I remember looking at the in-situ valuations a long time ago. Was comparing platinum juniors who were bought over in 2007 for about USD 10/oz, Afri Ore, Afplats and Southern Platinum by Implats and Lonmin. The PGM basket price at that time was about USD 940/oz.
Therefore, if a takeover was to happen. I would expect at least USD 10/oz for a platinum junior who has not commenced production nor development. Assuming in-situ peer valuations, this would equate to about $680m or close to $1.00 per share.
Personally, I would love to see some action by the Chinese. A country with more risk appetite, cash backing and possibly a bunch of IP Man or Kung Fu Master type soldiers to protect the mine site from bullies. The Chinese not long ago purchased 51% of Wesizwe Platinum 13.26 Moz 4PGE+Au for $227.5m, equivalent to about $34.31/oz. The project have since obtained funding, settled legal disputes and progress into the construction phrase with TWP. Good progress in a small space of time, on the other hand NKP... ermmm, we waited for the BFS.
On the side note the markets in general have taken a beating. 200MA support levels for S&P500 for example have broken. Europe especially is dragging the markets down, the situation now is a flash back to the days when the Governments decided to guarantee banks debts. Rather than allowing the banks to default, the debts became Sovereign, and banks became nationalised as the private bank's debt became the country's debt i.e. Ireland. I am reviewing the scenario of whether the GFC have fully done its course? Because, if Greece default for instance (I think they will), the burden of debt will likely fall back to the banks, i.e. US, Europe, Asia. The markets are all interrelated.
No matter what unfolds, we are yet to see more evidence of the trillion dollar bailout package funds flow back into the markets, if it does, commodities would usually ride it with inflation. Unless of course, in a rare occasion that the billions flowed back into minority pockets, or to the lobbyist who pursued the Government to bailout the banks. Nevertheless, Europe will be punished, Greece and Co with too good welfare and debt. This world will be owned by the hard working peeps, be it China, India or the Germans with hard workers and savers in general with little safety net.
Until I see what hatches, I don't think I will be giving PL anymore smiles when I see him at West Perth hehe...
Bring it on! Time to hatch the platinum egg!
o
NKP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
