Afrimat to acquire 100% of the Gravenhage manganese resource

On 20 May 2021, Afrimat announced that it had agreed to acquire 100% of the Gravenhage manganese mining right and associated assets. The parties are engaging in respect of the final actions to achieve completion of the acquisition. Total project peak funding is estimated at approximately R1.5 billion, with the project expected to contribute to the financial results of the Group in the 2024 financial year.

Gravenhage is a long-life, near-development manganese resource situated approximately 50 km’s north of Hotazel and approximately 120 km’s from Afrimat’s existing Demaneng mine in the northern region of the globally significant Kalahari Manganese Field. A definitive feasibility study was finalised, confirming Gravenhage’s technical and economic feasibility based on an initial open-cut operation, with the potential for subsequent underground mining. The resource, and its significant potential, has been well-defined by continued exploration drilling.

On 9 December 2021, Afrimat announced that it had purchased certain assets and rights to mine select deposits at the Glenover mine, as well as the option to acquire the shares in Glenover from the current shareholders, for a total purchase consideration of R550 million. The Glenover acquisition includes phosphate stockpiles, rare earths and a vermiculite mining right, which positions Afrimat to enter new commodities. The implementation of this acquisition has been staged, and good progress has been made on the follow-up phases of this project.

In addition to the above, the Company continues to explore appropriate further opportunities as these arise that will fulfil Afrimat’s current strategic objectives and support diversification. The equity raise will both partly fund the described growth projects in combination with existing cash flows, and allow for additional balance sheet flexibility.

The Company’s iron ore operations are expected to remain profitable even at the lower end of the iron ore commodity cycle, allowing Afrimat to remain resilient to the recent decline in the iron ore price. Inflation and price increases on inputs such as fuel, electricity and explosives are placing pressure on operating costs, which are being actively managed.