New independent black-controlled PGMs investment opportunity heads for the JSE
RBPlat holds a 67 percent interest in the Bafokeng Rasimone Platinum Mine (“BRPM”), a joint venture established in 2002 between RBPlat’s wholly-owned subsidiary, Royal Bafokeng Resources (Proprietary) Ltd and Rustenburg Platinum Mines Limited, a wholly owned subsidiary of Anglo Platinum Limited (“Anglo Platinum”). RBPlat has been the operator of BRPM since 4 January 2010.
“The investment case for RBPlat is compelling,” says CEO Steve Phiri. “Fundamental demand for PGMs remains robust, with RBPlat presenting to the market a well-established, shallow Merensky producer on the Western Limb of the Bushveld Igneous Complex (“Bushveld Complex”), with substantial opportunities for growth. RBPlat intends optimising operations at the Boschkoppie mine, which produced some 270,000 ounces of PGMs (4E)1 in 2009, and bringing the R11.8 billion Styldrift project into production by 2017.”
“RBPlat has an experienced and focused board and management team in place, is well funded and is positioned to grow organically and through consolidation opportunities as they arise. Its primary shareholders, RBH and Anglo Platinum are committed to ensuring its success as a vehicle for sustainable wealth creation.”
1 Platinum, palladium, rhodium and gold
For further enquiries, please contact:
Royal Bafokeng Platinum (Proprietary) Limited
Lindiwe Montshiwagae, Investor Relations Manager
Tel: +27 (0)11 530 8056
Mobile: +27 (0)82 920 7803
Russell and Associates
Charmane Russell +27 (0)11 880 3924 / +27 (0)82 372 5816
Nicola Taylor +27 (0)11 880 3924 / +27 (0)82 927 8957
NOTES TO EDITORS:
- Royal Bafokeng Platinum (Proprietary) Limited (the “Company” or “RBPlat”) is an independently operated and managed, black-controlled mid-tier platinum group metal (“PGM”) producer whose current mining operations and planned expansion prospects are based in the Bushveld Igneous Complex (the “Bushveld Complex”) in the North West Province, South Africa, the largest source of PGMs in the world.
- The Company’s key asset is a 67 percent controlling stake in a joint venture between the Company and Anglo Platinum Limited (“Anglo Platinum”), the world’s largest platinum producer, at the Bafokeng Rasimone Platinum Mine (“BRPM”). Operational control of BRPM was transferred to RBPlat on 4 January 2010.
- The Company has the benefit of entrenched broad-based black economic empowerment (“BEE”) ownership by the Royal Bafokeng Nation (through its wholly owned investment vehicle Royal Bafokeng Holdings (Proprietary) Limited (“RBH”)). These BEE credentials have ensured that all of the BRPM joint venture’s mining and prospecting rights have been converted to “new order” rights as required under South African law.
- BRPM is an established 73 million ounce resource producing 270,000 4E PGM ounces per year in concentrate, which provide the Company with strong margins through a high-grade ore and a low cost curve position.
- BRPM is a productive underground mine currently operating at a depth of less than 500 metres, accessed by two decline shafts. This mine, previously known as the Rasimone Mine (solely operated by AngloPlat) produced its first concentrate from the Boschkoppie property in 1999 and is producing, at steady state, approximately 200,000 tonnes of milled ore per month, yielding approximately 180,000 platinum ounces in concentrate per annum.
- The total BRPM Merensky Reef and UG2 mineral reserve estimate (proved and probable) amounts to 18.6 million ounces at an average grade of 4.13 grams per tonne of platinum, palladium, rhodium and gold (together known as the “4E” elements).
- The Company is developing a brownfield project on the neighbouring Styldrift farm, which is contiguous to the Boschkoppie mine, involving a new mine development sunk to a depth of 740 metres. This development is expected to increase the Company’s production to 430,000 tonnes per month of milled ore yielding up to 420,000 platinum ounces in concentrate per annum. The Styldrift 1 project development has an expected nominal capital cost of R11.8 billion (of which R9.4 billion is for mining infrastructure and R2.4 billion is for expansion of the concentrator) and is expected to achieve steady state production by 2017.
- BRPM concentrate is currently produced at a concentrator situated on the BRPM joint venture property, and operated by Royal Bafokeng Platinum Management Services (Proprietary) Limited (“RBPlat MS”), a wholly owned subsidiary of the Company, which has been contributed to the BRPM joint venture for the life of the joint venture by Anglo Platinum. The Company has long-term offtake arrangements with Anglo Platinum for the Company’s share of concentrate. The concentrator’s capacity will be increased by approximately 2.8 million tonnes per annum at a cost of approximately R2.4 billion to accommodate the additional production from the Styldrift 1 project.
- For the year ended 31 December 2009, the Company reported revenues of R1,155 million and EBITDA of R330 million, with an EBITDA margin of 28.6 percent. For the six months ended 30 June 2010, the Company’s revenue was R988 million and its EBITDA was R441 million, with an EBITDA margin of 44.6 percent. The Company operates with low gearing and, as at 30 June 2010, it had debt of R114.7 million and R182.1 million in cash.
