Aquarius Platinum, which jointly owns Zimbabwe’s Mimosa Mine in Zvishavane, has accepted a cash offer for its entire issued capital from Sibanye Gold, the two companies said today.
The Bermuda registered Aquarius’ primary assets are its stakes in the Kroondal platinum mine and Platinum Mile, a re-treatment facility near Rusterburg in South Africa, as well as Mimosa, a 50:50 joint venture with Impala Platinum.
In July the miner said that it was reviewing the viability of all of its mines following the fall in platinum prices which stood at $922 an ounce from the $1 006/oz Aquarius received in the fourth quarter of its financial year.
Sibanye’s offer is for $0.195 (R2.66) per share, valuing Aquarius at $294 million and represents a 56 percent premium on Aquarius’ closing share price of R1.70 yesterday.
“We are extremely pleased to have received the full support of the Aquarius board for this Transaction, following extensive due diligence and negotiations,” said Sibanye chief executive, Neal Froneman.
The acquisition of Aquarius follows Sibanye’s recent purchase of Anglo American Platinum’s Rustenburg operations and provides an entry point for the miner into Zimbabwe, which hosts the second largest platinum reserves in the world after South Africa.
Froneman said Mimosa represents significant “low cost optionality” while the whole transaction is “highly complementary with the Rustenburg acquisition.”
“The board of directors of Aquarius has unanimously recommended that Aquarius shareholders vote in favour of the Offer at the Aquarius Special General Meeting, which is yet to be scheduled. The Aquarius board intends to vote in favour of the Offer with respect to their own beneficial holdings,” said Sibanye in a statement.
Sibanye is the largest individual producer of gold from South Africa and is one of the world’s 10 largest gold producers, producing 49 432kg in 2014.
The acquisitions of Anglo American’s Rustenburg platinum operations and that of Aquarius gives it a foothold in the platinum group metals and diversity in its portfolio.
“The acquisition of Aquarius is consistent with Sibanye’s strategy to secure value accretive, cash flow enhancing opportunities, which support its dividend strategy,” the company said.
It noted that despite a seven percent year-on-year drop in PGM prices, Aquarius reported cash of $196 million for in the full-year to June.
Net cash flow from operations approximated $18 million for the year with an additional $20 million dividend from Mimosa.
Mimosa’s revenue for the full-year to June rose five percent to $272 million and delivered all time record production of over 236 000oz of platinum group metals (4E).
Aquarius said it was in the process of obtaining the necessary regulatory approvals, including from the South African and Zimbabwean Competition Authorities and the South African Reserve Bank.-The Source
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