Implats buys stake in South Africa platinum project with option to take control

Platinum Metals

16/10/2017 14:52

JOHANNESBURG, Oct 16 (Reuters) - South Africa's Impala 
Platinum (Implats)  IMPJ.J  said on Monday it would pay $30 
million for a 15 percent interest in a platinum project in the 
northern Waterberg region and had an option to acquire a 
majority stake in the development. 
    South Africa's Chamber of Mines estimates that 65 percent of 
platinum operations in South Africa are losing money in the face 
of depressed prices and after years of soaring labour costs but 
Implats said the resource has "an attractive risk profile given 
its shallow nature." 
    "This facilitates fully mechanised production with the 
potential for the project to have amongst the lowest operating 
costs in the PGM sector," Implats, the world No. 2 platinum 
producer, said in a statement. 
    Mechanised operations are far less labour intensive, 
reducing exposure to high wage bills and the bouts of labour 
unrest which have rocked the sector in South Africa, home to 
about 70 percent of known global platinum reserves. 
    The stake is being acquired from Platinum Group Metals Ltd 
 PTM.TO  and state-run Japan Oil, Gas and Metals National 
Corporation. 
    Implats said it would now carry out a "definitive 
feasibility study" (DFS) of the project. Following approval of 
the DFS, it will have 90 business days to decide whether or not 
to exercise its option to acquire majority control at a cost of 
around $165 million.   
 
 (Reporting by Ed Stoddard; Editing by James Macharia) 
 ((Edward.Stoddard@thomsonreuters.com; +27 11 775 3160; Reuters 
Messaging: edward.stoddard.thomsonreuters.com@reuters.net)) 
 
Keywords: IMPALA PLATINUM M&A/