R20 Million Strategic Equity Opportunity in a Chrome Beneficiation SPV
Lancaster Group is invited to invest R20 million for a 20% equity stake in the chrome beneficiation SPV. The equity investment will support asset acquisition, land acquisition, transaction completion, technical optimisation, compliance close-out and contingency. Starting working capital will be financed separately through a R14 million facility from Crede Capital at 12% interest. A further R6 million asset finance facility will be raised separately, with the financing institution to be finalised during close-out.
Lancaster Equity Investment
R20m
Lancaster Equity Stake
20%
Implied Post-Money Valuation
R100m
Working Capital Facility
R14m
Crede Capital
Working Capital Interest
12%
Indicative
Asset Finance Facility
R6m
Institution TBC
Year 1 Feed / Concentrate
10,000 / 5,000t
Monthly
Year 2–5 Feed / Concentrate
13,000 / 6,500t
Monthly
All financials are indicative and subject to final financing terms, due diligence, binding commercial agreements, technical validation, environmental compliance, financing approval and final legal documentation. Forecasts are not guaranteed.
Five reasons this opportunity is investor-grade.
Asset-backed opportunity
The SPV will be anchored by an identified chrome washing plant, land, infrastructure and operating assets.
Beneficiation margin
Value created by upgrading ROM / chrome sweepings into saleable chrome concentrate.
Visible commercial pathway
Feedstock supply confirmations and a non-binding offtake intention support the case, subject to binding agreements.
Strong cash generation
The new business case indicates approximately R249.09 million in five-year gross operating contribution before tax, reserves and reinvestment.
Platform growth potential
First operating node in a broader chrome beneficiation and trading platform.
Value Pathway
A 40 / 40 / 20 ownership structure with codified investor protections.
Proposed Equity Split
| Shareholder | Equity | Role |
|---|---|---|
| Elderberry ZA Mining | 40% | Mining commercialisation, capital raising, governance, chrome value-chain strategy |
| Magnalux Vita | 40% | Asset origination, plant acquisition, operations, feedstock and offtake mobilisation |
| Lancaster Group | 20% | Strategic equity investor, governance partner, capital participant |
Lancaster Investor Protections
Mooinooi / Majakaneng chrome wash plant in the North West chrome belt.
| Project Item | Position |
|---|---|
| Plant type | Chrome wash plant / gravity separation |
| Year 1 monthly feed | 10,000 tons ROM / sweepings |
| Year 2–5 monthly feed | 13,000 tons ROM / sweepings |
| Processing yield | 50% |
| Year 1 concentrate output | 5,000 t/month · 60,000 t/year |
| Year 2–5 concentrate output | 6,500 t/month · 78,000 t/year |
| Feed grade indication | 24% – 28% |
| Concentrate grade indication | 40% – 42% |
| Lab sample result | 41.42% Cr₂O₃ |
Production Funnel (Year 2–5 Steady State)
Process Flow
Encouraging laboratory indicators, pending independent verification.
Feed Grade
24–28%
Cr₂O₃ indication
Concentrate Grade
40–42%
Target output
Lab Sample
41.42%
Cr₂O₃
SiO₂
15%
Cr / Fe Ratio
2.8
| Quality Area | Current Indicator | Close-Out Required |
|---|---|---|
| Feed grade | 24% – 28% | Bulk sampling confirmation |
| Concentrate grade | 40% – 42% | Representative production trial |
| Lab sample | 41.42% Cr₂O₃ | Independent sampling verification |
| Assay process | Initial lab result available | SGS / Bureau Veritas or equivalent verification |
The current lab result is a positive indicator, but independent bulk sampling and representative assay verification will be completed as part of the investment close-out process.
Interactive base-case calculator.
Adjust the operating assumptions to see the model recalculate. Defaults reflect the base-case business plan.
Inputs
Per-Ton Economics
Monthly Revenue
R13,38m
Annual Revenue
R160,5m
Monthly Gross Profit
R3,53m
Annual Gross Profit
R42,3m
Base Case Reference
| Commercial Metric | Year 1 Base Case |
|---|---|
| Year 1 selling price | R2,675 / ton (escalates 7% p.a.) |
| Year 1 production cost | R1,970 / ton (escalates 10% p.a.) |
| Year 1 gross profit per ton | R705 |
| Year 1 monthly concentrate output | 5,000 tons |
| Year 2–5 monthly concentrate output | 6,500 tons |
| Year 1 annual revenue | R160.50 million |
| Year 2–5 annual revenue range | R223.26m – R273.50m |
Visible commercial pathway, with binding agreements still to be secured.
