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MRC takes greater stake in Tormin

12th April 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – ASX-listed Mineral Commodities (MRC) has announced plans to increase its ownership in Mineral Sands Resources (MSR) and the Tormin mineral sands operation, in South Africa, from 50% to 69%.

MRC has to date developed and operated the Tormin project through its 50% shareholding in MSR, with the remainder of the company held by empowerment partner Blue Bantry, as dictated under South African law.

MSR will now adopt a recoverable interest methodology to determine amounts owing, given that MRC is likely to remain the sole external funding source for the company, under which MRC could recover contributed capital by withholding 80% of available dividends payable to participants until its capital contribution is repaid in full.

There is also a minimum annual dividend set at $10 000 per 1% interest in MSR aimed at ensuring the flow of regular dividends, or equity equivalent benefits, to the respective broad-based black economic empowerment (B-BBEE) participants.

MRC on Wednesday said that in consideration for the reduction of Blue Bantry’s interests in MSR from 50% to 21%, the company had agreed to forgive long-term loans and other amounts owed to it by Blue Bantry, and the parties had agreed that Blue Bantry would be entitled to receive 11.3-million fully paid ordinary shares in MRC, together being in consideration for amounts that would have been payable to Blue Bantry if the recoverable interest methodology had been applied since inception of the Tormin operation.

Blue Bantry will have a carried interest of R33-million still payable to MRC as at July 2022, being the effective date of the proposed transition.

Completion of the restructure of MSR is subject to the satisfaction of a number of conditions precedent including the receipt of all required regulatory approvals, and the receipt by MRC of shareholder approval for the issue of the consideration shares, given MRC director Madiba Qunya is a 50% owner of Blue Bantry.

“The company recognises the importance of its BEE partners, employees and community. The company has taken a proactive initiative to embrace the South African Mining Charter recommendations, with the current restructuring arrangements with its B-BBEE partner, employees and local community,” said MRC interim CEO Adam Bick.

“It recognises and is committed to the entrained principles of legislation relating to historically disadvantaged South Africans and the equitable fairness which must be applied to ensure real tangible redistribution of the financial benefits of mining at its Tormin operations. We look forward to welcoming our B-BBEE Partner Blue Bantry as a shareholder in MRC and our [historicaly disadvantaged] employees as shareholders of MSR, and to sharing the benefits of not only Tormin operations but the company’s overall capital growth with our new stakeholders.”

Edited by Creamer Media Reporter

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