Barry Sergeant|17 March 2011 14:18 Has the DMR defied the Constitutional Court?
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Nkwe Platinum knocked by Constitutional Court "Execution of a prospecting right...
Nkwe Platinum: between the JSE and Xstrata A strange silence falls over 68.5m... Nkwe Platinum ?re-awarded? prospecting rights over Eerste Geluk. JOHANNESBURG - Australia-listed Nkwe Platinum on Thursday advised its shareholders that Genorah, its South African ?black economic empowerment? (BEE) partner, has been ?re-awarded? the farm Eerste Geluk 327KT, of which it had been dispossessed of prospecting rights by South Africa?s Constitutional Court, in a lengthy judgement handed down on 30 November 2010.
The court also dispossessed Nkwe/Genorah of prospecting rights over an adjacent farm, Nooitverwacht 324KT. These have not yet been ?re-awarded?. Among other irregularities, the Constitutional Court found that the Bengwenyama community, in continuous occupation of the farms since 1859, had not been consulted.
A reading of the lengthy judgement indicates that the Department of Mineral Resources (DMR) conducted itself in a manner that raised all kinds of interesting questions. Disbelieving lawyers for the Bengwenyama community on Thursday said the DMR had been requested to confirm that Eerste Geluk had been re-awarded.
If this indeed proves to be the case, the Bengwenyama community Traditional Council would once again apply to the High Court for interdicts over Eerste Geluk. Interdicts against Nkwe/Genorah over both properties had been held by the community since 2007, and only technically expired when the Constitutional Court handed down its judgement. Beyond that, lawyers said that once again, the Bengwenyama had in no way been consulted. The DMR, already requested on Wednesday to give voice on Nkwe/Genorah, has so far chosen to remain silent.
A key issue is that Eerste Geluk and Nooitverwacht are the richest, of five Nkwe/Genorah-claimed properties, of the nine which comprise what is known as Modikwa Deeps. Anglo Platinum remains busy with two separate sets of action over Modikwa Deeps as a whole, where, as early as 2007, it applied to the DMR for a review over each of the nine farms.
To reserve its legal rights, Anglo Platinum far more recently also initiated the potential of judicial processes in terms of the Promotion of Administrative Justice Act (PAJA), a statute which played a significant role, in favour of the Bengwenyama, in the Constitutional Court case.
Anglo Platinum had long owned ?old-order? prospecting rights to the nine farms, which were required to be converted to ?new order? by April 30 2009. But years before that, prospecting rights were awarded over the nine farms by the DMR to other parties. Three have been claimed by Johannesburg-listed Bauba Platinum, and are now mired in uncertainty. The nine farms fall under the Modikwa joint venture, which dates to 2001, when Anglo Platinum formed a 50:50 entity with Johannesburg-listed African Rainbow Minerals, ARM.
In its 2010 annual report, Nkwe stated that ?work will begin on the Tubatse BFS which is envisaged to take approximately 18 months to complete?. Tubatse comprises the farms Hoepakrantz 291KT, Eerste Geluk 327KT, and Nooitverwacht 324KT.
In reporting on the June 2010 quarter, Nkwe said ?drilling also continued on the Tubatse Project?. This was mostly nonsense. On May 27 2010, Nkwe announced that it would also list in Hong Kong. At the same time, in conjunction with a relatively small capital raising, it announced that ?The funds raised will be used to fast track [the] drilling program and BFS on the Tubtase Project?. This was also rot.
What Nkwe has totally failed to tell shareholders is that years ago, back in 2007, Nkwe/Genorah were court-interdicted from accessing Eerste Geluk and Nooitverwacht. The first interdict was ignored. The second interdict was ignored. The Bengwenyama community (winners of the Constitutional Court case) went back to court and asked that the directors of Nkwe and Genorah be imprisoned, on contempt of court charges. The third interdict hit home.
Even so, Nkwe/Genorah has played a bizarre game, led by CEO, Maredi Mphahlele, a director of both companies (and apparently holding 15% of Genorah). Finally, by the end of 2007, Genorah removed all of its equipment and people from the two properties. Neither the equipment nor the people have ever been back, but Nkwe has created the illusion that the properties are being evaluated on an industrial scale. Nkwe today does not mention anything remotely along the lines of a ?fast track? for the Tubtase Project.
