Southstone Minerals Limited (TSXV: SML) has announced an arrangement agreement dated September 21, 2026, under which Executive Chairman and Interim CEO Terry L. Tucker will acquire all common shares he does not already own, taking the company private. Minority shareholders will receive cash consideration of $0.0375 per share, representing aggregate consideration of approximately $1,073,508 for 28,626,888 shares. The transaction, which requires shareholder and court approval, would result in the delisting of SML from the TSX Venture Exchange and the company ceasing to be a reporting issuer. Investors are watching the deal closely given the company's disclosed going-concern uncertainty and the expiry of its key mining right in South Africa.

Key Points

  • Southstone Minerals Limited (TSXV: SML) has entered into a going-private arrangement agreement dated September 21, 2026
  • Executive Chairman and Interim CEO Terry L. Tucker will acquire all shares he does not already own at $0.0375 per share in cash
  • The $0.0375 consideration exceeds the fairness advisor's indicated value range of $0.024–$0.034 per share by approximately 11.6% to 54.6%
  • Shareholders holding approximately 20.68% of shares have signed voting support agreements in favour of the transaction

Transaction Terms and Tucker's Current Ownership Stake

Under the arrangement, Tucker — who currently beneficially owns 4,775,000 shares representing approximately 14.30% of Southstone's issued and outstanding shares — will acquire the remaining shares he does not hold. The aggregate consideration payable to minority shareholders totals approximately $1,073,508. Total obligations addressed under the arrangement, including parent-level indebtedness, estimated costs, and subsidiary obligations, are expected to be approximately $4.943 million. Tucker will not receive any consideration in respect of the shares he already owns.

Special Committee Review and Fairness Opinion on SML Shares

Because Tucker is both an officer and a significant shareholder, the transaction constitutes a related party transaction under Multilateral Instrument 61-101. The board formed a special committee of independent directors, Kevin Ma (Chair) and Neil Budd, who retained Evans & Evans, Inc. as independent financial advisor. Evans & Evans provided a verbal fairness opinion concluding the consideration is fair, from a financial point of view, to shareholders other than Tucker. The board unanimously approved the arrangement after receiving the special committee's unanimous recommendation, with Tucker recused from deliberations.

Oena Diamond Mine Challenges Informing the Going-Private Decision

The special committee considered several material circumstances disclosed in the company's continuous disclosure record. The mining right over the Oena Diamond Mine, held by African Star Minerals (Pty) Ltd, in which Southstone holds a 43% interest, expires on March 14, 2027, and the renewal application has not yet been lodged. The company's most recent financial statements disclose a working capital deficiency and a going-concern uncertainty. The company also notes that consolidated revenue includes 100% of diamond tender sales despite the contract miner being entitled to the majority share of proceeds.

Shareholder Vote and Approvals Required to Complete the Arrangement

Completion of the arrangement requires approval by at least 66⅔% of votes cast by shareholders at a special meeting, as well as a simple majority of minority shareholder votes excluding Tucker. Court approval from the Supreme Court of British Columbia and TSXV regulatory approval are also required. Shareholders holding approximately 20.68% of shares have entered into support agreements. The management information circular will be mailed to shareholders and filed with applicable regulators in due course. The immediate share price impact was not clear from available public information.