Aim-listed Goldplat has announced that all conditions precedent in respect of the sale of its subsidiary Kilimapesa Gold, which owns the Kilimapesa mine, in Kenya, to Mayflower Gold Investments have either been met or waived and that the sale is now complete.
The completion of the transaction will enable Goldplat to focus on its recovery operations in South Africa and Ghana and Mayflower Gold's parent company Mayflower Capital Investments to accelerate its investment into Kilimapesa.
To enable early completion of the transaction, both parties agreed to waive the requirement that London-listed Papillon Holdings completes its proposed reverse takeover (RTO) of Mayflower Gold.
The initial consideration receivable by Goldplat is in the form of a secured debenture of $1.5-million, to be satisfied by cash and/or the issue of shares to that value in Papillon payable on Papillon's readmission to trading on the LSE following completion of the RTO, with 30% of the initial consideration payable in cash.
In the event that Papillon is not readmitted to trading on the LSE by July 16, the full initial consideration will become payable in cash and will attract interest of 4% with effect from January 1.
As part of the conditions to complete the transaction and additional to the initial consideration, Mayflower Capital has agreed to pay $150 000 of the loan balance outstanding from Kilimapesa to Goldplat.
Mayflower Gold and Mayflower Capital have also waived all further conditions, specifically the conditions with regard to the renewal of the prospecting licence.
Earlier this month, Mayflower Capital raised $2-million of funding and has undertaken to use the funds towards meeting Kilimapesa's capital expenditure and working capital requirements.
Moreover, Mayflower Capital has secured a further £2.5-million conditional on completion of the RTO and readmission of Papillon to trading on the LSE.
With the completion of the sale of Kilimapesa, Goldplat is entitled to receive a 1% net smelter royalty on all production from Kilimapesa up to a maximum of $1.5-million on any future production from Kilimapesa.
"I am extremely pleased that we have been able to complete the sale of Kilimapesa to Mayflower Gold.
Mayflower has proven its commitment over the last eight months to Kilimapesa gold mine through investment of capital and management resources and has raised further cash of $2-million to advance the project.
“We believe that it was opportune for us to complete the transaction at this stage to allow the Mayflower team to implement their strategic initiatives and to ensure the success of the Kilimapesa mine for all stakeholders involved. This releases Goldplat from any further financial or management requirements and allows us to focus on our continued recovery operations,” comments Goldplat CEO Werner Klingenberg.
"We are delighted with the excellent progress made, including the accelerated acquisition of Kilimapesa, which significantly de-risks the transaction for our shareholders. This progress is down to the efficiency of both teams' collaboration and takes us another step forward towards completing the RTO process.
“The focus for all parties is now on investment activities and operational changes on site at Kilimapesa given the accelerated development and production timelines. We look forward to providing shareholders with further updates on developments in due course regarding advancing the remaining necessary approvals ahead of finalising the transaction and completing the RTO,” says Papillon executive director Charles Tatnall.