Tharisa, the leading integrated platinum and chrome producer with operations in South Africa, has announced the acquisition of Salene Chrome Zimbabwe (Pvt) Limited (‘Salene Chrome’) for USD3.0 million.
Salene Chrome is a development stage, low cost, open pit asset, located in the Great Dyke in Zimbabwe. The acquisition provides geographic diversification with access to a premium chrome product, a short development timeline and a low capital requirement.
The parties have negotiated a restructured agreement and that Tharisa has acquired a 100% shareholding in Salene Chrome from Leto, by way of a sale and purchase agreement entered into between Tharisa and Leto, the effective date being 31 March 2021.
SALIENT TERMS OF THE ORIGINAL OPTION AGREEMENT
The salient commercial terms of the original option agreement may be summarised as follows:
- Tharisa to acquire a 90% shareholding in Salene Chrome at par value (USD90)
- Salene Chrome East concessions only
- Tharisa to fund and undertake an initial exploration programme up to USD3.2 million
- Arxo Resources Limited (‘Arxo’), a wholly owned trading subsidiary of Tharisa, to be the sole off-taker/marketing agent for the chrome concentrates produced, thereby leveraging existing platforms across borders and increasing chrome sector market share
- Leto to retain a 10% free carried shareholding in Salene Chrome
- Leto to be entitled to a 3% commission on the Cost, Insurance and Freight (CIF) sales value of the chrome concentrates and any other commodities sold
The transaction is in line with Tharisa’s growth strategy, including geographic diversification, operating low cost and open pit operations with access to a premium chrome product, replicating the Tharisa model in a different jurisdiction, and maximising value for Tharisa with a low entry cost, a short development timeline and limited capital requirements while exercising full control over the development.
The Great Dyke of Zimbabwe contains the world’s largest known platinum group metals and high grade chrome deposits outside of South Africa. Salene Chrome was awarded a number of special grants in May 2018 on the eastern side of the Great Dyke of Zimbabwe (‘Salene Chrome East’), allowing for the mining of various minerals.
Salene Chrome subsequently had also applied for, and was granted a number of licenses to the western side of the Great Dyke (‘Salene Chrome West’). Salene Chrome East covers 11 900 ha adjacent to the Great Dyke in Zimbabwe and Salene Chrome West covers 12 400 ha to the west of the Great Dyke. The Special Grants have been renewed for an additional two years with effect from 25 February 2021.