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Terms announcement and withdrawal of cautionary
ROYAL BAFOKENG PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2008/015696/06)
JSE share code: RBP ISIN: ZAE000149936
(“RBPlat” or the “Company”)
TERMS ANNOUNCEMENT AND WITHDRAWAL OF CAUTIONARY
1. Introduction
Further to the cautionary announcement released by the Company on SENS on 28 July 2017,
RBPlat is pleased to advise shareholders that it has concluded a term sheet (the “Term Sheet”)
with Platinum Group Metals (RSA) Proprietary Limited (“PTM (RSA)”), a wholly-owned subsidiary
of TSX-listed Platinum Group Metals Limited (“PTM”), in terms of which RBPlat will, subject to the
fulfilment and/or, where applicable and to the extent legally permissible, waiver, of the conditions
precedent set out in –
1.1. paragraph 8 below, acquire the concentrator plant (the “Plant”), related water and power
allocations, surface rights in respect of the immovable property owned by Maseve
Investments 11 Proprietary Limited (“Maseve”) which may be required by RBPlat for
purposes of accessing and operating the Plant (the “Immovable Property”) and access to
tailings infrastructure, for an aggregate consideration equal to the ZAR equivalent of USD58
million (the “Plant Consideration”) (the “Plant Transaction”); and
1.2. paragraph 9 below, acquire 100% of the shares in and shareholder claims owing by Maseve
for an aggregate purchase consideration equal to the ZAR equivalent of USD12 million (the
“Share Consideration”) (the “Share Transaction”).
The Plant Transaction and the Share Transaction are hereinafter collectively referred to as the
“Proposed Transaction”.
2. Further information in respect of Maseve
PTM (RSA) currently holds 82.9% of the ordinary shares in Maseve, with the balance of 17.1% held
by Africa Wide Mineral Prospecting and Exploration Proprietary Limited (“Africa Wide”).
Maseve’s primary asset is the Maseve platinum mine which is located on the Western Limb of the
Bushveld Complex, to the South West of, and contiguous to, RBPlat’s Styldrift I project.
Maseve’s operations consist of two shaft decline systems, which are designed to mine both the
Merensky and UG2 Reefs, a concentrator plant, a tailings storage facility and associated mining
infrastructure.
As at 31 July 2017, the net asset value of Maseve was R3.63 billion and for the twelve month
period then ended, Maseve incurred an operating loss of R6.23 million.
3. Rationale for the Proposed Transaction
The Plant Transaction provides RBPlat with immediate access to an operational concentrator plant
to treat ore in respect of Styldrift I and the strategic flexibility to potentially extend the life of mine
of the South Shaft Merensky operations. This may accelerate the date on which Styldrift I ore can
be treated, whilst reducing both the capital outlays and the technical risk associated with the
construction of a new plant.
Furthermore, the Share Transaction provides RBPlat with early access to its Frischgewaagd
orebody at Styldrift.
PTM will, today, published its own news release regarding the Proposed Transaction.
4. Deposit
Subject to approval of the Proposed Transaction by the boards of directors of RBPlat, PTM (RSA)
and PTM and the execution of an escrow agreement on terms acceptable to RBPlat, RBPlat will
make a cash payment into an escrow account equal to the ZAR equivalent of USD3 million,
calculated at the USD/ZAR exchange rate as published by the South African Reserve Bank on its
website on the date of payment (the “Deposit”).
The Deposit will be transferred out of the escrow account to Maseve, to be utilised in part
payment of the Plant Consideration, on the later of:
4.1. the date on which the relevant competition authorities approve the Proposed Transaction
unconditionally or, if subject to conditions, on such conditions that are acceptable to the
party affected thereby (the “Competition Approval Date”);
4.2. the date on which the board and/or shareholders of Maseve pass all such resolutions as may
be required to validly approve the entry into and implementation of the Plant Transaction,
to the reasonable satisfaction of RBPlat; or
4.3. the date on which either:
4.3.1. Africa Wide enters into a share purchase agreement with RBPlat in terms of which it
irrevocably agrees to sell its 17.1% shareholding in Maseve (the “Africa Wide Equity
Interest”) to RBPlat on the terms proposed in the Term Sheet; or
4.3.2. Africa Wide is obliged and deemed to have accepted the offer by RBPlat to purchase
the Africa Wide Equity Interest from Africa Wide in accordance with the Share
Transaction, on the terms proposed in the Term Sheet; or
4.3.3. the shareholders of Maseve pass a resolution approving a scheme of arrangement
in terms of section 114 of the Companies Act, pursuant to which Africa Wide is legally
compelled to sell the Africa Wide Equity Interest to RBPlat on the terms proposed in
the Term Sheet.
