Lions Bay Capital Inc. Enters into Loan and Option Agreement with Salamander Mining International Ltd.
Vancouver, British Columbia--(Newsfile Corp. - June 17, 2021) - Lions Bay Capital Inc. (TSXV: LBI) ("Lions Bay" or the "Company") announces that it has entered into a loan and option agreement with Salamander Mining International Ltd. ("Salamander") as a result of which it may earn a direct cash flow from gold processing within the next year.
Under the terms of the agreement Lions Bay will:
- Loan Salamander $US1 million over the next four months secured by a first charge over its assets;
- Receive interest of 15 per cent on the outstanding balance;
- The loan will be repaid on a monthly basis from the free cash flow from the Joyce tailings project commencing five months from the loan initiation with total term of the loan being 18 months;
- Receive a raising fee entitling Lions Bay to 25 per cent of the free cash flow of the Joyce tailings project in Zimbabwe;
- Be granted a 9-month option to acquire 100 per cent of Salamander in return for the issuance of 100 million Lions Bay shares;
- Be mandated to secure a public listing of Salamander on an appropriate recognised international stock exchange; and
- Receive a 12-month option to acquire 20 per cent of Salamander for $2 million.
Salamander is a Mauritius based mining group currently focused on tailings extraction and pyrometallurgical recovery of gold. The co-founder and CEO of Salamander is Mr Lloyd Birrell who was instrumental in the reopening of ERGO (now DRD Gold) and founded Stonewall Resources (now ASX listed Theta Mines). The other co-founder and CFO is Deon Robbertze who has extensive experience with mining projects in sub-Saharan Africa including the role of CFO at Xstrata SA (now part of Glencore).
Under the terms of the loan agreement, Salamander will use $US750,000 of the funds to build and operate a 20,000 ton per month mobile treatment plant to be initially located on the Joyce mine in Zimbabwe, some 50 kms from capital, Harare. The plant will produce a gold concentrate which will be exported and is expected to be operational before the end of 2021.
Salamander designed and constructed a 12,500 ton a month plant for Bosveld Mines in South Africa which is currently being commissioned. Salamander is entitled to 10 per cent of the profit of the operation and has a $US2.1 million loan note secured by the plant and tailings.
Salamander is also a major creditor of the Vantage Goldfields group which is currently in Business Rescue, which is similar to a receivership in Canada. Vantage was placed into business rescue in April 2016. At the time its mines and mills were producing at an annual rate of 32,400 ounces of gold. Its published reserves and resources were in the order of 4.96 million ounces.
Salamander is in negotiations with the various parties and creditors with a view to treating the tailings from the mines and using the funds to settle debts and reopen underground operations.
The Vantage gold assets are located within the Barberton Greenstone belt, a world renowned heavily mineralised zone stretching from Zimbabwe through Eastern South Africa and into north-western Eswatini (formerly known as Swaziland). Mining of the belt has been taking place for over 100 years and is home to famous gold mines such as Sheba, Consort, Fairview and Agnes. These mining areas have limited oxidised orebodies remaining but vast resources of gold that is refractory, encased in pyrite, making recovery extremely difficult.
Up until the late 1980s there were numerous roasters in South Africa which enabled the recovery of gold from concentrates produced from the Barberton sulphide ores. Environmental concerns forced the closure of these facilities and now almost all these concentrates are shipped for gold processing and recovery in China. Realizing that a roaster project is critical to unlocking the gold production potential of the Barberton resources, the Salamander team has formulated a plan to solve the environmental problems associated with roasting concentrate by securing a strategically located base metal mineral resource that utilizes the sulphuric acid produced as a by-product of roasting to produce magnesium sulphate.
Salamander has a 50 per cent interest in Kobolondo Mining Pty Ltd (KME). The remaining 50 per cent is owned 25 per cent by the Ingwenyama Trust for the Nation (administered by His Majesty, King Mswati 111) and 25 per cent the Government of Eswatini (KME has been granted a mining lease over the old Havelock chrysotile asbestos mine with 25 million tonnes of tailings containing 23 per cent magnesium. By leaching the tailings with sulphuric acid, the chemical structure of the chrysotile asbestos is destroyed thereby achieving dual objectives of rehabilitation and low-cost magnesium sulphate production. It is planned to complete a competent persons report on the project as soon as possible and a bankable feasibility study by the end of the year.
The executive chairman of Lions Bay, Mr. John Byrne, commented: "The Salamander loan transaction is the first of what I hope are several steps that transform Lions Bay from an investment company to an operating company. The loan is a normal part of our business, but it provides us with several options that will only be exercised on verification of the business case and all necessary regulatory and shareholder approvals. We look forward to working with the Salamander team to deliver the best results for our shareholders."
About Lions Bay Capital Inc.
Lions Bay Capital Inc. is a TSX-V listed Investment Issuer that is focused on high return investment opportunities, principally in the mining, clean energy and clean technology sectors, where it provides public and private companies with strategic and financial support.
On behalf of the Board of Lions Bay.
Tel: +61 3 9236 2800
For more information, please visit the corporate website at www.lionsbaycapital.com or contact the above.
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