[miningmx] — Diamond producer Trans Hex’s inability to absorb the entire
environmental liability of De Beers’ Namaqualand mines has pushed the companies to
revise their sales agreement on the asset, with De Beers retaining a portion of both
the property and liability.
The transaction, first announced in May 2011, would’ve included seven mining rights
and an exploration right over the Namaqualand Mines territory for R225m, in addition
to Trans Hex assuming all the liabilities related to the asset’s environmental
rehabilitation.
Trans Hex’s 50% held associate company, Emerald Panther Investments (EPI), would
now acquire Namaqualand Mines for R166m, excluding the Buffels Marine mining right
and its associated rehabilitation liability – more than 50% of the entire area’s existing
liability.
The parties didn’t want to disclose the full value of Buffels Marine’s liability, but it has
to be more than R80m given that the new deal allows De Beers a four-year put option
to sell Buffels Marine once the liability is less or equal this amount.
Similarly, Trans Hex has a call option for the same period over Buffels Marine, as well
as a pre-emptive right over the asset for another two years.
In a statement issued on Wednesday, Trans Hex said the changes came after the
Department of Minerals Resources (DMR) had approved revised rehabilitation plans for
the mine.
“Trans Hex believes that the exclusion of [Buffels Marine’s] assets and liabilities from
the proposed transaction significantly reduces risk for Trans Hex, as the
environmental liability associated with Buffels Marine constitutes a substantial
proportion of the original environmental rehabilitation liability, while the Buffels Marine
itself is a lower priority asset in comparison with the Buffels River and Koingnaas
complex assets,’ Trans Hex said.
Still, the transaction remains far from done, as EPI and the DMR still has to agree on
the 20% stake the department owns in Namaqualand. The DMR acquired the portion
in February 2007 when the West Coast operations of state-owned Alexkor and
Namaqualand were amalgamated.
Trans Hex said it expected all the conditions precedent would be met within six to 12
months. Its shares closed up 2.05% at R2.99 on Wednesday.