Offtake — Zopco
Zopco has issued a non-binding offtake intention confirming completion of KYC on Magnalux Vita and capacity to purchase a minimum of 5,000 tons / month of chrome concentrate, with payment via EFT within 48 hours after final assays and specification testing. Year 2–5 output of 6,500 t/month requires expansion to a second offtaker or larger Zopco commitment.
| Offtake Item | Required Close-Out | Status |
|---|---|---|
| Year 1 minimum volume | 5,000 t/mo (Zopco non-binding) | Open |
| Year 2–5 expansion | Expand to 6,500 t/mo or add second offtaker | Open |
| Product specification | Cr₂O₃, moisture, sizing, impurities | Open |
| Pricing | Fixed, formula or index-linked | Open |
| Payment terms | EFT / LC / bank transfer timing | Open |
| Assay process | SGS / Bureau Veritas or equivalent | Open |
| Delivery terms | Ex-works, FOB or delivered basis | Open |
| Contract tenor | Initial term and renewal mechanism | Open |
Feedstock Supply Pathway
| Supplier | Indicated Supply | Grade Indication | Required Close-Out |
|---|---|---|---|
| Manezulu Mining | 15,000t sweepings + 5,000t ROM / mo | Sweepings 18–20%; ROM 26–30% | Binding supply agreement |
| New Mar Trading | 10,000t sweepings + 1,000t ROM / mo | Sweepings 24–28%; ROM 30–34% | Binding supply agreement |
The Zopco offtake letter is non-binding and currently supports only 5,000 t/month — Year 2–5 output of 6,500 t/month requires expansion or a second offtaker. Feedstock confirmations from Manezulu Mining and New Mar Trading must be formalised through binding supply agreements covering 13,000 t/month from Year 2.
Use of Lancaster's R20 million equity investment.
Lancaster's R20 million investment will be applied to asset acquisition, land acquisition, transaction completion, technical optimisation, compliance close-out and contingency. The SPV's starting working capital will be financed separately through a R14 million working capital facility from Crede Capital. Allocation is presented as strategic funding buckets — exact Rand allocations will be confirmed as part of close-out.
Strategic Funding Buckets
| Use of Funds | Purpose |
|---|---|
| Asset Acquisition Contribution | Contribution toward the chrome recovery plant and transaction completion |
| Land Acquisition Contribution | Contribution toward the land where the chrome recovery plant will be operating |
| Technical Optimisation | Telemetry, weightometers, flow meters, density meters, metal accounting and plant optimisation |
| Environmental and Compliance Close-Out | Tailings, water, stormwater, environmental and site compliance review |
| Legal, Transaction and Governance Close | SPV formation, shareholders agreement, due diligence and closing documentation |
| Contingency | Commissioning and operational contingency |
Working capital reserve, feedstock ramp-up reserve and offtake expansion are not a direct use of Lancaster's R20 million. Working capital is funded separately by Crede Capital; commercial close-out support is captured under legal, transaction and governance close.
Lancaster equity, working capital and asset finance — three distinct facilities.
To preserve Lancaster's equity capital for asset formation, transaction completion and technical de-risking, the SPV will use separate debt facilities for working capital and asset finance. Lancaster's R20 million equity is not being used as the starting working capital facility.
| Funding Component | Amount | Provider / Status | Indicative Terms | Purpose |
|---|---|---|---|---|
| Lancaster Equity Investment | R20.00m | Lancaster Group | 20% SPV equity stake | Asset acquisition, land acquisition, technical optimisation, compliance close-out, legal close and contingency |
| Working Capital Facility | R14.00m | Crede Capital | 12% interest (interest-only assumption) | Starting working capital for feedstock, production cycle, logistics, labour, utilities and operating cash cycle |
| Asset Finance Facility | R6.00m | Financing institution to be finalised | Indicative modelling: 15.25% over 60 months — subject to final lender terms | Asset finance support for plant / equipment-related funding requirement |
The asset finance terms are shown on an indicative basis for modelling purposes only. Final interest rate, tenor, security package and repayment profile will be confirmed once the financing institution is appointed and the facility is approved as part of transaction close-out.
Five-year business case before financing costs.
Indicative base-case business performance shown before working capital interest, asset finance debt service, tax, corporate overheads, sustaining capex, growth capex, rehabilitation provisions, reserves and shareholder distributions.
