Niall Carroll, CEO Royal Bafokeng Holdings
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Bafokeng might list platinum project
Allan Seccombe
Posted: Tue, 21 Nov 2006

[miningmx.com] -- ROYAL BAFOKENG HOLDINGS (RBH) might list its Bafokeng Rasimone Platinum Mines (BRPM) to raise capital to develop the Styldrift deposit, which could precipitate a flow of deals and consolidation, officials from RBH said on Tuesday.

BRPM is an equally held joint venture with Anglo Platinum on the Western Limb of the Bushveld Igneous Complex, the world’s richest known platinum deposit. There is an operating 200,000 oz platinum mine generating cash and the untapped Styldrift deposit.

A bankable feasibility study will be completed at Styldrift in the first quarter of next year and a decision to pull the trigger on the R3bn project will be made by June, Carroll told Miningmx in an interview.
easily the sexiest
“It’s highly unlikely that the project will not be a go,” he said. “Styldrift is easily the sexiest of the junior projects.”

BRPM is one of the 15 investments where RBH is most anxious to grow value and it wants to formulate a clear plan on how to do that, he said.

RBH will have to fund half the project and there are four options for the business arm of the Royal Bafokeng Nation, which has derived billions in income from royalties charged on the platinum deposits mined by Impala Platinum.

The BRPM mine is generating cash, but it is not going to be sufficient to fund the estimated R1.5bn needed at Styldrift, Mzila Mthenjane, RBH’s investment manager said.

“One of the options is listing it to get a market value on what we have. A listing does make sense and it will provide us with other opportunities as well,” he said.

A listing could open the doors to other deals and consolidation, Mthenjane said. RBH could also raise debt, which is the least favoured route.

Anglo Platinum could provide the necessary funding, which RBH could pay back from its portion of Styldrift’s operating cash flow, or, lastly, RBH could approach the Royal Bafokeng Nation for the money.

Carroll pointed out that it was still early in the decision making process and he hammered on about how Anglo Platinum had funded RBH’s stake in the BRPM mine, which made it difficult to draw a clear conclusion on the funding mechanism favoured by RBH.

Mike Solomon, chief executive of JSE-listed Wesizwe Platinum, which is exploring an extension of the Styldrift ore body, has long proposed some form of consolidation or partnership between the two potential mines, arguing the economic case for a single large concentrator for example.
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Mthenjane said working across farm fence boundaries to fully exploit ore bodies made sense, but Carroll pointed out BRPM was on the verge of completing a full feasibility study, while Wesizwe was at least a couple of years away from that.

Canadian company Platinum Group Metals (PTM) is the third company with a neighbouring property that Solomon has included in his vision of consolidation in the area. It too is working on a feasibility study.

“There are a lot of things around there that are low down on the value curve,” said Carroll.

“If we get involved in the consolidation game it will be to create value, unlike some other juniors who just want to be taken out,” he said “We don’t have to do anything. We are not a mining house. We don’t have to grow in the mining space.”

BRPM is the second-largest investment held by RBH after its soon-to-be-completed acquisition of a 13.4% stake in Impala Platinum. The Impala transaction should be completed by the end of this year.

The eligible members of the 300,000-strong traditional community vote this weekend on a transaction to swap future royalties for the stake in Impala. Impala shareholders will vote on the deal within the next couple of weeks.

The Impala transaction will hopefully not curtail further projects with Anglo Platinum, Carroll said.

“If both partners act in their own self interest then there are still areas of overlap. Anglo Platinum needs to do what it needs to do to gain empowerment credits and we want to do value accretive deals.”