Eland Platinum Adds to Mine Area

Platinum mining house Eland Platinum [JSE:ELD] had exercised its option to acquire the remaining portion of land adjacent to its Elandsfontein Platinum Mine, being built near Brits, for R70 million (US$9.74 millio), it said yesterday.

The purchase of the 51% stake in the property from black empowerment group Waterberg Portion Property, led by Pretoria-based businessman Mpume Sikhosana, will give Eland Platinum a 73.9% stake in the “triangle” area of the farm Elandsfontein, which forms part of the developing mine. The mining rights at Elandsfontein extend over the triangle area.

Payment will be made in R50 million (US$6.96 million) cash and 285,715 Eland Platinum shares at R70 (US$9.74) a share, with a three-year lock-in provision. The purchase price is equivalent to R29/oz (US$4.03/oz) of platinum in the ground.

The triangle area is former state-owned land, which, according to Eland Platinum’s mineral reserves statement published at the beginning of the year, contains an estimated resource of 34.8-million tonnes of ore at a grade of 4.28g a tonne of four platinum group metals, giving 4.80-million ounces of precious metals.

Eland said in January it would exercise its option to acquire the outstanding 51% stake in the triangle and said it was also evaluating other platinum group metals properties held by Sikhosana.

CE David Salter said Eland Platinum was evaluating a number of properties, including some held by Sikhosana, over a wide area on the western Bushveld.

The group has stated its intention of being a 1-million-ounce-a-year producer by 2015 and Salter would look at opportunities that would add to its growth in an appropriate way, if the price and asset were right.

Salter said management had no fixed ideas and would consider either an outright purchase or a joint venture, depending on the asset.

Another platinum venture on the western limb of the Bushveld that is widely speculated to be seeking partners or consolidation opportunities is Wesizwe Platinum’s Frisch-Ledig project, which released its pre-feasibility study last week.

Salter said Eland was not talking to Wesizwe [JSE:WEZ].

Today, Wesizwe reported a R19.8 million (US$2.75 million) loss for the year ended December. However, the group pointed out that, as an exploration and development focused entity, it was at present not a cash generative business and that the loss therefore represented investment in asset growth and development as opposed to operating losses as understood in a conventional business sense.

Mike Solomon, CEO of Wesizwe, described the past financial year as a highly successful and significant one for the company. He said the company had accelerated its exploration programme to the point where it was now generating some 10,000 million of core per month and the graduation of the resource from the Inferred category to the Indicated and Measured categories was proceeding apace.

Solomon said that the company was looking forward to as successful a year this year.

Source : www.resourceinvestor.com