Impala nibbles away at RBPlat

Impala nibbles away at RBPlat
Brendan Ryan | Tue, 08 Mar 2011 14:17
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[] -- ROYAL Bafokeng Platinum (RBPlat) has struck another deal with Impala Platinum (Implats) over ground it owns which will be mined by Implats on a royalty basis.

Implats will recover about 2.2 million ounces of platinum group metals (pgm) over a 30-year period by mining an isolated portion of the RBPlat lease termed �the boot�, which sticks out into Implats ground near the group�s new 20 shaft.

RBPlat will be paid a royalty of 17.5% of revenue earned from the area, an improvement on the 15% royalty agreed last year for Implats to mine other portions of the RBPlat lease area from its Number 6 and 8 shafts.

That agreement covered about 780,000oz of pgm to be mined only from the UG2 reef while, in terms of the latest agreement, Implats will initially mine the higher-grade Merensky Reef until 2023 before switching over to UG2 as the Merensky reserves are depleted.

Implats has repeatedly made it clear it has far greater ambitions for its relationship with RBPlat.

Implats last year made a bid to take over the entire Bafokeng Rasimone Platinum Mine Joint Venture (BRPM) ahead its listing on the JSE as RBPlat.

The offer was accepted by Royal Bafokeng Holdings (RBH - the business arm of the Royal Bafokeng Nation) but vetoed by Anglo Platinum (AngloPlat) in terms of its joint venture agreement with RBH over BRPM.

RBH is the largest shareholder in both RBPlat and Implats and, according to RBH CEO Niall Carroll , �given our significant shareholding in Implats and the contiguity of BRPM to the Impala lease area, there was clear logic for a combination of these two assets and a consolidatin of RBH�s equity interests into one platinum producer.�

Implats CEO David Brown indicated to Miningmx on February 17 that his group was still keen on doing a deal over RBPlat.

He said: �AngloPlat had the right to veto the deal and I have to respect their decision. But that�s not the end of it, because that veto right will expire and then who knows what might happen.�

RBPlat CEO Steve Phiri played this down when questioned at a presentation to financial media and analysts in Johannesburg on Tuesday.

Phiri said: �David Brown has not spoken to me about this, and there�s nothing on the table. I believe RBPlat could be a catalyst for consolidation in the region and I am always open to deals that make sense.�

RBPlat increased production by 7% to 288,100oz of pgm in 2010 during the first year it had full operational control of the mine.

While the mine increased tonnage milled by 12%, the results were offset by a 5% drop in the head grade of ore mined because of lower in situ underground grades and the impact of an increased number of potholes encountered by the mining operations.

RBPlat is pushing ahead with the R11.8bn expansion project to build the Styldrift mine, expected to ramp up to full production between 2015 and 2018.

RBPlat has to fund R7.9bn of this capital cost, which it intends doing through a mixture of cash from operations (50%), equity (22%) and debt (28%).

On the current funding plan, the company will not pay a dividend until 2017 and may come back to the market in 2014 to raise another R700m in equity to complete Styldrift.