Eastplats on Wednesday announced that it plans to sell its South African subsidiary Barplats Mines, which holds the Crocodile River mine, to the Chinese company Hebei Zhongheng Tianda Platinum (HZT) for $50-million – payable in cash.
Both parties have entered into a definitive agreement and the transaction will remain subject to certain conditions including regulatory approvals.
The acquisition will be carried out in a manner compliant with South Africa’s mining laws, and environmental and socio-economic requirements. Upon closing, HZT will assume operating responsibility for the Crocodile River mine and ownership of Barplats Mines.
[quote]However, Eastplats will continue to maintain ownership of its Eastern Limb projects, which include the Mareesburg, Spitzkop and Kennedy’s Vale projects.
David Cohen, President and CEO of Eastplats, says they are pleased that HZT’s plans to inject foreign capital and the creation of much needed jobs will stimulate socio-economic development in areas surrounding the Crocodile River mine.
“We will retain our large and shallow eastern limb PGM project base. While the PGM sector remains under pressure, closing the transaction will leave Eastplats extremely well capitalised,” says Cohen.
The company’s financial advisor, Paradigm Capital Inc., has delivered a positive opinion to the company’s board of directors as to the fairness of the transaction from a financial point of view to Eastplats. The transaction is expected to close within six months.
HZT has reassured Eastplats that it is not connected with Hebei Zhongbo Platinum, the company which had a previous arrangement to acquire all of Eastplats’ South African assets. The transaction was unexecuted resulting from shareholder disputes within Hebei Zhongbo Platinum.