Mantengu Mining (JSE: MTU): (JSE: MTU): R315m Loss, Then a Dubai Takeover Bid

Show notes

A year ago Mantengu said a phantom short seller was the villain. Since then: a R315 million loss, an audit opinion that was qualified and then withdrawn, two JSE censures, and a Dubai-based group eyeing a back door onto the JSE.

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We first sat down with Mantengu Mining in May 2025. Back then the story had a proper villain arc. Not the company, the villain. Mantengu told the whole market it was a victim: somewhere out there, someone was rigging its share price, possibly through naked short selling, and it laid a criminal complaint to prove it.

A year later, the annual results are out. And one number quietly explains the whole saga. Three digits, with a minus sign welded to the front.

Time to pull the mask off.

Turns out the call was coming from inside the house.

Previously, on Mantengu

Mantengu is a small chrome player on the JSE, ticker MTU. In 2025, under then CEO Mike Miller, it was convinced its share price was being pushed down, and naked short selling was part of the claim. That’s when someone sells shares they haven’t actually borrowed, betting the price drops. In theory it can push a price down unfairly. In practice, proving it is like proving your neighbour is the one letting his dog into your yard. You’re sure. Good luck with the evidence.

On 8 and 9 May 2025 the company put two voluntary announcements on SENS: one about a criminal complaint over share price manipulation, and one warning of “shorting risk”. Plenty of retail investors loved it, because who doesn’t love a story where the little guy is being done dirty by faceless money men?

The referees weigh in

Here’s where it gets awkward. In May 2025 the FSCA, the market conduct regulator, said it had found no evidence to support the price manipulation allegations and would take no enforcement action. On the specific claim of naked short selling of 387,044 shares in the first week of June 2024, it concluded those trades were not uncovered short sales. It also found no reason to suspect improper conduct by the JSE or its officials. Mantengu disputed the findings, saying the investigation was too narrow.

Then the JSE weighed in, twice.

On 6 March 2026 it publicly censured Mantengu for failing to publish a cautionary announcement in June 2023, when it learned that confidential deal information had leaked. Mantengu took that to the Financial Services Tribunal. The tribunal refused to suspend the censure on 20 May 2026, and dismissed the challenge itself on 21 September 2026. That censure stands.

On 27 May 2026 the JSE censured the company again, this time over those May 2025 announcements, which it found were “speculative, unverified and unsupported” and should not have gone out on SENS. It fined Mantengu R100,000, wholly suspended for three years on condition there’s no similar breach. The JSE stressed it was not ruling on the manipulation allegations themselves. Mantengu said it was considering a tribunal reconsideration or a High Court review.

The company that said it was the victim ended up sanctioned for what it put on the noticeboard. Fights like that cost money and attention, and that tends to show up in the numbers.

Mantengu’s R315 million loss

For the year ended 28 February 2026, Mantengu reported a loss of R315.161 million. No short seller wrote that figure. The company did, in its own financial statements.

Here’s where people get it wrong. The year before, Mantengu reported a profit of R303.3 million. So it looks like a face-plant from big profit to big loss in twelve months. Except that previous profit leaned on a R350.115 million gain on bargain purchase. That’s an entry you book when you buy a business for less than the value of its bits. A paper high five. No cash walked in the door. Like telling everyone you made money because you bought a bakkie for less than it’s worth. Nice, but your bank balance didn’t move.

This year, revenue rose from R317.5 million to R393.2 million, so more chrome was sold. But gross profit collapsed from R106.4 million to R23.6 million. Sold more, kept almost none of it. Like doubling your boerewors roll sales at the school fete, then realising the meat cost more than you charged for the roll.

Add finance costs of R82.7 million, the debt quietly charging rent every month, plus a R44.4 million impairment charge, and you reach that R315 million hole. By the company’s own breakdown, the silicon carbide business Sublime accounted for about R168 million of it and the chrome operations about R115 million. And the cash at year end: R4.698 million. That’s not a war chest. That’s a tab.

Mantengu’s audit opinion: qualified, then withdrawn

When auditors are happy, they give a clean, or unqualified, opinion. When they’re not fully happy, they give a qualified one: we mostly agree, except for these bits. It’s the mechanic saying the car is fine, except they couldn’t check the brakes, and they’re a bit worried about the brakes.

