Media releases

Mvela acquires 50% JV interest in Booysendal - Confirms intent to consolidate platinum interests in Northam

12 February 2004

SENS announcement: Acquisition by Mvela Resources of a 50% joint venture interest in the Booysendal Platinum Project and consolidation of this interest into Northam (PDF - 80KB)

Mvelaphanda Resources Limited (Mvela) and Northam Platinum Limited (Northam) announced today that agreement has been reached on Northam’s acquisition of Mvela’s Khumama interest in the Booysendal Platinum Project.

This follows Mvela having acquired the entire issued share capital of and loan accounts against Khumama Platinum (Proprietary) Limited (“Khumama”) for a total consideration of R313 million, comprising a combination of cash and new Mvela ordinary shares.

The shares issued by Mvela will be subject to a lock-in period of five years, with Mvela having the pre-emptive right to take these up after this period, and a voting pool agreement.

Mvela Director Mark Willcox said today “The purchase of Khumama not only brings access to a world class PGM resource, but also significantly enhances the direct and beneficial broad based empowerment ownership in Mvela.”

With the Khumama transaction Paseka Ncholo, Nomazizi Mtsotshisa and Robinson Ramaite, currently directors of Khumama, will join the Mvela board.

Booysendal is a well explored area on the Eastern Limb of the Bushveld Complex, and is underlain by the Merensky and UG2 reef horizons. Measured, indicated and inferred resources on the UG2 horizon total some 76.8 Moz with 38.4Moz attributable to Khumama. The resource base on the Merensky Reef horizon measures 47.6 Moz, with 23.8 Moz being attributable to Khumama.

The consideration payable by Northam for the JV right (or the Khumama interest) will be a combination of cash, Northam deferred ordinary shares and new Northam ordinary shares. The total consideration is estimated at R460.3 million. This consideration is equivalent to R11.99 (US$1.74 at an exchange rate of R6.90 per US$) per UG2 oz attributable to Khumama and R7.38 (US$1.07 at an exchange rate of R6.90 per US$) per combined ounce on the Merensky and UG2 horizons, attributable to Khumama.

This transaction will significantly enhance Northam’s empowerment status with a BEE equity participation of approximately 34%.

Commenting on the transaction, Mvela director Mark Willcox said today that this was the first phase in Mvela’s stated strategy of consolidating its platinum interests and creating a world class black-owned and operated PGM company. “With Northam’s proven track record and expertise in mining and smelting, its ungeared balance sheet and improved production profile, Northam is an obvious choice to develop the Khumama asset.”

Mvela director Bernard van Rooyen added that Mvela was continuing to explore ways of bringing its other platinum projects, including the Dwaalkop JV with Southern Era into Northam. We will be keeping shareholders informed of progress.”

Northam general manager Glyn Lewis said “Over the past couple of years Northam has proved its operational robustness. With this transaction, Mvela has brought to the party an expansion opportunity which will significantly increase our resource base, and will provide Northam with the opportunity of diversifying its asset base. This will stand us in good stead as we continue to focus on reducing costs.”

Queries:

For Mvela:
Mark Willcox: Tel: +27 82 823 6666
Bernard van Rooyen: Tel: +27 82 659 1421

For Northam:
Derek Wolstenholme: Tel: +27 82 655 3413
Marion Brower: Tel: +27 82 895 0698

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