[miningmx.com] — SOMETIMES a little fanfare would not hurt. A case in point is the quiet listing of GVM Metals on the JSE at the end of November, when investors and fund managers were maybe too busy to finish their work for the year in planning their holidays.
The first trade in the shares were only on 27 December – two weeks after the listing in the metals sector of the JSE. In the first 29 days on the JSE, trades were recorded on only nine days. To date, slightly more than 100,000 shares have traded.
Despite the subdued listing, GVM Metals has started to attract attention and the share reached a new high of R4.50 last week, compared to the first trades at R2.60.
In thin trade, the share hiked up by another rand to R5.50 on 18 January.
Previously known as Golden Valley Mines, GVM has been listed on the Australian Stock Exchange since 1980. It secured a secondary listing on the Alternative Investment Market (AIM) of the London Stock Exchange in 2005 – also in the quiet weeks of December – and now in the minerals sector of the JSE. Of interest is that the share trade at a premium in South Africa to it primary listing in Australia, as well as the London listing.
Through a series of strategic acquisitions GVM Metals Limited has moved its focus from being a gold, platinum and base metals exploration company to becoming a coal mining and metals processing business, targeting predominantly South African mining and minerals processing assets.
GVM Metals listed in South Africa to be able to fund acquisitions with shares. Currently the company earns most of its income from a 74% stake in a nickel magnesium alloy facility near Magaliesburg, west of Pretoria.
It has just acquired a coal deposit near Kinross from black empowerment company Motjoli Resources in exchange for giving Motjoli a 32% stake in GVM. It also bought a coal deposit in the Limpopo area for the equivalent of R84m, paid for in the newly-listed shares which could help liquidity if the sellers of the coal fields decide to unload their shares.
GVM aims to complete a feasibility study at the Kinross coal deposit early next year and will apply for new-order mining rights then. The potential mine has an inferred resource of 50m tonnes to produce 800,000 tonnes per annum (tpa) of thermal coal and 400,000tpa soft-coking metallurgical coal starting in 2008.
The mine in Limpopo could be brought into production in 2009. It currently has an inferred resource of 325m tonnes, but it is expected to be as high as 500m tonnes.
Initial capital to get the ball rolling was raised in Australia. GVM issued another 12.2m shares in a private placing to Asia Energy plc, an minerals investment company run by ex-Rio Tinto managers.
This raised R34m for working capital to start with initial work to get the South African mines up and running. The secret is out, with enough risk to satisfy South African speculators in smaller mining shares.
