Nkwe wins rights back, shares fall

[miningmx.com] — NKWE Platinum has regained the prospecting right to a farm which had been set aside by the Constitutional Court in November, a development which prompted the readmission of its shares for trading on the Australian Stock Exchange (ASX).

In a statement released on Thursday, the group said the department of mineral resources had awarded the prospecting rights for the farm Eerste Geluk 327KT to the Roka Phasha community, with Genorah Resources (Nkwe’s majority shareholder) as the economic partner.

“Genorah Resources is a major shareholder of Nkwe and by virtue of back-to-back arrangements with Genorah, Nkwe will now have its 64% interest in the Eerste Geluk farm returned,’ read the statement.

The awarding of the rights to the Roka Phasha came despite the Constitutional Court declaring as a statement of fact that the Bengwenyama-Ya-Baswati was the rightful owner of Eerste Geluk.

Ian Shapiro of the law firm Evershed, who represented the Bengwenyama at the Constitutional Court, said his client would request a review of the DMR’s decision.

“If that is not successful, we shall approach the courts again,’ he said.

The court set aside the rights to the farm, owned at that stage by Genorah, after it found that the Bengwenyama were not properly consulted.

Nkwe’s managing director Maredi Mphahlele played down the ownership dispute.

“Given tribal history and shifting allegiances there will always be issues regarding who does represent relevant communities, but the key point we have always made is that we actually have in the past and will continue to move forward working closely and constructively with representative bodies to ensure all our responsibilities in empowering and assisting local communities are positively discharged.’

Mphahlele also blasted the commercial representatives of the Bengwenyama, saying they had been “previously involved in the funding and running of prior “community’ land claims involving mineral rich farms’.

The formal awarding of the rights to a second farm which formed part of court ruling, Nooitverwacht, is yet to take place.

“Nkwe expects an outcome which will provide a joint ownership scenario with Nkwe’s partners having a 50% interest,’ read the statement.

The farms have a combined resource of 20.4 million ounces (m oz) of platinum group metals; 12.6m oz of UG2 Reef and 7.8m oz of Merensky Reef. According to Nkwe, Eerste Geluk is the primary farm, having the most accessible resources at the shallowest depth.

MARKET REACTION

Despite regaining the rights to Eerste Geluk, Nkwe’s share price dropped significantly on its first day of trading on the ASX since December 7, falling 20% from A$0.45 to A$0.36. Trading volumes were close to 10 million shares.

Nkwe was also facing legal action by African Rainbow Minerals and its Modikwa Deeps equity partner Anglo Platinum over the rights to Eerste Geluk and three other farms which are contiguous to Modikwa Deeps.

Said ARM CEO Andre Wilkens on February 28: “We have tried to settle this out of court because the DMR was keen that it should not end up in court, but we have failed. We are taking a firm stand on this and are now going to get a ruling from a judge on who owns these prospecting rights.’

Nkwe responded in Tuesday’s statement that the dispute was resolved following an agreement by the parties in February 2008.

“Nkwe considers the current purported action by the parties to be disingenuous and vexatious and is designed to do nothing more than gain some perceived commercial advantage in negotiations with the DMR, Genorah and Nkwe to reach a commercial settlement of a dispute which has already been settled.’