Platinum Miners Look North


"PGM miners seek low-risk, high-reward 'sweet spots' for significant returns."

South Africa dominates the world in platinum resources and mining: it supplies about 75% of the world's freshly mined platinum, 40% of its palladium, and some 85% of its rhodium. The amount of metal still in the ground is astonishing.

Even so, there are ongoing signs that platinum companies are shifting attention elsewhere. This could be at least partially explained, according to a recent report by RBC Capital Markets, by a sector consolidation in South Africa that "faces significant hurdles, due mainly to the uncertainty relating to BEE status and mineral rights." The analysts anticipate focus to switch to the North American PGM scene, where there could be "large-scale consolidation."

As such, "having stakes in highly prospective areas is the low-risk, high-reward sweet spot that should deliver significant returns."

RBCCM analysts say that particular issues relating to politics and infrastructure in South Africa are "most certainly re-focusing the attention on the almost ‘forgotten' North American PGM (platinum group metal) projects and prospects. We have little doubt that this region will see a significant resurgence of interest and capital in the next three years, with PGMs now well positioned."

The world's, biggest PGM miners seem busier in Zimbabwe. Anglo Platinum has also reported a number of promising platinum prospects in Brazil, where Toronto-listed Colossus Minerals Inc. (TSX:CSI) has outlined an initial gold-rich PGM resource at Serra Pelada.

It could take time for South African "issues" to settle down. There is plenty action specifically in the PGM sector. As a sampling, Anglo Platinum remains busy with two separate sets of action over nine farms (known as Modikwa Deeps) on the eastern limb of the Bushveld igneous complex, part of the world's biggest PGM basin.

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