The black economic empowerment (BEE) deal concluded by Aflease Gold and Uranium Resources earlier this year will contribute to empowerment in the communities where the group’s assets are located, in compliance with the requirements of the Mining Charter, while substantially protecting the investment of the group’s current shareholders from any value erosion.
That’s according to the group’s CEO, Neal Froneman.
The agreement is for the sale, from September 1, of an undivided 26% stake in Aflease’s Dominion and Bonanza operations at Klerksdorp in North-West Province.
The transaction will result in an Aflease workers’ trust and a Klerksdorp community trust each holding 30% of the BEE consortium, with Africa Vanguard Resources having a 20% interest, and four additional groupings — Indalo Resources, Emseni Investments, Umlilo Mining and Finance and Magumo Investments — each holding 5%.
“While we will be financing the acquisition on an interest-free loan basis, our agreement with our empowerment partners requires them to repay this loan from their share of future profits from the Klerksdorp assets, with the first such payment being due within three years of the first distribution of profits.
“Under the agreement, the value of the loan is adjusted on each repayment to ensure that the payments reflect the lower of market value or net present value at the payment date. In this way, we can do our part to contribute to empowerment in the communities where our assets our located, in compliance with the requirements of the Mining Charter, while substantially protecting the investment of our current shareholders from any value erosion,” Froneman added. ‒ I-Net Bridge