Andrada Mining wants to increase its ownership interest in Uis Tin Mining Company from 85% to 100%.
The Uis Tin Mining Company holds mining licenses 133, 134, and 129, where Uis Tin Mine and Spodumene Hill are located.
The Small Miners of UIS currently hold the 15% that Andrada Mining wants to acquire.
As part of the transaction, the Small Miners of UIS will transfer a 5% ownership interest from the 15% to Sinco Investments Five (Pty) to fulfil its mandate to empower Namibians further and enable access to the mining industry.
Sinco is a locally owned and managed investment company focused on developing mining and construction projects within Namibia.
It works with partners across the mining value chain to advance Namibian interests.
If all conditions of the agreement are met, Andrada Mining Namibia will acquire this 5% interest from Sinco, as Sinco has expressed a preference to hold Andrada-listed shares.
Andrada Mining will issue ordinary shares to the Small Miners of Uis valued at N$12 million using a 30-day VWAP on the date before the completion of the acquisition.
The Small Miners of Uis will receive N$18 million in cash from Andrada Namibia through 240 monthly payments of N$75,000.
After completing the documentation, Andrada Mining will exercise its option to acquire the remaining 5% of Uis Tin Mining Company held by Sinco through issuing ordinary shares valued at N$24 million using a 10-day VWAP on the date before the completion of the acquisition.
The acquisition, including the transfer of license 129, and the option are conditional upon, amongst other items, ministerial consent and consent from Orion, Standard Bank, and the Development Bank of Namibia.
Andrada Mining says the restructuring is intended to consolidate the ownership of the Uis and Lithium Ridge licenses to target and expedite the development of these individual mining licenses through complete operational and strategic control.
Andrada Namibia will also dispose of its 85% interest in license 129 to Small Miners of UIS as part of the transaction.
License 129, known as Spodumene Hill, will no longer align with Andrada’s current plans, and it presents a valuable opportunity for the Small Miners of Uis to drive immediate development and economic growth in the Erongo region.
Andrada Mining also says the restructuring of licenses 134 (Uis) and 133 (Lithium Ridge) should augment Andrada’s strategic dialogue with potential funding partners and culminate in a series of value-accretive transactions aimed at realising the full potential of the company’s lithium resource and asset portfolio.
The company says this transaction will allow it to retain its empowerment credentials, which is in line with its commitment to uplifting economic empowerment in Namibia.
Andrada Mining directors believe the new structure will allow the streamlining of operations for value creation and create the opportunity for more rapid development of the assets through the introduction of project-specific financing partner solutions.
Andrada Mining CEO Anthony Viljoen said the transaction reflects their strong and collaborative relationship with the Small Miners of Uis over the years.
Viljoen also said it signifies the mutual growth and development of Small Miners of Uis as a partner and the progression of the organisation.
Furthermore, he said, it marks a significant step forward in leveraging our combined strengths to advance historical mining areas’ economic revival and uplift local communities.
“Building on this momentum, we have reached a mutually beneficial share swap agreement that upholds our commitment to empowering local Namibians.
“The net effect of this restructuring should be value-accretive for all Andrada shareholders and facilitate Andrada’s long-term strategy,” Viljoen said.
According to Viljoen, Andrada’s full ownership of the Uis and Lithium Ridge licenses will provide strategic optionality to enhance the portfolio value proposition.
He said that when completed, they would be well-positioned to unlock the full potential of both assets through the various ongoing strategic discussions that the company is currently undertaking.
The Uis Tin Project comprises three separate mining licenses, 129, 133, and 134, each historically exploited for tin on varying scales.
License 134 is the company’s primary license and incorporates the former Uis Tin mine, while License 129 is the least advanced of the three licenses.
Andrada Mining directors do not consider license 129 a material license in the company’s portfolio or believe it to align with its current objectives.
Andrada Mining says the losses attached to the 15% interest in Uis Tin Mine Company for the year ended February 28, 2023, are N$9,720,115.20, and the turnover was N$29,612,777.40.
A 15% interest in the gross asset value of Uis Tin Mine Company is N$90,420,734.70 by reference to the annual audited accounts for the year ended February 28, 2023.
