RBPlat has entered into a gold streaming agreement through its wholly-owned subsidiary, Royal Bafokeng Resources, with Triple Flag Mining Finance Bermuda.
In terms of this agreement, the RBPlat will receive an upfront cash prepayment of US$145 million in exchange for the future delivery of gold from the RBPlat mining operations, payable over the life of mine.
RBPlat will deliver 70% of its payable gold production to Triple Flag until 261,000 ounces are delivered under the Stream, and 42% of payable gold production thereafter.
For every ounce delivered as part of the Stream, Triple Flag will pay 5% of the spot gold price to RBPlat.
Gold production represents a small portion of RBPlat’s revenue and the stream will allow RBPlat to monetise a portion of this gold production at a time when the Rand gold price is at a high, compared to prices over the past decade.
Further, and reflective of the long-term partnership envisaged as part of the Stream, Triple Flag has undertaken to complement the current bursary scheme administered by RBPlat with a fully-funded scholarship program to support undergraduates from families of employees and doorstep
The scholarship will support the graduation of more than 50 young engineers, geologists and other technical professions over the life of the Stream, through a US$100,000 per annum investment by Triple Flag, starting in the upcoming 2020 academic year.
This scholarship is a reflection of RBPlat’s and Triple Flag’s support for host communities.
Steve Phiri, CEO of RBPlat, comments:
“This long-term streaming agreement represents a significant commitment of international capital in RBPlat and signals confidence in our business.
This provides RBPlat with a liquidity injection which will strengthen its balance sheet and free up cash in support of the company’s strategy of meeting its obligations to RPM as they fall due, delivering high quality growth, UG2 mining flexibility, reduced finance costs and underpinning the prospects of paying of dividends in the future as and when approved by the board.”
Hanré Rossouw, CFO of RBPlat, adds:
“This agreement, which is accretive both in terms of value and earnings per share, further optimises the company’s balance sheet and enables us to settle in cash the outstanding deferred consideration for the purchase of Anglo American Platinum’s 33% stake in the BRPM Joint Venture.