Aquarius grabs Afarak

[] — AQUARIUS Platinum, the world’s fourth-largest primary platinum producer, said it would buy 74% of Afarak Platinum for $109.7m to build up its reserves of the precious metal and cash in on rising prices.

Spot platinum prices gained over 20% in 2010 and are expected to continue rising this year as risk aversion and low interest rates boost their allure.

Afarak’s assets comprise interests in new order prospecting rights to two properties, Hoedspruit and Kruidfontein, located on the west of South Africa’s Bushveld Igneous complex.

The company has a 100% in Hoedspruit, which contains 7.23 million 4E platinum group metal (PGM) ounces. Afarak also has the right to earn a 50% interest in Kruidfontein, which contains 45.40 million 4E PGM ounces.

Aquarius said it would pay $70.2m in cash and 6.8m Aquarius shares for Afarak. Following the deal, Aquarius will own 74% of Afarak, with the remaining 26% held by Watervale.

Aquarius also has the right to spend $15m of exploration expenditure at Kruidfontein to acquire a 50% interest in that property.