Anglovaal Mining Limited – Avmin Acquires Anglo American’s 25% stake in Nkomati Nickel
6 February 2004
Diversified mining company, Avmin, has acquired the remaining 25 percent of the Nkomati operation from Anglo Operations Limited (“AOL”), a subsidiary of Anglo American plc.
Nkomati was a joint venture entered into between Avmin and AOL in 1995, and Avmin has managed the venture since inception. The purchase price is R260 million and will be settled in cash, which Avmin will fund from debt raised from a South African institution. The effective date of the transaction was 1 February 2004.
Nkomati is South Africa’s only primary nickel producer and produces copper, cobalt, and platinum group metals (PGM’s) as by-products. In 2003 Nkomati produced 4 900 tons of nickel and 39 000 ounces of PGM’s. For the year ended 30 June 2003, Nkomati generated revenue of R503 million (2002: R434 million) and an operating profit of R236 million (2002: R209 million). The mine currently employs 100 people. The transaction values Nkomati at just over R1 billion and will be value enhancing, allowing for improved cash flow into Avmin. In addition, this acquisition provides Avmin with the strategic flexibility required to advance on plans currently being considered for the significant expansion of Nkomati.
As part of the broader transaction that Avmin is currently engaged in with African Rainbow Minerals and Exploration Investments Limited (“ARMI”) and Harmony Gold Mining Company Limited, Avmin will be creating a significant PGM portfolio. This portfolio currently includes Nkomati and 55% of the Two Rivers project. At Two Rivers further capital provisions have been approved to conduct trial mining and to develop necessary infrastructure. The addition of 41.5 % of Modikwa, to be acquired from ARMI, and 100% of Kalplats, to be acquired from Harmony, will significantly enhance this portfolio. The portfolio will have the potential of achieving sizeable attributable PGM production levels through a number of expansion plans that are currently being considered.
Announcing the acquisition, Jan Steenkamp, CEO of Avmin said:
“This purchase is a further step in our ongoing strategy of creating critical mass in the PGM and nickel market. We look forward to developing these assets to their fullest potential as we focus our efforts on positioning Avmin as South Africa’s largest diversified and empowered mineral resources company.”
For further details contact:
+27 11 447 3030
GM � Investor Relations
+27 11 634 0333
+27 83 291 3384
Notes to Editors:
Avmin is a South African diversified mineral resources company listed on the JSE and the London Stock Exchange. The group has a market capitalisation of R5.2 billion, with a share price of 4 650 cents as of 6 February 2004.
The company’s assets are as follows:
Avgold (42%), which operates the Target gold mine and which has a reserve and resource base of over 7 million ounces of gold. Plans are also underway to develop the area to the north of Target that has additional indicated and inferred resources of over 60 million ounces,
Assmang (50%), an iron ore, manganese and chrome producer that is jointly managed with listed company Assore Limited,
Two Rivers Platinum (55%), which is a partnership between Avmin and Impala Platinum, and
The chairman of Avmin is Rick Menell (48yrs) and Jan Steenkamp (49yrs) is the CEO.
Avmin has recently entered into a transaction with Harmony and ARMI, the essence of which, pending shareholder approval, is as follows:
Avmin will sell its 42% interest in Avgold to Harmony in exchange for Harmony shares,
Avmin will buy from ARMI, in exchange for Avmin shares
its 13.6% of Harmony and
its 41.5% of Modikwa joint venture,
Avmin will buy 100% of Kalplats platinum discovery and associated mineral rights from Harmony, for Avmin shares; and
Harmony will merge its Avmin shares with the Avmin shares controlled by ARMI to create a voting pool arrangement holding approximately 63% of Avmin’s ordinary issued share capital.
Please visit the company’s website for more information at www.avmin.co.za where you will find photographs of directors and management.