Northam acquires contiguous additional resources at Zondereinde Mine from Anglo American Platinum Limited

  1. INTRODUCTION

    Northam is pleased to announce that it has entered into agreements with Rustenburg Platinum Mines Limited (“RPM”), a wholly owned subsidiary of Anglo American Platinum Limited, on 10 October 2016, whereby Northam will:

    • acquire a portion of the Amandelbult mining right contiguous with the north western boundary of Northam’s Zondereinde mine, including all of RPM’s rights and obligations thereto (“Acquired Resource”), for a cash consideration of R1 billion;
    • acquire a portion of the Elandsfontein 386 KQ farm overlying part of the Acquired Resource, in exchange for a portion of the Zondereinde mining right, located on the north western corner of the Zondereinde mining right including all of Northam’s rights and obligations thereto (“Sold Resource”), (collectively the “Transaction”).

    Paul Dunne, Northam’s Chief Executive Officer, said “the Transaction adds flexibility and optionality to the mining operations at Zondereinde. The Acquired Resource is of high quality, is well understood by Northam and allows us to better leverage the existing Zondereinde infrastructure. The additional resource also enables Northam to continue mining higher grade Merensky ore for a longer period, with relatively low incremental capital expenditure. Northam is confident that the Transaction will add sustainable shareholder value, unlocking a large resource in a capital efficient manner. The Transaction positions Zondereinde on a similar long-term footing as our Booysendal operation.”

  2. BACKGROUND INFORMATION

    Acquired Resource

    The Acquired Resource is contiguous with the north western boundary of Zondereinde. Its resource characteristics and properties are similar to those of the Zondereinde orebody lying to the west of Zondereinde mine shaft. A short lead time and limited capital expenditure is required to access the Acquired Resource from Zondereinde’s existing infrastructure.

    It extends on dip from approximately 1 400 metres below surface, corresponding to the Zondereinde 3 level, to the deepest extent of planned mining on 18 level. Laterally, it extends for approximately 3.6 kilometres.

    Sold Resource

    The Sold Resource is located in the north western corner of the Zondereinde mining right. This area has never been mined and did not form part of the Zondereinde life of mine (LOM) plan, as it is above the minimum depth required for effective use of hydro-powered mining equipment.

  3. RATIONALE

    The acquisition of the Acquired Resource provides Northam with numerous benefits, such as it:

    • Extends the Zondereinde economic LOM to beyond 30 years.
    • Provides extensive mining flexibility associated with a high quality resource that is well understood by Northam.
    • Provides early access to additional higher grade Merensky and UG2 reef on 10 and ultimately 16 mining levels.
    • Reduces the overall average mining depth of the Zondereinde mine, with associated potential savings.
    • Provides long-term optionality and reduces Zondereinde’s operational risk profile.
  4. CONDITIONS PRECEDENT

    The Transaction is subject to, inter alia, the consent by the Minister of Mineral Resources in terms of section 102 of the Mineral and Petroleum Resources Development Act, No. 28 of 2002.

  5. CATEGORISATION

    The Transaction falls below the threshold for categorisation in terms of the JSE Limited Listings Requirements and is provided for information purposes only.

Johannesburg
11 October 2016

Corporate Advisor, Sponsor and Debt Sponsor
One Capital

Attorneys
Cliffe Dekker Hofmeyr Inc.