Jubilee eyes other platinum exploration firms
Posted: Thu, 07 Dec 2006
[miningmx.com] -- NEW JSE entrant Jubilee Platinum is looking for South African platinum exploration projects that are in the pre-bankable feasibility study stage for it to buy and build itself up as a mid-tier producer over the next five years, CEO Colin Bird said on Thursday.
Jubilee, which is quoted on London’s AIM, has come to the JSE with the desire to use its Johannesburg paper to acquire assets rather than to raise funds. Jubilee, which is involved in a number of joint ventures both in South Africa and Madagascar, does not have an operating asset.
There are an estimated 20 junior and exploration platinum companies operating in South Africa and Bird said he had spoken to management of these firms informally in an effort to understand what they’ve got.
“When the new year starts we’ll be looking around and talking around to see what the best opportunities are,” Bird said, adding the Jubilee team was stronger on the operational side than exploration.
Dennis Tucker from Investec Corporate Finance estimated there will be three mid-tier platinum companies within a decade, one of which could be Wesizwe Platinum, which has two neighbouring projects that could be consolidated into a good-sized operation.
The first JSE trade in Jubilee was at R9 a share and 350,000 shares swapped hands. This is roughly in line with the AIM price of nearly 64 pence.
Jubilee’s flagship is the Tjate project on the northern tip of the Eastern Limb of the Bushveld Complex, which is moving towards a releasing a pre-feasibility study early next year.
Jubilee is funding all the exploration work under its agreement with
black-owned Tjate Platinum Corporation, which owns the rights to the properties. Jubilee bought a 25% stake in Tjate Platinum for R35m and has the option to lift that to 35% by spending R14m on exploration.
Jubilee currently owns about 31%, but Bird said holding just 35% of the project was unsatisfactory. There might be an opportunity when Tjate Platinum comes to the market to raise funds to construct a mine and concentrator for Jubilee to take a larger stake.
“Thirty five percent is a true minority interest and there would be some sense if any of our partners were interested in increasing our position to below the 50% that is expected of us,” Bird said.
Under mining legislation, former state-held mineral properties must be majority owned by black companies.
The other partners are the nine-year-old Sebata Kgomo Consortium, which acquired the Tjate property from the government, and Tiego Moseneke’s New Diamond Corporation (NDC).
opportunity to team up with a major platinum producer could present itself with Impala Platinum, which is mining the UG2 reef updip from Tjate at Marula and has left its shallower Merensky reef untouched.
Jubilee is focussing on Tjate’s Merensky reef, which starts at a depth of 650 metres and is a sought-after sulphide ore body with sizeable concentrations of nickel and copper apart from platinum and palladium.
However, Jubilee wants to know the full value of its Tjate asset before making any overtures towards Impala on a possible joint venture.
“An approach to them now would not be smart. They know what they want to do and they know down dip of them is our Merensky. Subject to the Tjate board, we’ll always be interested in a joint venture or whatever makes sense,” Bird said.
Jubilee would like to define a resource of at least five million ounces at Tjate to give it a mine capable of 250,000 oz/year over 20 years.