[miningmx.com] – EFFORTS by Aquarius Platinum to ease pressure on its balance sheet and grow the business has been dealt a blow by the South African government which failed to provide approvals ahead of a $37m (R410m) asset sale.
The R5bn company said in an announcement today that a proposal to sell its Blue Ridge and Sheba’s Ridge platinum prospects to a consortium lead by China National Arts & Crafts Corporation had been extended on nine occasions to allow for approvals.
These included South Africa Competition Commission approval and a number of Department of Mineral Resources (DMR) regulatory approvals. The deal, first announced on January 30 was earmarked for completion on June 30.
“As at 14 October 2014 certain South African regulatory approvals had regrettably not yet been granted,” Aquarius Platinum said in its announcement.
On 14 October 2014 Aquarius had been advised by the consortium that it had decided not to again extend the outside date, as a result of which, the agreement terminated on 14 October 2014,” it added.
An agreement to sell the Krudfontein asset to Pallinghurst Resources, at a value of $27m, was not part of the Blue Ridge and Sheba’s Ridge transaction, and had already received a Section 11 change of control permit by the DMR.
A portion of the proceeds from the asset sales would have been channeled towards helping finance three projects of which the largest was the $70m expansion of Aquarius’ Mimosa platinum mine in Zimbabwe by 70,000 PGM ounces.
On August 7, Aquarius posted a net loss of $13m – a vast improvement on the $288m loss of the previous financial year but it was a performance Aquarius CEO, Jean Nel, said had “irritated” him as the figures remained in the red.
Since taking the reins of Aquarius, Nel has closed loss-making mines and cut debt of some $165.7m following a $226m rights offer which increased the company’s cash balance to $137m as of the close of the 2014 financial year.
The astonishing aspect of the failure to close the sale of Blue Ridge and Sheba’s Ridge is that it is South African red tape that is its cause despite the perception that China’s authorities are notoriously slow at providing approvals.
Blue Ridge, situated near Groblersdal on the eastern limb of the Bushveld Complex consisted of two decline shafts which at full capacity were expected to mine 120,000 tonnes a month of ore over a projected economic life of 18 years.
The project was expected to produce at a rate of 150,000 ounces a year of platinum group metals (PGM), while sister deposit, Sheba’s Ridge contained 1.4 million tonnes (mt) of nickel, 19 million ounces of PGM and 0.5mt of copper.
