JOHANNESBURG (miningweekly.com) – The world’s leading platinum producer Anglo Platinum, which has been pursuing a black economic-empowerment (BEE) transaction with Pelawan and Anooraq for the Lebowa platinum mine, announced a downscaled deal and mining plan on Thursday, which the participants indicated was in greater alignment with the prevailing difficulties in the market.

Anglo Platinum, Anooraq and Pelawan reported that they had renegotiated the transaction consideration from R3,6-billion to R2,6-billion, with Anglo Platinum also agreeing to reinvest a portion of the consideration.

Under the initial terms announced in 2007, Pelawan, Anooraq’s controlling shareholder, and Anooraq were to acquire an effective 51% of the Lebowa platinum mine, together with an additional 1% controlling interest in the joint-venture projects known as Ga-Phasha, Boikgantsho, and Kwanda projects.

However, the companies said on Thursday that, given the recent deterioration of global economic conditions and the weakening of platinum group metal (PGM) prices it became necessary to pursue new commercial terms for the transaction.

A complete review of the Lebowa long-term plan and project pipeline was undertaken and the commercial terms for the transaction were also reviewed.

As a result, a new mining plan had been agreed to reflect new forecasts for production of platinum ounces in concentrate of 150 000 oz/y by 2012 – a decrease from the previous 200 000 oz/y, on the back of a deferral of the Middelpunt Hill UG2 capital expansion project.

The capital expenditure on this project was estimated to be around R3,2-billion, over a four-year period.

Under the new terms, Anooraq wholly-owned subsidiary Plateau Resources has agreed to credit-approved financing terms with Standard Chartered Bank to raise R750-million of senior debt funding in terms of the Standard Chartered debt facility, of which R500-million would be immediately available for drawdown and the balance would be applied to allow an interest and capital repayment holiday during the first three years, while the Lebowa mine completed its initial ramp up stage to 2012.

Anooraq would apply R300-million of the Standard Chartered debt facility in part settlement of the transaction consideration. The balance of the funding received by Plateau from this facility would be used to settle Anooraq’s transaction costs and repay its existing bridging loan outstanding to Anglo Platinum.

The remainder of the transaction consideration would comprise a fixed and variable component, which would see Plateau raise R1,2-billion through the issue of cumulative redeemable shares to Rustenburg Platinum Mines (RPM), a wholly-owned subsidiary of Anglo Platinum, as well as raising a further R1,1-billion through the issue of cumulative convertible shares to the Pelawan Finance special-purpose vehicle.

In order to ensure the sustainability of Anooraq and the Lebowa holding company (Holdco), Anglo Platinum will make two further facilities available to Plateau, which would include an operating cash flow shortfall facility of up to R750-million, which Plateau may use to fund its share of any operating cash flow shortfall that may arise in Lebowa Holdco for the first three years post closing of the transaction.

Anglo Platinum would also provide a standby loan facility up to a maximum of 29/49 of RPM’s attributable share of the free cash flows from Lebowa Holdco, which Plateau may use to settle any cash flow shortfall that may arise in funding any accrued or capitalised interest and scheduled capital payments on the Standard Chartered debt facility not funded by Plateau’s attributable share of free cash flows from Lebowa Holdco, for the term of the Standard Chartered debt facility.

Anglo Platinum has further agreed to provide about R150-million to facilitate the participation of communities and Lebowa employees in the transaction.

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