I have been thinking about the HK Listing, developments in the...

I have been thinking about the HK Listing, developments in the PGM market and Xstrata.

If I put myself in the shoes of NKP management then my first preference would be to do the G & T projects with Xstrata as they are a large diversified miner and will have gone through the teething problems at Elands so will have the experience on all the difficulties associated with PGM mining. NKP would then be free to look at further PGM projects to develop differently.

The HK move however adds another dimension to possibilities. In recent months the debt finance markets for mining projects have returned and finance deals of 70% debt 30% Equity have been offered for highly profitable projects. The HK listing is devised to attract Asian (read Chinese) equity capital and could well be NKP's plan B if the Xstrata JV does not work out.

PGM's are attracting new financial investment recently in the form of ETF's and I can see that with Asian Growth and the potential of inflation as Europe prints money to get out of its soverign debt mess, there are strong funding options for NKP to do this alone or with another strategic PGM mining partner that may take a stake. We should not brush off the possibility of strategic relationships with the likes of Aquarias Platinum, Lonmin with involvement also of Chinse interests. Aquarious involvement would be very interesting for them beacuse of reaching the scale to have theeir own processing plant.

With xstrata we also need to watch the developments with Glencore. Glencore could well be looking to becoming a publicly traded mining giant through a reverse takeover of xstrata and will itself have a keen eye on building up its PGM production and trading business. Also If I were part of Xstrata managent team I would certainly in the current environment be looking at the lowest cost / quickest payback options and would want to see a staged plan where PGM cash flows commence as soon as possible and could be used to fund further expansions to the final 1,000,000 Oz production per year.

I have no idea how the final structure for G&T projects will play out, but under any set of circumstances I see huge value (even after dilution) on what the market is offering for NKP at the moment.

For me NKP shares are a long term Holding and if the development stages of Aquarius or even further back Northam, Impala Platinum is anything to go by, there are many multiples of potential value in this sp.

BR
Max