Neo Energy Metals enters deal to meet South African mining regulations

(Alliance News) - Neo Energy Metals on Wednesday said its South African subsidiary has signed a ...

Alliance News 29 January, 2025 | 3:21PM
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(Alliance News) - Neo Energy Metals on Wednesday said its South African subsidiary has signed a deal with Siyakhula Sonke Empowerment Corp Pty Ltd, a majority black-owned group of mining firms based in Johannesburg.

The deal is to meet the minimum requirements of South Africa's new mining charter. This requires companies such as London-based miner Neo Energy Metals which are seeking new mining rights to be at least 30% owned by individuals or businesses which qualify for Black Economic Empowerment status.

The BEE designation was introduced by the South African government to boost employment among the country's historically disadvantaged population.

Neo Energy Metals in December acquired full ownership of the Beisa project in South Africa's Witwatersrand Basin. Its local business arm, Neo Uranium Resources Beisa Mine Pty Ltd, was established to run operations.

Wednesday's deal requires Neo Energy Metals to transfer 30% of its stake in Neo Uranium Resources to Siyakhula, for a total see-through purchase price of ZAR390 million, which is about GBP17 million.

Of that 30% stake, two newly-formed trusts will each hold 5%, while Siyakhula holds the remaining 20% interest in the Beisa Project. Dividends will come from the profit generated by planned uranium and gold mining at Beisa.

Neo Energy Metals pointed out Siyakhula's "long standing relationships" with local mining unions and government departments.

Siyakhula Founder and Chief Executive Fred Arendse noted: "We are delighted to partner with Neo Energy Metals in undoubtedly one of the most advanced, high-grade uranium mines on the African continent."

The London mining firm's Chair Jason Brewer added: "Through this partnership, we aim to create lasting value for our stakeholders, empower local communities, and contribute significantly to the region's economic upliftment."

Neo Energy Metals shares were down 1.8% at 0.74 pence each on Wednesday afternoon in London.

The partnership is a move towards regulatory approval for Beisa, where operations are currently on hold. Neo Energy Metals in December ordered a valuation of 117.0 million pounds of uranium and 5.4 million ounces of gold derived from the site.

South Africa's total uranium production was estimated to be 200 tonnes in 2022, data from the World Nuclear Association showed, making it the world's tenth-largest producer of the mineral.

By Holly Munks, Alliance News reporter

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Neo Energy Metals PLC 0.69 GBX -8.59 -

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