TSX-V-listed junior Tango Mining, which operates the Oena diamond mine in South Africa, will sell its metallurgical coal and mining projects to focus on its diamond properties, it announced on Tuesday.
The company owns a 74% interest in each of Kwena Mining Projects, Kwena Mining and Metallurgical Services and Kwena Springlake Projects.
Tango will sell the Kwena group to a director, Kevin Gallagher, in a transaction that constitutes a "related party transaction" and will require minority shareholder approval.
As consideration for the acquisition of the company’s 74% interest in the Kwena group, Gallagher has agreed to return for cancellation an aggregate of 39 988 160 common shares of Tango at a deemed price of C$0.05 a share, for C$1 999 508. In addition, outstanding indebtedness owed to the Kwena Group from Tango and its subsidiaries in the aggregate sum of C$723 021 will be forgiven.
Gallagher will not hold any securities of the company, other than stock options.
After consummation of the transaction, Tango’s total assets will be reduced from $4 376 725 to $1 592 546 and the current liabilities will be reduced from $3 678 046 to $1 596 772.
An informal valuation of the Kwena Group from March 2017 gave it a total value of C$2 302 000.
Tango also announced that it planned to change its name to Southstone Minerals.