Implats won't take up majority ownership of Waterberg Development Project
JOHANNESBURG – Impala Platinum (Implats) said on Wednesday that it had elected not to take up majority ownership of the Waterberg Development Project because of concerns over the impact of the Covid-19 crisis on the global economic outlook and the long-term platinum demand fundamentals.
Implats, which finalised the definitive feasibility study into the project last year, said that the Covid-19 compelled the board to re-evaluate the impact of the heightened global economic uncertainty on its strategy and risk appetite in the short, medium and long term.
Implats also cited the long-term demand outlook for Platinum Group Metals (PGM) and the schedule and production ramp-up profile for its decision to opt-out of owning a majority stake of the project.
“The board of Implats has elected not to exercise the current option arrangement to acquire up to 50.1 percent from the joint venture partners. Implats will, however, retain its 15 percent ownership in the project,” said the company.
In 2017, Implats bought a 15 percent stake in the Waterberg project from Canada’s Platinum Group Metals, with the option to acquire a 50.1 percent stake in the low-cost and shallow palladium rich asset.
A decision to increase Implats’ stake in the project was expected to be a significant step in the full development of the project.
Implats said yesterday that the original investment decision was informed by Implats’ stated strategy to rebalance its portfolio of mining assets towards lower risk, shallow and mechanisable ore bodies.
“The final decision to increase participation in the project was always dependent on the outcomes of the definitive feasibility study,” it said.
Implats, however, reiterated its support for the project saying it intended to remain an active participant in the project at its current 15 percent shareholding, including funding its share of costs depending on future implementation decisions taken by all the joint venture partners.
The group confirmed that its rights relating to the concentrate off-take from the project remained unchanged and affirmed its commitment to continue negotiations with the joint venture partners.
“Costs associated with further study and optimisation work to de-risk the project implementation programme will continue to be funded by Implats, up to a maximum of R55 million as previously announced, with planned studies expected to be complete by mid-August 2020,” said Implats.
Platinum Group Metals holds a 50.2 percent interest in the Waterberg Project. The Vancouver-based group said on Tuesday that under the joint venture agreements Implats had 90 days after the grant of a mining right to decide on their option.
It also said that it had recently received interest in the project from other parties.
“These discussions will continue while the call-period programme and mining right application work are ongoing,” it said.
Implats shares rose 2.04 percent to close at R116.50 on the JSE on Wednesday.