Platexco revises terms of Winnaarshoek deal

With the South African Reserve Bank blocking the proposed acquisition by Platexco (PTX-T) of the Winnaarshoek and Buffelshoek platinum properties, the company is reverting to a modified version of an original option arrangement.

Platexco Vice-President Warren Newfield says the reserve bank nixed the deal due to its policy of only allowing companies to acquire other companies for cash and not paper. Platexco and vendor Vansa Vanadium had made an application for an exemption from the regulations, but it was not granted.

Platexco’s earlier plan to acquire 100% of Vansa was dropped when an agreement could not be reached.

Under the arrangements that were blocked by the reserve bank, Platexco was to have paid R8.5 million (about $2.2 million) and have issued 1.5 million shares to Vansa in return for 100% ownership of the mineral rights, with Vansa’s 20% participation right being cancelled.

Under the new terms, Platexco will exercise its option to acquire ownership of the mineral rights at the two properties for R24 million (about $6 million) in cash. As well, a 20% participation right currently held by Vansa will be cancelled through the issuance of 400,000 Platexco shares. The transaction is subject to reserve bank approval and other regulatory approvals.

Upon completing the transaction, Platexco will have 17.1 million shares outstanding and about $2.7 million in cash.

Should the revised transaction not be approved, the parties will revert to an original option arrangement, whereby Platexco can gain ownership of the mineral rights, subject to the 20% participation right in favor of Vansa, for R24 million in cash.

Vansa is controlled by PGM Investments, a subsidiary of the South African industrial conglomerate Barlows Group.

Meanwhile at Winnaarshoek, situated in South Africa’s Bushveld Complex, consulting firm Micon International is currently managing a prefeasibility study for Platexco, with work expected to be wrapped before the year’s end.

Regarding the litigation over the disputed Mokopane project on the Potgietersrus limb of the Bushveld, Newfield reports that the case will be heard next year in the South African courts.