q4 2010, the signs

Q4 2010; the Signs....

Some brief thoughts and a summary of some key events pointing towards a BFS release and the deal to be sealed with Xstrata by year end, 2010:

1) 061010: Bloomberg article, Alastair Reed
- Xstrata Plc will decide by the end of the year whether to exercise an option to buy half of a platinum project in South Africa (NKP)
- A recommendation on whether to take up an option will be presented to Xstrata's board by the end of 2010, citing Ben Moolman, head of Xstrata Platinum

2) 151110: NKP Annual Report 2010
The Option is exercisable within 90 days following completion of a Bankable Feasibility Study (BFS), expected to be completed Q4 2010 for Garatau

3) 030810: Xstrata Half-Yearly Report 2010
A bankable feasibility study pertaining to the northern portion of the Nkwe Platinum project area (Garatau), located on the Eastern Limb of the Bushveld Igneous Complex has progressed to the peer review phase. The study will be completed in the second half of 2010 and Xstrata has an option to acquire a 50% participation in the project.

4) Director's Interest Aligned with Share Price Performance

Options, $0.90 exercise price with an expiry date on 311210 (End of 2010), let's assume if the share price breaks $1.20 before Christmas due to a takeover or JV confirmation fuelled rally.

M Mphahlele - 4,500,000 Options ($1.35m return, or 450% current annual salary)
P Landau - 390,000 Shares, 2,500,000 Options ($750k return, 312.5% current annual salary)
S Pandor - 2,500,000 Options ($750k return, 1300.6% current annual salary)
M Nkuhlu - 2,500,000 Options ($750k return, 1300.6% current annual salary)

In addition to 50,592,387 Unlisted Options with a $0.90 exercise price and 311210 expiry date.

5) Top 40 holders increasing their holdings (Thanks again to Macleod22)

Top 40 hold 454m (72.93%)

JP Morgan now with two accounts holding 15m, up from 11.3m

National and HSBC increasing holdings

What does this tell us? JP Morgan boys not sitting still. NKP is tightly held, Banks in the know adding more clients onto their private funds? NKP shares are tightly held, the small fishes is playing with the daily share price fluctuations with the exception of brokers and others who may dump on instos cap raisings... Perhaps the instos are in the know and we small holders are left on scavenger hunts as seagulls in search for food.

7) More Synergies to be drawn from Xstrata neighbouring projects

$710m spend on Ferrochrome Expansion

Developing its own power generation and is currently completing a feasibility study for the first phase of a 600 megawatt thermal power generation plant that will supplement future electricity supply

Ferrohrome expansion construction (smelters, infrastructure) in 2011 (Garatau to commence construction in 2011), with completion dates appears succinct with possible Garatau and or Tubatse completion dates at 2013.

6) History - The last successful takeover bid for a platinum company by Xstrata

Eland Platinum - Junior JSE listed platinum company with a highly speculative 22m ounce of PGM resource. Xstrata purchased Eland Platinum for R7.5b, close to USD 1b. Note that Eland is a near term producer with less complicated ownership structure at that time.

Eland Platinum - R4.5b project to sink two decline shafts at Eland as open cast mining draws to an end

References:

1) http://www.xstrata.com/content/assets/pdf/xta-ir2010_en.pdf
2) http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=NKP
3) http://www.bloomberg.com/news/2010-10-06/xstrata-may-buy-half-of-south-african-platinum-project-business-day-says.html
4) http://www.miningmx.com/news/platinum_group_metals/955428.htm
5) http://www.miningweekly.com/article/sa-antitrust-body-approves-xstrata-acquisition-of-eland-platinum-2007-10-18
6) http://www.businessday.co.za/articles/Content.aspx?id=122900
7) http://au.advfn.com/news_Xstrata-To-Spend-710-Million-On-S-Africa-Ferrochrome-Expansion_44855224.html