JOHANNESBURG (miningweekly.com) − Platinum miner Aquarius has agreed to pay Northam Platinum R1,2-billion to acquire mineral rights on farms adjacent to the Everest mine, on the eastern limb of the Bushveld complex, potentially adding 22 years to the mine’s life.

Aquarius, which is listed on the ASX, LSE and JSE, said on Wednesday that it had entered into a binding sale of rights agreement with Northam and its subsidiaries.

Shares in Aquarius jumped 9% to a high of R40 apiece in Johannesburg, and rose 8% to 364,10p in London. JSE-listed Northam gained as much as 3% to trade at R44,85 a share before falling to R44,40 a share.

The platinum-group metals (PGM) and associated base-metals rights acquired comprise several farms referred to as Booysendal South, which contained about 31,1-million ounces of PGM resources, after geological losses, and would increase Aquarius’ current resource base by 24%.

Aquarius CEO Stuart Murray said that the acquisition could extend Everest’s life-of-mine from eight years to 30 years.

“This acquisition enables Aquarius to exploit these PGM resources using existing infrastructure, much in the way we transformed both Kroondal and Marikana through the pool and share deals with our partners. I expect a capital efficient expansion will ensue at Everest and the transaction would be highly accretive to the mine’s value,” he added.

Aquarius business development executive Gavin Mackay told Mining Weekly Online that in the last three months, the company had undertaken two transactions, which included the farms adjacent to the Everest mine, increasing its resource base by 50%.

Last month, the world’s fourth-largest platinum producer indicated it would buy Afarak Platinum for $109,7-million, following certain approvals.

“We have secured a mine life extension at Everest and are focused on the extending the life-of-mine for other operations,” he said.

Meanwhile, Northam Platinum said the deal with Aquarius would bring the Booysendal project, specifically the Booysendal North upper group two (UG2) mine, into production on schedule by early 2013.

CE Glyn Lewis said the transaction would permit Northam to realise value from Booysendal much earlier than would otherwise have been the case.

“The proceeds of the transaction will be applied to the Booysendal North UG2 mine, which is currently under construction.

“The amount of R1,2 billion, plus cash of R650-million derived from the acquisition of Mvelaphanda Resources, funds on hand and future earnings, would contribute significantly to bringing the Booysendal North UG2 mine into production expeditiously, thereby reducing the operating risk attaching to the company’s single operating asset, while adding some 60% to current metal.”

However, the closing of the transaction is subject to conditions, including the amendment of the Everest converted mining right to include Booysendal South and the Booysendal converted mining right to exclude it and other regulatory approvals.

Should these conditions not be fulfilled within 24 months, the agreement would terminate.

Mackay said Aquarius was confident that all conditions would be met.

Meanwhile, Aquarius would assist Northam with access to infrastructural services, such as power, water, road access and tailings disposal facilities, from the Everest property, which could expedite the development of phase two of Northam’s Booysendal expansion.

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