JOHANNESBURG - JSE- AND AIM-listed coloured-gemstone producer Gemfields was selling its minority stake in Sedibelo Platinum Mine (SPM) in the North West province, the group reported on Friday.
Gemfields said on Friday that it had invited bidders for its 23.65 percent equity holding in Pallinghurst Ivy Lane Capital incorporated in Luxembourg. Ivy Lane owns 27.64 percent of SPM, giving Gemfields an effective and indirect interest of roughly 6.54 percent in the mine.
“Interested parties should contact Liberum Capital Limited, who have been appointed by Gemfields to manage the sale,” said Gemfields. The proposed sale comes after the company previously told the market that SPM was a non-core asset and it was seeking an orderly disposal process for the asset.
SPM is an unlisted company incorporated in Guernsey in the English Channel. SPM owns and operates the Pilanesberg Platinum Mines in the North West and was expected to list on one or more of the world’s platinum stock market when market conditions are appropriate. In addition to Gemfields, SPM’s biggest shareholders are the Bakgatla-Ba-Kgafela Tribe and the Industrial Development Corporation.
In its financial year ended December 2019, SPM, which is chaired by well known financier, Arne Frandsen, sold 127 000 4E (element) ounces comprising platinum, palladium, rhodium and gold and generated around $13 million (R201.37m) in earnings, before interest, taxation, depreciation and amortisation.
Gemfields, whose operations are focused on mining gemstones at Mozambique’s Montepuez Ruby Mining and the Kagem operation in Zambia as well as Fabergé, said a review of its shareholding in SPM had resulted in a fair value write-down of $12.5m to $45m during the six months ended June. Gemfields went into the red during these six months after auctions were halted due to travel restrictions to prevent the spread of the Covid-19 pandemic.
In 2019, Gemfields’ six auctions accounted for 93 percent of total group revenue $200m out of some $216m, however, the auction schedule was severely effected by the several travel, quarantine and congregating restrictions put in place to mitigate Covid-19 contagion.
BUSINESS REPORT