I am just a little concerned that Mvelaphanda Res which owns 63% of Northam Platinum is seeking takeover offers. It may be tempting for Xstrata to purchase a BIGGER platinum deal than NKP's.
Why the concern?
1. Northam is currently producing 300,000oz of platiun pa. It has an additional resource of 100m oz ( same size as NKP) of platinum in its Booysendal project which is south of NKP's farms.
2. Mvelaphanda Res is valued at $1.43b. Most likely looking for more dollars for a takeover.
3.When you consider Xstrata is willing to outlay $800m capital for the Garatau project and possibly the same for the Tubatse Project and only get 500,000 oz pa it makes you wonder which is the better deal?
Without question I think Mvelaphanda Res due to Northam Platinum actualy producing and other investments in its portfolio.
4. Don't forget that Xstrata still has Eland which is also planning 1m oz pa after it expansion in a few years time.
5. If Xstrata was to include Northam Platinum plus Eland in its platinum portfolio it would become a giant with production exceeding 2m oz pa.
I hope that Xstrata makes no offers and continues with its recently communicated strategy of "no takeovers" and stays on the NKP JV path.
NKP Price at posting:
55.5¢ Sentiment: Buy Disclosure: Held
