Mantengu Mining has finalised the acquisition of Birca Copper and Metals (BCM), which mines and processes high-grade chrome ore in the North West province, for R29.9 million.
This has paved the way for BCM to expand its production while also enabling Mantengu to grow its footprint and portfolio.
As at the end of February this year, BCM had an unaudited net asset value of R102m and posted an unaudited attributable profit of R2m for the year ended February 29, 2024.
“The acquisition, valued at R29.9m in Mantengu shares, positions Mantengu to double its chrome operations, enhancing its market presence and reinforcing its commitment to sustainable growth,” the company said in a statement.
The acquisition of BCM has helped Mantengu to secure “a substantial increase in chrome ore supply, ensuring long-term cost stability, enhanced supply chain resilience” and unlocks “substantial economic and technical synergies” with its existing chrome operations.
BCM is controlled by Birca Investments, and SA Metals and Fossils.
Johann Jaen Brummer, Carl Hoepner and the Smit Family Trust control Birca Investments, while Marius Pienaar own all of the shares in SA Metals and Fossils.
“The acquisition of BCM is a pivotal moment for Mantengu, aligning with our vision to serve as a platform for smaller empowered mining companies to access global capital and trade markets,” Mike Miller, CEO of Mantengu, said.
Bierman Smit, the CEO of BCM, said the transaction was significant for BCM as it provided the company with “a tangible and much quicker route to significantly larger balance sheet” capacity.
“South Africa is highly illiquid and entrepreneurs in the mining sector battle to find responsible capital aligned with the developmental needs of SA,” Smit said.
“The transaction with Mantengu is exciting as it is run by a board of entrepreneurs who understand the need to create a greater, more equitable wealth for all South Africans.”
It is expected that the Goudini mine, from where BCM processes chrome ore in the North West, will deliver 3.2 million tons of opencast high-grade ore over a 10-year mine life.
Initial deliveries to Mantengu’s off-takers are slated to commence today, with a projected steady supply of 22 500 tons per month.
The transaction is, however, conditional on “the transfer of the mining right pursuant to an agreement concluded between NVMIH and BCM, in terms of which NVMIH sells the mining right” to BCM.
In October last year, Mantengu Mining announced secured R500m in equity financing from the GEM Global Yield Fund, an advance that has provided impetus to its expansion ambitions.
“The flexibility of the R500m equity facility provides Mantengu with both debt and equity levers with which to identify, structure and optimise investments in our focused sectors,” said Miller at the time.
BUSINESS REPORT