Booysendal moves ahead

Booysendal strike length increased; key ancillary assets, services secured

Mvelaphanda Resources Limited (Mvela Resources), and Northam Platinum Limited (Northam) today announced amended terms and key developments marking progress on the various aspects of the ‘Booysendal transaction’ with Anglo Platinum Limited (Anglo Platinum) originally announced in September 2007.

Mvela Resources, Anglo Platinum and Northam (the parties) have agreed to increase the extent of the Booysendal project area by 1.3 kilometres along strike into the southern part of Anglo Platinum’s Der Brochen project area (the Booysendal Extension) and have reached agreement on Northam’s purchase consideration for 100% of Booysendal (including the Booysendal Extension) from Mvela Resources being reduced to 121 million new Northam shares from 125 million new Northam shares.

The amendments were agreed by the parties following an independent due diligence commissioned by Northam, which defined an inferred resource for Booysendal of 94 million oz 4PGE (4PGE: platinum, palladium, rhodium and gold), compared with the 112 million oz 4PGE on which the original transaction agreement was based. The independent study assumed a higher geological loss in the southern area than before, due to the relatively shallow presence of basement rocks that have affected the structure and mineralization of the Merensky and UG2 reefs, possibly contributing to more challenging mining conditions in certain areas.

The Booysendal Extension contains approximately 9 million oz 4PGE, resulting in a revised total resource for Booysendal of approximately 103 million oz 4PGE.

Northam CEO, Glyn Lewis, said today, “The inclusion of the Booysendal Extension into the project area adds some 1.3km of strike to the project area, taking the total strike length to 14.5km. Having completed detailed work on the orebody, we now have an increased level of confidence in our planning for the project.”

Agreement in principle has also been reached on key assets and services which add further certainty to the sustainability of the project, comprising:

  • Electrical power;
  • Water;
  • Sites for slimes dams; and
  • Access to Booysendal;

Commenting on the developments made Mvela Resources CEO Pine Pienaar said today, “Securing the ancillary assets and services; power, water, access and slimes dam sites, was crucial for the sustainability and economic viability of Booysendal. Having agreed on these essential items, we will be able to move steadily towards concluding the transaction and bringing Booysendal to account.”

In respect of electrical power, Anglo Platinum has supported an arrangement in terms of which Booysendal will have temporary use of 16MVA of excess transformer capacity from transformers at the Mototolo platinum mine (a joint venture between Anglo Platinum and Xstrata), until the commissioning of Booyendal’s own transformers or the first quarter of 2011, whichever is the earlier.

Seven megalitres of water a day from the existing Lebalelo water scheme have been allocated to Booysendal – sufficient until after commissioning and initial production, after which water supplies will be augmented from the De Hoop dam, due for completion in 2013. The Lebalelo pipeline, which currently ends at Motololo, will be extended to Booysendal.

Studies to identify suitable sites for tailings dams will be commissioned over the Booysendal and Der Brochen areas. Anglo Platinum will grant traversing rights over Der Brochen to Booysendal.

Commenting on today’s announcement and the progress made with the transaction, Northam and Mvela Resources chairman Lazarus Zim said today, “In negotiating this transaction we said from the outset that our goal was a win-win outcome for all parties. When we initially announced the transaction we had a certain level of knowledge at our disposal and, having now further evaluated the Booysendal property and having undertaken the appropriate due diligence steps that are necessary to create greater certainty, sustainability and success, we have further refined this transaction. We are now at a stage where we can move on to the next step – closure of the transaction and the feasibility study – so that we can fast-track this project into production. Give the current circumstances in the market and the continued PGM supply shortfalls, Northam is fully committed to delivering this project as expeditiously as possible.”

Contacts:
For Mvela Resources

James Wellsted
+27 11 325 5323
+27 83 453 4014

For Northam Platinum

Marion Brower
+27 11 880 3924
+27 82 895 0698