27 August 2008
Black empowered mining group Mvelaphanda Resources has secured funding from Nedbank Capital to increase its stake in Northam Platinum from 22% to 63%, in a R4-billion deal that will create the fourth-largest platinum producer in the world.
According to a Nedbank statement last week, the transaction will be done through directly acquiring Anglo Platinum’s 22% stake in Northam Platinum, as well as through the vending-in of a 100% stake in Booysendal – 50% of which was acquired from Anglo Platinum – to Northam Platinum.
Mvelaphanda Resources chairman Lazarus Zim said the company was excited by the prospect of becoming a world-class platinum mining business, which will rank behind Anglo Platinum, Impala Platinum and Lonmin, in terms of platinum group metals (PGM) resources.
He said that the company was particularly positive about the acquisition of a stake in Booysendal, which still has a life of mine in excess of 100 years. This is as opposed to Northam Platinum, which was only left with a life of mine of 17 years.
“Prospects of our continuing presence in the PGM space looks decidedly positive,” said Zim. “This acquisition will strengthen our position both in the western and eastern limbs of the Bushveld where the PGM ore body is mostly found.”
A first for platinum
According to Zim, the acquisition of Booysendal by Northam was a landmark event, creating the first fully integrated, black-controlled platinum mining entity.
“This deal reinforces what we envisaged when Mvelaphanda Resources and Afripalm Resources joined forces in 2007, which is to become a pre-eminent black controlled mining house and principal consolidator of key opportunities,” he said.
“As we promised at the time, we will continue to unlock value in our operations, diversify our portfolio and achieve a better balance between the existing components of diamonds, gold and platinum as well as pursuing other interests in other commodities.”
Nedbank Capital acted as sole arranger and underwriter, as well as advisor to the deal, providing funding of R2.5-billion, with the balance being financed from Mvelaphanda’s own cash resources.
Nedbank Capital MD Brian Kennedy said the bank was proud to have structured a deal that would help create an extremely significant BEE player in the platinum mining arena.
“This is a continuation of our relationship with Mvelaphanda Resources after Nedbank Capital was involved in financing Afripalm Resources in the acquisition of its stake in Mvelaphanda Resources in 2007,” he said.
“This deal marks a historic occasion in the BEE mining space, and we feel honoured to have acted as advisors to the parties involved.”
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