Japanese trading house Mitsubishi has injected an initial $4 million, which could rise to $16 million, into platinum explorer Jubilee Platinum to secure a foothold in Jubilee's developing Tjatje property.
Jubilee took a secondary listing on the JSE last week.
This is the second deal Jubilee has announced in the past few days. It also recently agreed to raise its stake in the Tjatje project 13% to an effective 48%, with an option to add another 15%.
The Tjatje project, which is approaching prefeasibility stage, consists of prospecting rights on three farms on the eastern limb of the Bushveld complex.
Exploration to date suggests that the properties contain an inferred resource of about 65-million ounces of platinum group metals and gold.
Mitsubishi will invest $16 milliomn in three tranches over the next year in zero-interest loan notes, which are convertible into shares in Jubilee's South African subsidiary, Windsor Platinum Investments, to a maximum stake of 20%.
If Mitsubishi does not convert the notes into shares within two years from September, the notes will be cancelled.
Jubilee CEO Colin Bird said the agreement provided the company with significant funding to advance exploration in SA without diluting shareholders in Jubilee.
The agreement also gave Jubilee a partner with size and standing that would be useful in sourcing deals in line with Jubilee's aim of participating in the consolidation of SA's platinum sector.
From Mitsubishi's point of view, the corporation would gain an early entry into a company that planned to add more assets. In general, the Japanese appeared to be looking to secure sources of supply of platinum into the future, Bird said.
Jubilee's shares added 2,25p or 3,6% to 64,5p on London's Alternative Investment Market on Wednesday.
On the JSE, where the liquidity of Jubilee's shares is limited, they were unchanged at 900c after a single deal.
Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge
