Dundee Precious Metals (DPM) Inc., on Thursday announced that it has entered into an agreement to transfer an eight percent ownership interest in Dundee Precious Metals Tsumeb (DPMT) to Greyhorse Mining (GHM) Ltd.
Under the terms of the deal, Greyhorse Mining will acquire an eight percent shareholding for approximately US$20.2 million, with the deal financed by Dundee Precious Metals.
Greyhorse will receive an annual dividend of US$500,000 for the first five years subject to DPMT having sufficient available distributable funds and GHM achieving approved performance metrics.
GHM will nominate one of the five members of DPMT’s board. The board will also include three Dundee employees and a fifth independent director to provide additional Namibian perspective and diversity.
The transaction which has been substantially agreed to between the parties and is expected to be completed by mid-2018.
The company also announced that DPM will also be transferring an additional two per cent ownership interest in the Tsumeb Smelter to a DPMT Employee Trust to be established for the benefit of the smelter employees.
“This transaction is another demonstration of our support for the government and its New Equitable Economic Empowerment Framework (“NEEEF’),” said Rick Howes, President and CEO of Dundee Precious Metals Inc.
“This transaction creates hope for previously disadvantaged Namibians to believe that ownership of shares will let the business grow further. I am thrilled by the fact that our employees are new shareholders and they will be working for their company which will result in increased productivity,” said Zebra Kasete, DPMT’s Vice President and Managing Director.
The structure and details of the DPMT Employee Trust are still being crafted, with additional information expected to be availed when discussions have been concluded.
Greyhorse Mining intends to execute a broad-based empowerment strategy based on enterprise, entrepreneurial development, skills development, mentorship and knowledge transfer.
“We are extremely excited about our new relationship with DPM and DPMT.” said Saul Kahuika, the GHM board
According to the 2017 Annual Report of the Chamber of Mines of Namibia, Dundee made a loss of N$889 million in 2017 and produced 45,523 tonnes of blister copper and 221,050 tonnes of sulphuric acid.
Since the acquisition of the Tsumeb Smelter in 2010, Dundee has made significant investments to modernise the Tsumeb smelter and transform it into a sustainable operation. Through the Dundee Community Trust, DPMT also provides support to local SMEs and entrepreneurs and funds sport, art, health and education projects in the community.
Dundee Precious Metals is an international mining company which also owns and manages the Tsumeb Smelter in Namibia.