JOHANNESBURG (miningweekly.com) – The share price of platinum and gold exploration junior Platfields, which made its debut on the main board of the JSE on Tuesday, took the proverbial bath as it plummeted to less than half of its opening value.

Platfields opened on 140c a share and then fell progressively, ending up more than 53% down at 65c a share.

Even the opening price was a downside surprise for Platfields CEO Bongani Mbindwane, as the company had expected to list at between 160c a share and 180c a share, which would have placed its market capitalisation at from R1,2-billion to R1,5-billion, instead of the R500-million-plus level achieved.

Shareholder Gerhard Dreyer, who pioneered the Platfields Berg project - one of three the company has brought to the market - puts the fall down to profit taking by early mineral right holders.

Dreyer says that the former farmer owners of the mineral rights who received their shares for free, as well as historical shareholders who acquired their shares at low prices, are the ones cashing in early.

"The assets are good, the management is good, and we should see a decent price as soon as the small fry are out of the market," Dreyer comments to Mining Weekly Online.

On Platfields going on a R200-million capital raising in early 2011, Dreyer adds: "The Swiss backers should come to the party in the next raising, and the money should come in regardless of the share price."

After having been postponed several times in the wake of the global economic meltdown, the Platfields listing also took place against a background of Anglo American group platinum miner Anglo Platinum being in the process of taking legal action against the company, as well as the Department of Mineral Resources, in yet another prospecting rights dispute, which centres on the awarding of new-order prospecting rights to Platfields on a portion of a farm where Anglo Platinum has old-order rights.

The location in question – the prospecting right at Tigerpoort 426KS – has been excluded from the listing, however.

The idea is that Tigerpoort will eventually form part of the Platfields Liger project but, for listing purposes, the Liger project comprises only Leeuwkop.

Mbindwane says he is confident of settling the dispute with Anglo Platinum commercially and that he is also confident of raising R200-million from local and international investors in the first quarter of 2011, which is earmarked to fund Platfields' three exploration projects, the key one being the shallow Liger project, which has an inferred resource of 1,5 million ounces of platinum group metals.

The company intends using the funding to fast-track the “open pittable” Liger, which has the potential to be brought into production relatively quickly.

Mbindwane says that two contiguous new-order prospecting rights have been secured over the 1 100 ha Liger area on the eastern limb of the Bushveld Complex and that there are no community issues on any of the company's properties.

Platfields most advanced 7 000 ha Berg project has one million ounces of indicated resource and 600 000 oz of inferred resource.

Mining and exploration consultant Minxcon carried out the competent person reports on the listed properties.

Minxcon mineral economics director Johan Odendaal tells Mining Weekly Online that the three resources are properly compliant with the South African Mineral Resource Committee (Samrec) code.

"We've checked the drill core and verified all the data," Odendaal adds.

No resource statistics are provided for Platfields Grootfonteinberg gold deposit on 300 ha in Mpumalanga province, which is said to be relatively shallow and for which the company reportedly holds new-order prospecting rights.

Grootfonteinberg is located on four farms near the historic mining town of Pilgrim's Rest, next to Simmer & Jack's Beta mine.

On the disputed Tigerpoort area, Mbindwane says that it is a “very small piece of ground”, some 170 ha of land, far from Anglo Platinum’s operations.

“If Anglo Platinum is even interested in it, it will take them a minimum of 50 years to get into it. I think their transformation strengths will come to the fore and that this matter will be resolved very easily,” Mbindwane adds.

Platfields listed share capital, made up of two billion ordinary shares each of one thousandth of a cent (R0,00001) and an equivalent par value for the 789 597 005 issued ordinary shares, provided a share premium of R236-million net of share issue expenses.

Teba chairperson, former AngloGold Ashanti deputy chairperson and former National Union of Mineworkers president James Motlatsi is the Platfields chairperson.

"Our emphasis is on platinum group metals. We focused in the beginning on the Berg project, but now we are putting more emphasis on Liger, which is new in our suite of projects.

"We're going to focus largely on Liger because we believe very strongly that it's going to give us a swifter entrance to being a miner than just an explorer," Mbindwane says.
 

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