The Australian Stock Exchange was formally availed of the situation throughout and has done nothing. Part of the rot in and around Nkwe/Genorah can be traced to executive director Peter Landau, who switches mainly between Perth, Australia, and London. Landau is a long time associate of John Stratton, who was the closest confidant of the late Brett Kebble, who was murdered in Johannesburg on September 27 2005.
In December, an interested Australian investor sent your correspondent some rot that Landau posted on an apparently closed website. Landau was asked to confirm or deny the material, but declined. It said, in part, that ?Barry (the journalist) wrote the Brett Kebble story - he has his own agenda and works with the applicants [Bengwenyama] - the DMR and Anglo [Platinum] (to a lesser extent) are where this will be determined - never pleasant but we are dealing with decision makers not journalists - our focus is the community, the DMR and developing our project?.
Never mind Landau?s lily-livered accusation that your correspondent ?works with the applicants?, far more important is his assertion that the DMR is King of the Jungle. Landau could also be a sport and specify the names behind Starfair CC, a 5% shareholder of Genorah.
GENORAH RESOURCES
Shareholders Directors Stake
Mr P Mackenzie Mr P Mackenzie 15.0%
Mazw Trust Mr MW Mphahlele 15.0%
J van Schalkwyk Mr J van Schalkwyk 15.0%
Sunset Trading 375 (Pty) Ltd Mrs S V Sithole 10.0%
Njeya Investments Mr A N Nkuhlu 3.0%
Njeya Trust Mr A N Nkuhlu 10.0%
Ayanda Nkuhlu Family Trust Mr A N Nkuhlu 6.0%
Mr S J Pandor Mr SJ Pandor 6.0%
Elizabeth Makhele
5.0%
Starfair CC
4.0%
Mr J K Makwetla
2.0%
Mr P F Mogale
4.0%
"Communities"
5.0%
100.0%
Source: Court filings
In 2009, Starfair was engaged by Nkwe ?to facilitate the settlement of the Anglo Platinum claim?. For this, for achieving what appears to be zero, Starfair was paid A$1.25m. In the strangely bent and twisted world of Nkwe/Genorah, Nkwe on Thursday stated: ?Nkwe considers the current purported actions by the parties [Anglo Platinum and ARM] as disingenuous and vexatious.?
Nkwe has issued Genorah hundreds of millions of shares, giving the effect of Nkwe ?buying? into Genorah?s purported mineral rights. In 2009, separate to one such transaction, Nkwe issued a further 6.3m shares ?to an unrelated party as facilitation fees?, for a value of A$6.2m. Who is the ?unrelated party?? Landau has persistently dodged an answer to that one.
From court records, it is clear that two political heavies, Andile Nkuhlu and Sharif Pandor, can speak for 25% of Genorah. Indeed, as for being a ?broad-based black economic empowerment vehicle?, just six individuals speak for 80% of Genorah: Nkuhlu, Pandor, Mphahlele, one S V Sithole, one P Mackenzie, and one Mr J van Schalkwyk. Just 5% of Genorah is available for thousands of community members.
Given Genorah/Nkwe?s political connectivity, it is little surprise that it was rapidly awarded prospecting rights, as if the DMR was running on rocket fuel. It is again no surprise that Eerste Geluk has again been awarded to Nkwe/Genorah.
The DMR recently mounted a North American roadshow; the mines minister, Susan Shabangu, said on her return that: ?Our intention was to inform the investor community that our country is open for business. The engagements were robust and at times heated but we believe that we represented the country well?.
