AP Strategic buys stake in LionGold’s former gold project
Buyer says acquisition allows it to invest in highly prospective mineral mining business
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Buyer says acquisition allows it to invest in highly prospective mineral mining business
Andrea Sohsandrea
11 December 2014
Asia-Pacific Strategic Investments has picked up a stake in LionGold’s former Amayapampa Gold Project in Bolivia.
The firm, which is currently in the midst of a reverse takeover deal involving miner Coeur Gold Armenia, bought a 22.3 per cent stake in special purpose vehicle Silvermane Investments for S$6 million. The firm paid S$2 million in cash, and will pay the balance through non-transferrable convertible notes when the mine starts production. The notes will not bear interest and will mature within two years of being issued. They will be cancelled if Silvermane cannot provide evidence of having produced at least 30,000 tonnes of gold by the maturity date.
Silvermane currently holds a majority stake in LionGold South America, Vistra Gold Antigua and LionGold Bolivia, which together own Minera Nueva Vistra. The Amayapampa Gold Project belongs to Minera Nueva Vistra.
LionGold has on Dec 3 agreed to sell its remaining 10 per cent stake to Silvermane in the gold mine for S$3.5 million, incurring a S$3.8 million loss on the sale.
This stake was non-strategic to the group, LionGold said, adding that it would be more meaningful for it to focus on its existing projects. It had acquired the mine in June 2012.
Silvermane, incorporated in British Virgin Islands, is owned by Malaysian retiree and private investor Awang Ahmad Sah, who was previously a senior Sabah government officer. He had previously been connected to LionGold, agreeing in March to subscribe for S$7.5 million in unsecured redeemable convertible bonds due 2017.
Explaining the reason for the acquisition, Asia-Pacific Strategic Investments said it will enable the firm to invest in the “highly prospective” mineral mining business and own assets worth US$42 million to US$77 million. It also anticipates good cashflow from this business, enhancing shareholders’ value.
The Amayapampa gold project is a high-grade 1.8 million ounce open-pit mine located in south-western Bolivia, and consists of 38 overlapping concessions spread over an area of 3,367 hectares.
Asia-Pacific Strategic Investments, previously a funeral services firm, is in the midst of a S$500 million reverse takeover of Coeur Gold Armenia, for which the long-stop date has been extended a second time to February next year.
It has sold off its bereavement care business for RM10.7 million (S$4.04 million), incurring a disposal loss of RM189 million.
The counter fell 0.1 cent, or 1.82 per cent, on Wednesday to close at 5.4 Singapore cents.