JOHANNESBURG (I-Net Bridge) - North American-listed Black Economic Empowerment (BEE) company Anooraq [TSXv:ARQ; AMEX:ANO], the platinum explorer that recently took a secondary listing on the JSE, has issued 36 million new shares and 167 million warrants to its largest shareholder, Pelawan, under a settlement agreement between the companies.
Under the original agreement Anooraq would have been entitled to issue 74 million new shares to its empowerment partners, Pelawan. Without having raised C$98.4 million in equity financing and concluded a transaction by December as was originally forecast, the transaction would have been heavily dilutive.
"This deemed dilutive financing, against no corresponding inflow of funds, would have resulted in a significant decrease in the net asset value per share in Anooraq. This has been avoided," said the company in a statement on Tuesday.
In 2004, Pelawan performed a reverse takeover of Canadian-listed Anooraq by injecting its platinum assets into the company for a majority shareholding.
The 36 million shares will equate to a near 20% increase in Anooraq's issued share capital, and boost Pelawan's stake to about 65% in the company from 56.2% previously.
Pelawan has also been issued with warrants for the purchase of 167 million shares in Anooraq. The warrants are valid for two years to the end of calendar 2008.
Under the agreement Pelawan will also be entitled to sell up to 25% of the shares it receives by exercising the warrants, as long as the funds are used to finance the exercising of the warrants.
Anooraq is working in partnership with Anglo Platinum, the world's top PGM production company, in the prolific Bushveld Complex. Today, Anooraq has two major joint venture programs underway with Anglo Platinum: the Boikgantsho Joint Venture and Ga-Phasha Joint Venture.
Boikgantsho boasts 4PGM Indicated resources of 15.28 million ounces and Inferred resource of 8.2 million ounces with a 32-year mine life.
At long term metal prices of $650/oz for platinum, $250/oz for palladium, $375/oz for gold, $4.00/lb for nickel and $1.00/lb for copper used for the base case, the pre-tax and pre-royalty economic model for development forecasts the net value of the project at a 5% discount rate of $300.5 million and at 10% discount of $138.8 million with an internal rate of return of 25%. The estimated capital cost is $152.8 million with a payback of 3.25 years.
Meanwhile, Ga-Phasha has 20.83 million ounces of 4PGMs in the Measured and Indicated category, with 13.3 million ounces of Inferred resources at a 2 g/t cutoff.
At the listing in December, Tumelo Motsisi, deputy chief executive of Anooraq, said that a pre-feasibility on the company's Ga-Phasha project would be complete early in 2007, and that a bankable feasibility study and fundraising would hopefully take place before the end of the year.
He could not give an estimate on how much the project would cost but said that Ga-Pasha would produce 200,000 platinum ounces per annum (420,000 PGM ounces) from its UG2 reef open pit mine from 2010-2011, with a 150,000oz Merensky reef mine (220,000 PGM ounces) to follow two to three years later.
Lastly, mineralization on the company's Rietfontein property extends over 1,650 metres and is about 150 metres thick. With Resource Investor.
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