Anglo American Platinum’s wholly-owned subsidiary, Rustenburg Platinum Mines has signed a sale and purchase agreement with Glencore South Africa to purchase its 39% interest in the Mototolo joint venture.
The Mototolo JV is currently operated as a 50/50 joint venture between Anglo American Platinum and a partnership between Glencore and Kagiso Tiso Holdings Proprietary.
“The acquisition of Glencore’s stake in the Mototolo JV increases Anglo American Platinum’s interest in a mechanised, low-cost, high quality resource, creating another major PGM hub for the company,” comments Anglo CEO, Chris Griffith.
“The transaction unlocks significant optionality for the company in its wholly-owned Der Brochen resource,” he adds.
The acquisition of Glencore’s interest in the Mototolo JV better positions Anglo as the majority owner of a high-quality, fully mechanised operation.
The transaction will secure significant infrastructure for Anglo, allowing for value-enhancing optionality between the Mototolo JV area and the adjacent wholly owned Der Brochen resource, creating a major PGM hub for the company.
By combining the Mototolo JV area with the down-dip and adjacent Der Brochen resource, the life-of-mine is also significantly extended from the current five year life of mine, to well in excess of a 30 year life of mine.
The consideration for the transaction comprises an upfront cash payment, which at 30 June 2018 is estimated to be R0.8 billion on a cash free basis and an additional consideration, which will be settled monthly over a six-year period and will be determined based on the Rand PGM prices over the Mototolo JV life of mine.
While the additional consideration is not yet determinable it is estimated to be R1 billion based on current spot prices.
The total purchase consideration will be capped at R22 billion.
The transaction is subject to a number of conditions precedent, including Competition Commission approval.
The effective date of the transaction is expected to be in Q4, 2018.
As at the company’s year ended 31 December 2017, the value of the net assets, excluding cash pertaining to the transaction assets, excluding cash was R0.7 billion.
The losses attributable to the transaction assets was R3 million, impacted by the temporary closure of the Mototolo concentrator.
The transaction constitutes a category two transaction for the company and, as such, shareholder approval is not required.