Mvelaphanda Gold

completed

The project is a financial transaction whereby a consortium led by Mvelaphanda Resources Limited (Mvela or the company), through a wholly owned special purpose subsidiary Mvelaphanda Gold Limited (Mvela Gold), will purchase, for ZAR4.1 billion, a 15% stake in Gold Fields Limited’s (GFL) South African assets. Mvela has requested IFC to subscribe to ZAR200 million (approximately $27 million) worth of preference shares to Mvela Gold to support the financing of this transaction. This transaction would enable GFL to satisfy the requirement under the new South African Mining Charter that all mining companies achieve, within 5 years, at least 15% ownership transfer to historically disadvantaged South Africans (HDSAs). All mining companies will be required to meet the provisions of the Mining Charter before government will convert their existing “old order” mining rights into “new order” mining rights. The assets underlying the transaction comprise all of GFL’s South African operations, namely the Driefontein, Kloof and Beatrix mines, which have been estimated by GFL and Mvela to comprise 70% of GFL’s total value. The acquisition price was based on this percentage and the value of GFL at the time the transaction was first announced. Mvela has implemented two significant Black Economic Empowerment (BEE) transactions in the mining sector, whereby it acquired minority stakes in Northam Platinum Limited, a platinum mining operation, and Trans Hex Group Limited, a diamond mining operation. This transaction is consistent with Mvela’s strategy of acquiring stakes in a diversified range of mining companies, in the context of the Mining Charter and the SA government’s push towards BEE. It will be of an order of magnitude greater than the previous two transactions and is Mvela’s next step in fulfilling its ultimate ambition to become an operator in its own right.