Commodities

Migori gold miner gets nod for Sh743m Goldplat sale deal

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Small-scale gold miners in Migori County. FILE PHOTO | NMG

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Summary

  • The Competition Authority of Kenya (CAK) has cleared the takeover of Migori-based gold miner Goldplat by rival Mayflower Gold Investments.
  • The watchdog valued the assets of London-listed Kilimapesa Gold in Migori at Sh742,726,000.

The Competition Authority of Kenya (CAK) has cleared the takeover of Migori-based gold miner Goldplat by rival Mayflower Gold Investments.

The watchdog valued the assets of London-listed Kilimapesa Gold in Migori at Sh742,726,000.

“The Competition Authority excludes the proposed acquisition of entire issued share capital in Kilimapesa Gold Limited by Mayflower Capital Investments Limited from the provisions of Part IV of the Act because…the merger will not affect competition negatively,” said CA director general Wang’ombe Kariuki in a Kenya Gazette notice dated March 4 published on Friday.

“…the transaction meets the threshold for exclusion provided under the Competition (General) Rules, 2019. The acquirer had no turnover or assets for the preceding year 2020, while the target's assets were valued at Sh742,726,000.”

Goldplat said earlier the completion of the transaction would enable it to focus on its recovery operations and Mayflower Gold’s parent company Mayflower Capital Investments Pty Limited (‘Mayflower’) to accelerate its investment into Kilimapesa.

Mayflower said it would deploy about $2 million (Sh218 million) towards meeting Kilimapesa’s capital expenditure and working capital requirements following the purchase.

“We believe that it was opportune for us to complete the transaction at this stage to allow the Mayflower team to implement their strategic initiatives and to ensure the success of the Kilimapesa mine for all stakeholders involved,” said Goldplat CEO Werner Klingenberg in a statement.

“This releases Goldplat from any further financial or management requirements and allows us to focus on our continued recovery operations.”

Goldplat’s search for new investors started after the multinational’s shareholders declined to provide additional capital.

Kilimapesa Gold’s project is located in the Migori Archaean greenstone belt.

The funding gap has led to losses at Kilimapesa whose production has dropped significantly. The company was the first to be issued with a commercial gold production lease in Kenya in November 2011 and targeted to produce 5,000 ounces of gold per annum.

It was also expected to catapult the country, which has artisanal and small-scale miners, to a mainstream gold-producing nation.