angloplat, page-2

In August 2008 Xstrata signed a binding heads of agreement with Nkwe and Genorah Resources granting Xstrata an exclusive option to acquire a 50% interest in the Hoepekrantz, Nooitverwacht, Eerste Geluk, Garatouw and De Kom farms.

The attraction of the Option, from Nkwe's point of view, was its right to retain a 50% joint venture interest in the properties and for the properties to be developed to steady state production and fully funded by a joint venture partner.

An important part of the JV option was that the joint venture partners would undertake a further feasibility study into downstream processing in order to develop an integrated mine to market business.

Xstrata was to fund the total development costs of the Properties from mining through to concentrating.

According to the Company's 2010 Annual Report,

"Apart from the Xstrata Option, significant interest has been expressed by other major industry players to negotiate an entry into the Nkwe projects. The Group will consider these approaches with an open mind subject to any arrangement with Xstrata. On completion of the optimization and independent review of the Garatau Project BFS and decision by the Company as to the way forward in its development, the Group will immediately turn its attention to examination of the feasibility of developing its southern Tubatse Project which, in the Group's view, offers equally exciting opportunities."

From an operating perspective, the BFS confirmed the deliverability of an operating mine of 3.6Mtpa producing approximately 400,000oz per year at circa 84% recovery, with operating costs of around $US400-430/oz with cash costs of ZAR500 per tonne against a revenue of ZAR1,100 per tonne (based on the current PGM pricing as at September 2010), thereby providing a robust margin on the then current basket price.

According to recent posts placed here by well informed posters, the Company is now focussed on announcing a JV that is potentially far more important than delivering the "final" BFS results and that the study is being reassessed based on the joint venture partners needing to readdress the issue of resource access.

Can the Company's primary objectives be achieved without Xstrata?

It's quite feasible, but certainly not bankable.

In my opinion, we'll soon find out just how well our directors have negotiated on our behalf.


Stagman