[miningmx.com] — AUSTRALIAN junior Nkwe Platinum remains dead in the water as its plans to develop a platinum mine at Garatau/Tubatse on the eastern limb of the Bushveld Complex, continue to be stymied by legal issues.
These involve a dispute over ownership of the mineral rights to the Garatau and Tubatse projects awarded to Nkwe by the Department of Mineral Resources (DMR), but subsequently challenged by Anglo American Platinum (Amplats) and African Rainbow Minerals (ARM).
The ground under dispute forms what is known as the Modikwa Deeps – the deep-level, down-dip extensions to the platinum bearing reefs being mined at the Modikwa Platinum mine – which is jointly-owned by ARM and Amplats.
Nkwe shares have been suspended since November 9 at the request of the company, because Nkwe MD Maredi Mphahlele believed a deal was close.
In a statement released to the Australian Stock Exchange (ASX) on Friday he said “in anticipation of an impending settlement documented and signed by all parties, the company called a trading halt on November 9 2011”.
“There is substantial agreement between the DMR, Amplats, Nkwe and Genorah, however certain technical difficulties have arisen between the parties and the objectives of ARM.
“The company is acutely aware of the valid and substantial concerns expressed by shareholders due to the extended period of the negotiation and will ensure that any binding outcome will be announced immediately in conjunction with a resumption of trading in the Company’s shares on the ASX.”
Mphalehle is correct in identifying ARM as the company which has dug its heels in over this situation, but ARM has good reason to do so.
Both Mphalehle and other Nkwe directors have also seemed to be out of touch in the past regarding what’s actually happening on the ground concerning Nkwe’s situation.
In early September, Mphalehle gave a presentation to the Africa Down Under conference in Perth which he concluded by stating that Nkwe was “on the cusp of transition from explorer to producer”.
That seemed unduly optimistic at the time, given the legal dispute over the prospecting rights and the fact that, so far, Nkwe has not started any actual development on the ground. The furthest it has got is a bankable feasibility study on Garatau.
In December 2010, Nkwe had dismissed any threat to its prospecting rights by ARM.
In a statement the company declared “following protracted negotiations involving Nkwe, Genorah Resources, Anglo, ARM and the DMR it was agreed in February 2008 that Anglo would withdraw the proceedings (a review application) and that commercial negotiations on the exploitation of the five farms would be entered into.
“The discussions are on-going. ARM has no standing in any way to singularly commence any action against Genorah or Nkwe in respect of the five farms.”
Executive director Peter Landau at the time also dismissed claims that Nkwe had been “less than frank” with its shareholders over the significance of the on-going legal disputes and administrative uncertainties facing Nkwe’s projects.
The reason ARM has dug in its heels is two-fold. It owns a 50% share in that ground and it seems whatever agreement Amplats may have originally struck with Nkwe over the rights was not cleared with ARM.
ARM executives will not go into the details but CEO Andre Wilkens laid it pretty much on the line in February when he told Miningmx that “we at ARM are not prepared to give anything away”.
“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.
“This action is being brought by both ourselves and Amplats because we are 50/50 joint venture partners in Modikwa but, if Amplats wants to give up some of their 50% stake, that’s their decision.”
