividends paid from GRL;
-- increases its share by 16.63% in the intercompany loan of
GBP4.5 million (approximately ZAR 89,3 million) receivable by GRL
from the Group and the 1% interest receivable on the loan, which is
payable over the next 4 years; and
-- ensures that the minority shareholding is not taken up by a
party unknown to the Group.
Compliance with BEE regulations
These transactions result in a reduction in the Black Economic
Empowerment ("BEE") ownership of GRL. However, none of GRL's
current licenses to operate are impacted by these changes. The
reduction in the BEE ownership will impact on GRL's ability to
renew its mining right in South Africa when it comes up for renewal
in May 2023. GRL however does not plan to renew this mining right
as it does not have an identified minerals deposit and can continue
its current operations under the Refining License which only
expires on 1 November 2040. Nonetheless, the Group and GRL remain
cognisant of South African government policy to advance economic
transformation and enhance the economic participation of black
people in South Africa and will continue to look at means to do so
through ownership, management representation, development of
employee skills, local enterprise development and participation in
local socio-economic development.
Dividend Policy
With the disposal of Kilimapesa, as announced on 26 April 2021,
the Group has no further material calls on its cashflows to invest
into gold mining. The Group intends to continue to invest into and
develop its recovery operations, both by way of sustaining existing
operations as well as expanding these when appropriate
opportunities are identified. Subject to this, after the completion
of above Transaction, it is the Group's intention to distribute to
shareholders cash surplus to its expected operational and
development requirements and additionally, the Group intends to pay
as dividend any royalties received from Kilimapesa Gold on the
royalty agreement signed (whose conditions precedent were met or
waived on 23 April 2021), with Mayflower Gold Investments Limited
and Kilimapesa Gold.
Any distribution declarations will be applicable on net earnings
after 30 June 2021 and will be subject to, inter alia:
o Any banking or other funding requirements by which the Group
is bound from time to time;
o The operating and investment needs of the Group;
o The anticipated future growth and earnings of the Company;
o Provisions of the Company's Articles of Association;
o Emerging trends in Dividend pay-outs in the industry; and
o Any relevant applicable laws.
Werner Klingenberg, CEO of Goldplat commented: "I am pleased to
announce the share repurchase agreement with the minority
shareholders in South Africa and the share sale to Aurelian. I
believe this will provide Goldplat shareholders with the best value
for use of the cash generated in the Group. The transactions place
the Group in a position to start sharing the results of its
operations with shareholders through declaration of dividends from
future cashflows".
"I would like to thank Amabubesi and Dartingo for their
contribution and support as minority shareholders and am delighted
with the ongoing involvement in Goldplat and GRL of Mr
Ntsaluba".
For further i n fo rmat i on v i s it www .g o ld p lat.com, f o
l l ow on Twitter @GoldPlatPlc or contact:
Werner Klingenberg Goldplat plc Tel: +27 (0) 82 051 1071
(CEO)
Colin Aaronson / Harrison Grant Thornton UK LLP Tel: +44 (0) 20 7383
Clarke/George M Grainger (Nominated Adviser) 5100
Jessica Cave/ Lydia Zychowska WH Ireland Limited Tel: +44 (0) 207 220
(Broker) 1666
Tim Thompson / Mark Edwards Flagstaff Strategic and Tel: +44 (0) 207 129
/ Fergus Mellon Investor Communications 1474
goldplat@flagstaffcomms.com
Th e i n formati on co ntai ned w ith in t h is ann oun cement
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rmati on is now c o n s i dered to be in the pub l ic domain.
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END
MSCFIFLEDFIIFIL
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July 20, 2021 02:00 ET (06:00 GMT)
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