Lonmin acquires Amplats’ 42.5% Pandora stake

Lonmin acquires Amplats’ 42.5% Pandora stake

Lonmin (LON:LMI) has purchased Anglo American Platinum’s 42.5% stake in the South African Pandora mine.

The world’s third largest platinum producer will pay between R400 milllion and R1 billion for the interest and will result in Lonmin holding 92.5% of the project with North Platinum (JSE:NHM) keeping its 7.5% stake.

The Pandora mine is currently a joint venture between Lonmin subsidiary Eastern Platinum Limited (EPL), Anglo American Platinum and Northam. It accounts for 5% of Lonmin’s total production.

Lonmin will pay for the acquisition with 20% free cash flow generated from the Pandora mine over the next six years, with the final price dependent on platinum prices.

“The acquisition of AAP’s 42.5% stake in the Pandora JV allows Lonmin to consolidate its position in this relatively shallow and high-grade mineral resource providing an attractive option for development by EPL in both the short and longer term,” said the Lonmin statement.

“The Pandora JV area, which is contiguous with our existing EPL operations, relies on Lonmin’s mining and processing infrastructure and is already operated by EPL. The Pandora JV contributed 37,553 Platinum ounces(74,019 platinum group metal ounces) to Lonmin in the 2015 financial year.”