JOHANNESBURG (miningweekly.com) – JSE-listed junior Chrometco would reposition itself to move into platinum-group metals (PGMs) and other bulk commodities, on top of its chrome exploration assets, MD Petrus Cilliers said on Wednesday.
Despite the current global downturn in the chrome and PGM markets, Chrometco is looking to acquire the PGM rights to the Rooderand asset from Nkwe Platinum, which should give it a solid foothold in the PGMs space.
Cilliers said Chrometco was also scouting for other acquisitions, highlighting that the company was in a “comfortable position” with cash in the bank, no debt and low costs.
“We would certainly not rule out mergers and joint ventures, or disposal for that matter; everything is for sale at the right price. We would also look into memorandums of understanding with nearby mines with the facilities to beneficiate,” he said.
Cilliers noted the company was looking into mining and trading opportunities in the form of cash generators and tolling options.
“We are looking at future disposals for the right price. We are in the game to play deals and not looking at becoming a midtier or large player, unlike the adjacent mining companies,” he said.
Chrometco has agreed to buy the Rooderand asset for 90-million shares. The deal includes the mineral rights, historical drill core and geological data of the property.
Cilliers described Rooderand’s location on the western limb of the Bushveld Igneous Complex, with neighbours such as Platmin and Platinum Australia, as a “prime chrome/PGM neighbourhood”.
He pointed out that, once Chrometco has access to additional chrome exploration data on Rooderand, it would be well placed to move 13-million tons of the property’s current chrome resource from the exploration target category into the inferred category. With the addition of PGMs from the proposed Nkwe acquisition, it had the potential to increase Rooderand’s current valuation of R186-million to R370-million.
Chrometco expects “limited exploration” would be necessary to augment the chrome and PGMs exploration data.
Financial director Trevor Scott pointed out that the company was exporting almost all its chrome, but with a stockpile of 70 000 t, it was “well positioned” to make use of the nearby smelters, or of tolling, to implement local beneficiation.
Chrometco shareholders would vote on the proposed acquisition next month.
Edited by: Mariaan Webb
NKP Price at posting:
7.4¢ Sentiment: None Disclosure: Held
