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» African Platinum interested in JSE debut
» South Africa's ‘want-aways’ seeking cash
» Barplats prepares offshore listing
» Ridge enlisting partner for $690m mine


Barplats seeks R1bn for new mine
David McKay
Posted: Tue, 01 Nov 2005

[miningmx.com] -- THE race to develop South Africa’s next major platinum mine appears to be gaining some momentum, with at least three major developments worth a collective R5bn to R5,5bn and two new JSE Securities Exchange (JSE) listings on the cards.

Among the most interesting propositions is Barplats, which is giving thought to developing Kennedy’s Vale, a venture estimated to require R2,5bn in capital to build by former owner Impala Platinum Holdings (Implats).

It’s a bold move, as Barplats only recently reopened Crocodile River, a mine that struggled to cut a margin under Implats.

Newly appointed Barplats chairman Allen Palmiere said funding for Kennedy’s Vale would be sought next year. If it’s going to cost R2,5bn (a pre-feasibility for Kennedy’s Vale is under way) about R1bn may be equity financed, he said.

Kennedy’s Vale also has its own refinery, which could be used to help develop a separate toll-treating business offering competitive rates to Impala Refining Services, particularly for other juniors. Palmiere said: “It will require retro-fitting, but is currently up for study. We want to see what the capacity would be.”

Palmiere is unknown to South African investors but has a history in venture capital in North America. CEO of Toronto-listed Silk Road Resources, Palmiere is also chairman of HudBay Minerals, the company that bought the Hudson Bay base metals mine and complex from former owner Anglo American (and Minorco before that). Palmiere replaced Loucas Pouroulis at Barplats earlier this year following what appears to have been a disagreement over funding Kennedy’s Vale.

Armed with cash flow and an operational track record from Crocodile River, Barplats will be able to marshal enough support for Kennedy’s Vale, said Palmiere. A reverse listing of the shares owned by major shareholders the Platinum Consortium (69,1%) in Barplats into a North American-listed firm is one option. Others are being considered.

While Barplats is seeking offshore capital, Ridge Mining and African Platinum (Afplats) are expected to unveil plans to list on the JSE, both aimed at funding empowerment partners.
Capital raising could be tied to the JSE listing in 2006
Afplats has retained South African bank RMB to assess funding options for Leeuwkop, a platinum group metals development that has a 50% empowerment partner and will almost certainly require equity funding. The company has expressed interest in a JSE listing.

Ridge Mining, listed on the London Stock Exchange, wants to develop a R750m mine – Blue Ridge – and is scheduled to complete another feasibility study within weeks. It’s also seeking a JSE listing aimed at raising funding and ensuring the participation of its empowerment team, Imbani Platinum.

As of end-September, Ridge Mining had about $7m in cash and no debt, which would be enough to sustain current operations into the early part of 2006.

“But Ridge will have to raise capital to continue with the Sheba’s Ridge bankable feasibility study and development of the Blue Ridge study,” said Mark Smith, an analyst at RBC Capital Markets. “We believe this capital raising could be tied to the JSE listing late in first half 2006, after the release of the Blue Ridge feasibility study.”

Commenting on the feasibility study, commercial director Francis Johnstone said the report has been submitted to consulting engineering company SRK. “We expect details will be available in about two weeks.”

The report would also have to pass muster with the financiers of Imbani Platinum. “They need to be satisfied with the project themselves,” Johnstone said. He also confirmed that the company would seek a JSE listing but probably only in April 2006, as the audited statements would have to be submitted.

Analysts said each platinum aspirant had a fly in the ointment, but Barplats was possibly the front-runner, followed by Platinum Group Metals (a Toronto-listed firm) and Ridge Mining. Afplats is generating interest but there’s a worry that the 1 200m to which its mine will ultimately descend may make it high risk.

“A lot of these projects only become interesting when you start putting them together,” said Smith. Another platinum junior, Pelawan, which reversed into Anooraq Resources in Toronto, would be an obvious target for Anglo Platinum, he said.