South Africa – Kazakhstan and Central African-focused miner Eurasian Natural Resources Corporation (ENRC) has sold 51 732 782 ordinary shares, constituting about 13.01% of issued share capital in platinum miner Northam Platinum, the company announced on Tuesday.
A strategic review by ENRC, found that its shares in Northam represented “a non-core asset” and it therefore resolved to dispose thereof.
The 13.1% of oversubscribed shares is being placed at a price of R48.25 per share, representing a total transaction value of about R2.5-billion.
The shares are being disposed of it through a bookbuild led by One Capital as sole bookrunner.
“We are very pleased to again see the strong institutional support for Northam in a difficult platinum market,” says Northam Platinum CEO Paul Dunne.
Meanwhile, Northam, who believes that despite the difficult operating conditions, it is well positioned for the future, and is also very pleased to see institutional support extending to its Black Economic Empowerment (BEE) transaction.
All of the institutions have expressed support for Northam’s fully funded R6.6-billion 10-year secured BEE transaction, incorporating a fully funded R4.6-billion equity capital raising.
The transaction will secure a sustainable 35.4% historically disadvantaged South African interest in Northam and simultaneously secure funding for the company’s expansion and growth plans.
MiningReview.com last year reported that the 10-year security of HDSA ownership will ensure that Northam exceeds the minimum Mining Charter equity requirements, and is well-positioned in the sector as a potential HDSA partner for further transactions.
The transaction also has the support of the Department of Mineral Resources.
In an announcement in February, Dunne said clear opportunities were emerging in the platinum sector, which Northam is exploring and progressing in terms of its strategic review process.
These opportunities could see Northam grow its production in a capital efficient manner at the lower end of the platinum industry cost curve; diversify its production assets to reduce its operating risk; and reduce, over time, its risk exposure by focusing future growth on mechanised bord-and-pillar mining methods.
Northam said that it will also continue to assess opportunities which may arise from restructuring in the sector and which fit its objective of growing down the industry cost curve.