close to securing south africa mines permit

DJ Nkwe Platinum Close To Securing South Africa Mines Permit-Source

Feb 15, 2012 (Dow Jones Commodities News via Comtex) --

By Robb M. Stewart

Of DOW JONES NEWSWIRES

MELBOURNE (Dow Jones)--Nkwe Platinum Ltd. (NKP.AU) is expected to receive as early as Thursday a mining license from the South African government for three sites in the country's platinum-rich Bushveldt region, a move that should come as a relief to investors concerned about the company's ability to retain and develop two promising projects, a person familiar with the situation said.

A license from the Department of Mineral Resources could help settle a long-running dispute over control of several blocks of land between Nkwe, its major shareholder Genorah Resources Ltd. and Anglo American PLC's (AAL.LN) Anglo American Platinum Ltd. (AMS.JO) unit and its venture partner African Rainbow Minerals Ltd. (ARI.JO).

Trading in Nkwe's shares has been halted in Australia since Nov. 9 pending a statement regarding the outcome of joint venture negotiations.

Nkwe has for several years been fighting for control of land that makes up two mining projects in the Bushveld that sit near Angloplat's Modikwa mining venture with ARM and Impala Platinum Ltd.'s (IMP.JO) Marula mine. It has during this time continued to invest in the projects and has previously said it was pushing ahead with a bankable feasibility study.

The mining license is expected to cover the Garatau, DeKom and Hoepakrantz farms, the person said.

Nkwe's flagship Garatau and its Tubatse projects consist of five sites with a footprint of more than 10,500 hectares. An earlier study by the company and Genorah said they could develop two mines with combined annual production of more than 1 million ounces of platinum group metals. Mining giant Xstrata PLC (XTA.LN) in 2008 acquired an option to buy a 50% interest in the five properties, subject to the completion of a bankable study.

However, the rights to the areas have been subject to an ongoing and complicated dispute.

The challenges date back to 2007 when South Africa's then Department of Minerals and Energy awarded prospecting rights for nine tenements over land Angloplat had laid claim to. Angloplat appealed for a court review of the government's decision, and called for the rights to be set aside. Local media reports at the time cited a government official as saying Angloplat hadn't complied with the law in its own application for rights to the nine properties.

Five of the rights went to Genorah and Nkwe, which have continued to defend their claims.

Nkwe in early 2008 issued a statement on behalf of itself, Genorah, Angloplat, ARM and the government, which said that after a series of meetings the parties had agreed to abide by the department's original decision to award the prospecting licenses and to reject Angloplat's application. ARM and Angloplat later denied any such agreement was reached.

In one of the many twists in the dispute, South Africa's highest court in 2010 ruled in favor of a group of villagers and overturned exploration rights to two tenements held by Genorah because of a failure to consult properly with locals. However, a tribal authority for the area defended Genorah's claim to the land and claimed other villagers with no rights to the tenements had misled the court.

Africa's Department of Mineral Resources in late 2010 awarded rights to the Eerste Geluk farm that forms part of Nkwe's Tubatse project to a local community following a fresh application process. The decision is being appealed.

Nkwe last week said it remained confident ongoing negotiations conducted with the aid of the Department of Mineral Resources were on track. It at the time said it was "acutely aware of the valid and substantial concerns expressed by shareholders due to the extended period of the negotiation."

-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094; [email protected]

(END) Dow Jones Newswires

02-15-12 0255ET

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