SOUTH AFRICA - Toronto-based SOUTHERN PLATINUM is agreeable to a cash-only takeover offer from LONMIN of London, U.K. Lonmin is offering Cdn$2.66/share for all the outstanding shares of Southern Platinum. The deal could be worth a total of US$190 million.
Southern Platinum's chief asset its 91.2% share of Messina Platinum, which owns a project of the same name on the eastern limb of the Bushveld Complex. The first phase of development, the Voorspoed mine, came into production in 2004 with an estimated output for the year of 45,000 oz of platinum. Messina has been a financial drain on Southern Platinum, created to manage non-diamond assets previously held by SOUTHERNERA. (SouthernEra's diamond assets are now held by SouthernEra Diamonds.)
Lonmin, the world's largest primary platinum producer, has its own mine only 250 km away. This company hopes to boost annual Messina output to 75,000 oz, but that will require an investment of US$75 million over three years. Lonmin has also agreed to acquire the Messina concentrate off-take contract from IMPALA PLATINUM HOLDINGS. Lonmin will treat the concentrates at its own smelter and refinery beginning in mid-2006.
The corporate presentation outlining particulars of the deal is posted at www.southplats.com and at www.lonmin.com.