Wesizwe Plat­inum in An­glo’s sights

Ju­nior could be next tar­get for cor­po­rate ac­tion

Finweek English Edition - - Companies & markets - DAVID MCKAY

WHOEVER IS BUY­ING shares in Wesizwe Plat­inum may be hop­ing the ex­plo­ration com­pany will be an ac­qui­si­tion in the mould of Afriore and African Plat­inum, com­pa­nies Lon­min and Im­pala bought for R3,2bn and R3,7bn re­spec­tively.

Wesizwe Plat­inum is now worth R4,25bn fol­low­ing near dou­bling of its share price to R10 since Jan­uary. Why has this hap­pened?

“I hear Wesizwe Plat­inum has been do­ing some he­li­copter flips show­ing in­sti­tu­tions its prop­er­ties,” says an an­a­lyst. “If a US in­sti­tu­tion put in an or­der, that would af­fect the share,” he says.

But it might be more than just that. Wesizwe Plat­inum’s Ledig and Frischge­waagd farms on the west­ern Bushveld are sand­wiched be­tween prop­er­ties owned by Cana­di­ans, Plat­inum Group Met­als (PTM). Each can de­velop a mine in­de­pen­dently, but would be bet­ter to­gether.

An­glo Plat­inum’s Styldrift prop­erty is also ad­ja­cent to Wesizwe’s farms. It’s sig­nif­i­cant that An­glo Plat­inum is a 37% share­holder in PTM’s farms.

One view is that the criss-cross of in­ter­ests and am­bi­tion can only be solved by An­glo Plat­inum. “It [Wesizwe Plat­inum] has well-po­si­tioned pieces of ground and it shouldn’t stand alone,” says Steve Shep­herd of JP Morgan.

Mike Solomon, Wesizwe Plat­inum CEO, agrees: plat­inum in­dus­try con­sol­i­da­tion is in the air, but he’s fo­cus­ing on build­ing one 180 000 tons/month mine.

Solomon pro­fesses an ad­mi­ra­tion for the busi­ness style of Aquar­ius Plat­inum CEO, Stu­art Murray. Murray has shown the plat­inum in­dus­try that ap­par­ently in­sol­u­ble min­eral right own­er­ship prob­lems can be solved through pool and share agree­ments.

One pos­si­bil­ity, there­fore, is that Wesizwe Plat­inum will do the same, al­low­ing An­glo Plat­inum a share of prof­its gained on met­als mined on Wesizwe Plat­inum’s land in re­turn for ac­cess to its re­fin­ing.

All Solomon will of­fer is the fol­low­ing: “Who we choose [for a smelt­ing part­ner] has strate­gic im­por­tance.”

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