JOHANNESBURG (miningweekly.com) – Johannesburg-listed Sable Metals & Minerals has concluded a R10-million funding deal with nonexecutive director Botha Schabort.

In return for the R10-million sum, which would be payable in tranches over the next four months, Schabort would receive ordinary shares in Sable at the lesser value of 54.09c a share or at a 10% discount to the 30-day volume-weighted average price on the day the funds were received.

Upon receipt of the initial tranche of R1.5-million, which had already been paid, Schabort was entitled to a commission of 2% on the gross proceeds of ore sold by Sable or its subsidiaries.

Further, this commission would increase pro rata to the additional tranches received to a maximum commission of 5%.      

Schabort also retained the right to a like commission on any orebody sold by the group or on the sale of any mineral right held by it.

Further elaborating on the deal, the company said in a statement that, should the full R10-million payment be made by Schabort and the group had not yet been granted a mining right and concluded an offtake agreement for the sale of a minimum of 50 000 t/m of ore from the property holding the mining right, certain rules would apply.

Among these, if the ore had not been sold within a period of two-and-a-half years from the date of the first tranche of the loan, a penalty of R2.5-million would accrue to Schabort and would be credited to his loan account.

If the ore had not been sold within a period of two years and nine months from the date of the first payment, a further penalty of R2.5-million would be credited to his loan account.

Further, if the ore had not been sold within a period of three years from the date of the first payment, a further penalty of R5-million would be credited to his loan account.     

In the event that Sable had exercised its right to seek alternate funding, thereby precluding any further subscription for shares by Schabort, the above penalties would be pro-rated to the actual investment made by him.

The funding deal remained subject to approval by shareholders and all regulatory approvals being obtained by Sable.