On the other end of the line was an investment bank (undisclosed) seeking to divest a 5.5% interest in Platmin, an unlisted Canadian company that holds a controlling interest in platinum group metal projects in South Africa.
MinSec paid $US4.7 million for the stake – part of which was paid by divesting three Australian juniors for a pre-tax profit of $A4 million – and, around two weeks later, bought a further 4.3% for $US4.8 million.
MinSec currently holds some 10.2% of Platmin, which is aiming to initiate an IPO on London’s AIM sometime next year.
MinSec claims its investment equates to around $US7.65 per resource ounce, with Platmin having attributable ounces of nearly 14 million ounces (3PGE plus gold).
Liddell calls the Platmin investment one of two “sleeping giants” in the MinSec portfolio, the other being the stake in Tianshan Goldfields and its Gold Mountain project in western China.
While a platinum price in the vicinity of $US1000 per ounce would be reason enough to smile, Liddell is especially optimistic given his expertise in this section of the mining world. He was, after all, the key player in the rise and rise of ASX-and-AIM-listed, South African-focused platinum miner, Aquarius Platinum.
The beauty of this investment according to Liddell it that while Platmin has, on the one hand, key similarities to Aquarius – including inventory and grade - it is very significantly undervalued on the other given the established miner is said to capitalised at around $US54/oz.
Moreover, its key Pilanesburg project on the mainstay Western Limb of the Bushveld will involve open cut mining, representing a major reduction in risk.
As MiningNews.net understands it, the aim is to have Pilanesburg into production by late next year/early 2008, at a rate of around 300,000 PGM ounces per annum – of which some 200,000 will be attributable to Platmin. As a comparison, Aquarius produces at around 330,000ozpa.
The initial capital cost is put at around $US120 million, while resources are apparently enough for some 20 years of mine life.
Platmin isn’t a one trick pony either, having begun building its land position in the Bushveld in 1999. The development pipeline envisages the M’Phatlele project on the Eastern Limb coming on stream some 12-18 months after Pilanesberg, followed by the Loskop joint venture (with Lonmin) a further 12-18 months after that.
MinSec’s shares have appreciated from around 70-80c to just over $1 since the deal was first unveiled. Late last month the company placed just over 3 million shares at $1/share. The stock closed up 1c at $1.05 Monday.
Disclosure: The reporter holds shares in Tianshan Goldfields
