JOHANNESBURG (miningweekly.com) – Atlatsa Resources Corporation and mining major Anglo American Platinum (Amplats) have concluded a R3.5-billion revised restructuring, recapitalisation and refinancing plan for Atlatsa and the Bokoni group of companies.

The announcement came on the back of a detailed strategic review exposing Atlatsa’s likely inability – as a result of the tenuous current market environment – to repay a R3.3-billion debt to Amplats in the medium term.

In terms of the renegotiated transaction, Amplats would acquire the eastern section of Atlatsa’s Ga-Phasha and Boikgantsho projects for R1.7-billion, the proceeds of which would be used by Atlatsa to reduce the existing debt owing to Amplats.

The Ga-Phasha and Boikgantsho projects were contiguous to Amplats’ Twickenham and Mogalakwena mines respectively.

In addition, Amplats would subscribe for 125-million new common shares in Atlatsa for an aggregate subscription price of R750-million, the proceeds of which would be used by Atlatsa to further reduce the existing debt owing to Amplats.

“On implementation of the transaction, Atlatsa and the Bokoni Group will be well positioned to implement its business strategy on a more conservative, lower-risk and sustainable basis,” commented Amplats CEO Chris Griffith.

After taking the above transactions into account, Atlatsa’s remaining debt to Amplats would be some R830-million. 

Moreover, Amplats would provide Atlatsa with an additional debt facility of about R720-million, bringing the total debt facility up to a limit of R1.55-billion, which would attract a facilitative variable interest rate and was repayable between 2018 and 2020.

In addition, Amplats would provide a R90-million working capital facility to Atlatsa, repayable in full by December 31, 2018.

Atlatsa would not pay any dividends until the working capital facility was fully repaid.

Bokoni Expansion
Meanwhile, mining operations at the Bokoni platinum mine – in which Atlatsa held a 51% stake and Amplats 49% – would be expanded to produce 160 000 t/m, up from the current 100 000 t/m, at a total expected capital cost of R1.1-billion to fill the existing concentrator to its capacity.

Atlatsa would be able to use the available credit under the debt facility to finance its attributable portion of the Bokoni expansion project costs.

Atlatsa chief commercial officer Joel Kesler said the new operating plan included lower-cost, opencast project opportunities, which would enable Bokoni to fill its installed processing capacity in the near term, while ramping up production in a lower-risk and less capital-intensive manner.

“Capital expenditure of some R2.3-billion, associated with UG2 expansions at the Bokoni mine, has been deferred, thereby reducing the anticipated debt burden for the company through to 2020,” he commented.

“As a result, Bokoni mine will become a predominantly Merensky Reef producer, accounting for 70% of total estimated production.”

Share Unwinding
Meanwhile, the parties had also agreed to simplify the Atlatsa capital structure through unwinding the current B preference share arrangement, such that Atlatsa would have one class of common shares going forward.

Amplats would sell 115.8-million Atlatsa common shares, arising from the unwinding of the B preference shares, to black economic-empowerment (BEE) shareholder Atlatsa Holdings for R463-million, on loan account, on terms mirroring the debt facility owing to Amplats.

This would increase the BEE shareholding of Atlatsa Holdings in Atlatsa from 51% to 62%.

Following the transaction, Amplats would retain a 22.6% ordinary equity interest in Atlatsa and a 49% equity interest in Bokoni.