Eastern Plat Share Discussion Threads

[doobydave] 09/3/2007 00:07

Very brief but very positive mention of ELR on RobTV, courtesy of Lawrence Roulston - one of the shrewder and more level-headed commentators specialising in mining & exploration stocks. If interested, it's at Go to 7pm and fast forward to 51 minutes.

"I think we're now at the point where we're going to see some real action in terms of getting going on mining... and translate into significant investor attention"

" I think it could break out pretty significantly from here".

[rambutan2] 08/3/2007 10:11

interesting to note that both xstrata and barrick are new to pgms and the bushveld, having only commenced operations there in 2006. seems to me that they aren't the type of cos likely to stand still and will either want to expand on the pgm front or sell out?

[doobydave] 06/3/2007 18:11

42.4% of 26% of Market cap ZAR3.03b = ZAR334m

Rozier is getting them for ZAR43m plus taking on ZAR167m of debt - ZAR210m

As usual, correct me if I'm wrong, but this does look rather good. I know one has to take the effect of South African inflation into account, but even so... Rozier refers to "a period of lengthy negotiations with the South African regulatory authorities and our BEE partner". What did he do - hypnotise them?

Just as interesting is the value placed on the 1% Spitzkop NSR - US$6.5m plus 12m shares of the Company. For convenience, call that CAD6m plus CAD22m i.e circa CAD28m. That may turn into the deal of the century, though there's many a slip twixt cup and lip.
DD

[rambutan2] 06/3/2007 17:31

my late afternoon brain is too tired to work out the implications of the above. but no doubt it's a good deal.

[doobydave] 06/3/2007 14:36

More news - never a dull moment with Eastplats.

March 6, 2007
Eastplats to Purchase 42% of Barplats Partner and Reaches Agreement to Purchase Royalty Over Spitzkop

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 6, 2007)

- Mr. Ian Rozier, President and CEO of Eastern Platinum Limited (the "Company") (TSX:ELR)(AIM:ELR), is pleased to report that the Company has reached an agreement (the "Sale of Shares Agreement") to acquire 42.39% of the shares of Gubevu Consortium Investment Holdings (Proprietary) Limited ("Gubevu"), which holds approximately 26% of the shares of Barplats Investments Ltd ("Barplats"). The shares are to be purchased pro rata from the three shareholders of Gubevu, Barplats' Black Economic Empowerment ("BEE") partner, for a purchase price of ZAR 43,000,000 (approximately Cnd$6.9 million). In addition, the Company will settle Gubevu's financial obligations under its existing financing agreements, totaling ZAR 167 million (approximately Cdn$26.8 million) over a period of between two and five years.

Barplats has a current market capitalization of approximately ZAR3.03 billion. As the only assets which Gubevu holds is its shareholdings in Barplats, the value of the assets being acquired by the Company derive their value from Barplats' market value, less Gubevu's financial obligations that are being assumed.

"The recently announced proposed transactions involving the acquisition of a further 5% interest in Barplats, the inward listing of Eastplats on the JSE, and the acquisition of a 42.39% interest in Gubevu, follow a period of lengthy negotiations with the South African regulatory authorities and our BEE partner. We are pleased to have acquired the additional portion of the Barplats assets at this very early stage in their development and look forward to adding considerable value in the short term," stated Ian Rozier, President and CEO of Eastplats and Chairman of Barplats.

Concurrent with entering into the Sale of Shares Agreement, the Company has also entered into a four year put and call option agreement (the "Option Agreement") with the same shareholders of Gubevu over the balance of the shares of Gubevu. Under the terms of the Option Agreement either the Company, or the shareholders of Gubevu, may compel the purchase by the Company or its assigns and/or nominees of two further tranches of 28.83% each of the shares of Gubevu (the "Optioned Shares") at any time following March 1, 2009, as to the first tranche, and March 1, 2010, as to the second tranche. The purchase price for each tranche is ZAR 50,000,000, and may be satisfied at the election of the Company by the issuance of shares of the Company valued at the then market price.

Exercise of the put option by the shareholders of Gubevu is subject to the existing mineral rights of Barplats having been converted into New Order Mining Rights under South African mining legislation and the status of the Barplats assets remaining empowered as required in the South African regulatory codes. In circumstances where such conversion has not been effected by the triggering dates for either the first or second tranche of the Optioned Shares, the purchase price with respect to such tranche shall increase by ZAR 450,000 per month until such conversion has been effected. The Sale of Shares Agreement and the Option Agreement remain subject to the required regulatory approvals, including approval of the South African Reserve Bank and competition Commission, and satisfactory arrangements being reached with Gubevu's lenders, including Eagle Worldwide Investments Ltd.

