- Published on 24 February 2017
Northam is pleased to announce that it has entered into the following agreements:
- an agreement with Glencore Operations South Africa (Pty) Ltd (“GOSA”) to purchase the Eland Platinum mine (“Eland” or the “mine”) for a cash consideration of R175 million (“Eland transaction”); and
- a long-term chrome marketing agreement with Glencore International AG (“Glencore”) to exclusively market and sell chrome produced at Northam’s Zondereinde and Booysendal operations.
More on Eland
Eland is located on the south-eastern limit of the western limb of the Bushveld Igneous Complex. It comprises two mining rights and contains a resource estimated at 21.3 Moz 4E with an average in situ 4E grade of 4.4 g/t (source: Glencore resource and reserve statement 2016).
The mine was placed on care and maintenance in September 2015. In terms of the Eland transaction and for a purchase price of R175 million in cash, Northam will acquire all Eland’s assets, including:
- Eland’s two mining rights;
- surface and underground infrastructure including a concentrator with a nameplate capacity of 250ktpm; a chrome spiral recovery plant; a tailings storage facility with a capacity of 100 million tonnes; two decline systems equipped to 1.3km; and surface support infrastructure designed for a 250ktpm operation;
- immovable property; and
- a mining fleet in excess of 100 vehicles which includes low profile mechanised mining equipment.
The transaction includes the takeover of Eland’s environmental obligations and responsibilities. The purchase consideration will be payable on the fulfilment of all the conditions precedent. Northam will be granted access to Eland from the signature date of the agreement to the fulfilment of the conditions precedent in order to facilitate a smooth transfer of ownership. Northam will reimburse GOSA for care and maintenance costs, amounting to approximately R30 million per annum, during this period.
Commenting on the transaction today, Northam chief executive Paul Dunne said, “the Eland transaction provides Northam with a medium-term option over a large, shallow resource with fully developed, world-class surface infrastructure. Northam will also be acquiring a sizeable mining fleet, a portion of which will be utilised at the Booysendal South operation.
The chrome marketing agreement establishes a long-term relationship between Northam and Glencore, a leading global chrome trader, which will contribute to maximising Northam’s chrome revenue.”
The Eland transaction is subject to, inter alia, the following conditions precedent:
- consent being granted by the Minister of Mineral Resources in terms of section 11 of the Mineral and Petroleum Resources Development Act, No. 28 of 2002;
- Northam entering into a chrome offtake agreement with GOSA or its affiliates in respect of all chrome produced at Eland; and
- cancellation of certain existing contractual arrangements between Eland and certain third parties, subject to Northam’s satisfaction.
The Eland transaction falls below the threshold for categorisation in terms of the JSE Limited Listings Requirements and this announcement is provided for information purposes only.
24 February 2017
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