In June, auditor HLB CMA gave Mantengu the qualified version. It could not get enough evidence to support the value of tailings stockpiles at Meerust, carried at about R156 million. It said tailings at Langpan needed a R84.2 million write-down, which the company did not book. And it took issue with a liability linked to the Blue Ridge shareholder loans. The board publicly and strongly disagreed on every point.

The auditor also flagged a material uncertainty related to going concern. Going concern is the assumption that a company will still be trading in twelve months. It doesn’t mean the company is finished. It means someone with a calculator and no sense of humour is worried. The board says it has no doubt about the group’s future.

Then it got stranger. On 26 August 2026 HLB withdrew its audit report altogether, saying a deferred tax asset was overstated by about R58.3 million, reported a reportable irregularity, and resigned. The board disagreed again. On 30 September HLB took back its resignation, but only to finish extra work and reissue the audit report. Until that reissued report lands, the company itself says the 2026 financial statements are unaudited. So every number above comes with that asterisk.

A full strategy rebuild

New drivers: Magen Naidoo, previously CFO, became CEO from 1 March 2026, with Langton Mpofu as CFO. Three moves to watch.

1. A new name. The company dropped Mining from its name. It’s now Mantengu Limited. When a company changes its surname, pay attention.

2. Switching off Sublime Technologies. Sublime makes silicon carbide in open arc furnaces, which need enormous amounts of electricity. Its Eskom tariff agreement expired on 31 March 2025, and the board says operating at current tariffs isn’t viable. It shut down in May 2025 and never restarted. Retrenchment consultations started on 14 May 2026.

3. Selling Blue Ridge Platinum. On 12 June 2026, Mantengu announced advanced talks to sell Blue Ridge to Afresources Mining for R50 million. That was the price for all of Blue Ridge, including the 30% minority. The deal signed on 16 July is for Mantengu’s 70% stake and claims, for R35 million cash, still subject to conditions. Afresources also lent Mantengu R35 million at prime plus 1%, to be settled from the sale proceeds. Separately, its chrome mine Langpan signed new offtake and funding agreements with HMS Bergbau Africa.

The big one: a proposed reverse takeover from Dubai

On 20 May 2026, Mantengu announced advanced negotiations with Averi Finance, which News24 describes as Dubai-based (Engineering News calls it Mauritius-regulated). In a reverse takeover, a private business climbs into a listed one to reach the market without a full new listing. The back door onto the JSE.

The indicative maths: Mantengu would issue 650 million new shares for Averi’s assets. Averi was given an implied equity value of R2 billion and Mantengu R1 billion. Existing shareholders, holding about 325 million shares, would keep 33.3% of the enlarged group. All terms are indicative and subject to due diligence. In its latest update on 21 September, Mantengu said talks were continuing and due diligence on the South African assets was progressing, with no final terms yet.

Mantengu bull case

New management with no scars from the old fight. A simpler business after selling Blue Ridge and stopping Sublime, which the company says should cut ongoing losses by about R24 million and R38 million a year respectively. A new chrome offtake and funding partner. And, if the Averi deal lands, a bigger pan-African platform with exposure to energy and infrastructure. For a company that ended the year with R4.698 million in the bank, a bigger partner could be a lifeline.

Mantengu bear case

Shareholders who held through the short seller drama would be diluted to a third of a company that would no longer be mainly what they bought. The business lost R315 million, carries a going concern warning, and its financial statements are currently unaudited after the auditor withdrew its report. Two JSE censures sit on the record. And a reverse takeover is a way for a private business to list without a fresh IPO. Is Averi the rescue, or just using a convenient listed vehicle? Only the circular and the fine print will tell.

Neither case says buy. Neither says sell.

Key numbers

Loss for the year to 28 Feb 2026: R315.2m. So what: the company’s own numbers, not a short seller’s.
Gross profit: R23.6m, down from R106.4m. So what: more sales, almost nothing kept.
Cash at year end: R4.698m. So what: a tab, not a war chest.
Existing shareholders after the proposed Averi deal: 33.3%. So what: two thirds of the enlarged group would belong to someone else.

Takeaway: We pulled the mask off, and the villain was the income statement all along.

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