I copied this from the Sylvania Share Chat forum at
http://www.lse.co.uk/ShareChat.asp?page=1&ShareTicker=SLV --------------------------------------------------------------------------------------------------------- Thanks MRP for bringing this article to our attention--one of the most interesting comments is that made by Ruukki CEO Alwyn Smit--" We started seeing a timetable that was going out and out and we saw a scenario where we could only complete this at the end of first quarter next year and it started getting to a point where this merger was standing in our way of doing things"---and that Smit met with Terry McConnachie of SLV and decided to to can the merger and work together in some way in "the best interests of our shareholders"----
hence the fact that the merger is now off should actually be taken as POSITIVE news guys!!--If you are still in the shares like me and i am sure many others then one should definitely hold on and any spare cash --top up at these lower levels!--for anyone not in the shares or sold out luckily higher up should seriously consider buying back now!--hence my views are totally in agreement with the management of SLV and Ruukki--good luck to all anyway and it will be very interesting to see if another party should make an approach to take over/ do a deal with SLV.---watch this space ! ------------------------------------------------------------------------------------------------- Ruukki/Sylvania seek fresh options. Allan Seccombe | Fri, 23 Oct 2009
[miningmx.com] -- THE merger of junior platinum and chrome producer Sylvania and Finland’s ferroalloy smelter Ruukki has fallen through, but the two are still exploring ways to work together, said Ruukki CEO Alwyn Smit, who is now hunting other partners for his group’s platinum strategy.
The transaction was designed to create a mine-to-market company in the platinum sector, but Ruukki is now exploring other options to follow this strategy, including a possible joint venture with Sylvania, he told Miningmx.
Ruukki’s shares rose more than five percent in Helsinki on the news that the transaction, valued at around R3bn when unveiled in June, had fallen through.
“We always knew this was going to be a difficult, complicated deal,” Smit said. Sylvania is traded on the Australian and AIM bourses and Ruukki in Finland, making it a challenge from a regulatory point of view.
Sylvania was completing two transactions to acquire Great Australian Resources and SA Metals Ltd and that deal went on a little longer than anticipated. An independent experts’ report into Ruukki commissioned by Sylvania has also not been completed.
“We started seeing a timetable that was going out and out and we saw a scenario where we could only complete this at the end of first quarter next year and it started getting to a point where this merger was standing in our way of doing other things,” Smit said.
“It was standing in the way of us working closer together to find solutions and to figure out what we would have to do with our furnaces to smelt platinum group metals because we were not making progress at the operational level. All of this was at a corporate level,” he said.
Smit met with Terry McConnachie, the head of Sylvania and they decided to can the merger and work together in some way in “the best interests of our shareholders.”
The two companies have started early-stage talks on how to work together and getting a project plan prepared to see how much needs to be invested in the furnaces Ruukki has at its Mogale operations and how much money they could make.
Once that work is done, Ruukki can decide whether to tweak one of its existing ferrochrome furnaces or build a new one to handle platinum concentrate. This concentrate will not necessarily come from Sylvania.
You can’t get into bed with everybody“With the merger not being there it frees us up to look at other parties. The smelting capacity that the smaller producers, like Sylvania, needs are fairly small. They are in pole position of all the other players out there,” Smit said.
“You can’t get into bed with everybody, so in the end there are only two or three that we can partner with or do things with,” he said, adding Ruukki wanted to separately list its wood business to make the company a pure mineral play.
McConnachie said Sylvania is keen to treat low-grade platinum group metal concentrate that existing AC furnaces can’t economically treat, which would add value to the Great Australian and SA Metals assets it acquired. “Sylvania and Ruukki are therefore continuing to evaluate alternative possibilities for cooperation in the PGM business,” he said.
Among the parties Ruukki could talk to are Braemore and Jubilee Platinum, despite those two companies merging. The model between those two companies is very similar to what Ruukki and Sylvania wanted to achieve, with a mine-to-market strategy.
Braemore has licensed smelting technology from Mintek to treat high-chrome content platinum concentrate and Jubilee is bring tailings and an exploration project to the party, planning to use Braemore’s technology to start generating cash from the tailings.
There was a strong rumour in the market that Ruukki was talking to Braemore ahead of the Jubilee deal to combine the companies.
“They still need people with smelting expertise and an operational unit... they’ll need someone like us. We know them well. It’s quite possible we’ll do something with them, but we haven’t been in formal discussions with them for some time now since they decided to go with Jubilee,” Smit said.
The rising cost of electricity in South Africa has not much altered Ruukki’s view of the country offering the best growth in chrome and PGMs and it feels comfortable operating there. “Our long-term view is that South Africa affords us an opportunity to make a superior return on capital.”
Ruukki bought Mogale for R2bn in May this year, giving it one 44 MVA DC furnace with a capacity of 50,000 tonnes a year of alloy, two 20 MVA submerged arc furnaces with a capacity of 48,000 tonnes/year of silico manganese and a 12 MVA DC furnace for chrome.
It has mining and beneficiation in Turkey, smelting and processing in Germany and procurement and sales in Malta.
SLV Price at posting:
90.0¢ Sentiment: None Disclosure: Not Held
