Impala Platinum Holdings Ltd. inked definitive deals with Platinum Group Metals Ltd., JOGMEC, Mnombo Wethu Consultants (Pty.) Ltd. and Waterberg JV Resources Pty. Ltd. to acquire up to a 50.01% stake in the Waterberg platinum project in South Africa.
Implats will immediately acquire a 15.0% interest in the project for a total of US$30.0 million, comprising Platinum Group's 8.6% interest for US$17.2 million and JOGMEC's 6.4% stake for US$12.8 million.
Implats will also acquire a right of first refusal to enter into an off-take agreement, on commercial arms-length terms, for the smelting and refining of mineral products from the project. JOGMEC will retain certain metal marketing rights to final metal related to the project.
Meanwhile, Implats agreed to contribute an estimated US$1.5 million for its 15.0% pro rata share of definitive feasibility costs.
Following the ongoing feasibility study on the project, Implats will have the option for 90 days to review the study and elect to exercise an option to increase its interest to up to 50.01% and assume control of the property.
Implats will have another 90 days to confirm the salient terms of development and mining financing for Waterberg, including a signed financing term sheet.
Implats will purchase an additional 12.195% equity interest from JOGMEC for US$34.8 million and make a firm commitment to spend US$130.0 million in development work if it elects to increase the project stake.
Platinum Group secured approval from Sprott Resource Lending Partnership and Liberty Metals & Mining Holdings LLC, among other lenders, for the transaction. Sprott also agreed to provide the company up to a US$5.0 million bridge loan until the closing of the initial purchase.
Cash-strapped Platinum Group noted Oct. 16 that it will use the proceeds from the recently announced sale of the Maseve mine to Royal Bafokeng Platinum Ltd., as well as from the sale of Waterberg project, to repay debt. Implats' participation in Waterberg will also materially reduce the capital commitment, the company added.
Macquarie Capital and BMO Capital Markets are acting as financial advisers to Platinum Group with regard to the Waterberg transaction.