Mining exploration and development firm Jubilee Platinum has abandoned plans to acquire Platinum Australia, after failing to reach a deal on how to structure the agreement.
Jubilee Platinum said the proposed transactional structure as described in the current implementation deed (ID) entered with Platinum Australia on 25 February 2013, no longer represents optimal value for its shareholders, given current market conditions.
Jubilee noted that it is continuing negotiations with a view to targeting terms that are more mutually beneficial.
The talks will also focus on funding the re-commissioning of the mining and processing operation, which includes the processing of Jubilee's platinum-containing chrome tailings material.
Pollux Investment Holdings, a subsidiary of Jubilee Platinum, was awarded the processing rights to recover the platinum group metals (PGM) contained in the estimated 800,000t of DCM surface tailings.
The company carried out the PGM processing agreement with PhokaThaba Platinum, a subsidiary of Platinum Australia, for the beneficiation of the PGM's and chrome contained in the DCM tailings in November 2012.
Jubilee Platinum CEO Leon Coetzer said the escalating debt position of Platinum Australia impacted the value proposition to the company's shareholders.
"The processing of the DCM tailings could significantly enhance Jubilee's earnings capability to further enhance shareholder value," Coetzer said.
"The material is at surface and therefore does not incur any mining cost and is suited for the further refining in the ConRoast process, to which Jubilee holds the exclusive rights."
Coetzer noted that the earnings capability of the project would further enhance the targeted earnings for the Middelburg smelter operation.