Aim-listed Katoro Gold and Target Mine Consulting (TMC) have agreed to seek admission for 100% of the Blyvoor joint venture (JV) project by vending each of their interests into a new company to be listed on the standard list of the LSE.
Admission will be accompanied by an initial public offering (IPO), which will seek to raise sufficient funds to complete the equity requirements for financial close of the project and the cash requirements provided for in the agreement between the parties.
The application process for listing on the standard list of the LSE is set to start immediately.
The partners have agreed to vend their interests in the Blyvoor JV in exchange for shares and cash in new entity BV ListCo, including TMC's 100% equity interest in the project's corporate entity Blyvoor Gold Operations.
Pre-admission, and before settlement of any cash obligations to other parties, Katoro will hold 45% and TMC 55% of BV ListCo, based on the parties' respective project development contributions to date.
Katoro intends to maintain a strategic interest in BV ListCo post admission, which it estimates to be about 30%, subject to the IPO raise, with about 40% to be in public hands, ensuring continued upside from future developments.
Katoro hopes to recover its total cash expense to date of about £1.5-million in project development from the IPO.
The admission is planned to capitalise and complete financial close of the project with production starting within 12 to 18 months from the IPO.
River Group has been appointed as adviser to manage the admission and the associated IPO.
"We are extremely excited about this dynamic development of Katoro's largest business venture to date. The Blyvoor project competent persons report indicates healthy returns and amidst an indicative cyclical longer-term upswing in the raw commodities sector we remain very optimistic about this project.
“In light of the foregoing, we believe it is an opportune and highly strategic time to list the project as a standalone company on the LSE. As a separate standalone entity with a clear corporate strategy, the project has more readily available access to both equity and debt funding opportunities.
“Crucially, Katoro will retain a significant strategic interest in the vehicle to hold this robust project, which we expect will result in a value uplift for Katoro shareholders once it is listing and funding is complete,” says Katoro CEO Louis Coetzee.