Metals One taking 19.1pc stake in Lions Bay Capital

(Sharecast News) - Metals One said on Friday that it is taking a 19.1% stake in Lions Bay Capital as part of a CAD 0.75m (�0.41m) investment aimed at securing exposure to a near-term gold processing opportunity in South Africa.

The AIM-traded miner subscribed for 7.5 million shares in the Canada-listed mining finance group, with the first tranche of 3.53 million units now settled and the balance pending TSX-V approval.

Lions Bay was planning to refurbish and restart a gold processing and power cogeneration plant in South Africa by late 2026, providing an alternative to exporting gold-bearing concentrate to Asia.

The facility, shut in 2021 after less than 18 months in operation, is reportedly capable of roasting 5,000 tonnes of concentrate a month and producing around 12 MW of continuous power.

Lions Bay has until November 2025 to acquire the plant for $1.4m, and had commissioned a competent persons report due in October before securing feedstock agreements.

It was looking to use future cash flows to acquire additional gold mines in the Barberton region to supply the facility.

"We believe the Lions Bay's gold processing plant in South Africa offers exceptionally attractive economics," said Craig Moulton, chair of Metals One.

"The near-term cash flow opportunity complements our earlier stage critical metals exploration projects, balancing Metals One's asset base.

"With a market capitalisation of under CAD 4m and a portfolio of other projects, we regard this as a highly opportunistic investment."

Lions Bay also holds stakes in projects including Fidelity Minerals in Peru and Canada, Epic Minerals in Australia, and KALiNA Power in low-carbon power generation.

It reported a pre-tax loss of CAD 2.99m on nil revenue in the year ended 31 May 2024, with net assets of CAD 3.58m.

At 1156 BST, shares in Metals One were down 8.51% at 4.2p.

Reporting by Josh White for Sharecast.com.