Lions Bay increases loan with Metals One to $10M

Executive Summary

• Lions Bay Capital Inc. increased its loan facility with Metals One PLC from $4.0 million CAD to $10.0 million CAD to fund the acquisition of Vantage Goldfields Group assets and general working capital for its South African subsidiary, Lions Bay Resources (LBR).
• Metals One intends to convert $1.8 million USD of its loan into equity in LBR, increasing its stake to 30%, while Lions Bay Capital and Salamander Mining will each hold 35%.
• LBR has reached a preliminary agreement with the business rescue practitioner of Vantage Goldfields Group to acquire its assets, which include 4.5 million ounces of historical gold resources and a central metallurgical complex.
• LBR is acquiring a cogeneration plant in Newcastle, South Africa, for $1.36 million USD, with plans to potentially reconfigure it for gold concentrate roasting to avoid export discounts and provide local power.

Key Details

• Financing Structure:
  • Loan facility increased from $4.0 million CAD to $10.0 million CAD.
  • Interest rate charged at 20% per year, passed on to LBR.
  • Funds to be applied toward LBR's Vantage acquisition plan and general working capital.
  • Related party transaction under Multilateral Instrument 61-101.
• Collateral for Loan:
  • First-ranking fixed and floating charges over all Lions Bay Capital assets, including:
    • 16,926,506 common shares of Fidelity Minerals Corp.
    • 499 ordinary shares in LBR.
    • All loan accounts to LBR held by Lions Bay Capital.
    • $2.2 million USD debt owing to Lions Bay Capital from GNT Mining.
    • All LBR bank accounts and funds.
  • First-ranking fixed/floating charges over LBR assets, including bank accounts and a fixed charge over the Vantage tailings.
  • Cross-default provisions included.
• Equity Conversion:
  • Metals One converting $1.8 million USD of convertible loan notes (CLNs) into LBR equity.
  • Post-conversion ownership structure: Metals One (30%), Lions Bay Capital (35%), Salamander Mining (35%).
• Vantage Goldfields Acquisition:
  • LBR reached preliminary agreement with the business rescue practitioner (BRP) for the purchase of Vantage assets and settlement of creditors.
  • Vantage assets include mining leases in the Barberton region, a central metallurgical complex, and extensive underground development.
  • Historical resource inventory: 4.5 million ounces of gold (based on Jan 1, 2015 competent person's report by Minxcon Consulting).
  • Final terms to be announced after BRP signs and publishes the plan.
• Cogeneration Plant Acquisition:
  • LBR acquiring a fluidized bed cogeneration plant in Karbochem Industrial Park, Newcastle, South Africa, for $1.36 million USD.
  • Plant inspected by TerraVista Solutions P. Ltd. in Oct 2025; replacement value ascribed at $39.6 million USD.
  • Estimated investment to restart steam and power production: $4.5 million USD.
  • Current specifications:
    • Two 30-tonne-per-hour Thermax combustion boilers.
    • 6-megawatt GE-Triveni steam turbine.
    • Feedstock: Coal from local dumps and biomass.
    • Infrastructure: Boiler house, turbine, control room, motor control centre, compressed air plant, electrical substation, inclined conveyor to six silos (1,500 m³ each).
  • Potential revenue streams: Electricity, steam, and gold roasting.
  • Strategic benefit: Reconfiguring for gold roasting avoids discount for exporting concentrate to Asian smelters; generating power allows for wheeling to Vantage mines to avoid load shedding.

Notable Quotes

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