JOHANNESBURG (www.miningweekly.com) – Australian platinum exploration company International Goldfields (IGC) has finalised its terms for the proposed merger with emerging platinum producer Nkwe Platinum.

In 2008, Nkwe Platinum signed an option for the exclusive rights to negotiate a transaction with IGC to acquire its South African platinum assets or shares.

Under the terms of the IGC proposal, Nkwe would offer to buy all IGC ordinary shares on the basis of IGC’s cash in the bank, at the time of the implementation of the scheme, as well as a valuation of IGC’s interest in the Tubatse project, located in the platinum-rich Bushveld Complex in South Africa.

The agreement would be valued at about A$60-million, IGC said in a statement to the Australian bourse.

However, the final offer price would be determined by the total number of shares in issue at the time the scheme was implemented.

The targeted completion date of the agreement was March 31.

IGC executive chairperson Tony Sage stated that the company was united with Nkwe in the belief that a consolidation ownership structure needed to occur, as the Tubatse project developed towards a significant production asset.

“That being said, we are also very strong in our belief that our own shareholders should be rewarded for the current value of their holdings,” he added.

“We believe the terms that we have proposed to Nkwe are reflective of this, and will ultimately be supported by the Nkwe board.”

Nkwe recently exercised an option to acquire a 59% interest in the Tubatse project, and the option agreement with IGC would provide the company with an increased participation of 74%. Black-empowerment company Genorah Resources held the remaining 26% interest in the project.

The platinum explorer also held a 74% working interest in the two farms directly adjacent to the Tubatse project, and has a stated goal of becoming a platinum producer with its joint-venture partner Xstrata.

Nkwe hoped to produce one-million ounces a year of platinum group metals.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.