Johannesburg - Northam Platinum has acquired a portion of Anglo American Platinum’s Amandelbult’s mining rights for R1 billion.
The acquisition would give Northam access to higher grade Merensky. The companies said yesterday that proceeds from the transaction would help Amplats reduce its debt and extend the economic life of mine Northam’s Zondereinde operation to beyond 30 years.
The deal is substantial for Northam as the resource comprised an area of Merensky and UG2 resources containing 16.7 million 4E ounces and bordering the west side of the Zondereinde mine.
It is in line with the company’s growth plans that have seen it invest R5.5 billion in four new projects to take advantage of rising platinum demand in the future.
The company said the resource was similar to that of the Zondereinde orebody lying to the west of the mine shaft. It noted that the company would require limited capital expenditure to access the existing Zondereinde infrastructure.
Northam’s chief executive, Paul Dunne, said the resource was of high quality, well understood and allowed the company to better leverage the existing Zondereinde infrastructure.
“The additional resource also enables Northam to continue mining higher-grade Merensky ore for a longer period, with relatively low incremental capital expenditure. Northam is confident that the transaction will add sustainable shareholder value, unlocking a large resource in a capital efficient manner,” added Dunne.
Amplats, which restructured its operations and sold its Rustenburg operations to Sibanye Gold last year, said the transaction helped flexibility for the placement of future mining infrastructure, including options for expansion plans at Amandelbult.
Amplats’ chief executive, Chris Griffith, said the transaction allowed Amplats to exit resources for value which were outside of the company’s life-of-mine plans and did not impact current mining or the future potential of Amandelbult.
“We have also secured an ancillary contiguous resource that provides us further flexibility for our future plans for the mine. The proceeds will be used to further reduce net debt and strengthen Amplats’ balance sheet,” Griffith said.
Amplats said the resource was outside its long-term life-of-mine plans and did not impact mining plans.
Amplats has about 14 000 less employees since 2011 following drastic steps taken to reign in costs including the shutting of loss making mines.
The transaction is subject to the Minister of Mineral Resources’ consent, including approval in terms of Section 102 of the Mineral and Petroleum Resources Development Act.
Rene Hochreiter, a mining analyst at NOAH Capital Markets said Northam would be the biggest winner as he believed R1bn was a bargain. “Amplats will get R1bn, but Northam will get an additional R10 per share in value. The property that they bought to the west of Zondereinde contains the high-grade Swartklip Facies of the Merensky Reef. This Merensky contains roughly 50 percent higher grade than other Merensky Reef in the Bushveld Complex.”
Northam shares gained 4.72 percent on the JSE yesterday to close at R48.30.
BUSINESS REPORT