Northam Platinum acquires stake in Royal Bafokeng for ~$1.1 billion
(Kitco News) - South African platinum group metals (PGM) producer Northam Platinum today announced its acquisition of a 32.8% interest in another local PGM producer Royal Bafokeng Platinum (RBPlat) for R17.0 billion (~$1.1 billion), representing R180.50 per RBPlat share.
In addition, the company said that a call and put option arrangement has been entered into with Royal Bafokeng whereby Northam may increase its interest in RBPlat to 33.3% in aggregate.
Moreover, Northam added that RBH will further endeavour to procure that one of its wholly owned subsidiaries enters into an agreement with Northam whereby Northam could increase its interest in RBPlat up to 34.9%, pursuant to an additional call and put option arrangement.
"The transaction is aligned with Northam's operational diversification strategy and will result in Northam acquiring a significant and strategically beneficial interest in RBPlat, providing direct exposure to RBPlat's proven mining operations and well-understood shallow ore bodies, of which a significant portion is mechanized," the company said in a statement.
In addition, the company pointed out that this transaction will provide a strategic platform for Northam to pursue a possible combination of Northam and RBPlat's business operations in the medium-term, should Northam wish to pursue such opportunity.
"Northam is of the view that there is a compelling and complementary synergistic fit between the business operations of Northam and RBPlat and that a potential combination of the business operations will create and unlock significant value for shareholders of both companies," Northam noted in a press-release.
Importantly, Northam said that the RBPlat assets are young, shallow and well capitalised and occupy a strategically important position in the Western Bushveld.
By Vladimir BasovFor Kitco News
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