Dual-listed Eastern Platinum (Eastplats) could be facing regulatory challenges with the Department of Mineral Resources, following the relinquishing of interests by its black economic-empowerment (BEE) shareholders.
The company said last week Gubevu Consortium Investment Holdings’ and Lion’s Head Platinum’s shareholders had relinquished their interests in varying amounts to Serina Services and Ingwenya Incorporated.
Gubevu is Eastplats’ BEE partner in Barplats Investment, while Lion’s Head is a BEE-compliant corporation in the company’s Mareesburg project.
South African mining regulations require 26% of black ownership or shareholding to obtain mining rights, with Eastplats now possibly facing the retraction of the rights.
The BEE shareholders originally acquired these shares from Serina and Ingwenya, which have now reverted back. “Neither Eastplats nor our subsidiaries were parties to these purported transactions and we have not been provided with direct confirmation of, or further information regarding, these transactions,” Eastplats said in a statement.
Eastplats further pointed out that former management had, on June 30, 2016, two days following the announcement of the proposed sale of the Crocodile River mine, caused the company to enter into certain share purchase agreements with Serina and Ingwenya.
Those agreements contemplated payment by Eastplats of about $13.4-million on change of control of the company.