Platexco takeover clears hurdle

The long-drawn-out takeover of platinum junior Platexco (PTX-T) by South Africa’s Impala Platinum Holdings has cleared its final regulatory hurdle and is now expected to close by year-end.

In June, Impala (Implats) announced an all-cash offer of $9.50 per Platexco share, or $191 million for 20.1 million fully diluted Platexco shares.

The junior’s principal asset is its Winnaarshoek platinum group metals (PGMs) property in South Africa’s Eastern Bushveld complex, where proven and probable reserves in the Merensky and UG-2 reefs stand at 62.5 million tonnes grading 5.54 grams combined platinum-palladium-rhodium plus gold per tonne (or 11.1 million contained ounces PGMs plus gold). An additional 80 million tonnes of 6.65 grams PGMs plus gold lie in the resource category.

The takeover was unanimously approved by Platexco shareholders in July. However, the offer was conditional on a side deal whereby a wholly owned Platexco subsidiary was to lease a 1,219-ha portion of the adjacent Driekop property, owned by Rustenburg Platinum Mines, a subsidiary of Anglo American Platinum (Amplats).

The new area, subject to a 1.5% net smelter royalty payable to each of Rustenburg Trust and the Lebowa Minerals Trust, is expected to improve the economics of mining at the Winnaarshoek property.

The granting of the Driekop lease required the approval of South Africa’s minister of minerals and energy, who acts as a trustee for the Lebowa Trust. Lebowa holds mineral rights for the benefit of the inhabitants of the Lebowa region.

The minister finally granted approval in early December, paving the way for the takeover of Platexco to close by year-end.

A prefeasibility study of the Winnaarshoek property was completed in July 1999, and an ongoing feasibility study is being expanded to include the new Driekop area, which will add resources of 12 million tonnes grading 5.72 grams PGMs plus gold of Merensky material and 16.1 million tonnes of 7.27 grams PGMs plus gold of UG-2 material.

Platexco has been studying the possibility of boosting mining rates to 120,000 tonnes per month for each of the Merensky and UG-2 reefs.

Also, as part of the agreement, Implats and Rustenburg are swapping mineral rights on certain properties in South Africa. Specifically, Rustenburg will acquire the rights to Impala’s Hendriksplaats property, whereas Implats will acquire Rustenburg’s rights to the Clapham and a portion of the Forest Hill properties. Forest Hill and Clapham are contiguous to Winnaarshoek and Driekop.