London, England — 18 December 2012 – Aquarius Platinum has agreed to the sale of 51% of the 211,000ozpa Mimosa mine for US $550 million, a transaction that sees the JSE and UK-listed firm comply with Zimbabwe’s indigenisation laws.
Miningmx reports that the transaction structure allows for 51% in Mimosa Investment Holdings, a 50:50 joint venture with Impala Platinum, to be sold to a combination of government, a local community, and mine employees.
Although not stated, it’s thought that the structure of the deal will provide a model for the completion of Impala’s indigenisation obligations.
Mimosa has been among the most profitable of contributors to Aquarius’ bottom line over the years. In the 2012 financial year (ended-June), it was the only profitable mine in the group with attributable gross profit of US$52 million. The mine has total attributable mineral reserves of 1.66M oz.
In terms of the transaction, payment for the stake in Mimosa Investment Holdings will be vendor-financed in which the buyers would pay for the shares over 10-years by agreeing to waiver 90% of the company dividend flow. An interest rate of 9% would be applied.
“Although the negotiations have taken some time, the final plan represents a significant milestone for Aquarius and Mimosa as we work towards full compliance with the law and regulations in Zimbabwe,” said Aquarius Platinum CEO Jean Nel.
Given a total fair value of US$1.09 billion, Nel said the valuation was “a true reflection of the worth of our investment in Mimosa Investments” which he billed “… a valuable asset and one of the lowest cost producers in the PGM sector globally.”
Zimbabwe minister of youth development, indigenisation and empowerment Saviour Kasukuwere, who steadfastly demanded that control of the asset be yielded to his government, said negotiations had been “cordial and frank.”
“I am pleased to say that Mimosa Investment’s indigenisation plan reflects the spirit and letter of Zimbabwean law and signals that we welcome Aquarius as an investor to Zimbabwe,” Kasukuwere added.
Said Implats CEO, Terence Goodlace, in his company’s announcement: “We are very glad to have reached agreement with the government of Zimbabwe to further realise our ambition to be a good corporate citizen and create a sustainable platinum mining company which can attract the kind of investment needed to deliver profits and prosperity for the people of Zimbabwe, our employees, the local community and all other stakeholders.”
Source: Miningmx. For more information, click here.