Galane Gold Ltd. Announces the Completion of a Transaction With the Phakamani Foundation Trust as Part of Its Empowerment Requirements in South Africa
TSX VENTURE: GG
TORONTO, March 19, 2019 (GLOBE NEWSWIRE) -- Galane Gold Ltd. (“Galane Gold” or the “Company”) (TSX-V: GG) is pleased to announce that it has completed the donation of 17% of the total issued share capital of Galaxy Gold Mining (Pty) Ltd (“Galaxy”) to the Phakamani Foundation NPC (“Phakamani”) as part of its empowerment requirements in South Africa(1)(2).
Phakamani is a development micro-finance institution that envisages South Africa as a country in which even the poorest entrepreneur can create a micro-enterprise and build a dream. Since inception in 2008, the Foundation has issued over US$32 million in loans to over 96,000 different women. Each client has been exposed to an integrated program of basic business training, group loans, and on-going support. Phakamani’s end goal is to leads its clients towards a liveable income, savings, and hope for the next generation. Further information on Phakamani and its activities in South Africa can be found on their website http://phakamanifoundation.org/.
Mark Tucker, CEO of Phakamani, commented: “Phakamani cannot do this alone and we are delighted that Galaxy is partnering with us to enrich the development of the poorest people in South Africa.”
Galane Gold CEO, Nick Brodie commented: “We are delighted that Phakamani has agreed to partner with us and believe its aspirations to empower the poorest people within South Africa embodies Galaxy’s requirement to empower the historically disadvantaged.”
In addition to the donation of the Galaxy shares to Phakamani, Galaxy’s subsidiary Galaxy Gold Reefs (Pty) Ltd (“GGR” and together with Galaxy, the “Galaxy Companies”) has donated 5% of its total issued share capital to a community based trust and 5% to a local employee share scheme(1)(2). With these three donations, Galaxy has fulfilled its obligations with regards to Black Economic Empowerment(1)(2)(3).
About Galane Gold
Galane Gold is an un-hedged gold producer and explorer with mining operations and exploration tenements in Botswana and South Africa. Galane Gold is a public company and its shares are quoted on the TSX Venture Exchange and the Botswana Stock Exchange under the symbol “GG”. Galane Gold’s management team is comprised of senior mining professionals with extensive experience in managing mining and processing operations and large-scale exploration programmes. Galane Gold is committed to operating at world-class standards and is focused on the safety of its employees, respecting the environment, and contributing to the communities in which it operates.
- In terms of the Mineral and Petroleum Resources Development Act, 2004 (“MPRDA”) of the Republic of South Africa, together with the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (“Mining Charter”), the equity ownership of Galaxy, as the holder of existing gold mining rights, is required to comprise, directly or indirectly, of at least a 26% shareholding by historically disadvantaged persons (“HDPs”). An HDP is defined as any person, category of persons or community disadvantaged by unfair discrimination prior to the 1996 Constitution of the Republic of South Africa coming into effect, and include juristic and quasi-juristic entities such as companies, trusts, associations or the like which are directly or indirectly majority owned and managed by HDPs. In terms of the Mining Charter, HDPs are effectively limited to South African citizens of African, Coloured and Indian descent, defined as “Black People” in terms of the Broad-Based Black Economic Empowerment Act, 2003 and the Codes of Good Practice promulgated thereunder.
- The financial commitments of the community development and employee participation trusts to their respective beneficiaries will initially be supported with loan funding from the Galaxy Companies, until sufficient dividend income from the underlying GGR shares is achieved. The Galaxy shares held by the enterprise development entity are subject to a call option in favour of its parent company, Mupane Gold Mines Limited, at a pre-agreed strike price that takes into account any increase in the enterprise value of Galaxy. The call option is furthermore annually renewable at an agreed premium which will ensure that such shareholder receives in cash a minimum annual amount. Dividends will only become payable by the Galaxy Companies after having settled all applicable loan funding and external and inter-company debt.
- As the relevant shares in the Galaxy Companies will be donated outright to the BEE shareholders, once the BEE transactions are fully implemented, GGR’s mining rights should be recognised as achieving an effective 27% debt-free equity interest (or equity equivalent benefit) in HDPs that delivers tangible economic benefits to the HDPs and, accordingly, as fully compliant in these respects with the requirements of the MPRDA and the Mining Charter.
Certain statements contained in this press release constitute “forward-looking statements”. All statements other than statements of historical fact contained in this press release, including, without limitation, those regarding the Company’s future financial position and results of operations, strategy, proposed acquisitions, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements.
Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to: the Company’s dependence on two mineral projects; gold price volatility; risks associated with the conduct of the Company’s mining activities in Botswana and South Africa; regulatory, consent or permitting delays; risks relating to the Company’s exploration, development and mining activities being situated in Botswana and South Africa; risks relating to reliance on the Company’s management team and outside contractors; risks regarding mineral resources and reserves; the Company’s inability to obtain insurance to cover all risks, on a commercially reasonable basis or at all; currency fluctuations; risks regarding the failure to generate sufficient cash flow from operations; risks relating to project financing and equity issuances; risks arising from the Company’s fair value estimates with respect to the carrying amount of mineral interests; mining tax regimes; risks arising from holding derivative instruments; the Company’s need to replace reserves depleted by production; risks and unknowns inherent in all mining projects, including the inaccuracy of reserves and resources, metallurgical recoveries and capital and operating costs of such projects; contests over title to properties, particularly title to undeveloped properties; laws and regulations governing the environment, health and safety; operating or technical difficulties in connection with mining or development activities; lack of infrastructure; employee relations, labour unrest or unavailability; health risks in Africa; the Company’s interactions with surrounding communities and artisanal miners; risks related to changes in laws and regulations relating to holders of existing gold mining rights as they relate to HDPs; the Company’s ability to successfully integrate acquired assets; risks related to restarting production; the speculative nature of exploration and development, including the risks of diminishing quantities or grades of reserves; development of the Company’s exploration properties into commercially viable mines; stock market volatility; conflicts of interest among certain directors and officers; lack of liquidity for shareholders of the Company; risks related to the market perception of junior gold companies; and litigation risk. Management provides forward-looking statements because it believes they provide useful information to investors when considering their investment objectives and cautions investors not to place undue reliance on forward-looking information. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.
Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information please contact:
CEO, Galane Gold Ltd.
+ 44 7905089878