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The Mine Restoration Investment Group (“MRI”) has historically been an environmental services company which focussed on the abatement of environmental impacts of the mining industry, whilst striving to deliver sustainable returns to its shareholders. It developed two core areas of expertise being coal fines processing and acid mine drainage (AMD).

 

Coal fines have traditionally been an unwanted by‐product in the coal mining industry and remain a major disposal challenge. The coal fines business was established to tackle this challenge. MRI commissioned a 5,000 tonne per annum screening, agglomerating and briquetting operation near Vryheid in February 2014 to process the waste dump and current tailings of the Keaton’s Vaalkrantz Colliery. The plant was placed on care and maintenance in July 2015 owing to severe drought conditions and other operating challenges. Given these challenges the board of directors of MRI (“Board”) made the decision to shut down the operation and write off the investment in full.

 

Gold mining operations in the Witwatersrand Basin over the last century have created underground voids that have filled with water creating AMD, posing a significant threat to ground water in Gauteng. MRI’s subsidiary, WUC, was established by the mining industry in 2007 to find a solution to the problem. After extensive research, it chose the CSIR’s Alkaline Barium and Calcium process, building a pilot-plant and presenting a bankable feasibility study to government in 2010. However, the Department of Water Affairs launched a feasibility study in February 2012 to investigate all possible technologies, the outcome of which was never released to the market. Whilst the Board continued to engage stakeholders to find possible commercial applications for the technology, no viable application was found and thus the Board took the decision to write off the assets in full.

 

Given that MRI has fully written off the coal fines processing and AMD investments, the Board is in the process of getting the MRI business into a position to attract a suitable funder to support a range of possible investment opportunities. Given this the Board has resolved to voluntarily wind up its subsidiaries so as to flatten out the Group structure. Since writing off these investments, MRI has existed as a listed clean cash shell and has been working with the JSE and its Advisors to finalise its reinstatement onto the JSE’s alternative exchange. Throughout this period, the Board has continued to canvass the market for viable investment opportunities.

 
 

Current

On 10 October 2019, it was announced by MRI on the Securities Exchange News Service that it had entered into a share purchase agreement with the shareholders of Langpan Mining Co Proprietary Limited (“Langpan”) in terms of which the Langpan shareholders will dispose of their entire shareholding in Langpan for an aggregate purchase consideration of R550 million, to be settled through the issue by MRI of 137 500 000 000 shares.

 

The advent of the coronavirus pandemic in early 2020 resulted in significant uncertainty in global capital and commodity markets. In order to mitigate this risk, the Langpan stakeholders restructured the underlying transaction such that MRI and Langpan would not be materially impacted by the uncertainty in the markets and retain the intrinsic value of the transaction. This restructure was completed in late May 2020 which resulted in the Langpan starting in June 2020.

 

As a result of the restructure, the Board allowed the original share purchase agreement to lapse on 8 July 2020. This was strategically done to ensure that the Board had adequate time to review the revised transaction structure so as to ensure its commercial viability and value for MRI shareholders. The Board completed the review and found the transaction to be viable and materially in line with the original transaction. As a result of this fact, the Board entered into a new share purchase agreement on 13 August 2020 on essentially the same terms and conditions as before.  The Board is now working with the Company advisors, Merchantec Capital, on obtaining MRI shareholder approval through the JSE circular processes.

 
 

Langpan

Langpan mines and processes chrome ore to form chrome concentrate, with a by-product having a high concentration of Platinum Group Metals (“PGM”). Langpan owns the plant and machinery and the mining rights, respectively, in relation to the chrome and PGM mining and associated beneficiation operations on the farm Langpan 371KQ. Langpan is currently mining the high grade chrome seams in order to sell high grade, unprocessed chrome ore to the market. The Langpan orebody consists of 3.1 million tonnes of open cast resource and over 4.9 million tonnes of underground resource, as confirmed by MSA Competent Persons report.

 

Langpan is in the process of upgrading the existing wash plant and tailings dams. Langpan operations are expected to reach steady state in March 2021.  The upgraded chrome wash plant is planned to have an expected operating feed capacity of 30 ktpm, which can produce approximately 17 ktpm of chrome concentrate graded 42% to 44% chrome. The Langpan Farm orebody has a PGM (6E) in situ grade of 1.6 g/t which will result in a net grade of 2.95g/tonne post chrome beneficiation. The full updated resource and reserve statement in relation to the Langpan orebody will be contained in a circular to shareholders setting out the details of the proposed transaction.

 
 

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