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Extension of Royalty Agreement with Impala Platinum
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")
EXTENSION OF ROYALTY AGREEMENT WITH IMPALA PLATINUM
On 8 November 2013, shareholders of RBPlat (“Shareholders”) were advised that
RBPlat and Impala Platinum Limited (“Impala”) had renegotiated terms and conditions
of the 6 and 8 shafts royalty agreement originally concluded in 2010 (“Royalty
Agreement”).
Background
The Royalty Agreement affords Impala the right to mine a demarcated southern
portion of the Bafokeng Rasimone Platinum Mine Joint Venture’s (“BRPM JV”)
Boschkoppie property from Impala’s 6 and 8 shafts in return for a royalty payment.
Impala determines the rate of mining and bears all the mining, safety, health and
environmental risks associated with mining this area.
In terms of the Royalty Agreement, Impala pays the BRPM JV a royalty that is based
upon a factor that is linked to the Impala Rustenburg operations’ gross profit
margin with a minimum royalty payment of 5% of revenue earned and a maximum royalty
payment of 25% of revenue earned.
Amended Royalty Agreement
Shareholders are now advised that RBPlat and Impala have agreed to expand the
mining area covered by the royalty arrangement and as a consequence revised the
Royalty Agreement (“Amended Royalty Agreement”). Effectively, RBPlat has granted
Impala an additional area to access and mine from Impala’s 6 shaft resulting in the
original Royalty Agreement life potentially being extended up to 2026. This Amended
Royalty Agreement will add approximately 360koz (4E) resource, which represents an
increase of approximately 58% to the original 620koz (4E) attributable to 6 shaft
in terms of the original Royalty Agreement. The total resource included in the
original Royalty Agreement was 780koz (4E) of UG2 comprising 620koz (4E) for 6
shaft and 160koz (4E) for 8 shaft. This Amended Royalty Agreement will enhance
RBPlat’s royalty income cash flow from 2017 and extend the duration of the royalty
income stream by a further 5 years.
RBPlat continues to seek value enhancing opportunities in line with its 4th
strategic pillar. The board of directors of RBPlat believes that the terms of the
Amended Royalty Agreement are aligned to the Company’s strategy and interests, and
are therefore beneficial to Shareholders.
The terms and conditions of the 20 shaft royalty agreement with Impala remain
unchanged at 17.5% of revenue.
Fourways, Johannesburg
8 September 2016
JSE Sponsor
Merrill Lynch South Africa (Pty) Limited
For further enquiries, please contact:
Lindiwe Montshiwagae
Executive: Investor Relations
Tel: +27 (0)10 590 4517
Mobile: +27 (0)82 920 7803
Date: 08/09/2016 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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