questionh for kiwi & all non holders, page-6

I'm a non-holder who was asked to look at this company in Feb 2010 by a large investor who wanted exposure to platinum... he'd read one of NKP's ASX announcements and he thought they sounded like a massive opportunity (I also think some investment newsletter mob had been spruiking NKP which may have helped to generate his interest)...

after a few days of basic reading into the accounts, ASX announcements, annual reports and researching some of the other players involved (e.g. Genorah) I sent him an email recommending that he stayed well clear of NKP...

My main concern was that NKP seemed to state that they owned or controlled a massive JORC compliant resource of 68.6 Moz 3PGE+Au, but if you looked closely, NKP didn't seem to have full ownership of anything really, and ultimate ownership rights were not, for my liking at least, transparently disclosed. I used the following breakdown to demonstrate how little NKP shareholders appeared to me to actually own...

as at 26 Sep 2009, NKP announced publicly that they owned 74% of the Garatau project, and 59% of the Tubatse project... so the actual metal that NKP owns appears to be as follows -

23.2 Moz Garatau project 74% = 17.168 Moz

45.3 Moz Tubatse project 59% = 26.727 Moz

of that total 43.895 Moz there is a clear 70% ownership by Nkwe SA, but then there is the disconcerting statement about Blue Nightingale which appears to dilute that further by 30%, so ultimately it appears NKP only owns 21.509 Moz!

Perhaps more concerning though is that ultimately NKP are minority holders (49% at best) to Blue Nightingale, so in all likelihood NKP don't really control this thing at all?? Regardless, Genorah Resources with 63% ownership of NKP surely controls the show anyway??

On top of that, there is the Xstrata option, which will see NKP end up with 50%, which as a headline number sounds fine, but once you take into account the various ownership dilutions it brings the metal content down to 10.754 Moz. If you assume that 63% is Genorah's, then NKP's other shareholders get access to 3.979 Moz. That figure is vastly different to the touted 68.6 Moz JORC compliant 3PGE+Au resource!!!

My simple conclusion was: The headline figures look great, and it is undoubtedly a great project, and there is huge upside for the project... however there appears to be a BIG question mark over actual participation in this upside by NKP shareholders.


Ultimately NKP shareholders will have difficulty getting any recourse if things go completely pear shaped, as everything will be nicely documented to ensure nothing that is flung (mud or otherwise) sticks to anyone in particular... I would expect your only recourse is to ensure you alert everyone you know of the situation that befell you, so that they can avoid similar situations, and/or perhaps avoid certain individuals.

As an aside, let me just say that I have avoided CCC based on my assessment of NKP!