  | |
| |
 |
|
| ||
Eland received takeover calls Posted: Thu, 22 Mar 2007 [miningmx.com] -- ELAND Platinum, a Johannesburg-listed exploration company, had received “expressions of interest” from platinum mining companies and mining firms that produce other metals, said CEO David Salter. “We have a project that is attractive to any mining company not just platinum companies,” Salter told Miningmx. “We’ve had no approaches of any substance, but there have been lots of enquiries.” There is widespread speculation in the market that Eland is up for sale. It is developing an open cast mine, which it started blasting in January this year, and aims to produce platinum concentrate from October. Eland’s share price has risen 172% in the year since listing in March 2006. The shares are trading at R62.25 each. “Eland is a logical target,” said Heye Daun, a mining analyst with Old Mutual Asset Managers. “We have heard the speculation but nothing firm.” “Various players have been sniffing around uncommitted platinum players. If you look around the Bushveld there are not a lot of uncommitted platinum resources,” Daun said. Eland will be producing platinum this year, unlike some of its more highly priced peers who are still a number of years away from production. "We like the Eland platinum story and have been holding the share since they listed," Daun said. Indications are that the retail component in Eland’s share register has grown strongly in the last six months because of interest amongst smaller investors. Foreign institutional interest in the share has also increased. Speculation on who a possible buyer for the assets might be runs from the majors like Impala Platinum, Anglo Platinum and Lonmin to the mid-tier producers such as Aquarius Platinum. However, Impala is an unlikely suitor despite its stated intention of growing in South Africa because Eland will sell its concentrate to Anglo Platinum. For its part, Anglo Platinum has vast resources and does not really need to acquire more. That leaves Lonmin, which is an active buyer of projects, and Aquarius, which owns mines with a relatively short lifespan. Aquarius has $250m in cash on its balance sheet. Stuart Murray, Aquarius Platinum CEO, said the company remained “watchful” of potential acquisitions in South Africa. Gold Fields has openly talked of venturing into platinum. Another gold company, Barrick, has a platinum project further north of Eland called Sedibelo. Xstrata is involved in chrome extraction on the Eastern Limb and has long been thought to be looking for a platinum project. “We’ve heard all sorts of rumours about Eland,” Salter said, adding the company is not actively touting itself as a takeover target or a merger proposition. Another junior, African Platinum traded on AIM, is in the throes of being taken over in a R3.8bn bid by Impala Platinum. Lonmin has bought AfriOre for R3.2bn as it moves towards a two million ounce a year production target. The market is rife with speculation about consolidation of the junior sector and tie-ups with the major platinum companies. “Consolidation is likely. A lot of new platinum projects carry lots of negative cash flow for years to come,” said Aquarius’s Murray. Salter declined to offer any concrete comment on its efforts to raise R800m towards capital expenditure, but it’s understood that funding will be in place at the end of March. Click Here to subscribe to our daily newsletter
| ||||||||
