legal challenges

In order to gain a better understanding of the issues relating to the Bengwenyama Minerals case and the implications on the Xstrata JV , I have exchanged emails and had discussions with a number of interested parties. Without disclosing names of individuals these have included the legal firm representing Bengwenyama Minerals, a Bengwenyama Minerals Tribe spokesperson, South African Centre for Environment Rights, NKP representatives, a journalist and a broker. Following is a summary of key points. I qualify my post by stating that I will continue to hold NKP shares.

The first I knew about any legal cases (relating to two of the three Tubatse farms) was after reading Allan Seccombes ( Miningmx ) interview with Nkwes MD Maredi Mphahlele. I expressed disappointment that NKP had not kept its shareholders informed of legal proceedings that may impact projects.

NKP responded by stating that it was not a party to the disputations. Furthermore NKP after seeking legal advice on associated risks to their farms/projects, obtained advice from the ASX regarding its obligations to comment on such matters. At the time of the original court case Nkwe only had an option on the Tubatse farms. This option was exercised after the case failed.

The case against Genorah Res has gone to two South African courts namely the High Court and the Supreme Court. I understand that on both occasions the Appellants failed on all alleged grounds and had costs awarded against them. The Appellants have now applied to the Constitutional Court for the case to be heard.

I have been told that it would be a rare situation if the Constitutional Court would overturn previous judgements. Nkwe has subsequently received compelling legal advice regarding the right to even have the final appeal.

My understanding is that if Bengwenyama Minerals was successful in its appeal that they most likely would seek compensation and not attempt to take over the two farms and/or the Tubatse project. I understand that lawyers for Benwenyama have at times tried to extract shares out of Nkwe to get a settlement because they are acting on a success fee basis.

The legal challenge does not relate to the Garatau project. Although Xstrata has shown interest in both projects it is unlikely that the delay on the JV relates to pending legal matters but rather the finalisation of the BFS.

Allan Seccombe stated it is understood that one on the concerns Xstrata has had is the number of court cases contesting Nkwe and Genorah Res. There is no direct quote anywhere from Xstrata on such concerns. Surely if there was a concern Xstrata would have communicated as such and may have qualified its support for the BFS and or the JV agreement.

Xstrata Deal

Although there is optimism by Nkwe , brokers, journalists and shareholders that a JV will be consummated by Xstrata, there is no guarantee that this will occur. The final BFS and terms of any agreement will need to be discussed by both NKP and Xstrata Boards before a decision is made and communicated to shareholders and the investment community. I understand that no joint Board discussions have taken place as yet.

It is anticipated that the final BFS will be presented to Xstrata during June. If a JV is indeed executed it will be a major boost to the South African economy as many thousands of new jobs will be created.

If the JV is not consummated with Xstrata, NKP as previously stated, will seek a partnership with other parties that have expressed an interest.

I suggest that you do your own research. The above are my points of view after researching this topic.