Nkwe, Zijin Mining join forces to develop Garatau project
PERTH (miningweekly.com) – South Africa-focused platinum developer Nkwe Platinum has signed an agreement with China’s Zijin Mining to jointly develop the flagship Garatau project.
The ASX- and JSE-listed Nkwe said on Monday that, under the terms of the agreement, Zijin, through a wholly owned subsidiary, would invest some A$20-million in Nkwe through a placement of three-year convertible bonds.
Subject to the adjustment of certain events, the bonds would be convertible into 200-million Nkwe shares at a price of 10c a share.
In exchange, Zijin would be granted exclusive rights to participate in Nkwe’s mining projects, including a right of first refusal to finance project development and receive offtake supply. The company’s subsidiary had also appointed an executive director to the Nkwe board.
During the project financing decision period, which has been capped at 18 months, Zijin would also be granted a right of first refusal to acquire Nkwe’s black economic-empowerment partner Genorah Resources’ shares in Nkwe, as well as the mining tenements forming part of Nkwe’s portfolio.
“The strategic partnership agreement will allow Nkwe to fulfill its key goal of developing its world-class platinum-group metals (PGM) assets and, in particular, the Garatau project, and become a significant producer of PGMs,” said Nkwe MD Maredi Mphahlele.
A bankable feasibility study has estimated a capital requirement of some A$641-million to fund the development of a 3.6-million-ton-a-year operation, producing some 330 000 oz/y of platinum over an initial 17 years, at Garatau.
Nkwe previously said it hoped the project could be in production by 2015.
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