Selected platinum stocks
Stock From From Value
Tier I platinum price high* low* USD bn
Anglo Platinum ZAR 648.37 -22.0% 7.3% 24.179
Impala Platinum ZAR 190.00 -22.0% 11.7% 16.994
Lonmin GBP 15.97 -25.3% 18.8% 5.212
Averages/total
-23.1% 12.6% 46.385
Weighted averages
-22.4% 10.1%
Diversified
Anglo American GBP 29.92 -13.7% 34.3% 64.799
Mvela Resources ZAR 35.50 -14.7% 22.5% 1.090
Norilsk USD 24.58 -7.6% 77.1% 46.856
Camec Now at ENRC
ARM ZAR 199.41 -15.5% 36.3% 6.013
Xstrata GBP 13.55 -14.2% 62.8% 64.785
Averages/total
-12.9% 42.6% 118.758
Weighted averages
-11.5% 48.4%
Tier II platinum
Stillwater USD 20.99 -19.0% 99.5% 2.145
Aquarius GBP 3.31 -32.4% 56.5% 2.474
Northam ZAR 41.00 -24.7% 4.6% 2.097
NA Palladium CAD 5.98 -24.5% 95.4% 0.981
Zimplats AUD 14.00 -16.4% 47.4% 1.478
Eastplats CAD 1.31 -33.8% 52.3% 1.190
Anooraq CAD 0.93 -48.3% 5.7% 0.190
Royal Bafokeng Platinum ZAR 60.51 -14.8% 2.6% 1.406
Averages/total
-30.6% 52.0% 10.553
Weighted averages
-33.9% 24.2%
* 12-month
Source: market data; table compiled by Barry Sergeant
PGM developers and explorers
Platmin CAD 0.67 -55.3% 8.1% 0.508
Wesizwe Platinum ZAR 2.32 -12.1% 63.4% 0.262
Noront Resources CAD 0.76 -60.4% 1.3% 0.141
Goldbrook Ventures CAD 0.18 -53.8% 9.1% 0.033
Platinum Australia AUD 0.54 -49.0% 17.4% 0.208
Eurasia Mining GBP 0.01 -40.3% 84.0% 0.011
Starfield CAD 0.08 -57.9% 128.6% 0.052
Sirius Resources AUD 0.17 -56.6% 37.5% 0.024
PGM CAD 1.91 -34.6% 12.4% 0.342
Solitario CAD 3.65 -14.5% 102.8% 0.110
Colossus Minerals CAD 7.55 -23.5% 21.8% 0.747
Jubilee GBP 0.26 -40.3% 1.0% 0.109
Nkwe Platinum AUD 0.36 -50.3% 33.3% 0.198
Bauba Platinum ZAR 2.20 -63.3% 10.0% 0.005
Platfields ZAR 0.18 -87.1% 20.0% 0.020
Caledonia CAD 0.13 -25.7% 136.4% 0.066
Duluth Metals CAD 2.74 -14.4% 126.4% 0.286
Magma Metals AUD 0.30 -60.0% 11.1% 0.058
Falcon Minerals AUD 0.14 -61.4% 28.6% 0.022
Avalon Rare Metals CAD 6.16 -26.8% 225.9% 0.581
Eurasia Mining GBP 0.01 -40.3% 84.0% 0.011
Largo Resources CAD 0.35 -39.7% 150.0% 0.109
Macdonald Mines CAD 0.17 -34.6% 47.8% 0.033
Hard Creek CAD 0.43 -33.8% 126.3% 0.033
Polymet CAD 1.92 -27.3% 44.4% 0.300
MetalCORP CAD 0.12 -52.1% 43.8% 0.008
Wallbridge CAD 0.22 -32.3% 69.2% 0.028
Benton Resources CAD 0.90 -37.9% 143.2% 0.069
Mustang Minerals CAD 0.11 -33.3% 57.1% 0.017
Northern Shield CAD 0.25 -13.8% 138.1% 0.023
Platina AUD 0.32 -49.2% 60.0% 0.031
Darnley Bay CAD 0.16 -67.3% 60.0% 0.017
Pacific NW Cap. CAD 0.23 -36.1% 187.5% 0.016
Platfields ZAR 0.18 -87.1% 20.0% 0.020
Huston Lake CAD 0.16 -31.9% 39.1% 0.008
Goldplat GBP 0.10 -34.4% 21.2% 0.018
Hinterland Metals CAD 0.12 -42.5% 155.6% 0.009
Village Main ZAR 2.00 -33.3% 5.3% 0.077
Premium Exp. CAD 0.52 -16.1% 116.7% 0.061
Blackthorn Resources CAD 0.52 -44.1% 15.6% 0.090
Silvermet CAD 0.14 -22.2% 86.7% 0.022
Andulela ZAR 0.13 -74.0% 116.7% 0.008
Developer averages/total
-44.3% 71.7% 4.791
Weighted averages
-39.8% 44.7%
* 12-month
Source: market data; table compiled by Barry Sergeant
