Eastplats sells its South African business to Hebei Zhongbo Platinum for $225m

9 November 2014 (Last Updated November 9th, 2014 18:30)

Canada-based Eastern Platinum (Eastplats) has signed an agreement with China-based Hebei Zhongbo to sell its South African platinum assets for $225m.

Canada-based Eastern Platinum (Eastplats) has signed an agreement with China-based Hebei Zhongbo to sell its South African platinum assets for $225m.

The cash deal includes the company's entire South African platinum group metal (PGM) business, as well as all loans between Eastplats and its subsidiaries.

Eastplats' South African PGM business includes Crocodile River mine, Spitzkop, Kennedy's Vale and Mareesburg projects and their associated mining and prospecting rights.

Eastplats president and CEO Ian Rozier said: "The entire resource sector is under considerable pressure and PGMs have been disproportionately impacted as a result of a number of factors unique to the sector.

"The entire resource sector is under considerable pressure and PGMs have been disproportionately impacted as a result of a number of factors unique to the sector." 

"The capital required to advance the Eastplats assets into production is not available in the public markets at this time and we are very encouraged by the ability of Hebei Zhongbo to deploy its resources in this regard.

"This foreign capital and the creation of much-needed jobs will contribute to the on-going socio-economic development in areas surrounding the mine and projects."

"Closing the transaction will leave Eastplats extremely well capitalised to take advantage of the considerable opportunities in this weak market."

The deal is expected to close within three to six months following definitive agreement and after fulfilling certain regulatory condition in South Africa and China.

Eastern Platinum said that the amount it will receive will be net of the amounts payable to certain minority interests, which remains to be settled.