Talks on asset sales may lead Platfields to a turnaroundComment on this story
PLATFIELDS was in talks with a prospective buyer of its mining assets, the suspended platinum producer told the market on Friday.
The purchase, if successful, would turn around its fortunes.
The company said it had been approached by a third party and had begun talks that could result in a reverse listing.
“The directors wish to advise that it has been approached by a third party and has commenced negotiations for the acquisition of substantial mining assets, which will result in a reverse listing, a change in control and in the board, as well as cash flow being injected into the group, if successful.”
Platfields was founded in 2002 as an emerging precious metals exploration company. The JSE suspended trade in its shares last year for its failure to publish financial results for the year to February 2013 and for the six months to August 2013.
Its key asset was the prospecting rights for the Leeuwkop project in Limpopo and a near-surface gold exploration project in Mpumalanga.
However, some of the group’s prospecting rights had lapsed and Platfields said on Friday that it had petitioned the minister of mineral resources to extend their validity and security of tenure.
Platfields said previously it had entered into new negotiations after an international funder pulled out of talks last year amid fears of labour instability in the platinum belt.
Last month it posted a loss a share of 81c and a headline loss a share of 62c for the year to February 2013. This was better than losses on both measures of R1.44 a year earlier.
Auditing firm Grant Thornton gave a damning report on the long-awaited financial results for the year to February last year. It also issued an adverse audit opinion on the results and noted reportable irregularities.
Grant Thornton voiced concern that some of Platfields’s mineral rights had expired since February last year, and the group had not impaired the assets despite doubt that these rights would be renewed.
The Platfields board responded by saying it was working on finding a solution to the issues that had resulted in the adverse opinion.
Grant Thornton also pointed to how Platfields had entered into an agreement with Majestic Silver Trading 222 to acquire the claim over Leeuwkop in January 2011 for a cash sum of up to R40 million.
In terms of International Financial Reporting Standards, Platfields did not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
Platfields is one of the many platinum juniors that have not recovered from the softening of prices for the metal in 2011.
In 2012 it wrote a letter to then minister of mineral resources Susan Shabangu asking her to implement initiatives that would spur the platinum sector.
Suggestions included the introduction of a platinum Nelson Mandela coin, similar to the gold Krugerrand coin.