[miningmx.com] – PALLINGHURST Resources chairman, Brian Gilbertson, said an improvement in the platinum price was the spur required for the listing of the group’s subsidiary, Sedibelo Platinum Mines (Sedibelo).
Commenting in Pallinghurst’s full-year results announcement, in which it posted a $15m (R161m) profit, Gilbertson said the inconsistency between the currently depressed platinum price and the increasing likelihood of a large supply deficit would not continue.
He added that the platinum market would be subject to supply shortages and suggested South African production would be permanently shut down as a consequence of the 10-week strike waged by the Association of Mineworkers & Construction Union (AMCU).
“The South African operations of the three largest platinum producers are now into their third month of industrial action, with significant loss of production and the increased likelihood of mine closures; yet the platinum price has hardly responded,” said Gilbertson.
“This inconsistency is unlikely to continue for a protracted period and when the turn comes, Sedibelo Platinum Mines, with its improving production profile and unique growth story, will be prepared to proceed with a listing,” he said.
The platinum price, at around $1,410 per ounce is only $30/oz higher than it was at the start of the year before AMCU’s strike kicked in. The apparent stubbornness in the price is being put down to significant levels of above-ground metal.
Sedibelo increased platinum production about 50% to 150,000 oz year-on-year and recently lifted its resource base to over 100 million 4E (four elements) platinum group metals after buying the Kruidfontein property which is adjacent to its Magazynskraal.
In addition to Sedibelo, Pallinghurst owns shares in Gemfields, a coloured gemstone miner and marketer which recently merged with Faberge, the Russian jewellery brand.
It also operates the Tshipi Borwa manganese mine which produced one million tonnes (mt) of manganese ore in the 2013 financial year, just under half of its planned 2.4mt nameplate capacity. It produced a profit for the year, said Arne Frandsen, CEO of Palllinghurst who added the group was still trading at a discount to its net asset value (NAV).
“There is still a significant gap between the share price and the Company’s NAV. However, I believe that the share price will respond positively and continue to narrow the discount as we move closer to monetising the underlying value of the investment portfolio,” said Frandsen of the ‘harvesting period’ Pallinghurst had now begun.
