fact discussion

NKP owns 74% of Garatau, 64% of Hoepakrantz and disputed E&N farms.

1. Mining Right RESOURCE - 27.99Moz
Garatau - 17.24Moz (23.3Moz*74%)
Hoepakrantz - 10.75Moz (16.8Moz * 64%)

2. Disputed Farm - E & N - 13.04Moz
E & N Farms - 20.37Moz * 64%)

Generally, total "reserve resource" NKP currently have is 27.99Moz. 13.04Moz is more likely a contingent resource.

However, Anglo & ARM are currently legally battling for portion of 27.99Moz as well. That's the most likely reason for recent heavy sell-off.

3. Part of $50m acquisition payment for 10% of Hoepakrantz - $22.6M

According to NKP's announcement on 8 October 2009, "NKWE to acquire 10% balance for A$50m upon Xstrata exercising option or the grant of Mining Right over the Tubatse Project."

But currently, only one of the three Tubatse farms has been granted MR, if NKP gotta pay, based on resource percentage, consideration payable will be $22.6m.

NKP currently is short of cash, how can NKP pay the $22.6m for 10% of Hoepankrantz Farm?
However, the term might be MR for the three farms, that would give huge relief for NKP.

4. Financials
Good news is significant reduction of initial capital cost to $625m.
Annual production - 408,000oz
Gross annual revenue - $500m
On-mine cost - 400R (Anglo 2011: 529R)
Gross margin say 50% - $250m (Anglo 2011: 45%)
NKP - 74% share gross margin - $185m

The annual operating margin of $185m looks good for $625m investment.

The potential downside is how much NKP need to give-away for JV partner and/or Anglo, ARM.

NKP should make an announcement regarding acquisition payment for Hoepankrantz farm, is $50 or $22.6m becoming payable?

The dispute over the farms will delay the project and destroy shareholder's value.

Disclosure. Hold