Merafe Ferrochrome and Mining concluded a sale agreement with Glencore Operations South Africa , in which Glencore has agreed to sell 20.5% of its 100% interest in Unicorn Chrome Proprietary Limited to Merafe Ferrochrome for approximately R32.2 million.
Unicorn has a shareholding in a UG2 chrome concentrate producer which extracts chrome concentrate from a tailings stream in the North West Province. Accordingly, Merafe considers Unicorn to be a valuable addition to its chrome interests. The net asset value of Unicorn as at the year ended, 28 February 2019 was R21.2 million and the profit attributable thereto was R28.6 million.
The Acquisition is not subject to any conditions precedent.
The Acquisition is not subject to Shareholder approval, provided an independent professional expert confirms that the terms of the Acquisition are fair to Shareholders. Merafe appointed Tamela Holdings Proprietary Limited (“Tamela”) as the independent expert for purposes of providing an opinion in respect of the fairness of the Acquisition (“Fairness Opinion”).
Tamela has considered the terms and conditions of the Acquisition and is of the opinion that the Acquisition is fair to Shareholders.
Merafe has sufficient cash reserves to complete such a beneficial Acquisition successfully.
Merafe considers this Acquisition as a long-term strategic investment that will place the Company in a better position and ahead of its peers from an operational perspective.
Given the cyclical nature of the mining industry, prudent cash management is crucial, especially now during the COVID-19 pandemic.
Merafe continues to closely monitor the costs and capital expenditure of the Company.