Finweek English Edition - - Cover -

ABOUT THREE YEARS af­ter pitch­ing its platinum ex­plo­ration en­deav­ours to in­vestors, this ju­nior min­ing group has turned its at­ten­tion to coal. That’s af­ter UG2 Platinum’s ini­tial fo­cus on its Tromps­burg and Vry­burg platinum projects were called off af­ter ex­pend­ing a few mil­lion rand in share­hold­ers’ funds.

At face value, UG2 is faced with the usual ju­nior min­ing quandary: not hav­ing enough cap­i­tal to harness a port­fo­lio of po­ten­tially prof­itable min­ing projects. As things stand it will prob­a­bly have to call on share­hold­ers (and pos­si­bly new in­vestors) to re­cap­i­talise its bal­ance sheet to fund its new coal min­ing ini­tia­tive. But fail­ure to suc­cess­fully ex­ploit its much- mooted platinum projects could dampen in­vestors’ en­thu­si­asm for new min­ing and ex­plo­ration ac­tiv­i­ties.

It’s too early to make a call on UG2’s plans to ex­ploit coal re­serves in Botswana, via a hold­ing in Ele­men­tary En­ergy. Gut feel, though, is that share­hold­ers – lest they want to wind the com­pany up – have pretty much no choice but to back its lat­est foray. To UG2’s credit it has dis­played lev­els of trans­parency not usu­ally as­so­ci­ated with un­listed ven­ture cap­i­tal com­pa­nies. Share­hold­ers have been timeously fur­nished with au­dited fi­nan­cial state­ments and have been kept well abreast of de­vel­op­ments thanks to its in­for­ma­tive web­site. CEO Gus­tav Trichardt is also will­ing to en­gage the me­dia – which, in our opin­ion, un­der­lines UG2’s determination to fight back af­ter its ini­tial set­back.

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