Cape Town – Lonmin [JSE:LON] announced it has completed the acquisition of the 42.5% stake of Anglo American Platinum (AAP) in the Pandora Joint Venture.
The agreement to acquire AAP’s interest in Pandora was first announced on 11 November 2016 and the acquisition of Mvelaphanda’s interest was announced on 13 May 2017.
Lonmin now owns 100% of Pandora.
"The acquisition allows Lonmin to extend mining at its Saffy Shaft without having to spend R2.6bn of capital expenditure, of which would have been required over the next four years," the company said in a statement.
The effective date for both transactions was 1 December 2017.
"This is an excellent strategic fit for us, which equips us with a valuable contiguous asset with long-term development potential and allows us to maintain production levels at Saffy while significantly reducing our capital expenditure requirements at this operation over the short- and medium-term," said Ben Magara CEO of Lonmin.
Prior to the acquisition, the Pandora JV was held 50% by Lonmin's subsidiary, Eastern Platinum, 42.5% by Anglo Platinum through Rustenburg Platinum and 7.5% by Northam through Mvelaphanda Resources.
The Pandora Joint Venture contributed 32.509 platinum ounces to Lonmin in the 2016 financial year.
The gross assets of the Pandora Joint Venture were R1.1bn at 30 September 2016. Pandora made an operating loss of R109m in financial year 2016, of which 50% was reflected in Lonmin’s 2016 accounts.
Lonmin received a contribution of R117m in its 2016 financial year from the ore purchase agreement, which offset the loss reported by the joint venture.
"This acquisition also provides significant future opportunities to develop Pandora’s potential," the company reported.
By early afternoon trade Lonmin's share price was up 6.27% to R11.86.
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