SA firm buys Mowana mine
Brian Benza | Friday November 25, 2016 18:00
The two mines, which are owned by Johannesburg Stock Exchange -listed ZCI Investments through its operating subsidiary Messina Copper Botswana (MCB), were placed under provisional liquidation twelve months ago after failing to pay creditors. Holding company ZCI this week said it had received a proposal from Leboam Holdings to acquire its Messina Copper assets.
Leboam, the acquiring enterprise, is an entity registered in Botswana and is wholly owned by Cradle Arc Investments, which is a newly registered entity, established for the purposes of this transaction.
Cradle Arc on the other hand is, currently, wholly owned by PenMin, an entity incorporated in accordance with the laws of South Africa which offers mining, infrastructure and construction business solutions.
“With effect from the acquisition’s effective date, ZCI will become a shareholder in Leboam,” ZCI said.
“The acquisition of the Messina assets by Leboam is subject to certain suspensive conditions to the offer being satisfied including approval by the Competition Authority of Botswana.”
Messina in August had interest-bearing loans totalling $104.9 million, excluding an existing convertible loan of a further $7.4 million.
Provisional liquidator, Butler Phiri of PwC confirmed the development but could not divulge how much the offer was worth saying he will release his final report on November 30, 2016.
On its website, Leboam Holdings says it is a Botswana copper development and mining company, whose focus is to grow as a base metal company and transition from operations start up to sustainable producer in Botswana.
Leboam says it plans to increase Mowana and Thakadu reserves through exploration development jointly with owners of neighbouring assets to deliver rapid production.
Amongst some of the directors of Leboam include former permanent secretary in the Minerals ministry, Boikobo Paya and former African Copper CEO Tom Kamwendo.
At the time it was closed Messina Copper had failed to pay its creditors leading to one of the company’s mining contractors, Diesel Power applying for the mine’s liquidation over a P47 million debt.
For some years, ZCI was financing operational costs at Mowana and Thakadu, which also ceased operations in 2014 because it was deemed a non-viable entity. ZCI is owed a combined $107 million by Messina for financing operations at Mowana and Thakadu.
Puma Energy and Global Holdings are also said to be some of the prominent companies owed by Messina. The liquidation of Mowana Mine saw close to 400 people losing their jobs.
The purchase of the mine will come as a boost to the economy as there is currently no operating copper mine in Botswana following the placement of the BCL Group under provisional liquidation last month.