JOHANNESBURG (Business Day) -- Lonmin's move to buy an 18% stake in its Canadian joint venture partner, Wallbridge Mining [TSX:WM], was not the first step in a strategy to ultimately take control of Wallbridge, Lonmin vice-president of investor relations Alex Shorland-Ball said yesterday.
It is designed to gain control of the properties that Lonmin is interested in, but that interest does not necessarily extend to all of Wallbridge's exploration properties.
Of Lonmin's injection of funds into Wallbridge, 60% must be spent on exploring Wallbridge's North Range properties.
This would investigate whether the same platinum group mineralisation found in the Sudbury basin extends to the northwest. Lonmin would have the right to acquire an interest in North Range properties on which Wallbridge does not already have agreements.
The investment also gives Lonmin first right of refusal on all Wallbridge's properties in the Sudbury basin for the next five years, subject to agreements with other parties.
The Sudbury Camp Joint Venture between Wallbridge and Lonmin covers the Trill, Skynner, Lake and Foy projects. Lonmin has a 50% interest in the joint venture and can increase this to 65% by taking the projects through feasibility studies and funding work and through to commercial production.
In March Wallbridge said that results from Trill had confirmed the high proportion of platinum group metals in the deposit, which also contains nickel and copper.
Lonmin's stated strategy is to build up a critical mass of resources from its two joint ventures at Sudbury - the other is with CVRD-Inco which would make it economical to establish a mill and concentrator to process platinum group metals.
