Mimosa Agrees to Zimbabwe Indigenization Plan

The Mimosa platinum operation in Zimbabwe produces about 210,000 oz/y. The two equal partners in the Mimosa
enterprise recently agreed to sell a 51% interest in it to a Zimbabwean indigenous group.
Aquarius Platinum announced in mid-December 2012 that Mimosa Investment Holdings, which it holds jointly in a 50:50 partnership with Impala Platinum, had agreed to sell a 51% interest in Mimosa to indigenous Zimbabwean parties for $550 million. Mimosa’s primary asset is the Mimosa platinum mine on the southern portion of the Great Dyke in Zimbabwe. Production totals about 210,000 oz/y of platinum group metals.

The sale price was based on an agreed fair market value for Mimosa Holdings of $1.078 billion. Mimosa Investments will provide a vendor loan funding mechanism to facilitate the transaction, which has a term of 10 years. The loan will bear interest at a rate of 9% annually and will be settled through the waiver of the right to receive 90% of dividends due to the indigenous entities in favor of Mimosa Investments. Any loan balance outstanding at the end of the 10-year period will be payable in cash. Mimosa Investments will continue to provide management and technical servic-es for the mine.

The 51% indigenization interest will be held 10% by the Zvishavane Community Share Ownership Trust, Zvishavane being the community in which the Mimosa mine is located; 10% by an employee share ownership trust to be established for the benefit of all permanent indige-nous employees; and 31% by the National Indigenization & Economic Empower-ment Fund.

Assuming receipt of regulatory approvals, the transaction is expected to close by the end of March 2013.

Jean Nel, CEO of Aquarius, said, “Although the negotiations have taken some time, the final plan represents a sig-nificant milestone for Aquarius and Mimosa as we work towards full compli-ance with the law and regulations in Zimbabwe. The indigenization plan, once implemented, will offer Mimosa security of tenure and is a true reflection of the worth of our investment in Mimosa Investments, a valuable asset and one of the lowest-cost producers in the PGM sec-tor globally.

“A particularly pleasing aspect of the plan is that it includes an employee share ownership trust as well as a community trust, so as to ensure all stakeholders ben-efit from the continued operation of Mimosa. Mimosa’s relationships with the government of Zimbabwe, its employees and communities have been fundamental to its success in the past and will remain important in the future.”

As featured in Womp 2013 Vol 01 - www.womp-int.com