Metals One clears key hurdle in South African gold play as Barbrook creditors back rescue plan
Metals One PLC (AIM:MET1, FRA:HT7, OTCQB:MTOPF), the critical and precious metals developer, has moved a step closer to securing a significant South African gold asset after creditors of Barbrook Mines approved a business rescue plan under which Lions Bay Resources (LBR) will acquire certain assets, including a 2.1 million ounce gold resource, for approximately $17 million.
Metals One holds a 30% stake in LBR, with an option to increase that to 49.9% subject to shareholder approval.
Under the plan, staff will receive 100% of their entitlements, while unsecured creditors will be paid 10% of approved claims immediately, with the remaining 90% payable once ministerial approval is granted for the transfer of mining rights under South Africa’s Section 11 process.
Initial payments will be funded from cash LBR holds in escrow, while the balance is expected to be covered by external funding proposals, including one indicative confidential offer already received.
Several conditions precedent must still be satisfied before completion, including full settlement of former employee salary claims and approval from the Minister of Mineral Resources and Energy for the transfer of mining rights.
A separate creditors’ meeting for the associated entity, Makonjwaan Imperial Mining Company, has been adjourned to 8 May following a motion by a creditor.
Metals One also flagged pending litigation in which certain stakeholders are seeking to convert the business rescue proceedings into liquidation, though the Johannesburg High Court has suspended those proceedings for three months to allow the rescue process to run its course.
LBR has taken legal advice and been told the pending matters are without merit, though Metals One cautioned that any adverse outcome could materially affect LBR’s financial position.
