Pan African Resources reached an agreement with Samancor Chrome’s subsidiary TC Smelters for the assignment of a tailings treatment agreement (TTA) to TC Smelters for its wholly-owned subsidiary Phoenix Platinum Mining.
Phoenix Platinum is situated on the IFMSA property and a portion of the feedstock for the Phoenix operation was obtained from IFMSA’s processing activities.
The agreement follows almost a year after the company informed shareholders that International Ferro Metals announced that as a result of the deteriorating business conditions its South African subsidiary, IFMSA had entered into a business rescue on 27 August 2015.
Phoenix also sourced electricity, water and certain other services from IFMSA and the relationship between Phoenix and IFMSA was governed by a TTA entered into by Pan African, Phoenix and IFMSA.
Although Phoenix was not solely reliant on material from IFMSA, the business rescue proceedings created a number of uncertainties and operating difficulties for Phoenix.
In terms of the business rescue proceedings, Samancor Chrome was selected as the successful bidder to acquire the business and assets of IFMSA.
This agreement allows the assignment of the TTA to TC Smelters to clarify a number of the provisions contained in the TTA which will become effective at the same time as the International Ferro Metals South Africa (IFMSA) and TC Smelters sale of business agreement.
Even though the agreement does not guarantee current arising feedstock to Phoenix, however this will be dependent on the manner in which TC Smelters utilises the IFMSA assets, it places Phoenix in a position where it will continue operations under similar conditions as those that existed prior to the business rescue proceedings.
It also ensures that Phoenix’s operations and interests are safeguarded.