The Battle For Royal Bafokeng Platinum Gets White Hot

Northam Platinum and Impala Platinum (Implats) are fighting for ownership of Royal Bafokeng Platinum (RBPlat), albeit Implats is more desperate for the deal.

The Merensky and UG2 reefs on the Boschkoppie, Styldrift, and Frischgewaagd farms in the Rustenburg area are where RBPlat mines platinum group metals (PGMs) just south of Sun City. The final undeveloped Merensky reef on the Bushveld complex’s Western leg can be found here.

RBPlat’s properties are some of the hottest real estate in the PGMs sector since they are the only known large shallow high grade Merensky deposits and reserves remaining accessible for mining in South Africa.

Implats entered the RBPlat game in October when it launched a cash-and-stock offer for all of RBPlat’s shares.

Royal Bafokeng Holdings, RBPlat’s largest stakeholder, was underwhelmed by the offer and stated two weeks later that it had agreed to sell 32.8 percent of its shares to Northam, with the option to increase the offer to 33.3%.

Implats responded with a counteroffer of R150 per share, which, while lower than Northam’s R180, did not take into consideration Implats’ high dividend flow, which would benefit shareholders in the long run.

Implats has reached agreements with RBPlat institutional shareholders to purchase 24.52 percent of the company. The offer consists of R90 in cash per RBPlat share and 0.3 ordinary shares in Implats each RBPlat share, representing a 22 percent premium over RBPlat’s November 24 closing price of R121.92.

Implats, without a doubt, requires the deal the most. Importantly, RBPlat’s operations are adjacent to Implats’.

Implats CEO Nico Muller told the press this week that this would result in a number of operational synergies, including shaft expansions and increased metal off-take.

Implats expects a successful takeover of RBPlat to produce up to 600,000 ounces of 6E PGMs (platinum, palladium, rhodium, ruthenium, osmium, and gold) per year and extend the life of its Rustenburg Mines by ten to fifteen years.

Implats needs to extend the life of these mines because they only have 10 years of output left.