14 Dec 2012 11:06
AQUARIUS PLATINUM LIMITED - Mimosa Agrees Indigenisation Implentation PlanAQUARIUS PLATINUM LIMITED - Mimosa Agrees Indigenisation Implentation Plan
PR Newswire
London, December 14
Aquarius Platinum Limited ("Aquarius") is pleased to advise that MimosaInvestment Holdings ("Mimosa Investments"), which is held jointly in a 50:50partnership with Impala Platinum Holdings Limited, has concluded a term sheetin respect of a proposed indigenisation implementation plan ("IIP") with theGovernment of Zimbabwe, as represented by the Ministry of Youth Development,Indigenisation and Empowerment.
The term sheet, which was signed today, 14 December 2012, provides for the keyterms, subject to certain conditions precedent, of the sale by MimosaInvestments of an aggregate 51% equity ownership of Mimosa Holdings (Private)Limited ("Mimosa Holdings"), the wholly owned operating subsidiary of MimosaInvestments which owns and manages the Mimosa mine, to select indigenousentities as described below.
The sale consideration for the 51% of Mimosa Holdings to the indigenous partiesis US$550 million (50% attributable to Aquarius), based on an agreed fairmarket value for Mimosa Holdings of US$1.078 billion.
Mimosa Investments will provide a vendor loan funding mechanism to facilitatethe transaction which has a term of ten years. This loan will bear interest ata rate of 9% annually and will be settled through the waiver of the right toreceive 90% of dividends due to the indigenous entities in favour of MimosaInvestments. Any loan balance outstanding at the end of the ten-year periodwill be payable in cash.
The parties acknowledge that the existing arrangement in terms of which MimosaInvestment provides management and technical services to Mimosa will continue. The terms of the Mimosa Holdings Shareholder Agreement to be executed by allparties will reflect the exclusive appointment of Mimosa Investments tocontinue to manage Mimosa and the terms and conditions of such management.
In terms of the IIP, the 51% interest in Mimosa Holdings will be sold asfollows:
* 10% to the Zvishavane Community Share Ownership Trust ("Community Trust"). This is the community in which the Mimosa mine is located. * 10% to an employee share ownership trust to be established for the benefit of all permanent indigenous employees. * 31% to the National Indigenisation & Economic Empowerment Fund ("NIEEF").In accordance with the terms of the Community Trust Deed, Mimosa willcontribute an amount of US$10 million in aggregate over a period of three yearsas part of Mimosa's Corporate Social Investment in Zimbabwe. To date, a totalof US$3 million has been paid to the Community Trust.
In the event of future funding being required, such funding shall be made byall parties. To the extent that shareholders cannot or do not comply with theirfunding obligations, Mimosa Investments may fund any shortfall which may leadto dilution.
The conditions precedent to the transaction include, inter alia, that:
* Mimosa Investments and the indigenous entities conclude definitive transaction agreements; * The parties are granted all necessary certifications, approvals and authorisations required in law to confirm the IIP's compliance with Zimbabwean law for the duration of the period of the IIP; * The parties obtain all regulatory approvals necessary; and * Mimosa Investments and its shareholders obtain Board approval as well as approvals of their shareholders, to the extent required.The parties have committed to co-operate to fulfil the conditions precedent by31 March 2013, and to the extent that obtaining regulatory approvalsnecessitate an extension, the parties will agree to such extension.
The Honorable Saviour Kasukuwere, Minister of Youth Development, Indigenisationand Empowerment, noted: "The negotiations around the indigenisation plan forMimosa Investments were cordial and frank. I am pleased to say that MimosaInvestment's indigenisation plan reflects the spirit and letter of Zimbabweanlaw and signals that we welcome Aquarius as an investor to Zimbabwe."
Jean Nel, Chief Executive Officer of Aquarius, commented, "Although thenegotiations have taken some time, the final plan represents a significant milestone for Aquarius and Mimosa as we work towards full compliance with the lawand regulations in Zimbabwe. The indigenisation plan, once implemented, willoffer Mimosa security of tenure and is a true reflection of the worth of ourinvestment in Mimosa Investments, a valuable asset and one of the lowest costproducers in the PGM sector globally. A particularly pleasing aspect of theplan is that it includes an employee share ownership trust as well as acommunity trust, so as to ensure all stakeholders benefit from the continuedoperation of Mimosa. Mimosa's relationships with the Government of Zimbabwe,its employees and communities have been fundamental to its success in the pastand will remain important in the future."
For further information please contact:
Jean Nel - Chief Executive Officer: +27 12 001 2001Willi Boehm - Company Secretary: +61 89 367 5211or visit:www.aquariusplatinum.com