Revenue (bars) vs Gross Operating Contribution (line) — Rm
Total 5-Year Revenue
R1.152bn
Total 5-Yr Production Cost
R902.65m
5-Yr Gross Operating Contribution
R249.09m
Lancaster 20% Share
R49.82m
Before tax, reserves, reinvestment
| Metric | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Total |
|---|---|---|---|---|---|---|
| Feed processed | 120,000t | 156,000t | 156,000t | 156,000t | 156,000t | 744,000t |
| Concentrate sold | 60,000t | 78,000t | 78,000t | 78,000t | 78,000t | 372,000t |
| Sales price / ton | R2,675 | R2,862 | R3,063 | R3,277 | R3,506 | — |
| Production cost / ton | R1,970 | R2,167 | R2,384 | R2,622 | R2,884 | — |
| Revenue | R160.50m | R223.26m | R238.88m | R255.61m | R273.50m | R1,151.75m |
| Production cost | R118.20m | R169.03m | R185.93m | R204.52m | R224.97m | R902.65m |
| Gross operating contribution | R42.30m | R54.23m | R52.95m | R51.08m | R48.52m | R249.09m |
Gross operating contribution is shown before working capital interest, asset finance debt service, tax, corporate overheads, sustaining capex, growth capex, rehabilitation provisions, reserves and shareholder distributions. Selling price is escalated at 7% p.a. and production cost at 10% p.a. — a deliberately conservative margin view. Financials are indicative and subject to due diligence, financing approval and binding commercial agreements.
Operating performance separated from financing structure.
The revised model separates operating performance from financing structure. The SPV will use a R14 million working capital facility from Crede Capital at 12% interest. A R6 million asset finance facility is assumed at 15.25% over 60 months for modelling purposes, with final terms to be confirmed during close-out.
Working Capital Interest
R1.68m
Annual · 12% on R14m
Asset Finance Debt Service
≈ R1.72m
Annual · 15.25% over 60 months
Total Annual Financing Cash Impact
≈ R3.40m
Financing Assumptions
| Financing Item | Amount | Assumption | Annual Cash Impact |
|---|---|---|---|
| Working Capital Facility | R14.00m | Interest-only at 12% per annum | R1.68m annual interest |
| Asset Finance Facility | R6.00m | Indicative 15.25% over 60 months | ≈ R1.72m annual debt service |
| Total Annual Financing Cash Impact | R20.00m combined facilities | Indicative | ≈ R3.40m per annum |
Asset Finance Detail
| Metric | Amount |
|---|---|
| Asset Finance Principal | R6.00m |
| Indicative Interest Rate | 15.25% |
| Indicative Tenor | 60 months |
| Indicative Monthly Instalment | ≈ R143,528 |
| Indicative Annual Debt Service | ≈ R1.72m |
| Final Financing Institution | To be finalised during transaction close-out |
Five-Year Business Case After Financing Impact
| Metric | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Total |
|---|---|---|---|---|---|---|
| Gross Operating Contribution | R42.30m | R54.23m | R52.95m | R51.08m | R48.52m | R249.09m |
| Working Capital Interest | R1.68m | R1.68m | R1.68m | R1.68m | R1.68m | R8.40m |
| Asset Finance Debt Service | R1.72m | R1.72m | R1.72m | R1.72m | R1.72m | R8.61m |
| Total Financing Cash Impact | R3.40m | R3.40m | R3.40m | R3.40m | R3.40m | R17.01m |
| Cash Available After Financing Impact | R38.90m | R50.83m | R49.55m | R47.68m | R45.12m | R232.08m |
Gross Operating Contribution vs Cash Available After Financing Impact — Rm
This is an indicative financing-adjusted view. It assumes the R14 million working capital facility is interest-only and rolled as operating working capital, and that the R6 million asset finance facility is amortised over 60 months at 15.25% per annum. Final debt service will change once actual asset finance terms are confirmed.
Financing Structure Risk and Mitigation
| Risk | Potential Impact | Mitigation |
|---|---|---|
| Working capital facility at 12% increases cash cost | Reduces distributable cash by ≈ R1.68m p.a. | Align facility drawdown with operating cycle and optimise cash conversion cycle |
| Working capital facility assumed interest-only | Principal repayment could affect future cashflow if called or not renewed | Negotiate rollover, repayment flexibility and facility renewal conditions |
| Asset finance institution not yet finalised | Final rate and repayment profile may differ from model | Secure competitive lender terms as part of close-out |
| Asset finance repayment adds fixed annual debt service | Reduces cash available for distribution by ≈ R1.72m p.a. | Match asset finance tenor to productive asset life and protect minimum cash reserves |
| Financing costs reduce Lancaster distributions | Payback moves later than pre-financing case | Present investor returns on post-financing basis and maintain conservative reserves |
| Interest rate risk | Higher final asset finance cost may reduce net cash | Secure fixed-rate or capped-rate terms where possible |
Returns after working capital interest and asset finance debt service.
