[miningmx.com] — AUSTRALIAN junior Nkwe Platinum still faces legal challenges over the prospecting rights to its three remaining farms, following the loss of its rights to two farms in terms of a ruling by the Constitutional Court.
The five farms make up Nkwe’s Tubatse and Garatau projects situated on the eastern limb of the platinum-bearing Bushveld Complex in Limpopo Province.
The Constitutional Court has set aside the award of prospecting rights over two of these farms – Nooitverwacht 324KT and Eerstegeluk 327KT – to Genorah Resources, the major shareholder in Nkwe.
That followed a drawn-out legal action by a local tribe – the Bengwenyama-ye-Maswasi community – acting in collaboration with Bengwenyama Minerals.
All five farms sit downdip of the Modikwa Platinum mine, jointly owned by Anglo Platinum and African Rainbow Minerals (ARM).
An ARM spokesperson confirmed to Miningmx that ARM and Anglo Platinum had jointly taken action against the awarding of prospecting rights to Genorah over all five farms.
This is because these farms are contiguous with Modikwa and form the natural deep-level extensions to the operations of that mine. On that basis, the JV partners had taken the award to Genorah on review with the department of mineral resources (DMR).
The other three farms are Hoepakrantz 291KT, Garatouw 282KT and De Kom 252KT.
The situation now facing Genorah appears to place a major question mark over whether Xstrata will follow through on the deal announced in August 2008, through which it negotiated an option to take a 50% stake in the Garatau and Tubatse operations.
Among various conditions, the deal hinged on completion of a bankable feasibility study (BFS) which was supposed to have been done by the fourth quarter of 2009.
An Xstrata spokesperson said the group would not comment until it had studied the judgment and considered the implications.
Nkwe MD Maredi Mphalele was not immediately available for comment.
He is quoted by Business Day newspaper as saying he was confident that the DMR would return the rights to Genorah.
In May 2010, Mphalele told Miningmx: “These have been spurious and trivial matters. They have all been turned down in court, even the one that got to the Supreme Court.’
But, now that the country’s highest court has ruled against Genorah, it’s difficult to see how Mphalele can be so confident Genorah will get those rights back.
Bengwenyama Minerals pointed out in a letter to the Australian Stock Exchange dated August 13 2009 that “pending the final resolution of this litigation, Genorah was interdicted by the High Court from conducting any prospecting activities on Tubatse.
“The BFS alluded to by Nkwe in various statements cannot be completed as a result of the interdict, and drilling operations at both Eerstegeluk and Nooitverwacht have ceased for the past 18 months since the granting of the interdict by the High Court. The interdict will remain in force until such time as a court (appellate division in 2010 or the Constitutional Court thereafter) pronounces finally on this matter.’
The point being made to the ASX by Bengwenyama was that, at that stage, Nkwe did not appear to have informed its shareholders of these legal actions.
A statement released to the ASX today by Nkwe director Peter Landau said, “The decision has no impact on Nkwe’s current Garatau Project the
subject of a Bankable Feasible Study nearing completion. A further
update on the BFS will be made next week with the release of further
financial modelling which sets a base case net present value of
approximately R14bn.
“Nkwe were not a party to the proceedings but the judgement does
have an impact on the current status of its 64% interest in the two southern
farms Nooitverwacht and Eerste Geluk which are the subject of
exploration drilling.
“The Court set aside the current prospecting right for the two farms on a
number of technical and administrative grounds including whether the
DMR had met all the technical requirements of the application and whether the requisite consultative process with the local community had been adhered to.
“Importantly, the Court issued no directions to the DMR and it did not
direct the DMR to award the prospecting right to an alternative
applicant.
“Nkwe is confident that an outcome will be reached which preserves its
64% interest in the two farms. In the interim, the immediate focus is with the
Garatau BFS and the commencement of development of Nkwe’s
flagship asset.”
The action against Genorah is not the only one concerning prospecting rights in this region in which Anglo Platinum and ARM are involved.
The two are also contesting the award of prospecting rights over the three farms forming the “southern cluster’ project held by JSE-listed exploration company Bauba Platinum.
Those farms are Genokakop 284KT, Grootvygenboom 285KT and Houtbosch.
