Amplats said yesterday that its subsidiary Rustenburg Platinum Mines (RPM) entered into a sale and purchase agreement (SPA) on July 4 with RBPlat’s wholly-owned subsidiary Royal Bafokeng Resources (RBR).
RBPlat is a subsidiary of Royal Bafokeng Holdings and it manages commercial assets for the Bafokeng tribe.
Amplats chief executive Chris Griffith said Amplats had accepted an offer from Royal Bafokeng Platinum for its 33percent interest in the BRPM JV, while retaining the BRPM JV purchase of concentrate.
“The transaction allows RBPlat to increase its attributable resource and reserve base in BRPM, and furthers empowerment in the platinum group metals industry with RBPlat fully owning and operating low-cost, high-quality assets with attractive growth optionality at Styldrift,” Griffith said.
The group said the transaction remained subject to the fulfilment of certain conditions including RBPlat shareholder and lenders approval as well as RBPlat implementing and completing the capital raise and receiving the proceeds of such capital raise. The effective date of the transaction is expected to be in the third quarter of 2018.
“The disposal of interest in the BRPM JV will allow Anglo American Platinum to focus its capital allocation into its own-managed mines and projects,” Griffith said.
BRPM JV produces 180 000 ounces of platinum output a year.
Amplats said exiting the BRPM JV allowed it to focus its capital into its own-managed mines and projects rather than into non-managed operations where it holds minority interests.
However, Anglo American Platinum will retain its right to process 50percent of the BRPM JV concentrate for the life of mine, and RBPlat will retain its termination right on the remaining 50percent of BRPM JV concentrate every five years, with the earliest termination being in August 2022.
The group said the purchase consideration of R1.86bn would be increased by any capital contributions RPM makes in respect of its 33percent interest in the BRPM JV between signing of the SPA and completion of the transaction, such that RPM effectively ceases contributing into the BRPM JV from the signature date of the SPA.
The upfront purchase consideration will be settled on the completion date of the transaction by a cash payment by RBR equivalent to the proceeds RBPlat raises through a 5percent capital raise of its shares in issue amounting to R200million at current market prices, plus any capital contributions made by RPM to the BRPM JV between signing of the SPA and the completion date.
The group said any portion of the purchase consideration remaining would be deferred and left outstanding on loan account and escalated at a rate equivalent to RBPlat’s borrowing rate plus a premium of 2percent.
The deferred consideration will be paid in three equal tranches.