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» Aquarius spurns pt juniors in growth quest
» Aquarius awaits Booysendal deal, seeks role
» Northam's reef woes rein in platinum output
» Northam Pt BEE deal "imminent"
» Anglo Pt pencils in spring BEE deadline

» JSE:Anooraq Resources Corporation:
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Deal fest coming soon to SA platinum
David McKay
Posted: Tue, 21 Aug 2007

[miningmx.com] -- SINCE IT’S GENERALLY believed that Anglo Platinum’s black empowerment transactions won’t be held up by the resignation of Ralph Havenstein, its former CEO, it might be worth pondering which companies will best benefit from the transaction fest, due to hit our screens any day now.

That’s according to one government source, who claims a deal may become public this month. But Cynthia Carroll, Anglo American’s swashbuckling CEO, says it could still take months.

NORTHAM PLATINUM: The big question for (minority) shareholders in Northam is what the company will have to “pay” to participate in Anglo’s empowerment plans. Northam is a one-asset company and its mine is unpredictable.

It sorely needs growth options and it’s thought 100% of the 125m plus oz Booysendal will be reversed into the company by Anglo Platinum (50%) and Mvelaphanda Resources (Mvela), which owns the other half.

In return, Northam will sell its shares. But will Northam’s minority shareholders look kindly on such a deal?

Northam shareholders will also be anticipating life under a new owner. In terms of Anglo’s empowerment plans, Mvela will buy its 22,5% stake in the firm – giving it around 45% of Northam in total.

It’s thought Mvela doesn’t have enough firepower to make a general offer to shareholders but will control the asset nonetheless. Given the initial size of its first empowerment deal – up to 10% of Gold Fields – Mvela has been a slow-moving investment house. It must now become an operating company.

VERDICT: A pawn in the chess game. May benefit from new exploration/production ounces – but at what price?

MVELA: With Northam Platinum under its belt, Mvela gets to control the destiny of at least one of its investments. That should surely be positive for Mvela, which will be glad to reduce its reliance on its Gold Fields’ investment. Cost increases are eating heavily into gold industry margins, which may explain the performance of Mvela’s share price.

Mvela has advised shareholders it will post a headline loss per share of between R11 and R13 for the year to end-June compared to earnings per share of R16.63 per share for the same period a year ago.

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"The expected decline in earnings is primarily attributable to the fair value adjustment to the group`s investment in Gold Fields arising mainly from the 32% decline in Gold Fields` share price during the year-ended 30 June 2007," Mvela said this week.

They’ll also now be focus on Mvela as an operating company. Execution of the Booysendal project will also fall under the microscope.

VERDICT: Reduces gold reliance. All eyes on its ability to operate a mine and bring momentum to a major project.

AQUARIUS PLATINUM: Not directly involved in the Anglo Platinum empowerment transaction but keen to deal with Booysendal, which Northam will own. Aquarius wants to conduct a pool and share agreement between its Everest project and neighbour Booysendal, providing it with some much-needed growth potential. If it gets this deal away, Aquarius will be a definite beneficiary and be another savvy deal for CEO Stuart Murray.

VERDICT: Stands a chance of resolving growing concerns the company has nowhere to grow.

ANOORAQ RESOURCES: Toronto- and JSE-listed Anooraq Resources is to buy more than 50% of Lebowa Platinum from Anglo Platinum, a modestly profitable mine situated in the northern part of the Bushveld.

In its favour, Lebowa Platinum nonetheless has significant annual output and cash flow, ideal for an exploration company. Anooraq will also become 100% owner of the Ga-Phasha prospect, providing it with fresh blue sky potential.

VERDICT: Winner. Now what about the poor share liquidity?

ANGLO AMERICAN: Having Anglo Platinum – a major contributor to profits – twisting in the wind, empowerment is a major strategic risk to Carroll’s faster-paced Anglo American.

Therefore, completing this empowerment deal will be a feather in Carroll’s cap and, more importantly, one less headache. But finding a replacement for the ousted Ralph Havenstein is easier said than done.

VERDICT: Big tick on Carroll’s onerous “to do” list.