[miningmx.com] – SABLE Platinum, the JSE-listed platinum group metal
and vanadium exploration company, has agreed in principle to buy just over a quarter
in Global Initiatives, a privately-owned company in Botswana.
Global Initiatives has the rights to retreat tailings and slag produced by Botswana’s
Selebi Phikwe, a base metals mine owned by state company BCL Ltd, that first began
production during the Fifties. The slag is rich in pig iron.
Sable Platinum said in an announcement today that it would buy an initial 4% tranche
in the company for $4m but had a series of option agreements in which it could grow
this investment another 22% over time.
James Allan, CEO of Sable Platinum, said the end-game was to add cash flow to the
company’s investment offering while it developed its platinum prospects,
predominantly situated on South Africa’s western Bushveld. He estimated that as a
whole, the slag could yield cash of between $100m to $120m a year.
“This is potentially a very lucrative deal from Sable and will help to bolster our cash
reserves. As you know, exploration companies always have cash issues,’ he said.
Efforts to secure additional funding from shareholders continued, he added.
Although Allan says there’s “no problem’ finding a market for pig iron in international
markets, the hope is that a long-standing Chinese investment in a local blast furnace
will become the natural end-user for the pig iron.
Global Initiatives had been investigating a $140m plant to retreat mine tailings and
smelter slag at Selebi Phikwe mine for three years.
Some 100 million tonnes (Mt) of mine tailings and 45Mt of smelter slag from the mine
were to be retreated yielding 150,000 tonnes of nickel, copper, and cobalt, according
to previous reports.
However, the collapse of the nickel price in the last two years has made these plans
no longer feasible; the proposal now is to retreat the slag which has some 40% of
iron content. Tailings is waste from the flotation process whereas slag is the waste
after nickel is smelted.
There are three option agreements that will see Sable Platinum buy 5%, 6% and a
further 11% in Global Initiatives. Crucially, Sable Platinum also owns the management
contract over the slag retreatment project.
“Early assessment of this project indicates that the acquisition of up to 26% of Global
and a management contract on the Selebi Phikwe project will provide a significant
uplift to Sable shareholders,’ the company said in its announcement.
Allan brought Sable Platinum to the JSE in November barely before the dust had
settled on labour protests, violence and strike action that idled a large slice of South
Africa’s platinum market.
Sable Platinum has a target resource of 42 million to 70 million ounces of 4E
consisting of platinum, palladium, rhodium and gold across five different exploration
properties on the western Bushveld.
One of the projects, Klipfontein, is a joint venture with Toronto-listed Platinum Group
Metals (51% to Sable Platinum) whilst Sable Platinum’s Syferfontein project is held in
joint venture with the Bakwena community and borders Xstrata’s Eland Platinum.
Allan said last year he was hoping to raise $30m from investors. “We have had a lot
of interest from investors who recognise in us a long-term strategic opportunity,’ said
Allan at the time.
Article updated to show that Global Initiatives is a privately-owned company, not a
state-owned company, and that the focus of the project is to retreat slag, not tailings.
