Copper 360 has completed its four-month due diligence on Mazule Resources, which previously owned Nama Copper, and paid a total of R140.5 million ($7.4 million).
The remaining R9.5 million ($501,000) is expected to be paid within the next two weeks.
It announced last November the acquisition of Nama Copper for R200 million ($10.5 million). However, before proceeding with the transaction, a thorough due diligence process had to be conducted.
This coincided with the initial cash consideration, which took place on 28 November 2023, the same day the agreement was signed.
A revised payment agreement was reached with Mazule after updates were made to the offtake terms related to Nama Copper's production.
At first, the payment plan included a cash payment of R150 million ($7.9 million), along with an extra R50 million ($2.6 million) from Mazule through a vendor-financed working capital facility as part of the offtake deal.
This was backed by Copper 360's commitment to provide shares to Mazule in the event of a default on the working capital facility.
Nevertheless, the terms of the offtake agreement have been revised, leading to Mazule no longer fulfilling the role of the offtake partner.
“This change means the working capital facility and the associated commitment to issue shares will be terminated,” it said.
The outstanding R50 million ($2.6 million) owed to Mazule will be paid in cash across three equal instalments dated March, April, and May 2024.
The plant at Nama Copper is set to be commissioned in the next three weeks, with an expected production of around 45 tonnes of copper.
According to the report, there are plans to significantly increase production and achieve an estimated 230 tonnes of copper within two months.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
