As I said last week, this is the beginning of what looks like merger mayhem in the mining world. The trick is to pick the right stocks – companies with assets that could get gobbled up in the future.
I think we will see a lot of this happening, and things will really start to get hot, as we see some of the tiny explorers start to get snapped up.
Last week the world’s-second largest platinum producer Impala announced a £265m takeover for Aim-listed African Platinum. It said it had approached the board of African Platinum to make a possible cash offer of 55p per share. The group shot forward on the back of the news up 9.5p to 50.25p their highest level for more than a year.
Platinum is a very rare metal, with most of the world’s supply comes from just one source, the Bushveld complex near Johannesburg.
Platinum facts
Platinum wasn't officially 'discovered' as an element until the mid-18th century, but it was in use as a metal by the pre-Columbian Indians. Because of its silvery-white colour, malleability, and resistance to corrosion in air, platinum is a popular metal for jewellery. However, it has many other uses. For instance, platinum is an important substrate for many chemical reactions because of its ability to absorb hydrogen at normal temperatures and release it at red heat.
Platinum is used in jewellery, wire, to make crucibles and vessels for laboratory work, electrical contacts, thermocouples, for coating items that must be exposed to high temperatures for long periods of time or must resist corrosion, and in dentistry.
African Platinum’s main asset if the Leeukwop platinum project, on the western part of Bushveld this is generally where the highest quality deposits are found. Impala has spotted the opportunity that African Platinum has, and wants it for itself.
Leeukwop could be in operation by 2009, and the offer from Impala will help to develop it.
As you can imagine, big platinum producers are keen to secure new reserves of the metal, the industry has been boosted by high platinum prices, and this in turn has lead to plenty of cash for takeover bids.
All this activity has stirred my interest and I am currently looking at a platinum explorers – I shall let you know what I discover.
Until tomorrow,
Melissa Carroll
for The Penny Sleuth
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