Anglo American Platinum confirms the completion of all conditions precedent in relation to the sale (as announced on 15 February 2017) of its 85% interest in Union Mine and its 50.1% interest in MASA Chrome Company Proprietary Limited by its wholly owned subsidiary Rustenburg Platinum Mines Limited to a subsidiary of Siyanda Resources Proprietary Limited (“Siyanda”) (“the Transaction”). The effective date of completion will be 1 February 2018, when Siyanda will take over ownership, control and management of these operations.

Disposal Proceeds

The upfront disposal proceeds of R400 million will be received in the form of cash on 1 February 2018 and used to reduce net debt and further strengthen Anglo American Platinum’s balance sheet.

In addition, a deferred consideration based on 35% of cumulative positive distributable free cash flow will be paid annually as an earn-out for a period of ten years from the effective date of the Transaction. The maximum cap on the deferred consideration is R6 billion. Anglo American Platinum has no obligation to contribute towards any negative cash flow that may be generated by the assets post the disposal.

Purchase and Toll Treatment of Concentrate

Siyanda will sell concentrate produced by Union Mine to Anglo American Platinum for a period of seven years from the effective date of the Transaction where after Anglo American Platinum will toll treat concentrate for the remaining life of Union Mine, both on pre-agreed commercial terms.

For further detail, please refer to the announcement released on 15 February 2017.

Chris Griffith, CEO of Anglo American Platinum commented on the Transaction:

“In addition to the sales of Pandora and Rustenburg, with the completion of Union, Anglo American Platinum has executed a core part of its strategy of repositioning the portfolio. This Transaction will allow us to focus on our most competitive assets, which are largely open-pit and mechanised operations which will result in higher margin production, a smaller and more highly skilled workforce, safer operations and a less complex organisation. Our core operations will benefit from dedicated management attention, technical expertise as well as enabling us to focus our capital allocation.”

Lindani Mthwa, Group Chairman of Siyanda Resources commented on the transaction:

“The Union Mine and Masa Chrome operations are quality assets which have long-term potential under Siyanda’s ownership and management. Siyanda’s management team has extensive mining experience including experience at Union Mine. This Transaction is mutually beneficial for all parties involved and, through our partnership with the Bakgatla-Ba-Kgafela and our employees, we believe that we will create a sustainable future for the operation.”