- As of July 2010, BRPM, through Bafokeng Rasimone Management Services (Proprietary) Limited (“BRMS”) employed approximately 3,000 permanent employees and approximately 4,500 contractors.
- The PGM sector has strong supply and demand fundamentals that are showing signs of recovery
- The BRPM joint venture has significant shallow, high grade and well known reserves and resources
- BRPM and future expansion and replacement projects are situated in the largest PGM enriched zone in the world
- Established producer with a track record of strong margin production with opportunity to reduce unit costs
- The Company is well positioned, with significant growth potential within its existing operations and in the surrounding area
- The Company has a focused management team and dedicated workforce with extensive experience in the platinum mining industry
- The support and expertise of Anglo Platinum as a joint venture partner and RBH as a major shareholder
- Steve (Stephen) Ditshebo Phiri joined the Group as Chief Executive Officer for RBPlat and its associated platinum interests in April 2010. Up until March 2010, he was the CEO of Merafe Resources Limited, a ferrochrome producer listed on the JSE and has previously headed up the Royal Bafokeng Nation’s corporate and legal affairs, which included negotiations with entities such as Merafe and Impala Platinum Limited. He is admitted as an attorney of the High Court of South Africa. Mr. Phiri holds a B.Juris degree from Vista University, an LLB from the University of the North, a Diploma in Corporate Law from Rand Afrikaans University, and an LLM from the University of Johannesburg.
- Nico (Nicolaas) Johannes Muller is the Chief Operating Officer of RBPlat. Mr. Muller has extensive experience in underground diamond, gold and platinum mining and has successfully implemented two major new underground mines from design stage through to full production. He is a qualified mining engineer with a Bachelor of Science Degree in Mining Engineering and has held various senior managerial positions at De Beers Consolidated Mines, Anglovaal Holdings Limited and African Rainbow Minerals Limited.
- Martin (Marthinus) Johannes Lourens Prinsloo joined RBPlat as Chief Financial Officer in March 2009, having previously acted in the capacity of joint Executive Head: Finance (CFO) on the Executive Committee of Anglo Platinum for 17 months, ending in November 2008. Mr. Prinsloo previously worked for Industrial Development Corporation of S.A. Limited, BoE Merchant Bank (director – Specialised Finance) and more recently as Head of Corporate Finance and Business Development for Anglo Platinum. Mr. Prinsloo holds a Bachelor of Commerce (Honours Accounting) degree and is a registered chartered accountant.
- Kgomotso Ditsebe Moroka is a businesswoman and veteran advocate practicing at the Johannesburg bar since 1989. Adv. Moroka has chaired M-Net’s Phuthuma Trust empowerment scheme and the black accounting firm Gobodo Forensic and Investigative Accounting and currently sits on the Board of Edcon (Proprietary) Limited, the Standard Bank Group Limited and South African Breweries Limited. She is also a director of the following companies: M-Net, Schindler’s Lifts and New Seasons Investment Holdings Limited. With a commitment to, and interest in education, Adv. Moroka is a trustee of the Nelson Mandela Children’s Fund and Project Literacy. She holds a BBProc from the University of the North and an LLB from the University of the Witwatersrand.
This announcement does not constitute an offer of securities for sale or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. This document does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. The securities have not been, and will not be, registered under the US Securities Act of 1933, as amended (the “Act”), or under the securities legislation of any state or territory or jurisdiction of the United States or any other jurisdiction and may not be offered, sold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Act and in compliance with any applicable securities laws of any states or other jurisdiction of the United States. There will be no public offering in the United States. Any proposed listing and distribution of this document and other information in connection with a potential listing may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
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The Company disclaims any obligation or undertaking to update, review or revise any forward looking statement contained in this announcement whether as a result of new information, future developments or otherwise.
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Morgan Stanley & Co. International plc, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Royal Bafokeng Platinum (Proprietary) Limited and no-one else in connection with the Listing. They will not regard any other person as their respective clients in relation to the Listing and will not be responsible to anyone other than Royal Bafokeng Platinum (Proprietary) Limited for providing the protections afforded to their respective clients, nor for providing advice in relation to the Listing, the contents of this announcement or any transaction, arrangement or other matter referred to herein. Morgan Stanley may participate in the offering in a proprietary basis and for the account of customers.
To the extent that any offer of the Company’s securities is made prior to the listing (which the Company intends implementing by way of a private placement and not a public offer), RMB (or persons acting on behalf of RMB) may over-allot securities or effect other transactions with a view to supporting the market price of the securities at a level higher than that which might otherwise prevail in the open market. However, there is no assurance that RMB (or persons acting on behalf of RMB) will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of such private placement of the securities is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the Listing or the relevant sale or issue date. Any stabilisation action or over-allotment must be conducted by RMB (or person(s) acting on behalf of RMB) in accordance with all applicable laws and rules.