Zijin’s independent valuation for the NKWE Platinum assets should be due soon. Given the track record of management the valuers should not rely on NKWE Platinum historic trading prices to substantiate Zijin's offer:
1. The incompetent management of Genorah Resources the Black Empowerment Partner failed shareholders for over ten years, almost lost the Mining Right and did lose the Tubatse project.
If you recall the Tubatse project was lost following a decision by Constitutional Court of South Africa in favour of the Bengwenyama Tribe. The Tubatse project cost NKWE Platinum 240,000,000 shares given to Genorah Resources for vending in the project.
2. NKWE Platinum director misappropriated $2.5mil and has still not repaid the debt.
3. This was followed by what some call the cover up "Settlement and Release Deed" 3rd September 2014 signed by Jin Jiang Director, Genorah Directors, Peter Landau and others.
4. Then NKWE Platinum one year suspension.
5. Let's not forget the timing of Zijin's proposed low ball 8 cent takeover offer announced three weeks prior to the Registration of the Mining Right.
Put aside the incompetent management and the ensuing 3 cent share price for a moment and refer to the following facts which substantially influence actual value and should be included in any future valuation;
1. Venmyn Deloitte valuation for Genorah Resources 20th December 2014.
Zijin offered to purchase Genorah Resources shares @12.5 cents only to later squeeze the offer price to 10 cents.
2. The contribution of the UG2 reef which contagiously underlies the Merensky reef in the Garatau project and which is included in the Mining Right substantially increases if not doubles the mine life of the overall project. The nature of the UG2 Reef is very well defined as it is mined by adjacent large mines operating in the area. Its inclusion will substantially increase project value.
3. The farm Hoperkrantz which is included in the Mining Right and which is now a discrete asset capable of development as a mine or sale or joint venture with others has significant value. The existing Modikwa mine which is immediately east of Hopekrantz is owned and operated by African Rainbow Minerals it adjoins the Hopekrantz boundary and mines the UG2 reef up dip which extends seamlessly on the farm Hopekrantz. We would expect this to be of material significance to overall valuation.
4. The value of the intellectual property in terms of exploration data and physical drill cores generated by exploration of the farms Eerst Geluk and Nooitwervacht which formed part of the Tubatse project previously controlled by Nkwe and which were lost following a decision by Constitutional Court of South Africa in favour of the Bengwenyama Tribe. The value of the intellectual property is substantial.
5. Of further significance is the potential for farm swaps in particular De Kom with other operators to provide more convenient access to the Merensky and UG2 reefs. This would be of significant value to the overall pricing of a Zijin bid.
NKP Price at posting:
7.1¢ Sentiment: Buy Disclosure: Held
