worst nightmare ! ... please don't go to 22c , page-47

Thanks Frosty. I would certainly appreciate the context of the statement.

Shadow, you are probably refering to the ownership structure as refered to within the Carmichaels report.

As follows:
"A Joint Venture would be formed between Xstrata, NKP and Genorah, the Black Empowerment Enterprise (B.E.E.) that is currently a 69% shareholder of NKP (after a decision to mine). The JV would extend to any contiguous properties acquired by either party.
The JV structure (with Genorah holding 69% of NKP) will allow the 50:50 JV to operate at a project level, whilst maintaining the necessary requirements for the BEE equity stake"

Their is also I diagram in that report that shows Genorah COULD sell their 26% stake(as part of the overall 50%) and still maintain BEE compliance via the 60% holding.

As you say this would actually leave a 4% "buffer" from which NKP could raise additional funds, thus diluting Genorah to 26%

What im getting at is more to do with the mirade of options available. Which would include Genorah selling none or part of their asset level holding.

For starters Anglo already meet BEE requirements. That would remove the need for genorah to maintain 60% of NKP(ie 30% >26%). That frees up NKP to raise more than 4%. Infinately more.

Also, lets assume the X deal pans out in it original form on the original terms(unlikely imo). Then clearly Genorah have sold their 26% into the JV.

So they must take something out to compensate.

So Xstrata free carry NKP into production. NKP have 50% and Xstrata have 50%. Genorah have and always did have 60% of NKP.

But Genorah has lost 26% direct holding in the process. Clearly Xstrata a paying capex, so NKP must either give Genorah cash or more shares to compensate for that loss imo.

This is a vehicle to fund Genorah afterall.

Perhaps NKP will issue more shares to Genorah, which will then enable NKP to raise more in a cr too and still maintain that magical 60%.

I agree with your Zimplats example. I only mention it purely in the context that Genorah are and always will be in the drivers seat. They dictate the exact structure so that the have either a greater share of production or even to cash out.

At some point I personally would like to see NKP divest of Genorah from the share register post JV. So if NKP end up with 50% of the project, we could just give Genorah 30%(divest) and cancel their shares. Leaving NKP with less shares and only 20%. More freedom to control our own destiny particularly with disclosure.

But I see it going the other way. NKP "acquiring" Genorahs 26% (by issuing more shares) then forming a 50:50 JV.

Certainly Genorah arent giving 26% away for nothing. They have been too astute for that.