In a separate transaction, the Company has entered into a Purchase Sale Agreement with Rhodium Reef Royalties ("RRR") for the purchase of the 1% net smelter royalty (the "NSR") on all platinum group metals recovered from the Spitzkop PGM project ("Spitzkop") held by RRR. The purchase price to be paid by the Company will be US$6,500,000 and twelve million common shares of the Company, the shares being restricted for transfer for a period of four months from the date of issue. Closing of the transaction shall take place on or before March 20th, 2007.

The directors of the Company consider, having consulted with its nominated advisor, that the terms of these transactions are fair and reasonable insofar as its shareholders are concerned. "These agreements clear the path for us to increase our holdings in South Africa, and simplify the overall corporate structure of these assets at the same time. Furthermore, our proposed JSE listing demonstrates our commitment to having a long term presence in the country and provides the opportunity for all South Africans to participate in the future growth of our Company," stated Ian Rozier.

The Company strategy since 2005 has been to acquire platinum group metal (PGM) projects that were rich in platinum and rhodium and could be developed for relatively low capital costs. The Company is currently focusing on financing the expansion of the Crocodile River Mine in South Africa, owned by Barplats Investments Ltd., in which the Company holds an indirect 69% interest. Through other direct and indirect holdings, the Company controls additional PGM projects in South Africa over which New Order Prospecting Rights have been granted under the New Mining Act.

The Company has a total of 517,084,321 issued and outstanding shares, a market capitalization of approximately Cdn$1 billion on an undiluted basis, and has working capital of approximately Cdn$78 million.

[rambutan2] 06/3/2007 12:00

sorry, had missed your above post dave.

re the barplats buyout, i'd been eyeing barplats up as they were too cheap, but didn't have any funds to purchase on jse. never mind.

[doobydave] 02/3/2007 22:53

Although about Independence - bought up by Braemore (BRR) in December - there is a lot of background info in relevant to Eastplats. It is even possible that Eastplats is one of the 5 juniors cited as having been in talks with them.

Rambutan - any views on the relative merits of the Conroast technology and Sylvania's various plants?
DD

[doobydave] 02/3/2007 08:20

From yesterday:

Eastern Platinum Offer Update


FOR: EASTERN PLATINUM LIMITEDTSX, AIM SYMBOL: ELR
March 1, 2007 Eastplats to Increase Interest in Barplats to 74% Through an Offer to Minority Barplats ShareholdersVANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 1, 2007) -

Mr. Ian Rozier, President and CEO of Eastern Platinum Limited ("Eastplats")(TSX:ELR)(AIM:ELR), is pleased to report on the proposed acquisition of minority shareholdings in Barplats Investments Limited ("Barplats"). Eastplats has submitted to the board of directors of Barplats a notice of its firm intention to acquire all the shares in the issued ordinary share capital of Barplats other than those already indirectly held by Eastplats through its wholly owned subsidiaries, and its BEE partner Gubevu Consortium Investment Holdings (Proprietary) Limited.

The consideration payable in terms of the offer will be 0.98 of an Eastplats' common share and 70 South African cents for every one Barplats share held. On this basis, the total cash consideration amounts to ZAR10,797,471 in cash (Cdn$1,759,125) and 15,118,699 Eastplats common shares. The scheme consideration represents a premium of 48% to the 30-day volume weighted average Barplats share price of R7.96, and a premium of 56.3% to the 60-day volume weighted average Barplats share price of R7.54 up to and including February 28, 2007.