After indicative working capital interest and asset finance debt service, the model shows ≈ R232.08m in 5-year cash available. Lancaster's 20% share is ≈ R46.42m before tax, reserves, reinvestment and shareholder-approved retained earnings. Toggle a distribution scenario to recalculate Lancaster's payback profile.
Lancaster 5-Yr Distribution
R32.49m
Gross Multiple on R20m
1.62x
Scenario Profile
Year 4
Indicative payback
Cumulative Payback Profile — 70% Distribution (Rm)
Balanced cash yield and reinvestment case
| Distribution Policy | Lancaster 5-Yr Distribution | Gross Multiple on R20m | Interpretation |
|---|---|---|---|
| 100% distributed | R46.42m | 2.32x | Maximum distribution case after financing impact, before tax and reserves |
| 70% distributed | R32.49m | 1.62x | Balanced cash yield and reinvestment case |
| 50% distributed | R23.21m | 1.16x | Conservative reinvestment-heavy case |
| 30% distributed | R13.92m | 0.70x | Heavy retention case; investor return depends on retained SPV value and exit |
Cumulative Cash Position at 70% Distribution
| Year | Lancaster 20% Share After Financing | 70% Distribution | Cumulative Position |
|---|---|---|---|
| Initial Investment | — | — | -R20.00m |
| Year 1 | R7.78m | R5.45m | -R14.55m |
| Year 2 | R10.17m | R7.12m | -R7.44m |
| Year 3 | R9.91m | R6.94m | -R0.50m |
| Year 4 | R9.54m | R6.68m | R6.17m |
| Year 5 | R9.02m | R6.32m | R12.49m |
Modelled outputs are illustrative and indicative only and do not constitute a forecast. Distributions are subject to tax, reserves, reinvestment requirements, final financing terms and SPV board approval.
Why a R100m post-money implied valuation is justified.
| Value Component | Contribution to Investment Case |
|---|---|
| Physical asset base | Asset register of R19.763m — plant machinery, heavy vehicles, infrastructure, land and improvements |
| Technical review | Site visit completed, plant process reviewed and optimisation items identified |
| Production ramp-up | Feed grows from 10,000 t/mo (Year 1) to 13,000 t/mo (Year 2–5) |
| Commercial pathway | Feedstock access (Manezulu, New Mar) and Zopco offtake discussions |
| Beneficiation margin | Value uplift from ROM / sweepings to 40–42% chrome concentrate |
| Strategic location | Mooinooi / Majakaneng — North West chrome belt |
| Platform potential | First operating node in a broader chrome beneficiation and trading platform |
| Capital strength | R20m investment funds completion, working capital, ramp-up and risk close-out |
| Cash yield potential | Lancaster 20% share of ≈ R249.09m 5-yr gross contribution = ≈ R49.82m |
Documents available for investor review.
Access is controlled. Lancaster will be granted credentialed access to the secure data room on signing of an NDA.
Identified risks with named owners and mitigation actions.
Risk Heatmap (click a tile)
Commercial Risk
Non-binding offtake
Impact
High
Likelihood
Medium
Mitigation
Convert to binding offtake agreement
Owner
Magnalux Vita + Elderberry ZA
| Risk | Impact | Mitigation | Owner | Status |
|---|---|---|---|---|
| Non-binding offtake | High | Convert to binding offtake agreement | Magnalux Vita + Elderberry ZA | Open |
| Feedstock variability | Medium | Binding supply agreements with multiple suppliers | Magnalux Vita | Open |
| Assay representativity | Medium | Independent bulk sampling and shipment assays | Elderberry ZA | Open |
| Plant instrumentation gap | Medium | Install telemetry and metal accounting system | Magnalux Vita | Open |
| Tailings / water containment | Medium | Tailings lining review and water management plan | Magnalux Vita | Open |
| Environmental compliance | Medium | Environmental, stormwater, water and dust review | Elderberry ZA | Open |
| Electricity cost / reliability | Medium | Review grid billing and backup power strategy | Magnalux Vita | Open |
| Working capital pressure | Medium | Maintain SPV working capital reserve | SPV Board | Open |
| Commodity price volatility | Medium | Pricing discipline and market monitoring | SPV Board | Ongoing |
| Delayed ramp-up | High | 90-day commissioning plan | Magnalux Vita | Open |
What Elderberry ZA and Magnalux Vita will close out before transaction completion.
