Metals One Gains Exposure to South African Gold Play Through Lions Bay Resources’ Vantage Bid

Metals One Plc (AIM: MET1, OTCQB: MTOPF) shares rose over 7% on Monday after the company said it is positioned to benefit from a potential vertically integrated gold business in South Africa, following an offer by Lions Bay Resources for the assets of Vantage Goldfields Group.

Metals One holds a stake in both Lions Bay Capital and Lions Bay Resources, the entities involved in the bid.

Lions Bay Resources, 47.39% owned by Lions Bay Capital (TSX-V: LBI), has offered C$46.5 million for Vantage, which includes an initial cash payment of C$12.7 million, a share issuance valued at C$18.8 million, and a final C$15.0 million royalty payment on gold revenue. Vantage, currently in Business Rescue, possesses a historical resource inventory of 4.5 million ounces of gold, a central metallurgical complex, and extensive underground development in the Barberton region.

Metals One’s exposure is twofold: it owns 19.1% of Lions Bay Capital and holds a 5% stake in Lions Bay Resources, alongside US$1.8 million in convertible loan notes (CLNs).

Should Metals One fully advance the US$1.8 million and convert the CLNs, its shareholding in Lions Bay Resources would reach at least 30% on a fully diluted and enlarged basis.

The C$18.8 million share issuance will partially be satisfied by issuing Lions Bay Capital shares at a deemed price of C$0.50 per share. The proportion will be determined by Lions Bay Capital’s ownership in Lions Bay Resources and is not expected to exceed 50%.

This acquisition could secure the necessary feed for Lions Bay Resources’ gold roaster project. The company has an option to purchase a cogeneration power plant that could be modified to process complex concentrates, similar to those historically produced by Vantage.

Daniel Maling, Managing Director of Metals One, commented: “Lions Bay Resources’ bid for Vantage marks an exciting step in its strategy to create a vertically integrated gold business in South Africa. As a stakeholder in both Lions Bay entities, Metals One could create significant value for its shareholders from these opportunities.”