HomeNewsLonmin completes acquisition of Pandora

Lonmin completes acquisition of Pandora

Lonmin now owns 100% of Pandora.

The agreement to acquire Anglo American Platinum’s interest in Pandora was first announced on 11 November 2016 and the acquisition of Mvelaphanda’s interest was announced on 13 May 2017.

The effective date for both transactions was 1 December 2017.

The completion of the Pandora transaction unlocks significant synergies for Lonmin.

It allows Lonmin to extend mining at its Saffy Shaft without having to spend R2.6 billion of capital expenditure, of which R1.6 billion would have been required over the next four years.

It also provides significant future opportunities to develop Pandora’s potential.

Pandora mines PGMs from the UG2 and Merensky reefs underlying the Pandora mining area.

100% of the ore produced by the Pandora JV is sold to Lonmin for processing and refining.

The gross assets of the Pandora JV were R1.1 billion at 30 September 2016.

Pandora made an operating loss of R109 million in financial year 2016, of which 50% was reflected in Lonmin’s 2016 accounts.

Lonmin received a contribution of R117 million in its 2016 financial year from the ore purchase agreement, which offset the loss reported by the joint venture.

“This is an excellent strategic fit for us, which equips us with a valuable contiguous asset with long-term development potential and allows us to maintain production levels at Saffy while significantly reducing our capital expenditure requirements at this operation over the short- and medium-term,” comments Lonmin’s CEO, Ben Magara.

Feature image credit: Wikimedia