Anglo American Platinum (AAP) confirms the completion of the sale of its 50% interest in the Kroondal Joint Venture (which comprises the Kroondal pool-and-share agreement (PSA) and the Marikana PSA) to Sibanye-Stillwater Limited (“Sibanye-Stillwater”), the other 50% owner of the PSAs.
Anglo American Platinum CEO, Craig Miller said: “The sale of our interest in Kroondal to Sibanye-Stillwater represents a positive step towards simplifying Anglo American Platinum’s portfolio. We have expedited the effective date to allow us to focus our attention and resources on maximising the value from our core assets.”
Overview of the sale transaction
Under the terms of the sale agreements entered on 31 January 2022, Kroondal’s infrastructure has been used to mine through the boundary into Sibanye-Stillwater’s adjacent Rustenburg operations resource for the benefit of the PSA parties. This enabled Anglo American Platinum to generate cash flows from its 50% share of the remaining economic reserve of Kroondal earlier and at a lower cost of production (after optimising the mine plan to extract the resource from both the Kroondal and Rustenburg mining right areas), unlocking greater value for all parties. This material was processed by the Company under the pre-existing Kroondal purchase of concentrate terms. The disposal will be effective after the delivery of the full 1.35 million 4E ounces, which is expected to be in the second quarter of 2024. Anglo American Platinum will sell its 50% interest in the PSAs, transferring all assets and liabilities (including all closure costs and rehabilitation liabilities) to Sibanye-Stillwater for a consideration of R1. In addition, should the remaining unmined Merensky mineralisation (which is not declared as a Mineral Reserve) be mined in future, the Company will earn a deferred compensation on a Rand per tonne mined (the rate will be dependent on metal prices at that time).
Deferred purchase price
Having received the mandatory regulatory approvals, including those from the Competition Commission and the Minerals and Petroleum Resources Development Act Section 11 ministerial consent to transfer the mining right, the parties agreed that the effective date of the disposal will be the 1st of November 2023 by waiving the last remaining condition precedent which was the delivery of 1.35million 4E ounces. To maintain the economic intent of the original terms of the agreement, Sibanye-Stillwater will pay AAP an agreed percentage of the cash flows generated by Kroondal until the delivery of the 1.35 million 4E ounces is achieved.
Processing of concentrate
The Company will continue to process the concentrate produced from Kroondal under the pre-existing purchase of concentrate agreement until the delivery of the full 1.35 million 4E ounces, after which the concentrate will be processed under the toll-and-purchase agreement that was concluded with Sibanye-Stillwater as part of the Rustenburg transaction (refer to Anglo American Platinum announcements dated 9 September 2015 and 1 November 2016).
E Viljoen
Company Secretary
Johannesburg
1 November 2023
Sponsor:
Merrill Lynch South Africa (Pty) Ltd t/a BofA Securities