Most items are in progress or to be completed before close. Click a status pill to update.
Investment committee close-out checklist.
| # | Condition Precedent | Required Outcome | Status |
|---|---|---|---|
| 01 | SPV incorporated | Project company legally established | Open |
| 02 | Shareholders agreement signed | 40 / 40 / 20 ownership and governance agreed | Open |
| 03 | Lancaster investor rights agreed | Board participation and reserved matters documented | Open |
| 04 | Asset sale agreement signed | Acquisition terms legally secured | Open |
| 05 | Land acquisition / control mechanism agreed | Land for plant operation contributed or controlled | Open |
| 06 | Asset title verified | Ownership and encumbrances confirmed | Open |
| 07 | Independent asset valuation completed | Asset value and condition confirmed | Open |
| 08 | Binding offtake agreement signed | Minimum volume, pricing and specifications agreed | Open |
| 09 | Expanded Year 2 offtake secured | Total 6,500 t/month concentrate sales route confirmed | Open |
| 10 | Binding feedstock agreements signed | Feedstock volume, grade and pricing secured | Open |
| 11 | R14m Crede Capital working capital facility finalised | Starting working capital secured at 12% interest | Open |
| 12 | R6m asset finance facility finalised | Financing institution, rate, tenor and security agreed | Open |
| 13 | Asset finance institution appointed | Final lender selected and term sheet signed | Open |
| 14 | Independent bulk sampling completed | Grade, recovery and product quality verified | Open |
| 15 | Technical ramp-up plan approved | Plant capacity, availability and water balance validated | Open |
| 16 | Technical optimisation budget approved | Telemetry, water, tailings and circuit improvements costed | Open |
| 17 | Environmental compliance review completed | Site operating compliance confirmed | Open |
| 18 | Insurance package placed | Plant, liability, stock, BI and key-person cover active | Open |
| 19 | Bank account and cash controls established | SPV account and signatories in place | Open |
| 20 | Investor reporting framework approved | Monthly and quarterly reporting agreed | Open |
From investment memorandum to first distribution.
01
IM Review
Lancaster review of investment memorandum
Deliverable
Internal IC briefing
Active
02
Management Q&A
Management presentation and Q&A
Deliverable
Workshop & follow-ups
Scheduled
03
Term Sheet
Non-binding term sheet
Deliverable
Heads of terms signed
Upcoming
04
Due Diligence
Commercial, technical, legal, environmental DD
Deliverable
DD report & risk register
Upcoming
05
Binding Agreements
SHA, asset sale, offtake, feedstock
Deliverable
Executed contract pack
Upcoming
06
Capital Subscription
R20m capital subscription for 20% SPV equity
Deliverable
Funds in SPV account
Upcoming
07
Operational Readiness
Plant, instrumentation, compliance close-out
Deliverable
Commissioning sign-off
Upcoming
08
Year 1 Production
Commissioning to 5,000 t/mo concentrate
Deliverable
Year 1 steady-state
Upcoming
09
Year 2 Ramp-Up & Reporting
13,000 t/mo feed, 6,500 t/mo offtake, reporting & distributions
Deliverable
Quarterly investor pack
Future
19 · Investor CTA
Participate in a structured chrome beneficiation SPV.
Elderberry ZA Mining and Magnalux Vita invite Lancaster Group to proceed to a formal investment discussion and non-binding term sheet for the proposed R20 million investment in exchange for a 20% equity stake in the chrome beneficiation SPV. The revised structure separates Lancaster's equity investment from the SPV's working capital and asset financing requirements, allowing the equity capital to support asset formation, land acquisition, technical optimisation, compliance close-out and transaction completion.
Confidential. Prepared by Elderberry ZA Mining and Magnalux Vita for Lancaster Group's investment committee. This document does not constitute an offer of securities. The financial model is indicative and prepared for investor discussion purposes. The model assumes a R14 million working capital facility at 12% interest, structured as interest-only for modelling purposes, and a R6 million asset finance facility modelled at 15.25% over 60 months. Final asset finance terms, repayment profile, security package and financing institution remain subject to close-out. Forecasts are not guaranteed and remain subject to due diligence, binding commercial agreements, technical validation, environmental compliance, financing approval and final legal documentation.