Ann: Jupiter welcomes Exxaro as prospective partner & shareholder, page-59

The Exxaro transaction is effectively a complete exit of Ntsimbintle's investments. All they have left is a 50.1% interest in tenements that cover the northern extension of Samancor's Wessels mine.

The read through is that Exxaro were looking to enter the manganese market (which they have been very public about since last year). Ntsimbintle have reportedly wanted to exit for a while and this transaction facilitates that. OM Holdings have also tagged along.

If you look at the totality of this Ntsimbintle transaction, Exxaro have bought a 50.1% interest in the Tshipi mine at the asset level. They have also bought 19.99% of Jupiter Mines. The combination of this gives them an effective ~60% economic interest in Tshipi. The effective look-through price paid for Tshipi at the asset level is over $0.30 per share AND they have also bought the JMS shares for over $0.31 per share.

They also paid to acquire Ntsimbintle's 51% interest in Mokala and a 9% interest in Hotazel. They face a situation where the JV partners for those assets (Glencore in the case of Mokala, and S32/Anglo American in the case of Samancor) have pre-emptive rights. Glencore can either buy the 51% Mokala share at the same price or force Exxaro to buy their 49% share at the same value. S32 and Anglo via the Samancor JV can also match Exxaro's bid for the 9% of the Hotazel assets (doubt they will).

I think you have to ask the question as to why Exxaro would do this transaction given the uncertainty around what can happen with Mokala and Hotazel. They have no control over what Glencore, S32, and Anglo will do. The cornerstone of this whole deal is Tshipi.

Tshipi has a 5 person board, where 2 of the Tshipi Directors are Jupiter nominees, 2 are Ntsimbintle/OM Holdings nominees, and the Chair is appointed by Ntsimbintle. The Tshipi JV structure has a 75% special majority voting threshold for most key operating decisions, which effectively means consensus from both JV partners is required for all meaningful decisions.

If you look at what Exxaro end up with, the end result is they have bought a ~60% economic interest in the Tshipi mine but don't have effective control over the asset given the Tshipi JV structure. Imagine you are a "big" corporate, you buy 60% of an asset, but you still have to depend on the leadership of offshore junior to say yes/no to any key decisions you want to make. For a corporate it's a completely ridiculous strategic position to end up in.

If they want control over Tshipi they need effective control of Jupiter, so this only ends one way.