AIM-listed mining exploration and development company Jubilee Platinum has acquired Chemstof for R65.6 million (£6 million).
AIM-listed mining exploration and development company Jubilee Platinum has acquired Chemstof for R65.6 million (£6 million).
Chemstof treats near-surface chrome bodies containing platinum group elements. The company has a 500,000 ton stockpile of chrome ore and operates a chrome processing plant.
The acquisition sees Jubilee, which is based in London, purchase 51 per cent of the ordinary shares of Chemstof. The transaction also includes the acquisition of 59 per cent of Platcro Minerals, which holds the mining and prospecting rights to the near surface areas.
The acquisition of Chemstof will extend Jubilee’s current operations in South Africa, which is primarily made up of the Tjate platinum project. It already manages a smelting plant in Middelburg. Jubilee also has operations in Madagascar and Australia.
Jubilee chief executive Leon Coetzer comments, ‘The acquisition will allow Jubilee to process the PGE-rich chrome ore tailings and, as such, provides ConRoast [Middleburg] with a ready supply of own platinum for processing.’
Under the terms of the deal, the consideration is performance based and payable in three separate stages over one year. The performance criterion is for Chemstof to achieve a projected net profit of £5.2 million in the next year.
The processing plant and associated surface stockpile would be held in a newly formed company, which Jubilee would hold 65 per cent. According to Jubilee, the structure of the deal could lead to the venture being entirely self-financing.
Coetzer adds, ‘This acquisition is structured so as to ensure that Chemstof’s chrome ore beneficiation operations produce significant profits by year end or the purchase price will be altered to reflect any underperformance by Chemstof.’
