HolGoun is still willing to talk to Lonmin

[miningmx.com] — THE HolGoun Group, whose subsidiary Keysha Investments was awarded a prospecting right over a portion of Lonmin’s property in the Bushveld, on Friday said it has and continues to be willing to find an amicable solution with Lonmin.

HolGoun came under fire this week after Lonmin was ordered to stop selling certain metals that were byproducts of the platinum production process.

Led by former DG of public enterprises Sivi Gounden, who also served on the Lonmin board until October last year, HolGoun insists that it has at all times acted with integrity.

“Gounden wishes to state categorically that at no point during his tenure on the board of Lonmin was there any indication either in writing or verbally that he had been derelict in exercising his fiduciary responsibilities as a member of the board of Lonmin,” HolGoun said in a statement.

Subsequent to the resignation, several meetings reportedly took place between Gounden and Lonmin CEO Ian Farmer where the Keysha matter was discussed.

“The spirit and nature of the discussions was cordial and aimed at finding an amicable solution between Keysha and Lonmin,” HolGoun said.

Lonmin, the world’s third largest platinum producer, last week announced that it had been instructed by the Department of Mineral Resources (DMR) to “refrain from selling nickel, copper, chrome, or any other minerals other than platinum group metals with immediate effect”.

The sale of these metals added $63m to sales in Lonmin’s last financial

Lonmin produces all of these metals a byproducts to its main business of platinum group metals (PGM) production but the DMR order appeared to stem from a dispute
between Lonmin and the government over the rights of Keysha to prospect for
minerals on land where Lonmin is already mining.

The DMR said it gave the prospecting rights for the byproducts of Lonmin’s platinum operation to Keysha after Lonmin in December last year withdrew its application for the rights to sell them.

Lonmin has since settled its dispute with the government and has been given the all clear to mine and dispose of associated minerals at all its properties other than the small area which is subject to the prospecting right issued to Keysha.

“We are deeply saddened by the turn of events,” HolGoun said, adding that it has consistently and continues to indicate a willingness to find an amicable solution with Lonmin.

The HolGoun Group was established as principally a mining investment company
in 2005.

In addition to the various mineral rights held and current projects being pursued, HolGoun owns minority stakes in each of Optimum Coal, Samancor Chrome and Shaft Sinkers.

The company said the first interaction that HolGoun had with Lonmin was in 2006 when it presented a comprehensive chrome beneficiation strategy to the platinum producer, inviting it to participate in rolling out that strategy.

Gounden, who was a Lonmin board member since June 2005, recused himself from any deliberations that Lonmin had on the matter and in the early part of 2008, HolGoun was informed by Farmer, the then head of business development, that Lonmin would not be pursuing this initiative with HolGoun.

Gounden then told Farmer that HolGoun would be pursuing the project independently and would also consider other partners for the project.

During the course of 2008 and the early part of 2009 Keysha proceeded to submit blanket applications – in excess of 120 – for the right to prospect for all base metals in the bushveld region using the platinum occurrences as a footprint taking in to regard of the closely associated geological footprint between the platinum group metals and chromite deposits in the Bushveld region.

But the majority of Keysha’s applications were rejected on the basis that other parties had secured base metal rights over their properties.

That was when Keysha was informed that its application was accepted for 15 farms in various areas including potions of the Middelkraal farm on which Lonmin
conducted PGM operations.

“It must be noted that the acceptance by the DMR was an indication that no other entity (according to their records) held these rights and that we were the first in line for these rights,” HolGoun said.

As per the administrative process, Keysha was required to consult with a range of stakeholders including mining companies that were mining other minerals in the same areas.

Keysha initiated this process, Lonmin being one of the parties with whom Keysha was to consult.

At this time Gounden notified Mr Farmer, now the CEO, that Keysha’s application had been accepted by the DMR over an area in which Lonmin had PGM rights.

Farmer indicated that he would look into the matter and subsequently reverted indicating that Lonmin would endeavour to protect its legal position by appealing the DMR acceptance of Keysha’s applications.