5. Settlement of the Plant Consideration
RBPlat shall settle the remainder of the ZAR equivalent of the Plant Consideration, after deducting
the Deposit transferred to Maseve as contemplated in paragraph 4, in cash to Maseve on the date
on which ownership of the Plant and Immovable Property is transferred to RBPlat.
The ZAR equivalent of the Plant Consideration shall be calculated at the USD/ZAR exchange rate
as published by the South African Reserve Bank on its website on the date of payment.
It is envisaged that the cash consideration, together with further capital required for the related
upgrades to the Plant and associated infrastructure, will be funded by RBPlat from the proceeds
of an equity capital raising of between R1.1 billion and R1.4 billion. Shareholders will be advised
of the details of the equity capital raise in due course.
6. Settlement of the Share Consideration
The Share Consideration shall be allocated as follows:
6.1. USD7 million in respect of the shareholder loan owing by Maseve to PTM (RSA), which loan
had a balance of approximately USD360 million at 31 May 2017, to be settled by issuing PTM
(RSA) with 2 841 612 shares in the share capital of RBPlat (“RBPlat Shares”);
6.2. USD5 million in aggregate in respect of the shares held by PTM (RSA) and Africa Wide in
Maseve, which shall be settled by RBPlat issuing 1 682 640 RBPlat Shares to PTM (RSA) and
347 083 RBPlat Shares to Africa Wide.
For the purposes of paragraphs 6.1 and 6.2 above, the RBPlat Shares shall be issued at a price of
R31.7366 per share, being the 30-day volume weighted average share price of RBPlat Shares on
the JSE on the day preceding this announcement, applying a USD/ZAR exchange rate of R12.8833.
7. Settlement of the rehabilitation guarantee deposit
PTM (RSA) has, historically, lent and advanced an amount of approximately USD4 million to
Maseve, which amount has been deposited by Maseve into an environmental guarantee bond
account (the “Maseve Environmental Deposit Amount”).
The parties have agreed that, on or before the the date on which ownership of the shares in
Maseve are transferred from PTM (RSA) and Africa Wide to RBPlat (“Share Transfer Date”), RBPlat
shall have arranged and entered into a replacement insurance policy / guarantee relating to or in
connection with environmental matters and/or rehabilitation obligations pertaining to the
Maseve mine (“RBPlat Policy / Guarantee”).
The RBPlat Policy / Guarantee shall be effective on the later of the date on which the existing
Maseve environmental guarantee bond is cancelled and the Share Transfer Date.
As and when the existing Maseve environmental guarantee bond is replaced with the RBPlat Policy
/ Guarantee, and the Maseve Environmental Deposit Amount is consequently refunded to
Maseve, RBPlat shall settle this amount to PTM (RSA).
