Impala Platinum has confirmed that it is postponing its proposed share capital acquisition of Mvelaphanda Resources and Northam Platinum, Mining Weekly reports today (12th December).

The world's second-largest producer of platinum originally stated in October that it was pursuing the deal in order to "create a South African-controlled platinum champion".

It put forward a R22 billion cash-and-shares offer for Mvelaphanda - an empowerment mining and minerals company - and Northam, its black-owned and controlled PGM-producing unit.

However, Impala revealed in a statement that the current global financial turmoil and subsequent downward pressure on PGM prices have made it difficult for the three parties to reach agreement over exchange ratios.

As it looks to preserve cash resources in the present climate, the company confirmed that it could not proceed with the transaction on the basis of 35 Impala shares for every 100 shares in Northam.

Nevertheless, Impala stated that it is still interested in securing the buy-out having conducted its due diligence investigation into the two firms and that it will keep markets updated with progress.

Under the terms of the deal, the company would receive access to Booysendal, Mvelaphanda's prime platinum deposit, which contains around 100 million PGM ounces which could be mined cheaply at shallow depths.

In addition, Impala revealed that it is looking at cost-cutting measures at all other ventures making up its five-year, R30 billion capital expenditure plan, such as the Marula Merensky and Afplats (Leeuwkop) projects.

And although its long-term outlook for the PGM industry remains positive, it is also suspending its proposed share buy-back programme, which is 18.6 per cent complete at present.

Source:

Platinum group acquisitions put on the back burner (12/12/08)

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