Rigel Resource Acquisition in talks to buy R7.9 billion South African gold miner

The New York-listed blank-check company, Rigel Resource Acquisition Corp. Is currently in talks to combine with a South African gold miner.

According to the Daily Investor, the deal could value Blyvooruitzicht Gold Mining Company at as much as $425 million (R7.9 billion).

The blank check company backed by Orion Resource Partners, an asset manager overseeing $8.5 billion, has enlisted Citigroup and Rand Merchant Bank for a pre-sale aiming to raise approximately $60 million in early 2024. Blyvooruitzicht, Citigroup, and Rand Merchant Bank declined to comment on the situation, and Rigel did not respond to email inquiries.

Ongoing discussions indicate that a successful deal is not guaranteed. Rigel had previously announced the signing of a non-binding letter of intent for a business combination within the global metals sector, withholding specifics about the target.

Special purpose acquisition companies (SPACs), or blank check companies, have attracted prominent figures in the mining industry, such as Robert Friedland and African Gold Acquisition Corp. However, SPACs targeting mining assets face challenges due to the limited timeframe to deploy raised funds, considering the time required for securing, completing due diligence, and vetting a mine.

Rigel had previously sought an extension for the time frame to “consummate an initial business combination,” extending it for a year from August 9, according to a company notice.

Blyvooruitzicht, with an annual gold production of 40,000 ounces and a mine life of 22 years, remains a key player in these potential developments.