8. Conditions precedent to the Plant Transaction
Completion of the Plant Transaction shall be subject to the fulfilment and/or waiver (to the extent
legally permissible) of the following conditions precedent on or before that date which is:
8.1. 60 business days after this announcement, or such later date as mutually agreed in writing
between the parties:
8.1.1. the shareholders of RBPlat placing sufficient shares under the control of the
directors for the purpose of settling the Share Consideration as contemplated in
paragraphs 6.1 and 6.2;
8.1.2. the shareholders of RBPlat approving an issue of RBPlat Shares for cash for the
purpose of funding the Plant Consideration together with the necessary upgrades to
the Plant and associated infrastructure;
8.1.3. to the extent necessary, the third party lenders to RBPlat approving the Proposed
Transaction;
8.1.4. to the extent necessary, the shareholders of PTM approving the Proposed
Transaction;
8.1.5. the shareholder of PTM (RSA) approving the Proposed Transaction;
8.1.6. unconditional written consent of the Proposed Transaction by the major lender(s) to
PTM, to the satisfaction of RBPlat;
8.1.7. the board and/or shareholders of Maseve passing all such resolutions as may be
required to validly approve the entry into and implementation of the Plant
Transaction, to the reasonable satisfaction of RBPlat; and
8.1.8. either:
8.1.8.1. the shareholder and board of Africa Wide approving the Share
Transaction and Africa Wide enters into a share purchase agreement in
this regard; or
8.1.8.2. Africa Wide is obliged and deemed to have accepted the offer by RBPlat
to purchase its shares in Maseve, on the terms proposed in the Term
Sheet; or
8.1.8.3. the Maseve Board, upon receipt of a written request to do so from
RBPlat, convening a meeting of Maseve shareholders to consider a
proposal to implement a scheme of arrangement in terms of section 114
of the Companies Act (the “Scheme”) with the majority support of the
Maseve Board, and the shareholders of Maseve validly approving the
Scheme;
8.2. 90 days after the date of this announcement, or such later date as mutually agreed in writing
between the parties:
8.2.1. RBPlat completing and being satisfied with the results of a comprehensive legal,
financial and technical due diligence into the business and affairs of Maseve;
8.2.2. the parties signing detailed and legally binding agreements to give effect to the
Proposed Transaction;
8.2.3. the relevant competition authorities approving the Proposed Transaction
unconditionally or, if subject to conditions, on such conditions that are acceptable
to the party affected thereby. The parties undertake to use their reasonable
commercial endeavours to procure that such competition approval is obtained as
soon as practically possible; and
8.2.4. obtaining any other regulatory approvals required for the Plant Transaction.
9. Conditions precedent to the Share Transaction
Completion of the Share Transaction shall be subject to the fulfilment and/or waiver (to the extent
legally permissible) of the following conditions precedent on or before that date which is three
years after the Competition Approval Date:
9.1. implementation of the Plant Transaction;
9.2. the Department of Mineral Resources (“DMR”) granting its approval, under section 11 of the
Mineral and Petroleum Resources Development Act, of the Share Transaction (“Section 11
Approval”); and
9.3. obtaining any other regulatory approvals required for the Share Transaction.
10. Management agreement
RBPlat and Maseve shall enter into a management agreement in terms of which RBPlat will
undertake to manage the Maseve mine in consideration for a management fee which is to be
agreed between the parties thereto (the “Management Agreement”).
The Management Agreement shall become effective on the Competition Approval Date and shall
terminate on the earlier of:
10.1. the date that is three years from the Competition Approval Date;
10.2. the effective date in respect of the Share Transaction; or
10.3. the date on which the DMR notifies Maseve that the Section 11 Approval has not been
granted.
11. Effective date
The effective date of the Plant Transaction and the Share Transaction shall be the date on which
the conditions precedent to the Plant Transaction and the Share Transaction respectively, are
fulfilled and/or, to the extent legally permissible, waived.
12. Categorisation
The Proposed Transaction constitutes a category two transaction and therefore, save for the
approvals required for the issue of RBPlat Shares, as set out in paragraphs 8.1.1 and 8.1.2,
shareholders’ approval of the Proposed Transaction is not required.
13. Memorandum of Incorporation of Maseve
In compliance with section 9.16 of the JSE Listings Requirements, RBPlat undertakes to ensure
that nothing contained in the Memorandum of Incorporation of Maseve will frustrate RBPlat in
any way from compliance with its obligations in terms of the JSE Listings Requirements or relieve
RBPlat from compliance with the JSE Listings Requirements.
14. Withdrawal of cautionary
Shareholders are referred to the cautionary announcement dated 28 July 2017 and are hereby
advised that, further to this announcement, caution is no longer required when dealing in RBPlat
securities.
Johannesburg
6 September 2017
Corporate advisor and transaction sponsor
Questco (Pty) Ltd
Legal advisor
Bowmans Law
JSE sponsor
Merrill Lynch South Africa (Pty) Ltd
For further information, please contact:
Lindiwe Montshiwagae
Executive: Investor Relations
Tel: +27 (0)10 590 4517
Email: lindiwe@bafokengplatinum.co.za
Date: 06/09/2017 01:33:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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