Platinum group metals and chrome co-producer producer, Tharisa Minerals, has acquired the remaining 26% shareholding in the company in a landmark broad-based black economic empowerment (BEE) transaction.
Tharisa is offering 13.9-million new shares (equivalent to $25.6 million) in exchange for the 26% of Tharisa Minerals it does not own.
Tharisa Mineral’s principal asset is the long-life open pit Tharisa Mine, which produces both platinum group metals (PGM) and chrome in a mechanised, low cost and energy efficient environment, with product beneficiation taking place on site. The company currently owns 74% of the issued ordinary shares of Tharisa Minerals, with the BEE shareholders Thari Resources owning 20% and The Tharisa Community Trust owning 6%.
The transaction is supportive of and consistent with the fundamental principles and objectives enshrined within the Minerals and Petroleum Resources Act (2002) (MPRDA), and the recent court ruling in South Africa clarifying the ‘once empowered always empowered’ position for mining companies. This ruling has afforded the company the opportunity to constitute Tharisa Minerals as a wholly owned subsidiary that continues to meet the requirements of the MPRDA and the Mining Charter (2004), while allowing the BEE shareholders to benefit from the wider and diversified asset portfolio of the Tharisa plc group, the company said.
The proposed share exchange and the valuation of the exchange account for the historical funding provided by the company in its role as the investment holding company, with the BEE shareholders having a free funded carry, resulting in its BEE shareholders holding unencumbered shares in Tharisa Minerals and now Tharisa plc.
The simplification of the corporate structure ensures that the company’s BEE shareholders participate in regular dividend flows with a stated dividend policy of distributing at least 15% of consolidated net profit after tax, while benefiting from the company’s growth strategy, broadening their exposure to beyond the Tharisa Mine. The broader exposure includes the group’s integrated sales and logistics platform, research & development and beneficiation division and strategic interests in PGM and chrome projects in Zimbabwe.
Phoevos Pouroulis, CEO of Tharisa, commented:
“We believe this agreement is a landmark transaction. It is truly empowering and in the spirit of the Minerals and Petroleum Resources Act. Local stakeholders have been central to Tharisa’s success, and we want to ensure they continue to benefit from the value we create from Tharisa’s flagship mine, as well as our other value-add assets. As public shareholders of Tharisa, they will benefit from diversification and the broader success of the company, receive dividends, and create financial flexibility. This transaction is value accretive to the company as it simplifies our corporate structure and consolidates the cash generation from the Tharisa Mine.”