Implats Signs Strategic Partnership Agreement
IMPALA PLATINUM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1957/001979/06)
Share code: IMP & ISIN: ZAE000083648
ADR code: IMPUY & LSE share code: IPLA
AFRICAN PLATINUM PLC
(Incorporated in the United Kingdom)
(Registration number 4422435)
LSE Share code: APP & ISIN: GB0031664823
IMPLATS SIGNS STRATEGIC PARTNERSHIP AGREEMENT WITH AFPLATS TO PARTICIPATE IN
THE GREATER LEEUWKOP PROJECT
Impala Platinum Holdings Limited (Implats) and African Platinum plc (Afplats)
have signed a binding Transaction Framework Agreement (TFA), in terms of
which Implats will acquire 29.9% of Afplats` South African assets.
The TFA details the basis on which Implats will subscribe for this equity and
assist Afplats in developing these assets. Implats will be granted certain
rights / protections commensurate with its investment. A definitive
agreement is currently being drafted with the aim to have concluded the
transaction in the first quarter of 2007, subject to all required
regulatory approvals being granted, thereby allowing immediate development
of the Leeuwkop Project to commence.
Under the terms of the TFA, Afplats will transfer its South African
subsidiaries, Afplats (SA), Imbasa Platinum and Inkosi Platinum into Newco,
a newly formed South African incorporated company held 100% by Afplats.
Implats will subscribe for an effective 29.9% of Newco for a consideration
of ZAR 1.068 billion and will have an option, subject to Afplats
shareholder approval which will be sought in early 2007, to convert its
shareholding in Newco into Afplats equity in the future should Implats so
The subscription money acquired from this transaction will be used to fund
Afplats` ZAR 1 billion commitment to the Leeuwkop Project in terms of the
recently signed agreement with their Black Economic Empowerment partners,
the Bakwena Ba-Mogopa Traditional Community.
The cash injected from the proposed transaction will provide funding for the
first two and a half years of the project`s development. This will allow
the remaining project funding to be secured at a lower cost once the
project has been significantly de-risked and mining has commenced.
Implats` technical expertise at the operational level will ensure that the
project is successfully and timeously developed in accordance with the
Bankable Feasibility Study parameters.
Leeuwkop is located on the western limb of the Bushveld Complex in the North
West province of South Africa near the town of Brits. Both the Merensky and
the UG2 Reefs are found on the property, but the initial focus of the new
mine will be the UG2 Reef. In respect of the UG2 Reef only, resources
total 60.2 million ounces (4E). The initial project, which focuses on the
Leeuwkop property contains reserves of 6.9 million ounces (4E), which are
included in the above resources.
The initial life of mine is forecast at 20 years at an underground production
rate of 3 million run-of-mine tonnes a year at a head grade of 3.95 g/t.
The underground mine will be accessed via a twin vertical shaft system and
mining operations will be fully mechanised. At full production, which is
forecast to be achieved during 2010, the mine will produce in the region of
300,000 ounces (4E) in concentrate per annum. Concentrate will be
transported to Impala Platinum`s Mineral Processes in Rustenburg in terms
of the previously signed 10 year offtake agreement with Impala Refining
Total development capital expenditure is estimated, in today`s money, to be
ZAR 2.3 billion of which R1 billion is sourced from the Implats capital
Implats is one of the world`s largest producers of PGMs, and expects to
produce in excess of 2 million ounces of platinum this year. The company
has operations in South Africa and Zimbabwe and exploration projects in
South Africa, Zimbabwe, North America and Madagascar. Implats employs close
on 31,500 people. The company is listed on the JSE and the LSE and trades
as a sponsored level 1 ADR in the United States.
Afplats is an exploration and development business focused on the platinum
group metals trading on the Alternative Investment Market of the London
Stock Exchange (ticker symbol APP). Afplats has three South African
subsidiary companies, Afplats (Pty) Ltd, Imbasa Platinum (Pty) Ltd and
Inkosi Platinum (Pty) Ltd. The company`s primary asset is Afplats (Pty)
Ltd, the entity which holds the prospecting permit to the Leeuwkop Project
on the western limb of South Africa`s Bushveld Complex.
For further information, please contact
David Brown Roy Pitchford
+27 11 731 9042 +27 11 467 1858
Brenda Berlin Russell Lamming
+27 11 731 9023 +27 (11) 467 1858
11 December 2006
Date: 11/12/2006 09:00:01 Produced by the JSE SENS Department.