PERTH (miningweekly.com) – ASX-listed West Wits Mining has struck a deal with its black economic empowerment (BEE) partner to increase its shareholding in the Witwatersrand Basin project (WBP), in South Africa, from 66.6% to 74%.
West Wits will acquire Lilitha Resources’ interest in the project for A$50 000 in cash and 96-million ordinary shares in the company.
“The acquisition increases West Wit’s share of the WBP at a substantial notional discount to the value implied by the $227-million net present value of the WBP scoping study released in March this year,” said West Wits MD Jac van Heerden.
“The transaction also substantially simplifies the company’s corporate structure, making West Wits Mining SA 100% owned by West Wits, and further aligns our BEE partner’s interest to the company by becoming a West Wits shareholder, extending our long-term and valued relationship.”
Lilitha holds a 33.4% interest in the South African project, and was instrumental in the WBP obtaining its mining right.
West Wits said on Thursday that changes to South Africa’s foreign investment rules will, subject to regulatory approval, enable Lilitha to swap a 7.4% effective interest in the WBP for aggregate consideration comprising A$50 000 in cash and 96-million fully paid ordinary shares.
Sevety-five per cent of the West Wits shares will be held in escrow, released via two equal tranches of 36-million, 240 days and 360 days from the completion date, respectively.
West Wits told shareholders that the substantial non-cash component of the consideration enables West Wits to preserve cash for the development of the WBP, while Lilitha obtains promising exposure as a shareholder at West Wits group level.