The offer to be proposed by Eastplats will be implemented by way of a scheme of arrangement envisaged to complete on May 18th, 2007. Completion of the acquisition is subject to the passage of a resolution by the minority shareholders approving the scheme. In order to pass, the resolution must be approved by a simple majority of the minority shareholders represented at the meeting. Should the scheme be implemented, Eastplats will acquire all of the scheme members' issued shares being 15,424,959 Barplats shares, or approximately 5.0% of Barplats' shares, and Barplats' listing on the JSE Limited ("JSE") will be terminated. Simultaneous to the termination, Eastplats will list all of its issued common shares on the JSE. The Eastplats common shares are already listed on the Toronto Stock Exchange ("TSX") and the Alternative Investment Market ("AIM") in London. Should the scheme be implemented, the indirect and direct interest held in Barplats by Eastplats would increase to approximately 74%. The Company is confident that the Barplats minority shareholders will vote in favour of the scheme given the very low liquidity and tradability of Barplats shares. Also, the scheme presents an opportunity for scheme members to participate in the future growth of Eastplats through receipt of Eastplats shares. Eastplats is well positioned to finance Barplats' production and expansion plans, already demonstrated by its considerable investment in Barplats' operations at CRM. Also the scheme, if implemented, should enable Barplats to realize value from its KV project in a timely and efficient manner, being developed in part through the proposed mine at the adjacent Spitzkop property by Eastplats.

"The BPL shareholders are being offered a significant premium for their shares at a time when the risks associated with their investment in Barplats have been largely mitigated through Eastplats' financing of the mine operations and expansions at Crocodile River," stated Ian Rozier.

"This offer is attractive, providing a premium to market and substantial liquidity and tradability for these shareholders, something they have not enjoyed in the past. The offer follows a period of lengthy negotiations with the South African regulatory authorities and our B.E.E. partners, and we are pleased with the cooperation and support that we have received," he stated.

[doobydave] 28/2/2007 21:24

Well, you can't call it over-hyped...

[gardenarc] 28/2/2007 21:00

interesting me this one

[doobydave] 28/2/2007 20:43

- I think...

[doobydave] 20/2/2007 15:51

See relevant post over on the SLV thread, which I recommend ELR watchers add to favourites.

[rambutan2] 19/2/2007 03:08

hi dd,

having had a scim through the slv aim admiss doc and the most recent quarterly, i think that slv is potentially interesting with the cwp side effectively valued at neutral but providing the pgm tailings for free to the prp plants. the comp persons report reckoned payback for the two ie combined entity, would be 30mths provided everything rolled out according to plan (at $1186 basket and zar1185 operating costs). however, the recent quarterly points to them being ahead of plan and all in all they seem to be on top of things generally which might bode well.

as you say, the ctrp is good for cashflow and any further expansion.

and then everest north is essentially in for free.

for what it's worth, the comp persons report gives values of US$7m for the ctrp; US$130 for cwp/prp; and US$6m for everest north = US$143m total npv

re everest north, i wonder how the links/agreements with aquarius would come into play if anyone was to make a bid? so far svl have paid aqu r2m with a further r6m to come on the granting of mining rights to slv. all pgm concentrate produced from everest n must be sold to aqu.

[doobydave] 19/2/2007 00:16

Hi Rambutan,
I decided to take up your challenge re. Sylvania.

153m shares in issue valuing SLV at £52m at 34p share price. My thoughts are that ELR doesn't have sufficient in the bank to make a cash bid, but some sort of merger / share swap is possible. Reading SLV's last quarterly, I notice mention of a third party with whom negotiations re a 3rd PRP plant were ongoing. This could easily be a red herrring but worth noting.

At Everest North, the inferred resource is a beggarly 0.8m oz - tiny in Bushveld terms. Worth no more than $4.8m at Aflats prices - call it £2.5m. However, there's an awful lot more PGM than that, you can stake your house on it.

I've no firm basis for valuing the CWP chromite at Milsell. At Everest North (contig w Mareesburg), the Chromite Tailings Retreatment Project (25% interest) looks like it is netting them $571K per quarter at a very early stage. Respectable cashflow is being generated and more is likely.

The fact of current cashflow generation has given me pause and I wonder anew if SLV is the target in Eastplat's sights. It could fit.
DD

[rambutan2] 19/2/2007 00:14

gets a mention in minesite canadian round-up...

Shares in Eastern Platinum continue to change hands at a frenzied pace. In the second quarter of fiscal 2007, the company earned C$1.6 million before a foreign exchange gain on revenues of C$28.4 million. Production tallied 25,873 ounces of platinum group metals. Eastern Platinum ended the week at a new 52-week high of C$1.87, up C$0.19 with over 25 million shares changing hands.

[rambutan2] 18/2/2007 22:05

dd, thanks for that.

I've seen a couple of presentations by afplats, but must admit to never having been impressed. In particular, the depth and hence costs didn't appeal to me. I wasn't overly keen on the management either. How wrong can you be!

