Platinum Group Metals (Platinum Group), listed on the TSX and NYSE American, has announced that it has entered into a term sheet to sell Maseve Investments 11 Proprietary Limited (Maseve) to Royal Bafokeng Platinum Limited (RBPlat). The transaction is valued at approximately US$74,0 million, with US$62,0 million payable in cash and US$12,0 million in RBPlat common shares. The cash proceeds of the sale will be used to repay debt.
Maseve is the operating and holding company for the Maseve mine, located on the Western Limb of the Bushveld Complex near Rustenburg. Platinum Group owns an indirect 82,9 % equity interest in Maseve.
The processing plant at Maseve (photo: Platinum Group).
R. Michael Jones, President and CEO of PTM, stated, “The sale of Maseve will allow Platinum Group to settle a substantial portion of its outstanding debt and focus on the advancement of its large-scale Waterberg project. We do believe we have settled upon terms which will benefit both companies and all stakeholders. RBPlat owns and operates the adjoining Bafokeng Rasimone Platinum Mine and is the logical buyer for the Maseve mine.
“The future integration of the Maseve mine into RBPlat's operations is expected to bring benefits to local communities, both directly in terms of job creation and corporate social investment, and indirectly through the associated benefits of economic activity in the region.”
In reaching its decision to sell the mine, Platinum Group says it considered the capital required to implement a revised mine plan, the metal prices required to deliver an appropriate risk-adjusted return to investment of further capital and the alternative investment or use of capital propositions available to the company.
As reported by Platinum Group in a news release dated July 17, 2017, active mining had been suspended at Maseve. Lender and investor support for further investment at Maseve in restructuring a more conventional mining format was subsequently not available.
Platinum Group believes that its resources are better utilised advancing the bulk mineable, large-scale project at Waterberg, which it says represents a significant shift in South African platinum mining away from narrow reef underground mining. The recent rising palladium price is also a significant factor as it is the dominant metal at Waterberg.
