Southstone, Afrium Energy mutually cancel term sheet

Southstone Minerals Limited (SML) and Afrium Energy have mutually terminated the binding term sheet, originally dated February 18, 2025 and subsequently amended, for the acquisition of all Afrium shares. The termination became effective on July 6, 2026, with no common shares issued and the 2.5% NSR royalty never granted. The parties have provided each other with a full mutual release of claims.

Trading in Southstone common shares remains halted on the TSX Venture Exchange since January 10, 2024. On May 27, 2026, Southstone announced it is taking steps to address Policy 3.1 deficiencies that caused the halt and intends to resume trading.

Southstone Minerals Limited’s termination of the Afrium acquisition eliminates its only visible path to diversify into uranium through Botswana licenses and removes a potential catalyst for addressing governance deficiencies. The company had planned to appoint independent directors and a chief financial officer upon closing the deal. Without the transaction, Southstone reverts to being a pure-play, single-asset diamond junior facing a two-year trading halt and a going-concern warning.

The termination removes any immediate incentive to rectify board composition or secure a clean listing, while also eliminating an opportunity to attract new strategic or financial investors. Although no shares were issued, thereby avoiding dilution, the market had already assigned the stock nearly zero value, with the share price halted at $0.01. The loss of the deal confirms the company’s inability to execute a transformative transaction and deepens uncertainty regarding its survival.

Southstone’s cash position stands at $1.65 million against $6.07 million in current liabilities, accompanied by a $22.3 million accumulated deficit. The CC Mining loan, which had previously been a concern, was fully repaid in May 2026, but other obligations remain and no new financing is evident.

Southstone Minerals Limited (SML) is a junior mining company focused on alluvial diamond production from the Oena Diamond Mine in the Northern Cape Province, South Africa. The mine is operated through a contract-mining arrangement with Rietput Delwery BK, featuring a revenue split that favors the contractor. Southstone’s effective economic interest is 8.6% when tender gross revenue exceeds ZAR10 million, otherwise 6.45%.

The company previously held the Moquita diamond project in Angola, which was terminated in 2019, and had a pending acquisition of Afrium Energy’s uranium prospecting rights in Botswana that is now cancelled. Other legacy service contracts in thermal coal and metallurgical processing in South Africa are mentioned in an old investor presentation, but no recent operational or financial contribution is disclosed. The technical and economic feasibility of the Oena mine has not been established; the deposit is still classified as exploration/evaluation, even though diamonds are being sold.