Tharisa has acquired the remaining 26% shareholding in Tharisa Minerals. Tharisa plc is offering 13.9 million new shares (equivalent to US$25.6 million) in exchange for the 26% of Tharisa Minerals it does not own.

“We believe this agreement is a landmark transaction. It is truly empowering and in the spirit of the Minerals and Petroleum Resources Act. Local stakeholders have been central to Tharisa’s success, and we want to ensure they continue to benefit from the value we create from Tharisa’s flagship mine, as well as our other value-add assets,” commented Phoevos Pouroulis, CEO of Tharisa.

Transaction details

Tharisa Minerals’ principal asset is the long-life open pit Tharisa Mine, which produces both platinum group metals (PGMs) and chrome in a mechanised, low cost and energy efficient environment, with product beneficiation taking place on site. The company currently owns 74% of the issued ordinary shares of Tharisa Minerals, with the BEE shareholders Thari Resources Proprietary Limited owning 20% and the Tharisa Community Trust owning 6%.

The transaction is supportive of and consistent with the fundamental principles and objectives enshrined within the Minerals and Petroleum Resources Act (2002) (‘MPRDA’), and the recent court ruling in South Africa clarifying the ‘once empowered always empowered’ position for mining companies. This ruling has afforded the Company the opportunity to constitute Tharisa Minerals as a wholly owned subsidiary that continues to meet the requirements of the MPRDA and the Mining Charter (2004), while allowing the BEE shareholders to benefit from the wider and diversified asset portfolio of the Tharisa plc group.

Exchange and valuation

The proposed share exchange and the valuation of the exchange account for the historical funding provided by the company in its role as the investment holding company, with the BEE shareholders having a free funded carry, resulting in our BEE shareholders holding unencumbered shares in Tharisa Minerals and now Tharisa plc.

The simplification of the corporate structure ensures that our BEE shareholders participate in regular dividend flows consistent with the company’s shareholders with a stated dividend policy of distributing at least 15% of consolidated net profit after tax, while benefiting from the Company’s growth strategy, broadening their exposure to beyond the Tharisa Mine. The broader exposure includes the Group’s integrated sales and logistics platform, research & development and beneficiation division and strategic interests in PGM and chrome projects in Zimbabwe.

The transaction will see 10.7 million shares issued to Thari Resources, resulting in ownership of 3.7% of Tharisa’s issued and outstanding shares, and 3.2 million shares issued to the Tharisa Community Trust, resulting in the ownership of 1.1%. Following the issuance of these shares, Tharisa’s shares in issue totals 285 549 991.

The Tharisa Community Trust will remain a shareholder in Tharisa plc for the Tharisa life of mine while Thari Resources has indicated it has no immediate plans to sell down its holding. Pouroulis further added that Tharisa shareholders would benefit from diversification and the broader success of the company, receive dividends, and create financial flexibility. “This transaction is value accretive to the Company as it simplifies our corporate structure and consolidates the cash generation from the Tharisa Mine. We welcome the Tharisa Community Trust and Thari Resources as shareholders in Tharisa plc,” Pouroulis concluded.

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