Wesizwe Platinum in Anglo’s sights
Junior could be next target for corporate action
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.”