Royal Bafokeng Platinum secures R2.1bn in cash-streaming agreement
Royal Bafokeng Platinum (RBPlat) has struck a R2.1bn deal to deliver gold to mining financier Triple Flag, the proceeds of which will be used to settle the costs of its recent acquisition of 33% of the Bafokeng Rasimone Platinum Mine (BRPM) joint venture.
RBPlat will deliver 70% of its gold production to Triple Flag until 261,000 ounces are delivered, and 42% thereafter. Triple Flag will pay 5% of the spot gold price per ounce.
Gold is a byproduct of platinum group metals (PGM) production at RBPlat’s mining operations and accounts for about 3% of the company’s revenue.
In 2018, the company announced the acquisition of the remaining 33% in the BRPM joint venture from Anglo American Platinum’s wholly owned subsidiary, Rustenburg Platinum Mines.
“This long-term streaming agreement represents a significant commitment of international capital in RBPlat and signals confidence in our business,” said RBPlat CEO Steve Phiri in a statement.
The liquidity injection will strengthen its balance sheet and free up cash, said Phiri.
At 11.55am, RBPlat’s share price was unchanged at R42.50, having gained 60.5% so far in 2019. The JSE’s platinum index has surged 127.5% in the year to date.