The Maseve concentrator
The High Court of South Africa has dismissed a challenge brought by Africa Wide Mineral Prospecting and Exploration (Africa Wide) against Platinum Group Metals (PTM) and Royal Bafokeng Platinum (RBPlat) over their 2018 Maseve transaction.
PTM announced in 2017 that it would sell the concentrator and related surface assets owned by Maseve Investments 11 and the shares in and shareholder claims owing by Maseve to RBPlat for about $70-million.
In September 2018, Africa Wide, a subsidiary of PTM’s former empowerment partner Wesizwe Platinum, instituted legal proceedings against PTM, RBPlat and Maseve, seeking to have the transaction declared unlawful and invalid.
Africa Wide, which held 17.1% of the shares in Maseve prior to the implementation of the share transaction, contended the transaction required the consent of Africa Wide in terms of a shareholders’ agreement and the company’s memorandum of incorporation.
The High Court dismissed all the claims and ordered Africa Wide to make payment of the defendants' costs.
PTM indicates that the Maseve transaction occurred as a scheme of arrangement by way of two interdependent stages in accordance with Section 115 of the South Africa Companies Act. Under the scheme, Africa Wide was required to simultaneously dispose of its 17.1% interest together with the company's 82.9% interest in Maseve.
Stage one, being the sale of certain of Maseve's assets for about $58-million in cash, was completed on April 5, 2018. Stage two, being the sale of 100% of Maseve's issued shares to RBPlat in exchange for RBPlat common shares, was completed on April 26, 2018.
PTM noted that the statutory period to challenge the scheme under the Companies Act had expired more than five months prior to Africa Wide instituting legal proceedings.
In its ruling, the High Court found that Africa Wide had firstly failed to make its case on the evidence and secondly that, having failed to challenge the Scheme under the Companies Act, Africa Wide's case was statutorily barred.
“We are very satisfied to receive the judgment of the High Court in this matter. This is the second formal dispute we have been subjected to by Africa Wide, and we are once again comforted by the fair, methodical and just functioning of the South African judicial system.
“We thank our legal team and our co-defendants in this matter for their dedicated and professional actions. We look forward to continuing our focus on the advancement of the Waterberg project,” said PTM CEO Frank Hallam.
Africa Wide may apply for leave to appeal the June 14 judgment of the High Court until July 6.