JSE-listed Mantengu has entered into a binding term sheet to acquire 100% of the ordinary shares of New Salt Rock City (NSRC), which owns 60% of Kilken Platinum, which, in turn, owns 70% of the Kilken Imbani joint venture (JV).

The sale shares comprise 100% of the issued share capital of NSRC, all owned by the Lutzkie Besigheids Trust.

The Kilken JV is an integrated processing operation that treats the tailings from the Rustenburg Platinum Mine (RPM) platinum group metals (PGM) mine, in Amandelbult, Northam.

RPM is owned 100% by Valterra Platinum (formerly Anglo American Platinum).

The Kilken JV operates through a sale of tailings agreement (STA), which was entered into with RPM in 2004. 

In terms of the STA, RPM is obliged to provide the Kilken JV with all the current PGM-rich tailings that arise from the Amandelbult operation.

The Kilken JV acquires the tails, processes the tails to extract PGMs and sells the PGM concentrate back to RPM.

The plant currently produces about 60 kg of PGMs a month. The life of the operation is expected to exceed 50 years.

The binding term sheet is subject to the fulfilment or waiver, if applicable, of conditions precedent customary for a transaction of this nature.

Moreover, Mantengu will appoint CEO Mike Miller and CFO Magen Naidoo to the board of directors of Kilken, with the appointments to be made immediately upon the execution of the term sheet.

These appointments will be subject to a direct mandate from NSRC to protect its indirect, ongoing interests in Kilken.

Also, NSRC has the sole discretion to terminate the appointments of Miller and Naidoo at any stage during the due diligence period, which would result in the simultaneous termination of the term sheet entered into by the parties.

Mantengu will be afforded a three-month period of exclusivity, starting on the date of the appointments as reflected at Companies and Intellectual Property Commission, within which to complete the due diligence and to negotiate and execute the definitive agreements.

The purchase consideration will be payable to NSRC in a combination of cash and shares issued by Mantengu, for a total consideration to be mutually agreed upon based on the completed due diligence.