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.