Company Overview and Strategy
Luiri Gold has entered into a binding share purchase agreement to acquire Aluminium Metal Recyclers (Proprietary) Limited (AMR), a South African company which owns and operates a metal processing facility in Pietermaritzburg, Kwa-Zulu Natal, South Africa. The transaction is expected to be completed around 30 November 2017.
AMR owns a melting facility which re-melts aluminium furnace dross, scrap and off-cuts primarily generated by aluminium processors or fabricators in South Africa. The facility has a total smelting capacity of 1,150 tonnes per month, and is currently permitted to process 600 tonnes per month. A new permit application to increase smelting production to 1,150 tonnes per month has been submitted to the relevant authorities and approval for this increase in capacity is expected soon.
Their newly installed capability re-melts bare scrap into sow format and recovers good quality metal units from furnace dross at competitive yields and operating costs.
AMR was established in 2016 to fill identified shortfalls in recycling capacity and quality in the region. The processing facility includes proprietary innovations to equipment and processes which reduce costs and improve recoveries. This technology forms the basis of the Company’s growth plans described below.
Before completing the acquisition of AMR, Luiri will enter into a Cooperation Agreement with IOS, the founder of AMR and the funder of its development. Under the agreement, the Company will have a first right of refusal on additional smelting facilities developed by IOS. The companies will also cooperate to identify and develop other business opportunities in metal recycling and smelting.
AMR currently processes some furnace dross and scrap from Isizinda Aluminium and has completed successful trials with South32 to process their furnace dross. Both companies are in Richards Bay, Kwa-Zulu Natal, South Africa and IOS plans to construct and install furnaces on the Isizinda site in Richards Bay to service these companies. Luiri expects to acquire the processing facility once it is completed (planned in 2018).
IOS is also investigating the reprocessing potential of an aluminium pit dripping and dross land fill site in Kwa-Zulu Natal. This opportunity was taken into consideration in the environmental impact assessment which has been approved for planned processing facility.
IOS’s management has developed relationships in the Middle East which may result in opportunities at several aluminium smelters. Management also has rotary tilting furnace know-how which may be applied to other metals (copper and tin) and discussions are afoot in this regard.