RPM entered into a sale and purchase agreement (“SPA”) on 4 July 2018 with RBPlat’s wholly-owned subsidiary Royal Bafokeng Resources Proprietary Limited (“RBR”).

Anglo American Platinum CEO Chris Griffith said: “Anglo American Platinum has accepted an offer from Royal Bafokeng Platinum for our 33% interest in the BRPM JV, whilst retaining the BRPM JV purchase of concentrate.

“The Transaction allows RBPlat to increase its attributable resource and reserve base in BRPM, and furthers empowerment in the PGM industry with RBPlat fully owning and operating low cost, high quality assets with attractive growth optionality at Styldrift.

“The disposal of interest in the BRPM JV will allow Anglo American Platinum to focus its capital allocation into its own-managed mines and projects.”

Rationale for the Transaction

Exiting the BRPM JV allows Anglo American Platinum to focus its capital into its own-managed mines and projects rather than into non-managed operations where it holds minority interests.

Anglo American Platinum will retain its right to process 50% of the BRPM JV concentrate for the life of mine, and RBPlat will retain its termination right on the remaining 50% of BRPM JV concentrate every five years, with the earliest termination being in August 2022.

Purchase Consideration

The purchase consideration of R1.863 billion will be increased by any capital contributions RPM makes in respect of its 33% interest in the BRPM JV between signing of the SPA and completion of the Transaction, such that RPM effectively ceases contributing into the BRPM JV from the signature date of the SPA.

The upfront purchase consideration will be settled on the completion date of the Transaction (“Completion Date”) by a cash payment by RBR equivalent to the proceeds RBPlat raises through a 5% capital raise of its shares in issue (“Capital Raise”) amounting to c.R200 million at current market prices, plus any capital contributions made by RPM to the BRPM JV between signing of the SPA and the Completion Date.

Any portion of the purchase consideration remaining will be deferred and left outstanding on loan account and escalated at a rate equivalent to RBPlat’s borrowing rate plus a premium of 2%.

The deferred consideration will be paid in three equal tranches after 1.5 years, 2.5 years and 3.5 years from the Completion Date. RBPlat has the option to settle the outstanding consideration either in cash or by the issue of additional RBPlat shares to RPM at each payment date.

RBPlat can early settle any part of the deferred consideration in cash within the payment period.

The purchase consideration will be used by Anglo American Platinum for capital at its own-managed mines and projects.

Conditions Precedent

The Transaction remains subject to the fulfilment of the following conditions precedent by no later than 31 December 2018:

  • RBPlat shareholder approval;
  • RBPlat lenders approval; and
  • RBPlat implementing and completing the Capital Raise and receiving the proceeds of such capital raise.

The effective date of the Transaction is expected to be in Q3 2018.

Source: Company Press Release