Royal Bafokeng Platinum and Triple Flag announce USD145 million streaming agreement
Johannesburg, Wednesday 16 October 2019. Earlier today the JSE listed Royal Bafokeng Platinum Limited (RBPlat), through its wholly-owned subsidiary Royal Bafokeng Resources Proprietary Limited, announced to its stakeholders that it has reached agreement with Triple Flag Mining Finance Bermuda Limited ("Triple Flag") in terms of which RBPlat will deliver a portion of its gold production to Triple Flag over the life of its operations for an upfront payment of USD145 million (approximately ZAR2.1 billion). In addition, Triple Flag will pay a further 5% of the gold spot price to RBPlat for each gold ounce delivered under the agreement.
Gold is a by-product of platinum group metal (PGM) production at RBPlat's mining operations and accounted for approximately 3% of the revenue reported by RBPlat in its last published half-year results.
Key features of the stream agreement include:
|•||USD145 million upfront payment for the future delivery of gold|
|•||Delivery of 70% of gold production up to 261koz delivered|
|•||After 261koz are delivered, delivery of 42% of gold production for the remaining life of mine|
|•||Ongoing payment to RBPlat of 5% of prevailing gold price for each ounce delivered under the agreement|
RBPlat CEO Steve Phiri noted, "Apart from the confidence that Triple Flag has demonstrated in our asset base and our business in general, this transaction adds further strength to RBPlat's balance sheet. "
"In addition, as part of the agreement, RBPlat will launch the Triple Flag scholarship programme for RBPlat employee families and doorstep communities. The scholarship will support the studies of more than 50 young future engineers, geologists, and other technical professions over the life of the operations and is funded through a USD100k per annum contribution from Triple Flag, starting in the upcoming 2020 academic year.
Shaun Usmar, CEO of Triple Flag, commented, "This agreement represents the ideal long-term partnership for Triple Flag: a mutually beneficial investment into a world-class resource and operation with a partner committed to ethical mining and the creation of value for all of its stakeholders. We are pleased to have secured this opportunity, and we are proud to support RBPlat's commitment to its employees and communities through the scholarship program created as part of this investment."
Steve Phiri noted, "The launch of the Triple Flag scholarship reflects RBPlat and Triple Flag's support for mine host communities and for building long-term partnerships."
The agreement is expected to close in January 2020 following regulatory approvals and consents.