17 July 2008
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Johannesburg — THE TIMING of platinum processor Braemore Resources' secondary listing on the JSE yesterday was unfortunate but, given the time taken to obtain regulatory approvals, unavoidable.
The shares are currently trading around 6,1p on AIM, below the 6,5p at which Braemore was able to place shares earlier this month, and considerably below the peak of 24,25p reached last November, soon after it announced it had started commercial smelting operations in SA.
Although Braemore Resources' fortunes are tied mainly to its ability to manage and increase the scale of its new smelting technology, it is also dependent on the health of the platinum industry.
The platinum price took a beating this week after several months when fears of supply disruptions had kept it above $2000/oz. It softened to $1977/oz on two bits of bad news : belt-tightening at General Motors in the US in response to falling sales, and the Japanese announcing a new technology to replace platinum in cataly tic converters.
Braemore Resources corporate development executive David Russell said the timing of the announcement of platinum replacement in catalytic converters could be linked to the fact that annual contract negotiations were under way. Similar announcements are a regular feature at this time of year.
But Braemore may also be a casualty of the change in sentiment which has driven investors away from small, early-stage companies to the bigger, diversified miners. It must be hoping sentiment will have changed by the time it needs to raise capital to build its first big smelter in the fourth quarter of this year.
The Bottom Line is edited by Edward West
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