Is Assore planning a move into PGMs after taking beachhead in Gemfields?

ASSORE, the iron ore investment company, has bought a 5% stake in Gemfields which mines and markets emeralds and rubies from Zambia and Mozambique, and has a 6.5% interest in Sedibelo Platinum Mines.

Gemfields disclosed today Assore had bought approximately 58.4 million Gemfields shares in off-market block trade at a price of R3.20 per share for a total amount of about R187m. The shares were bought at a 29% premium to Gemfields’ closing price on Monday.

Assore delisted from the Johannesburg Stock Exchange in May after 70 years as a public company. Its head of strategic development, Kieran Daly said at the time there were no particular plans to embark on new investment directions triggering the delisting.

Assore’s principle investment is a 50/50 joint venture with African Rainbow Minerals in Assmang, a company that produces iron ore and manganese ore and alloys. It also has investments in chrome and a 25.45 stake in IronRidge Resources, an exploration firm.

Regarding its 6.5% stake in unlisted platinum producer Sedibelo Platinum Mines, Gemfields said it was hoping to sell the investment ahead of the company’s listing – a strategy that is favoured by Gemfields former parent company, Pallinghurst Resources.

Pallinghurst Resources said it was hoping to list in the first quarter of this year, a target pushed back to later in the year.

It added that Sedibelo was expanding its Pilanesberg Platinum Mines in South Africa into contiguous deposits of Sedibelo Central, Magazynskraal and Kruidfontein.

Speaking to Miningmx in May regarding why the firm was delisting, Daly said: “There’s nothing particular going on. We have our strategic shareholders who dominate (the share register), including the Sacco family, which has one view of life, and then we have institutional shareholders who have a different view on things. In the end, the reality was that the value of our minorities and the available cash we had lined up”.

Gemfields has been through the wringer over the past 18 months. It closed its mines about a year ago in the early months of the the Covid-19 pandemic and did not reopen them until March this year.

The outcome was a R1.5bn net loss for the 2020 financial year. However, the company brought in $90m in revenues following the re-opening of its mines.