Goldplat (LON: GDP) said it has now sold Kilimapesa, owner of the Kilimapesa gold mine in Kenya, to Mayflower Gold Investments. The news, announced on Monday, paves the way for accelerated mine investment.

Mayflower Gold and Goldplat agreed to waive the requirement for Papillon Holdings (LSE: PPHP) to complete its proposed Mayflower Gold reverse takeover and re-admission to the London Stock Exchange (“LSE”).

The initial consideration takes the form of a $1.5 million secured debenture, which will be paid to Goldplat subsidiary Gold Mineral Resources (“GMR”).

This can be satisfied through cash or through the issue of equivalent Papillion shares, once Papillon is re-admitted to the LSE. Of the $1.5 million, 30% or $450,000 is payable in cash.

Should Papillion not be re-admitted to trading, the full $1.5 million is payable in cash and will attract 4% interest effective from the start of 2021.

On top of the $1.5 million initial consideration, Mayflower Gold’s parent company, Mayflower Capital Investments, will pay $150,000 of the loan balance outstanding from Kilimapesa to GMR and Mayflower Gold.

Mayflower Capital Investments has also waived all further conditions for the sale, specifically those relating to renewing prospecting licences.

The parent company raised around $2 million earlier this month, which it will put toward capital expenditure as well as working capital requirements for Kilimapesa.

On top of that, Mayflower Capital Investments has secured another £2.5 million, though this is conditional on completing the reverse takeover and re-admission of Papillon to LSE trading.

Mayflower Gold has provided GMR with a debenture of their assets, with Mayflower Capital Investments acting as guarantor.

In especially great news, Mayflower Gold has also committed to an additional charge provided by Kilimapesa over its assets for the benefit of GMR.

A novation agreement assigns the outstanding loan of around $10 million, made by GMR to Kilimapesa, to Mayflower Gold. This will complete when the initial $1.5 million initial consideration is received.

Once the sale is complete, GMR is also entitled to a 1% net smelter royalty on production from Kilimapesa, up to a $1.5 million maximum, for any future Kilimapesa production.

The price of gold climbed higher and higher in 2020 amid the escalating Covid-19 pandemic, which drove investors to seek safe havens. While there was a dip in the price at the start of 2021, gold has started to climb again as it becomes clear that the havoc wrought by the pandemic has not dissipated just because a vaccine is available to some.

Goldplat chief executive Werner Klingenberg noted Mayflower Gold’s proven commitment to Kilimapesa in the form of “investment of capital and management resources” as well as the $2 million raised “to advance the project”.

“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 Klingenberg.

The chief executive also noted that the deal “releases Goldplat from any further financial or management requirements”, letting the company focus on its “continued recovery operations”.

Goldplat has two gold recovery operations, located in South Africa and Ghana, that recover gold from mining process by-products. This gives mines a cost-efficient and environmentally friendly to remove waste material.

Author: Anna Farley

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of, has not been paid for the production of this piece by the company or companies mentioned above. and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance