JOHANNESBURG (miningweekly.com) – JSE-listed precious metals miner Village Main has bid R411-million for the control of Lesego platinum.

More than 205-million shares at a 200 c will be issued to settle the deal that will leverage the benefits of R142-million of capital Lesego has already raised to fund the Phosiri platinum project towards a bankable feasibility study stage.

Village, headed by former Harmony Gold CEO Bernard Swanepoel, has concluded a binding agreement to acquire control of Lesego as well as the affiliated entities that together control the 1 000 m-deep Phosiri project.

If concluded, an attributable inferred resource of 17,5-million ounces of platinum group metals (3PGMs plus gold) will accrue to Village and represent the fledgling company's first step towards realising its strategy of developing a portfolio of precious-metals mining assets.

The transaction will also augment Village's existing relationship with Umbono Capital Partners, which is described in a Stock Exchange News Service announcement as "a broad-based" black economic-empowerment (BEE) group with an established portfolio of mining and exploration assets in Southern Africa that are underpinned by a capital base, technical skills and resources.

Village will, if the deal goes through, have a BEE ownership of 60%-plus and have access to a broader set of mining business opportunities.

Joining the Village team would also be Lesego chairperson Roy Pitchford, Phiway Mbuyazi and Dorian Wrigley.

"Some may think 1 000 m to be quite deep, but there is a suite of producing mines that are already deeper than 1 000 m and there are also a few planned shafts that go beyond that," Mbuyazi has already pointed out to Mining Weekly Online on the depth of the Phosiri deposit.

Mbuyazi, who attended the prestigious Michaelhouse, is a graduate of Oxford University. Umbono has an educational trust that selects top black students to attend the highly rated schools like St Johns.

Lesego has been developing the Phosiri project - which is close to Anooraq's Bokoni mine, formerly Anglo Platinum's Atok, and Lonmin's Limpopo mine - since 2005 and the project reportedly has a total inferred resource of 27,8-million 3PGMs plus gold at a grade averaging 6,43 g/t.

The dipping Merensky and upper group two reefs that that make up the resource are 1,47 m and 1,18 m wide.

Village will control the entire project and own 63% of the total inferred resource.

Ongoing discussions with other minority project shareholders may increase Village's share of the project's inferred resource to more than 21-million ounces of 3PGMs plus gold.

Next month, Lesego will begin work on a bankable feasibility study that is expected to be concluded before the end of 2012.

The project holds new order prospecting rights for all minerals on six farms in Limpopo province, with Lesego owning 100% of the rights on the four northern farms that host 60% of the project's inferred resource, and an effective 45% of the southern farm Eerste Regt, which hosts 38% of the project's inferred resource. Included is the acquisition of a further 50% effective interest in Eerste Regt.

South Africa's State-owned Industrial Development Corporation (IDC) has acquired a 28% shareholding in Lesego for R142-million.

Village will not be expected to raise capital for the current project portion and will acquire the indirect interests of Umbono and Minex, Lesego's two major shareholders, as well as the interests of Nebavest 69, which owns half of the Eerste Regt prospecting right.

Binding agreements have been concluded between Village, Umbono, Minex and Nebavest.