[miningmx.com] – AQUARIUS Platinum’s ambitions of extending the
resources of its Everest mine seem set to founder after the company said its efforts
to secure approval from the South African government for the deal had failed.
Aquarius Platinum has until April 30 to win approval for a transaction in which it would
buy the Booysendal South property from Northam Platinum. The deal carried a value
of $135m and required the support of the mineral resources department (DMR).
“Despite our significant efforts with the DMR, we have no visibility as to what their
position is or whether or not the approval will be granted,” said Jean Nel, CEO of
Aquarius Platinum in an e-mailed response to questions posed by Miningmx. “We will
put out an appropriate release as soon as is practical,” he added.
Aquarius Platinum said in its third quarter production results published today that it
remained in contact with Northam Platinum and the DMR. “In the absence of the
necessary approval being granted on or before 30 April 2013, the agreement will
lapse,” the company said.
Northam Platinum declined to comment. It is understood, however, that it expects to
hear from Aquarius Platinum following the former’s board meeting. It was possible
that the transaction could be extended.
Analysts, however, believe the failure of the deal was not a disaster for Aquarius
Platinum which, on the evidence of its third quarter results, is showing signs of a
recovery following adoption of an owner-operator model on its mines.
In fact, delaying the deal might be in Aquarius Platinum’s favour as it would be able to
renegotiate the terms and timing of the deal, especially as the company also faces the
prospect of funding a R2.79bn ($300m) convertible bond (although in theory that could
also be rolled over for a further four year period).
In its present form, it was likely Aquarius Platinum would have to turn to a capital
raising exercise as it would not be able to fund the transaction from cash flows. An
adjustment in timing would assist the company’s recovery.
Booysendal South lies adjacent to Aquarius Platinum’s Everest mine and contains an
estimated 31 million ounces of platinum group metals in both UG2 and Merensky reef
formations. Incredibly, the deal was first announced nearly two years ago, on May 4
2011, in which time government approval has been pending.
“I don’t know of any mining company that has received a Section 11 (change in
ownership) from the DMR in the last two years,” one mining industry source said.
