Impala’s possible coup throws up questions

[] — I phoned David Brown, Impala Platinum CEO, to congratulate him on his poker face.

That’s nothing to do with the way he looks, but more the fact that during our lunch on Thursday, Brown betrayed no sign of what I believe could become a significant coup by Impala: the proposed three-way tie-up with Northam Platinum and Mvelaphanda Resources, unveiled late on Friday.

If you haven’t seen the details of this potential corporate action, then look no further than Allan Seccombe’s coverage. It’s an excellent piece.

During that lunch, Brown and I briefly discussed regional consolidation in which he said deep-level resources were unattractive to the group. I knew the company was looking for new acquisitions but I never thought it would plump for Mvela and Northam. The question, then, is why?

I’m inclined to believe Leon Esterhuizen, the RBC Europe analyst, who said Impala’s game was to buy improved margins and keep other recent acquisitions, such the deep-level Leeuwkop prospect, for long-term growth. Leeuwkop could sit in the cabinet along with the platinum resources of Zimbabwe that Impala owns.

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I want to come to Zimbabwe shortly, but in the meantime there’s some crucial questions Impala’s bid for Northam and Mvela throws up.

Assuming Impala’s offer becomes a takeover – a JV on the platinum assets is the other possibility – what becomes of Mvela’s other assets?

It has recently made no secret that its stake in Gold Fields is but a temporary one. (I got into hot water saying this a few years back but it still holds true). Would shares in Trans Hex also be up for grabs?

Secondly, there’s real concern now about the strategic direction of Aquarius Platinum.

Its CEO, the irrepressible Stuart Murray, was favourite to co-operate with Mvela Resources, but his relationship with Impala – which he once described as the “dribbling cousin’ of the platinum sector – means such an expansion might be off the radar.

Has Murray now been cast out in the cold?

I understand the speculated Mvela-Aquarius-Lonmin tie-up, intended to fend off Xstrata’s bid for Lonmin, was real.

It looks like Lonmin leaked the news to the Telegraph in London, a favourite conduit for Lonmin, to make Xstrata’s already hefty $10bn bid even more expensive.

Now, however, Aquarius is without a dance partner although the company says it’s pursuing its own corporate activity (but not with Lonmin). I wonder if Murray’s getting desperate? Conditions put Aquarius’s attempted merger with LionOre Resources, essentially a nickel producer, several years ago in a new light. Was it already then casting around for partners?

Thirdly, with further consolidation tying up all the major deposits, they’ll be fresh interest in the platinum exploration sector, currently mauled by the global sell-off of junior mining shares.

Eastern Platinum has been mentioned as one to watch. Platmin and Wesizwe Platinum are others.

Meanwhile, events regarding a Zimbabwe power-sharing deal on Friday represented another spot of good news for Impala.

Although barely the beginning of the road to recovery, power-sharing is a crucial start. And in the world of mining, where project planning is a question of decades, the mere prospect of a more sobre policy-making government in Zimbabwe means Impala can really again relish the prospect of deriving two million platinum ounces from the country, which is what it wants.

The morale lift to Impala would be huge, as if it were needed!