PATRICE SEEKING FINANCE OFFSHORE
PATRICE Motsepe's African Rainbow Minerals (ARM) may list its portfolio of exploration projects in North America, the Miningmx website reported yesterday.
The move would raise much-needed capital either for the development of these projects, or for other investment within the ARM group.
ARM executives told last month's Mining Indaba in Cape Town that while the company had an attractive exploration portfolio it needed to be structured for development and growth.
Independent advisers had been appointed to examine "valueenhancing options ... as the market has ascribed zero value to these assets and related growth prospects within ARM". ARM said it expected the review process to be completed by mid-2005.
Miningmx said one option under consideration was the separate listing of the non-South African exploration assets in North America.
These assets were formerly in the portfolio of Avmin, which was merged with other mining businesses last year to create ARM. They include platinum, nickel, zinc, lead and silver, copper and cobalt projects in Zambia, copper and cobalt in the Democratic Republic of Congo and gold in Namibia.
An ARM spokesman said yesterday that a listing of the exploration projects was "one of the scenarios one needs to investigate, but that does not necessarily mean there would be a listing".
A Johannesburg-based mining analyst said that the projects could be worth up to $100m.
"They are looking at selling off these assets, and also at a listing," said the mining analyst.
"ARM is desperate for capital, as the group doesn't generate much cash at the centre."
He said while there might be benefits in raising capital through an offshore listing, "the downside is that you would be selling down and diluting your stake in such projects at the wrong stage of development".
ARM's desire to generate extra cash has also been illustrated by Motsepe's repeated intention to do a deal in a "very unique cashgenerative" project, details of which have not been disclosed.
"We are positioning for a year of corporate activity that is aligned to our growth strategy," he said.
He said ARM was well-positioned, with a strong balance sheet, to participate in future empowerment transactions in the resource sector. "Exciting opportunities are being evaluated - SA remains our prime area of concern."
Motsepe said that following the cash-generative deal he would be in a position to decide whether to list the ARM group in New York, as a secondary listing.
This ambition has been around for a while, but Motsepe appears to want to present the new transaction to investors at the time of listing, in order to raise some of the funds needed to finance the venture.
