HomeNewsNortham acquires Everest from Aquarius

Northam acquires Everest from Aquarius

Platinum-group metals producer Aquarius Platinum South Africa (AQPSA) has entered into an agreement to sell its entire interest in the Everest mine, in Mpumalanga, to Northam Platinum for a cash purchase of R450-million.  

The transaction includes the sale of the mine’s related mining and processing infrastructure, including the concentrator plant and the chrome plant, as well as all of the moveable and immovable property. news_239195_0

Everest mine, which is located adjacent to Northam’s Booysendal resource, was placed on care-and-maintenance by AQPSA in June 2012 in light of the market conditions prevailing at that time.

The disposal transaction will require Northam to pay AQPSA R400-million on June 26, 2015 to acquire the concentrator plant and other mining assets of the Everest mine.

This payment is conditional on approval of the Competition Commission and the Bakone Ba Phetla Communal Property Association agreeing to cancel the existing lease of its immovable property to AQPSA and entering into a new written lease with Northam by June 23, 2015.

The transaction will further require Northam will pay AQPSA R50-million to acquire the Everest mining right and all the obligations of AQPSA in respect of that right.

This payment is conditional on the conditions to the first part of the sale being fulfilled and the Minister of Mineral Resources granting consent to the transfer of the Everest mining right to Northam in terms of section 11 of the Mineral and Petroleum Resources Development Act within three years of the signing of the sale agreement.

Should the ministerial consent not be obtained in time the first part of the disposal will not be unwound.

Northam will assume responsibility for carrying out the care and maintenance services and providing contract mining services at the Everest Mine during the period between the date of grant of the competition approval and the date of ministerial consent.

Aquarius Platinum CEO Jean Nel noted that the sale presents a valuable opportunity to a broad range of stakeholders.

“For AQP, the proceeds from the disposal will be used to increase AQP’s net cash and to strengthen the balance sheet in a somewhat challenging market, and is in line with our stated objective of focussing on our core operations at Kroondal and Mimosa and associated projects. And, at the same time, the potential re-starting of the mine is expected to bring benefits to local communities, both directly in terms of job creation and corporate social investment, and indirectly through the associated benefits of economic activity in the region,” he said in a statement.

He added that, in reaching its decision to sell Everest, AQP considered the capital that would be required to restart mining at Everest on a stand-alone basis, the potential for AQP to combine Everest with other operations in the area, the metal prices that would be required to deliver an appropriate risk-adjusted return to invest the capital and alternative investment propositions available to AQP.

Northam CEO Paul Dunne says the consolidation of Everest provides an excellent platform for Northam to develop the Booysendal Central and Booysendal South orebodies, market conditions permitting. These assets are an ideal geographical and operational fit for Northam’s Booysendal Division. Northam is confident that this transaction will add significant shareholder value, unlocking a resource of approximately 60 Moz of platinum-group metal ounces in an extremely capital efficient manner.