Black-controlled platinum mining company Royal Bafokeng Platinum (RBPlat) has entered into a $74-million term sheet transaction with Platinum Group Metals (PTM) to acquire the concentrator plant and surface assets of the Maseve mine, including power and water.

Both companies announced the two-stage deal last week in separate releases.

The Maseve platinum mine borders RBPlat’s Styldrift I project, with both on the western limb of the Bushveld Complex, near Rustenburg.

JSE-listed RBPlat, headed by CEO Steve Phiri, said in a Stock Exchange News Service announcement that the agreement afforded it immediate access to an operational concentrator plant to treat Styldrift I ore as well as the strategic flexibility to potentially extend the life-of-mine of the South Shaft Merensky operations.

Moreover, it has the potential to accelerate the date on which Styldrift I ore can be treated, and reduces both the capital outlays and the technical risk associated with the construction of a new plant.

Further, the share transaction provides RBPlat with early access to its Frischgewaagd orebody at Styldrift.

Payment to Maseve Investments will be made up of $62-million in cash and $12-million in RBPlat shares.

PTM plans to focus on its Waterberg project, a palladium-dominant development asset that hosts most of the company’s mineral reserves and resources.

The Canada-listed company said in a release to Creamer Media’s Mining Weekly that the cash proceeds of the sale would be used to repay debt.

PTM RSA currently holds 82.9% of the ordinary shares in Maseve, with the balance of 17.1% held by Africa Wide Mineral Prospecting & Exploration, which must dispose of its 17.1% shareholding to RBPlat.

The net asset value of Maseve is given as R3.63-billion, with the mine incurring an operating loss of R6.23-million in the 12 months to July 31.

Maseve’s operations consist of two shaft decline systems, which are designed to mine both the Merensky and upper group two reefs, a concentrator plant, a tailings storage facility and associated mining assets.

RBPlat must pay Maseve $58-million in cash to acquire the concentrator plant and surface assets of the mine, including power and water allocation.

Maseve will retain ownership of the mining rights, power and water rights, as well as certain surface rights and improvements.

The payment Maseve receives will be remitted to PTM RSA in partial settlement of loans.

RBPlat will be granted a management contract for the Maseve mine for carrying out care-and-maintenance services during the period between the date of grant of the competition approval and the date of Ministerial consent.

RBPlat, as owner and operator of the adjoining Bafokeng Rasimone Platinum Mine, is seen by PTM president and CEO Michael Jones as being the logical Maseve buyer.

He said that the future integration of Maseve into RBPlat’s operations would likely bring benefits to local communities, through job creation and corporate social investment.