That said, being stubborn, i still don't think that it can hold a candle to elr, some of whose many advantages you highlight.

Funnily enough, i was going to ask you whether you'd checked out slv as i had a briefish look at the end of last week and thought it might be interesting. However, its web site doesn't have a presentation or any recentish research and
i ended up a bit unclear on a valuation - apart from a gut feeling. And i hadn't factored in a possible bid for it by anyone.

edit: i've started a thread for slv, mainly cos there wasn't one (usually a good sign) and it's nice to have a place to stick any relevant links.

The other thought that crossed my mind was re barplats vs elr and whether considering that the former is where much of the latter's growth is expected to come from over the next 5yrs, would a purchase of the former's shares rather than the latters be worth consideration?

The Sunday Telegraph today carried a front page story on anglo american which led onto a consolidation amongst smaller bushveld pgm cos ie jubilee, platmin and aquarius piece. Needless to say, elr wasn't mentioned. But the piece said that lonmin wanted to expand.

[doobydave] 17/2/2007 08:17

Nice ongoing rises in Canada - tonight's close CAD1.87 (80p). RSI now exceeds 80 but I suspect there may be a little more to come before pullback. Fibonacci theory suggests $2.02 then retracement to $1.72, but the black arts of charting are way beyond my intellect :)

Not forgetting the Jan 2007 Raymond James 6-12m target of $2.75. Would you bet against it?

Have a good weekend.
DD

[rambutan2] 14/2/2007 23:25

ticks up nicely in london, and a bit less so in canada.

[rambutan2] 14/2/2007 13:42

well worth noting...

14 February 2007

Possible Cash Offer for African Platinum plc ('Afplats' or the 'Company')


The Board of Impala Platinum Holdings Limited ('Implats') notes the announcement made by Afplats and confirms that it has approached the board of Afplats with regards to making a possible cash offer to acquire the entire issued and to be issued share capital of the Company for 55 pence per Afplats share.

On 11 December 2006, Implats and Afplats announced that they had entered into a
binding Transaction Framework Agreement (TFA), under which Implats would acquire 29.9% of Afplats' South African assets. This transaction will continue to be implemented in accordance with the terms of the TFA, as previously announced.

This announcement does not amount to a firm intention to make an offer, and
accordingly there can be no assurance that an offer for Afplats will be
forthcoming. Implats reserves the right at its absolute discretion to make an
offer at a value less than 55 pence with the agreement of the board of Afplats
or in the event that a person not acting in concert with Implats announces an
offer of less than 55 pence.

A further announcement will be made if and when appropriate.

[rambutan2] 14/2/2007 09:15

dd, yes, that's what i thought re conveyor, and from 18 dec...
The underground conveyor system has been installed at Zandfontein. This has resulted in a significant reduction in operating costs, and together with the receipt of the New Order Mining Right at Maroelabult, will enable CRM
to proceed with plans to achieve steady state production of 180,000 tonnes per month.


but i suppose that was only at end of quarter and won't really kick in until the next quarter.

but is this referring to above or something extra?
- Underground development increased to 2,438m during the quarter up from 2,351m in the prior quarter.
Additionally, one adit system is being upgraded from a tracked to a conveyor system; these two factors should increase throughput rates and decrease power unit costs.

in any case, that margin leaves a great deal of profit to be gained as and when it grows toward the targeted levels.

[doobydave] 14/2/2007 07:41

Not entirely shabby quarterlies today. A profitable quarter with cash pile $70.7m, and bottom line profit $7.4m of which $1.6m was from operations at CRM and the remainder foreign exchange gain.

I'm a bit puzzled that the conveyor is said to being built - I thought that was done & dusted? Perhaps as a result, the margin of $228.31/oz PGM remains disappointing.

Company currently valued at ~£370m.
DD

[doobydave] 10/2/2007 21:53

For anyone who has never laid eyes on Ian Rozier, he is doing a 5 min interview for German Business TV. It seems to be fairly recent.

The interview gets a bit muddly where Rozier talks about mines coming on stream. First he talks about doubling production at one mine, then skips to mention of a third mine next year. I guess he is referring to Zandfontein and Maroelabult (one mine or two?). I note the website has Crocette as operating from mid-2007 (also CRM complex). Slight disparity - I think a question of semantics - but progress is excellent and I can't say it bothers me.
DD

[doobydave] 09/2/2007 07:57

Thanks Rambutan. Encouraging.