-  Garatau mining right decision
-  Company management changes
-  Tubatse Farm mining right

openbriefing.com 
Nkwe Platinum Limited (ASX: NKP; OTCQX: NKWEY), has announced that the South African Department of Mining and Energy (DMR) has granted Nkwe, together with its major shareholder Genorah, the Mining Right over three platinum farms (Garatau, DeKom and Hoepakrantz) on the eastern limb of the Bushveld Complex.  Can you explain the significance for the Garatau Project (NKP 74%) of the issue of the mining right?

MD Maredi Mphahlele
The issue of the mining right is the culmination of over six years and $50 million invested in drilling and feasibility work on our flagship Garatau Project.  Following the establishment of JORC reserves, environmental studies, complete feasibility mine and plant design, social and labour plans and all other technical work, the Mining Right application was submitted in 2010 and has undergone an exhaustive examination process, leading to the award this week. 

We acknowledge the negative fall out for Nkwe and Genorah of the South African Constitutional Court decision regarding our two southern farms and the continued perception that Angloplat and ARM would take our rights over the farms.

We’ve spent six years developing validly issued prospecting rights and working toward this week’s historic issue of the Mining Right over the three farms.  Our sole driver throughout that process has been the creation of significant shareholder and community value through the development of a major platinum group metals (PGM) mining operation that will create tens of thousands of direct and indirect employment opportunities in the Steelport district. 

We believe we’ve validly enhanced prospective PGM ground that was quarantined with no development opportunities until the government introduced new legislation allowing for black economic empowerment (BEE) participation and introducing the “use it, or lose it” concept to improve exploration and development opportunities in mining in South Africa.

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How do you plan to progress the development of a PGM mine now that the Mining Right has been issued?

MD Maredi Mphahlele
With the Mining Right issued we can now finalise various joint venture/funding opportunities we’ve been pursuing over the last six months.  As referred to in yesterday’s announcement, the final mine optimisation studies are almost complete and they demonstrate a robust and economic project involving what the Board believes to be one of only two major PGM deposits still to be developed in the world.  We’d anticipate the announcement of a strategic partner/financier in Q2 2012, with mine development commencing in Q4 2012.

As investors will see from the presentation slides attached to the Mining Right announcement, the project can be expected to attract significant interest because of its size and grade, and the potential to contain capital costs by focusing on Merensky Reef in the first 20 years of production.

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You’ve indicated you’re seeking a joint venture partner that will, apart from contributing financially, be able to supplement your existing management team.  In which areas do you see the need for deeper levels of expertise?

MD Maredi Mphahlele
We understand the significant pain and frustration felt by all Nkwe and Genorah stakeholders over the last 14 months.  With the Mining Right being granted, the Board believes we now have a clear path toward transforming Nkwe into a major PGM producer.  As such, as we evolve from junior explorer into mine operator, we recognise that a different set of skills and expertise will be required.  All aspects of corporate, operational and technical management will be addressed, along with Genorah focusing significantly more time on local community involvement and enhancement opportunities relating to infrastructure, employment, training, health and education.

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How can shareholders be confident that Angloplat/ARM will not continue its action against the original award of the farms six years ago and potentially halt development?

MD Maredi Mphahlele
We’ve always maintained that the matter was settled in February 2008, as announced in joint releases authorised and made by all relevant parties.  Further, we’ve negotiated with all parties in good faith and in deference to the DMR’s preference for a quick and equitable resolution.  We’ve done this in the knowledge that upholding our rights in court would not benefit our stakeholders from a timing perspective.  It’s our intention to continue to negotiate in good faith and attempt to resolve the issues outstanding.

The issue of the mining right further enhances our legal position with regards to tenure and the validity of the original issue of the prospecting rights.  Parties have watched us spend over $50 million over the past six years in establishing a world class PGM project without successfully bringing an action to reverse or even halt our exploration and development work.  We’ve retained the asset for the last six years and don’t believe it can legally be taken away from us.

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What is the status of the Tubatse Project (NKP 64%), given the appeal against the award of the prospecting right to Roka Pasha and Genorah (Nkwe)?

MD Maredi Mphahlele
As shareholders are aware, following the Constitutional Court decision in December 2010, the key Tubatse farm, Eerste Geluk was returned to the DMR and subjected to another application process.  The local Roka Pasha community, together with Genorah as its economic partner, was awarded the rights following an exhaustive application process undertaken by the DMR.

The award is currently under appeal from certain sections of the Bengwenyama community, with the first hearing date scheduled for March 2012.  Our position has never changed regarding Eerste Geluk. Genorah and Nkwe have always partnered the local Roka Pasha community in respect of this farm and continues to actively engage with all key representative community groups.  We have never waivered from involving and actively addressing all key community concerns both as stakeholders in Genorah and as the rightful partner in the validly issued prospecting right.

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What has been the progress in your discussions with potential JV partners?

MD Maredi Mphahlele
We’ve been approached by numerous parties with respect to being our strategic JV partner.  We’re quite encouraged by the quality of the potential partners that have come forward.  We’re focused on choosing the correct partner for the long term, with the credentials, technical expertise and financial ability to take the Garatau Project into production and create long term shareholder value.  We’ve appointed Gleneagle Securities to assist and advise on this process.

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Thank you Maredi.

For more information on Nkwe Platinum Ltd, visit www.nkweplatinum.com or call Maredi Mphahlele  or Peter Landau on +61 8 9488 5220

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