Canada-based miner Atlatsa Resources will put the Bokoni platinum mine in South Africa under care and maintenance as part of a restructuring strategy.
In this regard, Atlatsa had made an agreement for a two-phased transaction with South Africa-based platinum producer Anglo American Platinum which is its joint venture partner in the Bokoni mine project.
The terms include Anglo American Platinum agreeing to handle all costs related with the care and maintenance process of the Bokoni mine up until 31 December 2019 during phase 1.
Also included in the first phase is the South African firm agreeing to stop servicing and repayment of all current and future debt owed by Atlatsa Group until 31 December 2019.
In phase 2 of the transaction, Anglo American Platinum will buy the Central Block and Kwanda North prospecting rights from Atlatsa for ZAR300m ($23m).
Based on the implementation of the sale, Anglo American Platinum will capitalise and/or write off all debt about ZAR4.2bn ($330bn) owed to it by Atlatsa Group and Bokoni Platinum Mines Proprietary. It will be inclusive of further debt that would result throughout the care and maintenance period until 2019 end.
Atlatsa and Anglo American Platinum have agreed to retain their respective stakes of 51% and 49% in the Bokoni Mine.
Atlatsa has revealed that it has been mulling at divesting the Bokoni Mine along with Anglo American Platinum. However, they have failed to implement such an alternative for the mine along with finding of new funding partners, owing to the poor market conditions for platinum group of metals.
Atlatsa stated: “In recent months Atlatsa and Anglo American Platinum (Bokoni JV Partners), together with mine management, have continued to investigate a range of further mine re-configuration options.
“All of the options assessed demonstrate significant cash outflows in the short to medium term with material execution risk.”