JOHANNESBURG (miningweekly.com) – TSX-listed Platinum Group Metals (PTM) has completed the sale of its Maseve concentrator plant, near Rustenburg, in South Africa’s North West province, as well as the sale of certain surface rights to Royal Bafokeng Platinum (RBPlat).
PTM and RBPlat in November 2017 executed definitive agreements for a two-step transaction valued at about $74-million.
Conditions precedent to Step One were fulfilled on February 14, after which a deposit amount in escrow of R41.37-million (about $3.5-million) was released to PTM on March 14.
The final Step One payment of R646.72-million (about $54.5-million) was received by PTM, coincident with the registration of the applicable surface rights to a wholly-owned subsidiary of RBPlat.
PTM plans to use about $46.98-million from the final Step One payment to repay all remaining indebtedness under a facility with the Sprott Resource Lending Partnership, which encompasses the outstanding principal amount of $40-million, a bridge loan of $5-million and all accrued and unpaid interest and fees due of about $1.98-million.
It is also in the process of paying $7.52-million from the final payment to reduce outstanding indebtedness and to pay fees due under a second secured loan facility with Liberty Metals & Mining (LMM).
Following this payment, about $44.45-million in principal, accrued interest and accrued production payments will remain due to LMM.
The company is also required to pay LMM a production payment termination fee (PPTF) of $15-million before May 11, or $25-million, should the fee be paid thereafter. The LMM facility matures on September 30.
All payments to LMM are first applied to the PPTF.
Meanwhile, as reported in February, and as agreed with Sprott and LMM, PTM must raise $20-million in subordinated debt and/or equity within 30 days of the Sprott facility being repaid.
In addition, the company must also complete a second required raise of $20-million in subordinated debt and/or equity before July 31.
Proceeds from these capital raises will first be applied to remaining amounts payable for the PPTF and then to repay remaining amounts due pursuant to the LMM facility.
Voluntary repayments to LMM in excess of the first required $20-million repayment will be applicable to reduce the second required $20-million repayment. The company’s share of proceeds receivable for Step Two of the Maseve sale transaction are to be applied towards repayment of amounts owing to LMM.
During Step Two of the sales transaction, RBPlat is set to acquire 100% of the shares in Maseve, the holding company of the Maseve mine, and all shareholder loans owed by Maseve, for an aggregate consideration of about $16-million, of which about $855 000 is payable to a minority shareholder of Maseve.
The parties continue to work together to fulfil the remaining conditions precedent to the completion of Step Two, which includes the Department of Mineral Resources’ approval for the transaction under Section 11 of the Mineral and Petroleum Resources Development Act.
This is expected to occur in the weeks ahead.